1. Led Astray by Language
In ‘Freedom & Identity’ I made reference to the fact that the terms ‘left’ and ‘right’ only started being used in politics in the summer of 1789, during the French Revolution’, when the French National Assembly sat to decide on a new constitution, with two principal models up for discussion. The first was that of a constitutional monarchy which had already been operating in Britain for the best part of a century and was advocated by the more conservative members of the Assembly who were reluctant to go the whole way and remove the king altogether. The second model was that of a republic of the kind which had been established in America just two years earlier and was supported by what might be described as the more radical or revolutionary members of the Assembly such as Maximilien Robespierre.
As the weeks went by and positions hardened, it then just so happened that supporters of each side naturally started sitting together on each side of the aisle which divided the assembly chamber, with constitutional monarchists sitting on the right hand side and republicans on the left. This, however, was pure chance. It could have been the other way round, with republicans taking their seats on the right and constitutional monarchists on the left. For there is nothing inherent in the meaning of either of the two words ‘left’ and ‘right’ that suggests a political disposition. Nor, once these terms had become associated with certain dispositions, did they imply any specific political philosophy. For the most that could be said was that those on the right were a little more cautious and conservative in how they thought reforms should proceed while those on the left wanted more radical change.
Still, it may be said, we know what these terms mean today. But do we? Apart from being a term of abuse, what do we really mean when we call someone ‘right wing’? That they are a Fascist? Surely not. Not only is the use of these terms both lazy and divisive, however, allowing us to stigmatise our political opponents without even trying to understand their actual views or consider whether they might not have some validity, but they are also extremely misleading. For they give the impression that all political positions sit somewhere on a one-dimensional spectrum from left to right. As I also pointed out in ‘Freedom & Identity’, however, it is just as possible for a radical reformer to be a nationalist, for instance, as it is for a conservative, strongly suggesting, therefore, that nationalism, to take just one example, is not on the same political axis as radicalism and conservatism and that the true space in which politics operates is therefore far more multidimensional.
To understand what these multiple dimensions are, however, it is not sufficient merely to rid ourselves of these empty concepts of ‘left’ and ‘right’, we also need to define or map out the real political landscape in terms of the actual differences and oppositions which the terms ‘left’ and ‘right’ merely gloss over, and which for those of us rooted in the Anglo Saxon political tradition, first started to take shape in 1688, when seven prominent politicians in London, including Henry Sydney, 1st Earl of Romney, who actually drafted the document, wrote a letter to William of Orange in The Hague, inviting him to come to England and become king, thereby initiating what came to be known as the Glorious Revolution.
2. Legitimacy & Consent
Although it is generally supposed that what precipitated this unprecedented act was the fact that the incumbent on the English and Scottish thrones at that time, James II of England and James VII of Scotland, was a catholic, in many ways this is an oversimplification of a far more complicated and nuanced state of affairs. For while James’ overly conspicuous efforts to promote tolerance of his religion in both England and Scotland were certainly resented and deplored by the vast majority of the public, it wasn’t his religion as such that most disturbed English politicians, but that which lurked within it. For at the intersection of politics and Catholicism, there was a belief, probably held by all the Stuart kings and certainly held by James’ father, Charles I, that kings are anointed by God and are only therefore answerable to God, not the people and certainly not parliament. Having already fought one bloody civil war and executed the then king to disabuse any future monarch of this idea, the last thing politicians in London wanted, therefore, was to go down this road again, which they feared they might have to if James continued on the absolutist course which, by the summer of 1688, he appeared to have chosen.
The problem was that they could not just get rid of him, not only because any attempt to do so would have precipitated precisely what they wanted to avoid, but because they had tried this before, in the case of his father, and it hadn’t worked. For although they had given Oliver Cromwell the title of Lord Protector and had made him king in all but name, the fact remained that he wasn’t a king and didn’t therefore have the air of legitimacy which kings claimed as a consequence of their ‘divine right’. As a result, he had not commanded the same authority as his predecessor, had been constantly at odds with a divided parliament, which saw him less as their leader than a dictator, and ended up ruling as despotically as any monarch. What the political opponents of James II needed, therefore, was a real king, but one whose power they could limit and control.
