On August 15th, 1971, President Richard Nixon revoked the direct convertibility of the US dollar to gold, thus bringing to an end the Bretton Woods international financial system of fixed fixed exchange rates, which had managed the economic affairs of our planet in the post war period. The consequences of that change were not immediately obvious, and in fact have taken the better part of forty years to finally come home to roost.
Now, the defenders of globalisation and free trade will tell you that this switch to a floating exchange rate system and laissez faire model of international finance, which it is strictly appropriate to call British Capitalism, has ushered in the greatest period of economic prosperity the world has ever seen. But the reality, as we now know all too well, is entirely the opposite.
For example, if we take a look at the structure of the British economy today, as compared to where it was thirty years ago, it is obvious that we are no longer a productive nation. The vast majority of our industries have either been shut down or outsourced to cheap labour markets in “developing nations”, in replacement of which, our nation revelled orgiastically in the profits of a vastly expanded “financial services” industry and easy consumer credit, all lovingly nurtured under a government that is permeated with all the fiscal responsibility of a southern hick with a sieve, desperately panning for gold at the bottom of a virtual mine. That is, we revelled until the “mad hatters tea party” music stopped, and the ever friendly “Mr Banker” popped by to present us with the bill for our own stupidity, which, at last counting, was a very large, and very well deserved bill indeed.
Hence, as the greatest, and fastest, destruction of fictitious asset values in world history has shown us: money is not the same thing as value. So what is it then?
Well, it is the “free trade” system itself, which insists that commodities have no intrinsic value, their “worth” instead being determined by nothing other than the “invisible hand” and its accompanying and equally mystical principle of “willing buyer, willing seller”. It was this elementary principle, first articulated by none other than that ancient logical formalist Aristotle, but later revived and transmitted to the modern era by Giammaria Ortes of the School of Salamanca, which animates the pretentious notion espoused in conventional economic dogma, namely that it is “the market” itself which has unleashed the human creative potential to put men on the moon, harness the power of the atom, and generally produced all the wonders of the modern world. But has it, really?
Certainly, in the days when our banking system was constrained – by regulation – to favour investment in viable small businesses and long term economic productivity, rather than the quick buck of gambling on increasingly phantasmagorial and esoteric financial instruments, this may have been defensible as a working hypothesis. But as the destruction of fair competition and accelerating consolidation and cartelisation of the global economy – into what is now, demonstrably, in percentage terms, the greatest disparity in wealth distribution in known history - has accelerated, it is increasingly beyond doubt that it is in fact the irrational and capricious God of the “free market”, which has itself smashed the things of true value to our people and economy, and left us with nothing to show for it but a monetary “debt”, that will shackle us all, our children and even their children for a very long time to come.
If you step back and contemplate this for a while, it gradually dawns on you that lurking at the centre of a gigantic back hole of primitive accumulation, there exists a species of gravitational principle called “shareholder value”, and its nasty sibling, the avaricious drive for short term “profit”, which is relentlessly sucking the economic life force out of our nation. But what is this “principle” than the institutionalisation of the idea that human productivity and economic prosperity are nothing more than the efficient expression of human vices, in this case, of pure greed? And underpinning the axiomatic foundations of the entire teetering edifice of free trade, we find nothing else than this Mandevillian, bestial conception of human nature and economic relations.
Hence, when viewed from a spiritual level, it is this monstrous, unquenchable and unreasoning hunger, and its economic reverberations in the negation of human creativity (Imago Dei), that is destroying us.
So if “economy” is not about “money”, then what is it about? Well to start with, we need to think about economic processes in human terms, instead of the endless reams of academic jargon and hyperbole that is written by professional “economists” on the subject. On a very simplistic level, an economy is composed of the flow of goods and services from the point of production to the point of consumption. But on a deeper level, we also need to consider the legal and regulatory framework in which economic processes are operating, and also the relative sophistication of the public and private infrastructure which supports them.
