Novus Ordo Seclorum – A New order of the Ages.

A phrase adapted from Virgil’s fourth Eclogue and first applied to Christianity. Inscribed on the Great Seal of the Unites States of America in 1782 and printed on the back of the one dollar bill since 1935.

 

IN THIS SECTION:

 

The New World Order

A World Fit for Heroes

In the past century there have been innumerable promises of a new economic or political world order, and often both together. The reality is that we have today a world shaped by banking and corporate interests to their own purposes. After World War One President Woodrow Wilson issued his famous Fourteen Points, and used the term “new world order” as a summary of what he hoped they would achieve, a world without war, with poverty abolished and social justice for all – in Lloyd George’s ringing phrase, “a land fit for heroes.” The underlying thrust of this website is that without a new economic order, such optimism is unrealistic. By now we should be catching on to the simple logic that rebuilding a world on existing economic and educational foundations can only lead to the same dire situation of endless war and human oppression that all would wish to see abolished, except those who make a profit from it. The League of Nations was Woodrow Wilson’s great hope that we had the seeds of a new world order, but it proved powerless to prevent the rise of totalitarianism, both Communist and Fascist, and the renewal of war in 1939 on an even larger scale.

It is instructive that H. G. Wells, who took part in drafting the constitution for the League of Nations, wrote a book in 1940 entitled The New World Order in which he argued the need for a gifted oligarchy to rule the world. Much as Plato considered a philosopher-king as the ideal ruler of the city state, Wells advocated a ruling committee to be made up of businessmen, politicians, academics and, above all, scientists, who would lay down and enforce the necessary rules. To this extent, he had already given up on democracy as the universal saviour and assumes that the majority of people, what Marx called the Lumpenproletariat, were incapable of change. By the end of World War II, he seems to have concluded that not even a governing elite could influence the old order of the world, and in 1946 he wrote his last book, Mind at the End of its Tether.

This is perhaps surprising, as he must have known of a brave new initiative put together as World War II drew to its close, with plans for a reformed and restructured League of Nations, to be renamed The United Nations and integrated with international organisations to be responsible for world health (WHO), education (UNESCO), banking (World Bank and IMF) and trade (WTO). This would be a new world order indeed. The World Trade Organisation began as GATT, the General Agreement on Trade and Tariffs, and was fifty years in coming to birth. This page is dedicated to showing how the financial and trading arms of the United Nations have shaped a baneful new order to exploit the world’s wealth for the benefit of global financial interests and American military policy.

The economic aspect of American imperialism are treated more directly in The Bankrupting of America on the page The Endgame, but it cannot be separated from a political agenda of imperialism that can be clearly traced to a fringe group of Republicans calling themselves “neoconservatives”. This group started life as a think tank in the later years of the Carter administration, while the world was breathing a sigh of relief that the Soviet collapse in 1990 would bring an end to the cold war and the threat of nuclear war. The neocons saw the collapse of the Berlin Wall and all that followed as a unique opportunity for America to impose its dominance, backed by military power, on the whole world. The members of this group were later to be given high places in the George W. Bush administration, and thus empowered to put their doctrine of American hegemony into practice. It was elaborated in several open letters published from 1997 until 2007, when the group apparently disbanded, but the key paper, Project for the New American Century, (or PNAC) summarizes their strategy and has given its name to the group. It can hardly be called conspiracy theory, since it is all out in the open, and the appointment of the “conspirators” to high government office has been perfectly legal, under the powers of the American president. The geopolitical ambitions spelled out in the PNAC document have played a major part in driving the American and global financial system towards breakdown, and are summarised in the box below

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Project for The New American Century