Fortunately, England’s traumatic experience of the civil war, the execution of its king, and the repressiveness of the short-lived Commonwealth had, in itself, led many of the country’s best minds to think about a possible solution, it being generally agreed that human existence in a state of nature, as Thomas Hobbes described it in Leviathan, would be ‘solitary, poor, nasty, brutish, and short’, and that some form of government was therefore required to create and enforce laws for the common good. If a government was not going to be simply imposed by force, however, and legitimacy could not be founded on divine right without this degenerating into absolutism, the question was on what a legitimate form of government should be based. And the answer which England’s collective genius quite naturally came up with, of course, was a contract.
In a land of merchant traders, at a time of rapidly expanding commerce, it was, in fact, the most obvious and easily understood solution available. As expressed in John Locke’s ‘Two Treatises of Government’, it was also entirely logical. For if one accepts that the right of any government to govern cannot morally be based on force or the coercion of people who do not agree to be so governed, it follows that any legitimate government must be based on consent. It then further follows that if this consent is not to be based on the people’s belief in the government’s God given right to govern, as the Stuarts had maintained, then it can only be based on it being in the people’s best interests, not as a paternalistic government might choose see those interests, but as the people, themselves, see them. In other words, it has to be a deal done between government and consenting adults.
Not, of course, that this logical requirement – that the relationship between any legitimate government and the governed be based on a contract freely entered into on both sides – in itself determines the actual terms of the contract, not least because it is the negotiation of these terms that actually fulfils the requirement. Given that, in 17th century England, it was almost universally agreed that the primary purpose of government was to prevent the country descending into what Hobbes described as a ‘war of all against all’, however, it followed that, at a minimum, one of the principal terms of the contract had to enjoin the governed to refrain from indulging in those types of behaviour which would either constitute or result in this kind of anarchic free-for-all. Even more significantly, this in turn ensured that government fulfilled its own side of the bargain. For if it was going to avoid failing in its primary purpose of preserving law and order, then it had a reciprocal duty to extend the protection of the law to all law abiding citizens who might otherwise fall prey to such lawlessness and consequently be driven into taking the law into their own hands.
Nor was this the end of the myriad logical ramifications which flowed from conceiving of the relationship between the government and the governed in contractual terms. For the precise laws which the governed were obliged to obey were, of course, continually changing with changing circumstances. This meant that the contract wasn’t a one-off agreement but a continuous process, in which the governed, or their representatives, had to agree to all new legislation in order to prevent unnecessary and detrimental new laws being dictatorially imposed upon them. This therefore meant that some form of democracy was also needed.
It also brought about a separation of powers. For if the government could not make new laws without the agreement of the governed, this not only meant that some form of legislative body was required but that the legislature had to have sufficient powers to prevent it simply being overridden. This also meant, therefore, that the judiciary had a certain degree of independence. For although judges were appointed by the executive, in this case the king, the laws they were required to uphold were created by the legislature, thus giving rise to the tripartite form of government which was later enshrined in the constitution of the United Sates, and which has been held up ever since as one of mankind’s greatest achievements.
In England, however, all this happened nearly a hundred years earlier with the enactment of the Bill of Rights in February 1689, to which William of Orange and his wife Mary were required to agree before they could be crowned, and which laid out, in precise terms, the roles and duties of both the crown and parliament, making it impossible for either institution to rule alone and creating, as a result, one of the most stable forms of government the world had ever known, and which has so far lasted for more than three hundred years without any serious constitutional crises.
3. Whigs & Tories
At this point, however, you may be wondering what all this has to do with politics. After all, the formulation of a constitution has more to do with philosophy and law than with the everyday matters with which politics usually deals. The separation of powers required to avoid a monarchy descending into absolutism, however, in itself created a political division: one which naturally pitted those whose interests were vested in the monarchy against those whose interests were best served by having the freedom to pursue those interests without government interference.