For example, if we consider a business that produces consumer electrical goods, the cost base, and therefore the profitability of that business will largely be determined by the price of electricity and other essential services, business rates, transport costs and other factors of production. The cheaper and more efficient these factors become, the more profitable the business will be. By extension, a qualitative upshift in the basic economic infrastructure of an economy thereby has the effect of dramatically raising the productivity and profitability of all private enterprise. But all of that aside, as any entrepreneur will tell you, the real engine of profit in any business is intellectual capital and innovation, otherwise known as the “productive powers of labour”. Contrary to the rantings of economic liberals, no collection of “willing buyers and willing sellers” ever invented a microchip, a tesla coil, or a helicopter, these being the sole province of an intensively educated and nurtured creative intellect.
In so far as this “human centric” view of economic processes finds no corollary in the reductionist mathematical formulations of “free trade” dogmatism, it instead points directly towards a model of economy that is oriented around capital investment cycles and government provision of the required basic economic infrastructure upon which all economic activity depends – all of which is anathema to the purists of the Austrian school. For while “the free market” could not function or even exist in the absence of modern public infrastructure, neither can or should the government attempt to run or interfere unduly with private enterprise.
And so what is to be done with this fallacious choice between rigid interpretations of “protectionist” dirigisme versus “free trade” laissez faire? The two systems of economic theory and practice are without question mutually exclusive and could never co-exist in pure form. Nonetheless, while we cannot allow an economic theology which has dominated the world since 1971 to destroy the last vestiges of national sovereignty and enslave us all to a permanent corporatocracy which knows no geographical, moral or ethical boundaries, equally, a return to the bad old days of militant organised labour and state monopolisation would swing the pendulum too far in the opposite direction.
As is often the case with such conundrums, I would submit to you that the answer lies outside of the axiomatic frame of reference implied by the question. To illustrate my point, I should like to refer to the great German poet Friedrich Schiller, who said that it were not sufficient to simply be a patriot of one’s own country, but that we must also strive to be world citizens, to solve the apparent paradox of nationalism versus globalism, we must look to the best ideas of patriotic nationalists past, from Alexander Hamilton of the United States to Dr Sun Yat-Sen of China.
If Great Britain is to be a true nation state, it is not sufficient to simply commit ourselves to economic policies whose intention is to selfishly advance the interests of our own citizens, to the detriment of other nations and peoples, but instead take our place in the family of nations who are willing to collaborate in great projects for the common aims of mankind. This does not require us to convert our liberal, capitalist democracy, to a Marxist command economy, but it does require that we limit the power those supranational corporations who have taken control of the money supply, and thereby of global economic policy, away from sovereign governments, for their own selfish ends.
This is not some wild fantasy, if we take for just one example the grandiose vision that was outlined by the President of Russian Railways, Vladimir Yakunin, who, in a recent interview with the Daily Express, proposed a global Renaissance in rail travel, linking up the great landmasses of the planet in one single uninterrupted network by building a giant tunnel under the Bering Straight. This is just one of a myriad of such great development projects that stand waiting for the political will to be mobilized to force our governments to adopt them as policy.
All of this should bring the shenanigans of our politicians at Copenhagen into very sharp focus. In particular, if we consider remarks by Lord Turnbull, who recently criticised the method of accounting for CO2 emissions in the British economy as not including the carbon expended in producing the – vastly increased – volume of goods that we now import from abroad. Some might call this problem-reaction-solution, but, speaking on behalf of those nations and their people, I feel inclined to use somewhat harsher language. Happily, the nations targeted by the aforementioned “final solution” appear, at least for now, to have resisted the incredible pressure to give up their national sovereignty to a transnational menagerie of box ticking EU/UN Bureaucrats and their increasingly absurd and murderous environ-mentalist policies.
The choice before us in the opening days of this new decade could not be more stark. Either we continue with the “zero growth”, anti-industrial, monetarist vicious cycle downward into a new feudal dark age, or break out of it with a virtuous circle based on an ambitious program of international development and cooperation. And so, in the wake of the enormous strategic defeat that was handed to the forces behind globalisation at Copenhagen, let us grab this golden opportunity with both hands and fight to relegate that idiot money to its proper place, in service of the economic progress of civilisation, as a means to, rather than as an end in itself.