The prime mover in the PNAC was Dick Cheney, in 1997 the Chairman of Halliburton, a transnational oil and general contracting company, with oper­ations in 120 countries. In 2000 he was appointed vice-president by George W. Bush, and the subsequent fortunes of his “former” company improved dramatically. Detailed information can be found on www.Halliburtonwatch.org, but as an indicator it may be noted here than when Cheney took office Halliburton was 19th on the US army’s list of contractors, and is now number one, earning about $12 billion dollars annually from the government. In 1998 its tax bill was $302 million, and went the next year to zero. During his first five years as vice-president, Cheney’s share options in his [ostensibly] former company increased in value from a quarter of a million to sixteen million dollars. Cheney defends himself against criticism by saying that his money is held in a blind trust (as did Tony Blair) but the blindness and the trust are those displayed by the American people. Many simply do not want to believe that American political ideals – probably the finest in the history of civilisation – have been so blatantly betrayed.

The few figures given here are the tip of a very large iceberg of corruption, a marriage of government and big business interests, worse even than Eisenhower could have imagined. A full account of these would call for a large book, but it will suffice here to mention that Donald Rumsfeld, Bush’s former Secretary of Defense, was from 1989-2005 the chairman emeritus of the Carlyle Group, America’s biggest private defence contractor, Paul Wolfowitz became Deputy Secretary of Defense and President of the World Bank, and John Bolton became American Representative to the United Nations, despite his long-running and aggressive attacks on the institution, which he wished to see abolished. Condoleeza Rice was a director of Chevron oil, and Henry Paulson, Chairman of the Federal Reserve, moved to that position from being chief executive of Goldman Sachs, the world’s biggest investment bank, The last two mentioned were not members of the PNAC, but all used their promotions to cabinet rank to implement the grand strategy of the Project for the New American Century.

With these individuals, and others less prominent, in place, the stage was set to put into action what had been first put forward as “fundamental propositions”. The following are quoted from the original document. America needs, it says:

  • to increase defense spending significantly
  • to establish full spectrum dominance
  • to challenge regimes hostile to our interests and values
  • to accept responsibility for America’s unique role in preserving and extending an international order friendly to our prosperity and our principles

The armed forces will have a core mission which includes the ability to

  • fight and decisively win multiple major theater wars and
  • perform the ‘constabulary’ duties associated with shaping the security environment in critical regions.

The critical regions include not only the planet but space, for

  • if America is to retain its militarily dominant status for the coming decades [it must] control the new ‘International Commons’ of space and ‘Cyberspace’

With Russian communism dismantled, Japan a loyal ally under the American nuclear umbrella, and China at that time neither an economic or military threat, it might be asked what nation posed a threat to the “American security” that all this is aimed to create. The underlying purpose is given away in the phrase, a global Pax Americana will not preserve itself, for that ostensible mission for peace is, as the British political writer George Monbiot says, “a blunt attempt by the superpower to reshape the world to suit itself.”  The former “Father of the Commons,” Tam Dalyell, summed up the whole document as the work of men who “are in love with the idea of war … fantasist Americans who want to control the world.” (quoted in The Scottish Daily Herald, 15.8.2002), and it is of no small concern that the average American or global citizen is completely unaware that this plan for war exists.

One cannot escape the conclusion the President George W. Bush was effectively a willing puppet in the hands of this cabal of war-mongers, for in almost his first speech after being elected president, he stated, with breath-taking hubris and total disregard for international law, that America reserved the right to make pre-emptive attacks on any country in any part of the world.

An earlier paper, Rebuilding America’s Defenses (RAD) had stated that “the process of transformation [to a strategy of global dominance] even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.” The catalyzing event, which brought the world onto the American side, was to be the 9/11 attack on the Twin Towers and the Pentagon, and the extent of the American government’s complicity is a subject of great controversy.