Thus, on the one hand, one had an ancient aristocracy whose wealth largely consisted of land from which they obtained rents and whose status, influence and ability to gain more wealth was almost entirely dependent on obtaining preferment at court, while on the other, one had the new men whose wealth was largely based on trade and industry and who saw their future in exploration and innovation or, more broadly speaking, change, rather than the preservation of the status quo. To see the Tories and Whigs purely in terms economic and personal interests, however, is again something of an over simplification, not least because although part of what the Tories quite naturally wished to preserve was their ancestral privilege, another part was something which they feared the logic of the new men might destroy.
I say this because not everything that enables a society to function smoothly, without friction, can be worked out as logically as England’s new constitution or needs to be enshrined in law. Indeed, most of the rules which govern society have nothing to do with the law. Most of them evolve over time as unwritten codes of conduct, which, through trial and error and the salutary lessons of those who blunder off the charted course, are found to be helpful and even invaluable in maintaining social order, avoiding personal tragedy and promoting general happiness and wellbeing. In the 18th century, for instance, no young lady would have been allowed to wander around the town unaccompanied, not because their families wanted to arbitrarily restrict their freedom, but because such rules were necessary to protect them, not just from violent assault, but from the attentions of personable young men, who, through flattery and charm, might elicit from them some indiscretion injurious to their reputations and those of their families, thereby very possibly diminishing their chances of making the kind of marriage upon which their future security depended.
For the same reason, no gentleman would have approached a young lady on her own in such a situation except, perhaps, to offer her his services in finding her a carriage to take her home. For to take advantage of an unaccompanied young lady in such circumstances would have equally damaged the reputation of the gentleman concerned, very possibly leading him to be thought of as a rake and a scoundrel and causing him to be denied entry to respectable households, where any man wishing to pay court to the daughter of the house would first have to present himself to her father and ask whether he may call upon his daughter the next time the family was ‘at home’, when the young lady in question would, of course, be properly chaperoned.
Today, of course, we tend to think of such customs and traditions as lying somewhere between the quaint and the absurd. All this tells us, however, is that what society regards as correct and permissible behaviour is not immutable, continually changing over time. Whether consciously or not, what those of a conservative disposition have always tended to believe, however, is that such customs and traditions represent the accumulated wisdom of an entire way of life, with which one meddles at one’s peril. For given the complexity of any society, no one can ever really know what effects even a very small and seemingly innocuous change in its organisation may have. Pull at one loose thread and the entire fabric of society could unravel.
Suppose, for instance, that we allowed young ladies to wander around on their own and flirt with any young man who took their fancy. Nothing wrong with that, you might think. But suppose that one of the consequences of this was thousands of unmarried mothers living on state benefits at the tax payer’s expense and/or the state sanctioned murder of unborn babies. You may of course still think that this is a price worth paying for freeing women from the restrictions under which they previously lived. But is it what is best for society as a whole? And should what is best for society as a whole take precedence, as conservatives tend to believe. Or should the freedom of the individual to make their own way in life, not just in an economic sense but in how they choose to live their lives, have a much higher priority, as is fundamental to the philosophy of liberalism.
That’s not to say, of course, that many liberals in the 18th or 19th centuries would have allowed their daughters to wander abroad unaccompanied. For they generally went along with the mores of their time like everyone else. For them, however, being free to make one’s own choices was nevertheless a matter of principle, which was further reinforced by the belief that, just as Sir Christopher Wren had redesigned London on rational, geometrical principles after the great fire of 1666, replacing the higgledy-piggledy chaos of narrow streets and alleyways with broad tree-lined avenues and sweeping thoroughfares, so too, in an age of reason, society could be more rationally organised. And it was this that conservatives principally rejected: not just the idea that logic could replace what centuries of accumulated wisdom had distilled, but that an individual should place his own judgement above that of an entire culture, something which they not only saw as an act of reckless folly but of outrageous hubris.