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The IMF and Global Free Trade

In the post World War Two period, when its industry was at its strongest and there was enormous unused industrial capacity, America pressed strongly for unrestricted global free trade. On the surface this could produce nothing but benefit, enabling every country to gain by exporting those goods which it can produce most efficiently. The full picture, however, shows this conclusion to be simplistic. It is, for instance, obvious that transporting beans by air freight from Kenya, potatoes from Egypt and asparagus from Chile in order to offer European supermarket customers out of season delicacies or a few pence off the local price involves enormous environmental costs. Similarly, a small country trying to build up its domestic economy by nurturing home grown industry or agriculture gains little but unemployment from allowing cheap mass produced commodities in without restriction. There are many other drawbacks to a totally free globalised trade, but these will be passed over here to reach the more important point that however idealistic the Bretton Woods Agreement may have been in conception, the global financial institutions which it created have turned out in practice to be instruments for American domination of the global economy and in many instances agents working on behalf of transnational companies.

The IMF and World Bank were set up to create a pool of finance from which any country could draw in order to neutralize negative trade balances and, in so doing, stabilize the global system. To understand how this purpose has been suborned in order to support the dollar hegemony it is vital to know that the potential for abuse was built in from the beginning by the voting system. This called for an 85% majority of the directors to pass any decision, but the United States, having awarded itself an 18% vote, as the senior partner, had in effect a veto which ensured that the IMF has been run in America’s perceived interests.

The IMF has provided genuine benefits to countries in financial need, both through monetary assistance but also by its power to impose fiscal discipline on irresponsible governments. Britain itself was a beneficiary in 1976, with short term loans that stabilized the pound and the national economy. It is, however, now becoming too obvious to overlook that the IMF’s main policy for some years has been to act as a collector and enforcer for other lending banks, using its financial power to make financially weak countries hand over public assets to commercial companies before agreeing to lend money. These companies then proceed to convert what formerly were public service into profit-making companies, no longer existing for the benefit of those who formerly owned them but for international shareholders. Even when the facts are generally known, they are often accepted, because privatisation of public assets has become an accepted, even normal, policy of governments worldwide.

Large scale interference by the IMF in the economic affairs of individual nations began after the oil shocks of 1973 and 1978, when oil exporting countries suddenly had to find some way of investing enormous amounts of oil revenues and the IMF stepped in to help. Its help came by acting as an intermediary in lending out these funds at very low interest rates to developing countries. It was, apparently, the best of all worlds, for the investing countries had the security of knowing that sovereign nations do not default on debt, while such large sums with long repayment dates and at low rates of interest were exactly what the developing countries needed to finance infrastructure projects – roads, railways, dams, telecoms and water services.

However, in laying off these huge sums, the IMF changed its role from being a stabilizing fund for industrial countries to being a lead banker for consortia of international banks, and from that to being their enforcer. Tens and hundreds of billions of dollars were handed out as long term loans to countries with no realistic hope that the money would be managed responsibly and with certainty that a large proportion would immediately be siphoned off by corrupt politicians. When the borrowing countries failed to service the loans, the IMF stepped in to seize collateral on behalf of the lender. That collateral was in the form of national assets of various kind, mostly water, transport, energy and communication projects. In due course, new institutions were set up by the IMF to handle this policy shift, the most significant being the HIPC, the Initiative for Highly Indebted Poor Countries. The HIPC was, in effect, the bailiff responsible for seizure of the collateral. The process was no different in principle from that by which a bank forecloses on a defaulted mortgage, but it had one unique and critical factor which in the end made default on almost all of the IMF loans inevitable.

When the loans were made, interest was indexed not to the interbank lending rate, as one would have expected with a truly international fund, but to the Federal Reserve rate. Whether or not by foresight, this seemingly unimportant detail was to have devastating effects when the Fed rate soared in 1992 from 4% to almost 20%. This came about as Paul Volcker, president Reagan’s Secretary of the Treasury, attempted to “squeeze inflation out of the system.” Almost overnight, “heavily indebted nations” (an official new category in economic theory) which were carrying loans at 3% and 4% found themselves having to pay 16% and 18%. The economic effect, as can be imagined, was catastrophic. The developing countries which were effectively mortgaged to the IMF, were unable even to service the loan interest, and the IMF stepped in to fulfil its primary function and help them in this crisis.

The price exacted by the IMF for bailing out these countries in financial distress was referred to as “conditionalities”, sometimes euphemistically called “the IMF medicine”. On the face of things, the IMF demands were no more than a reasonable requirement for the borrowing countries to practice economic good housekeeping, cutting back on waste and public spending and raising capital by selling off state assets. Under the surface, however, these demands were so structured as to give far-reaching benefits to America and to a cartel of transnational companies working closely with the American government. The IMF was able to demand, for instance, not only the privatization of public services but their sale to selected TNC’s. As one example, Argentina was forced to sell the Buenos Aires water system at a knock down price to Enron. It is not likely that the friendship between Presi­dent Bush and Enron’s chief executive, the late Ken Lay was incidental to this deal. To give further financial advantage to America the IMF also called for the now economically helpless nations to devalue their national currencies against the dollar, often by 60% or 70%. This move not only strengthened the dollar and made American imports cheaper, but kept American inflation low. The IMF “conditionalities” – a cruel euphemism - invariably included demands that the developing countries slash expenditure on education and health.

It may be asked why any country would allow itself to be controlled in this way, and why those which experienced such economic pressure did not turn to other banks. The answer is simply that globalisation of banking had resulted in all the world’s banks being forced by the IMF to agree not to help with emergency loans until a Memorandum of Understanding had been signed in which the IMF’s conditionalities had been accepted by the debtor nations. Without the seal of approval of the IMF no loan money was available at this level of international banking. This collusion is never discussed, but is a kind of banking homerta. Once the IMF had wrested economic control from the supplicant country, the effect was to open it to international speculators. In the case of the most vulnerable, or those with corrupt governments, this resulted in a frenzy of looting of publicly owned assets. Perhaps the worst, and certainly the most visible, example of this occurred in Russia, when President Yeltsin of Russia sought financial help from the World Bank to support his post-Communist reform administration. Help was offered, but only on condition that he broke up all the state assets and sold them for pennies in the pound. The ordinary Russian citizen was allocated shares in some of them, but the plums went to a handful of sharp businessmen, who became billionaires almost overnight. The origins of the first “oligarchs”, most of whom were previously men of quite modest means, and where they obtained the necessary financing is a mystery, though the history of international banking provides tell tale clues. The connection between Nathan Rothschild and Oleg Deripaska came into the open in what the press dubbed “yachtgate”, but by no means fully.

Joseph Stiglitz, a former director of the World Bank wrote an expose of the IMF’s nefarious activities in Globalization and its Discontents, but considers much of the damage that it has done as accidental side-effects of well-intentioned objectives. By contrast, other well qualified commentators see a pattern of operations that can only be interpreted as deliberate criminal policy. Among them are Russell Mokhiber and Robert Weissman, authors of IMF and World Bank: Out of Control and William Engdahl, whose exposé “How the IMF Props up the Bankrupt Dollar System” is accessible on the Web. The degree to which the IMF now works as an arm of America and large companies close to the American administration can only be judged by looking impartially at the facts and deciding who benefits. This brief account is necessarily black and white, but it has to be said that it is not always easy in this story to distinguish between dedicated public servants and robber barons. While the former acted from the best of motives to impose a so-called “free market” agenda on the borrowing countries, the latter, mostly executives of global companies, saw the chance for easy pickings on a vast scale. James Wolfensohn calls for special mention, for his tenure as President of the World Bank (1995-2005) was marked by a crusading zeal to address the core issues of poverty and “the cancer of corruption” in developing nations. The extent to which wholesale embezzlement and misappropriation of funds has wrecked the best intentions of the IMF is a story yet to be told.

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The New World Order in Microcosm

One concrete example must suffice to show how the IMF and World Bank have cooperated to hand over control of the global economy to giant transnational companies. In 1992 the World Bank, in a prime example of Orwellian Newspeak, issued a paper entitled Improving Water Resources Management, in which it argued that “the poor need to be provided with a wider range of options so that they can choose the level of water services for which they are willing to pay, thereby giving supplies a financial stake in meeting the needs of the poor.” The weasel wording of giving choice to the willing poor concealed the reality which is, as the human rights campaigner Vandana Shiva says, the “conversion of water into a tradeable commodity rather than a life support base”. It was also a tacit rejection of the principle that the state has a responsibility to provide water as a means of life to its poorest citizens. From the example given below it can clearly be seen that the IMF’s policy sets in train a process unprecedented in the history of the human group. Where the IMF has dealt with financially weakened countries, it has enabled a new breed of giant commercial organizations to take over the resources of the national community and dictate social policy with the sole purpose of increasing the profits of the companies involved.

The practical effects of the World Bank’s policy statement quoted above was to start a scramble of gold rush intensity between TNC’s for the new gold of clean water. The rush was truly international, including the French corporate giants, Vivendi, previously a media and communications company, and Suez-Lyonnise des Eaux, various once British water boards, like Thames Water, drinks manufacturers like Seagram and Coca Cola and civil engineering companies like Bechtel, which had already shared in the spoils of the Iraq war. The case of Bechtel in Bolivia exemplifies global capitalism at its worst. In 1999, on the recommend­ation of the World Bank, a subsidiary of Bechtel was given the monopoly rights to the municipal water supply of Cochambamba, a small city in a semi-desert environment. Almost immediately water costs doubled to $20 a month, in a city where the average wage is less than $150 and many struggle to survive on half that sum. The extra cost of water had to be taken from other basic needs, like food and clothing, and as the water was cut off from those who faced a choice of starvation or water, civil action started spontaneously. The response of the police to peaceful demonstrations was violent repression, sometimes with live ammunition, but the resolve of the protesters won the day and in the end the municipal water supply was returned to public ownership and Bechtel withdrew. This brief account is a parable for our times.

When Corporations Rule the World

I have taken this heading from the title of David Korten’s admirable book, which I recommend to any viewer who wishes to go more deeply into the political and moral revolution that has come about as transnational corporations have assumed political as well as economic power. Almost three quarters of world trade is controlled by 500 companies, which constitute a shadowy empire that impacts upon the individual’s life and the planet in a way that is largely unnoticed. This is the reality of the economic world order within which we all exist. Korten is one of a new breed of what might be called investigative economists, who look beneath the surface to find out what is really moving economic events. The difference between reality and appearance is so great that it is no exaggeration to say that a long course of study would be required to obtain a good grasp of it, and it is to be hoped that some university may take up this challenge.

As one goes deeper into the tie-up between the Federal Reserve under Paulson, the IMF, the major investment banks, particularly Goldman Sachs, and an indeterminate number of giant transnational corporations, one becomes aware of a startling disjunction between economic theory and economic reality. At the centre, and holding this shadowy alliance together is the Federal Reserve and, at risk of restating what should now be obvious, because the Fed is not a branch of government but a private institution run for the benefit of its shareholders, it functions with a continual conflict of interest. When the welfare of the American people or of world trade conflicts with shareholder profit and directors’ bonuses, the latter will take precedence. Nowhere has this emerged so clearly as in the subprime and derivatives crisis, when American democracy itself has been put at risk. Fraud and deception on this scale numbs the mind: we do not want to believe it or apply the very real effort needed to understand it. Although it is a deep current that drives global economics, there is nothing about it in economics textbooks, and it is, alas, too easy to avert attention by calling it conspiracy theory.

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Globalisation: The Ideal and the Reality

Whereas the word “globalisation” is taken to indicate an unquestionable ideal, in practice it is an economic process by which national boundaries are flattened and elected governments overruled in pursuit of profit. The way in which this has come about can be clearly traced back to the Bretton Woods Agreement in 1944, when along with the World Bank and the International Monetary Fund there was set up an international trade agreement. At the time it appeared to be still born, since the US Congress saw it as a threat to American commercial interests and refused to endorse it. As a compromise the General Agreement on Tariffs and Trade (GATT) was set up in its place. One may wonder what happened to GATT, and the answer is that in 1995 it morphed into the World Trade Organisation (WTO) through a sleight of hand which is still difficult to make out but represented an absolutely critical change in its powers and its nature. Where GATT, as its name implies, worked to achieve mutual agreement between nations as to tariffs, the WTO is a body which has the authority to pass enforceable laws about international trade and impose them over any national laws. The WTO (with its offspring/rivals the TTIP and TTP) is now part of a triumvirate, along with the World Bank and IMF that is assuming governance of the world.

That would be dangerous enough in the best of situations, but when these three organisations are fronts for an unconstitutional group of corporations dedicated to making profit, it should set alarm bells ringing in the minds of anyone dedicated to democratic, humanitarian and ecological principles. Under cover of the bland term “harmonisation” the WTO was given rights to “ensure the conformity of members with its laws, regulations, administrative procedures and obligations.”  The end result is that the interests of international trade, which are in effect the interests of transnational corporations, take precedence over the interests of any nation or of the planet. If a national government resists, it will be taken to court and fined and sanctions imposed at the will and command of the WTO. Resistance is useless, since the WTO and IMF are prosecutor, jury and judge.

On the face of things, this may appear to have some justification insofar as it seems reasonable to punish those who obstruct free trade and all the benefits that it brings, but the reality is usually far more sinister. The WTO imposes, in effect, a new kind of colonialism by powers which have no national identity. As one instance of how this new global system works, a country which bans the use of a certain pesticide will be forced to allow both its use and the importation of food products which have been grown with it, if the WTO has sanctioned its use. There is nothing abstract about this: the WTO “Codex”, which sets the standard for DDT residues, allows fifty times more than the US Food and Drug Administration. The blanket justification for overruling the FDA or any other body charged with national health standards is that it is restricting trade or enforcing unfair practices, but behind this is the fact that large corporations will use the most powerful pesticides, and other chemicals such as preservatives, with minimum regard for long term health or environmental damage. Anything which hinders profit-making will be obstructed, whether this be a matter of environmental pollution, over-logging or decimating fish stocks.

The insidious power of the WTO goes far beyond doing away with tariff barriers. It enforces lower standards of many kinds on the global society, since the nation state is no longer able to forbid the importation of goods which it knows are produced in substandard, even subhuman, conditions. A country which wishes not to import goods from another country because they are produced with sweatshop or child labour no longer has choice in the matter. The WTO will force it to do so, and there will, of course, always be merchants willing to sell the imports, either through ignorance or callousness.

Equally damaging to global society is the WTO’s power to outlaw tariff barriers when these are used for the best of purposes, to allow a fledgling industry to grow to viable size. This is particularly damaging in emerging economies, but the WTO has no interest in the welfare of national communities, for it has been set up to maximize the profit of the banks and corporations which are its real constituency. Insofar as these are able to provide employment, they determine national policy in arbitrary ways by locating or relocating factories where labour and taxation costs are lowest, environmental controls are most lax and protective legislation for workers least demanding. The nation then becomes the suppliant of a corporation, as witness a grovelling advert in 1975 in the business magazine Fortune by the Philippine government: “To attract companies like yours … we have felled mountains, razed jungles, filled swamps, moved rivers, relocated towns … all to make it easier for you and your business to do business here.” That says almost everything about who rules the world today. The gift of employment is, however, a poisoned fruit for the country which increases its employment levels by attracting foreign investment in this way, since, once established, the corporation who bestows  the gift is able to exert permanent blackmail by threatening to move its plant elsewhere, with catastrophic effect on local economies.

The specious claim of the WTO is that trade free of national or other barriers reduces prices and raises the living standards of all. The reality is almost the opposite, for perfect freedom is an economic law of the jungle, allowing the most powerful to kill off competition. Every high street is witness to this process, with a dozen national or international names now dominating, and family businesses are now almost an extinct species. So advanced is this process that almost any high street is a clone of any other, and genuine competition, which is the life blood of the free market hardly exists. The effects of this go far deeper than usually suspected. While a brand like Coca Cola may seem to be in competition with other soft drinks, a look at their labels will reveal that they are in most instances actually owned by the Coca Cola company, the sales cabinet in the store or service station will contain only these, and the shop owner who wishes to sell any other soft drink can be brought to heel by having all the best known brands withdrawn. This is just one example of the sham of competition at high street level, but suppression of free trade goes much further.

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A Race to the Bottom

There are obvious economic benefits to globalisation in making imports cheaper and lowering the cost of living in every country, but the long term hidden costs, which are not obvious, will prove economically devastating if we define economics in terms of human welfare, not corporate profit. For the individual, the definition of globalisation is:

what happens when you lose your job in Bolton or Bristol because the company for which you work has been bought out by the UK subsidiary of a Dallas-based transnational company that has relocated its production of T-shirts to Mexico because of  cheaper wage costs and lower health and safety standards. It is what happens when you finally get a job in Slough under a new employment contract that lowers your wages and conditions and your boss explains that this is essential to complete with Mexican or Chinese workers. Globalisation is what happens when you are sacked from your nursing job because of budget cuts by the government that has to meet the demands of international credit-rating agencies.

(My acknowledgements to John Wiseman’s Global Nation? for the original, here slightly adapted.)

Whatever the genuine benefits of globalisation may be, this quotation reveals the continuous pressure to push down wages and working conditions and employment. The ideal factory is one run by robots, where there are no ongoing labour costs. In face of this pressure, and to maintain employment by courting transnational corporations sovereign states are forced to lower wages and living standards. This is a strange paradox, since practical economics is devoted to raising them. In any business larger than those which are family-run, wages are a variable overhead cost, and thus corporate profit increases by driving them down. In theory, it is the shareholders who gain the benefit, although there is ample reason to believe that the interests of the managers come first, whatever theory might say. It is clear that workers are exploited by this system, but what is not apparent on the surface is that all of us benefit from their exploitation, since our pension funds are largely composed of shares in large companies. The bizarre end result of the just-for-profit organisation is that we live within an economic system in which we exploit each other.

This race to the bottom is paralleled on a national scale by the need to compete in a global export market. Once globalisation is adopted as an unquestionable economic goal, every nation seeks prosperity through selling most cheaply to other nations – comparable quality of goods being assumed. Thus, not only is there pressure to decrease wages to decrease production costs, but as a national currency strengthens, it makes exports more difficult, even as it makes imports cheaper. The paradoxical consequence of this is that it makes national prosperity undesirable, for that would make the national currency stronger, weaken export competitiveness and put people out of work. That is the matrix of insanity within which live governments and university departments of economics.

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The New Missionaries

Just as the global expansion of colonialism in the nineteenth century was accompanied by missionaries who offered education along with religious conversion, the global corporations preach conversion of a different, and less obvious, kind. Their ideal is the opposite of an intelligent, spiritually sensitive and socially responsible citizenry, and since they control the media through advertising, they are in an almost unassailable position to shape it to their requirements. Leaving aside the effect of newspaper and magazine advertising, the average person in the West watches about five hours of television each day, and if commercials represent only a tenth of this, he or she is subjected to half an hour of indoctrination per day in a counter-religion of consumerism. Much of this is given during the most formative years of childhood and adolescence, so that it is taken to represent a social norm. Television functions as a pulpit for the propagation of anti-spiritual and anti-social values, giving its viewers a drumbeat message, “Buy this, buy it now, you must have it, indulge yourself.” The non-sequitur used by one advertiser, “because you’re worth it,” is all of a piece with the silent destruction of logical processes that goes along with the corporation’s need to create automatic consumers. Another advertiser, selling potato crisps, shows a celebrity refusing to share a packet with his friends, because they are “too good to share.” Religious loyalty is being replaced with “brand loyalty”, and this creates a weird kind of togetherness, of global solidarity. Almost half a million Koreans are the proud owners of Manchester United credit cards, and their brand loyalty swells the coffers of what people naively take to be an English football club. Once it was just that, but now it is a profit-making corporation, owned by an American family, and which happens to sell football, rather than bananas or computers.

What the effects on community twenty years from now will be of a generation indoctrinated into “retail therapy,” principled selfishness and brand loyalty can hardly be estimated, but it is safe to say that the deformation of ideals and character that flows from all this will not be countered by traditional education. The new religion of consumerism invented by the just-for-profit corporation is alien to an older generation, now dying off, but natural to the younger generation, and doubtless will be taken for granted across society in another twenty years. This is the reality of the new world order, and the ominous shape of things to come. Even on a purely materialistic reckoning, the economic effects are damning, for it is creating an ever-increasing divide between rich and poor. Taking the figures from David Rothkopf’s, Superclass: the Global Power Elite and the World they are Making, the top one per cent of the world’s population own 40 per cent of its wealth, and the top 1,000 richest have a net worth twice that of the poorest 2.5 billion. 

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The Global Casino

The astonishing size of the derivatives market, now approaching a quadrillion dollars, dwarfs the figures for global trade, and is a measure of how outdated and out of touch is orthodox economic theory. The global market in financial instruments  has become a gambling casino, with highly leveraged bets made on future events. Typically, insurance documents against loan default are themselves insured and then reinsured, each transaction making the ultimate insurer more difficult to trace and more unreliable. The unwinding of almost $600 trillion of such contracts is likely to create bankruptcies on a scale that will demolish the global financial system. Betting big against future interest rates is now a routine part of investment policy for non-financial companies. The pharmaceutical giant Merck lost $300 million in October 2008 through failed financial bets. The two significant things about such developments are that orthodox economic theory has become almost completely decoupled from economic reality, and gambling with borrowed money has replaced manufacturing and trade as the purpose of economic activity.

The Free Market in Chains

While the American government preaches the doctrine of the free market as an essential part of democratic government, it has acted to undermine it. After the stock market crash in 1987 President Ronald Reagan moved, or was moved, to issue Executive Order 12631: “Working Group on Financial Markets.” Since then it has become more generally known as the Plunge Protection Team, or PPT for short. Its purpose was, quite bluntly, to prevent the stock market going down, but the power with which it found itself endowed, has motivated it to manipulate stock, commodity and financial markets almost at will, and for the profit of institutions and individuals who were given prior knowledge of its decisions.

The PPT has a membership of four, namely the Secretary of the Treasure, the Chairman of the Federal Reserve, the heads of the Securities and Exchange Commission and of the Commodity Futures Trading Association.

Ostensibly set up to bring order to the markets, working in conjunction with the major investment banks, the PPT is able to influence prices almost at will through a variety of strategies, but mostly through selling huge future contracts in shares, commodities and indexes, using the vast resources of the Federal Reserve. Depending on the price set in these contracts, the markets will be under pressure to rise or fall. The advantages that this brings are, obviously, that insiders can bet with foreknowledge on market movements, but also that the price of gold can be suppressed artificially, and the falling value of the dollar concealed. Manipulation of the Comex gold market has been routine and blatent for years, using a device of stunning simplicity termed a "naked contract". In essence an individual (or more likely a bank) would contract to sell a large amount of gold at a future dates and a very low price. This would have the effect of lowering the market price in general. What was not apparent was that the seller did not actually own any gold (hence the "naked" element), but his phoney contract having forced down the price of gold, he himself could step into the market and buy as required using various derivative side bets to control things. As one researches the chicanery of which these are only examples, it becomes clear that we live in a new world order in which economic theory has become decoupled from economic reality.

 

A World Fit for Heroes | Project for The New American Century | The IMF and Global Free Trade | The New World Order in Microcosm | When Corporations Rule the World | Globalisation: The Ideal and the Reality | A Race to the Bottom | The New Missionaries | The Global Casino | The Free Market in Chains

 

 

 

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