In this regard, therefore, what divided liberals and conservatives was not just their respective economic interests, but a combination of both a philosophical outlook and a character trait: exactly the same combination of philosophical outlook and character trait that was demonstrated in Paris in the summer 1789, when the French National Assembly separated itself into those of a more cautious and conservative disposition on the right hand side of the aisle, and those of a more confident and radical outlook on the left.
4. The Introduction of a Third Political Position
Given the immense subtlety at play within the various differences that combined to forge this complex political polarisation, one may be forgiven for thinking, therefore, that, rather than try to unravel each individual strand, it would be easier to adopt the long accepted political convention of simply labelling the two poles ‘left’ and right’. Not only is this extremely unhelpful in trying to understand the political argument, however, but this kind of linear bifurcation is only really applicable to the 18th century, when only 3% of the population of England were eligible to vote and when the division of the electorate into Whigs and Tories merely represented the political differences at that time operating within the ruling elite. It did not represent the political differences operating between the ruling elite and the rest of the country, which had no political representation at all: a fact which, in itself, was seen by many as a gross injustice.
That’s not to say, of course, that from time to time there hadn’t been previous attempts to launch more broadly based political movements, some of which had had a distinctly modern and even ‘socialist’ feel. In Germany, during the late 16th century, for instance, Anabaptists had advocated holding all property in common, while in England, during the Civil War, the Levellers had proposed that all private property should be taken into public ownership. Being totally antithetical to the ruling class, however, all these movements tended to be short-lived and outside the mainstream political debate. It was only during the 19th century, when campaigns for electoral reform and universal suffrage began to gain momentum, that the political debate began to broaden. And it was only after the first world war, with the Representation of the People Act in the United Kingdom, for instance, that the political landscape actually began to change.
The mistake most people make, however, is to think of this change as merely an extension of the old linear bifurcation, in which the range of interests represented was now driven even further left to include those of ordinary working people. This, however, does not reflect the fact that what we broadly call ‘socialism’ is based on a wholly different political philosophy, one of the core principles of which is that of equally, placing it very firmly at odds with both liberalism and conservatism. In fact, contrary to the one dimensional linear model which we have retained despite its obvious inapplicability, this emphasis on egalitarianism places socialism even further away from liberalism than it does from that to which it is thought to be diametrically opposed. This is because two of the most important precepts at the heart of classical liberalism were individual freedom and meritocracy. That is to say that what liberals wanted was the freedom to make their own way in the world based on whatever talents they may have had and their own hard work, not some accident of birth. There is nothing, however, meritocratic about socialism, the purpose of which is to create a more equal society, a goal to which traditional conservatives, oddly enough, were not entirely opposed.
I say this because while 16th and 17th century aristocrats would have been utterly appalled by the idea of taking all property into common ownership, as the Anabaptists and Levellers proposed, they were not completely averse to sharing a little of what they had, as long, that is, as they were seen as doing so. For what they really cared about, of course, was maintaining their positions of power and authority. And nothing does this more effectively than by being a patron and benefactor to those who, in return, demonstrate a proper degree of gratitude. Thus, traditional conservatives have always understood the political wisdom of endowing a school or hospital, for instance. For as long as their patronage was acknowledged, not only were they able to feel good about themselves by contributing to society but they further cemented their position within it.
The reason they opposed socialism, therefore, was not because it forced them to share some of their wealth, but because it took the power of patronage away from them. Instead of being able to choose the recipients of their largesse and making their donations in public, what they would otherwise have given freely was now simply taken away from them in taxation and redistributed by a government which also took their place as the poor’s universal benefactor: something which traditional conservatives not only found politically unacceptable but personally galling.
In contrast, the opposition to socialism by traditional liberals was far more principled, being based on two main arguments. The first was that governmental patronage, like any form of patronage, is a threat to individual liberty. For whoever pays for something generally gets to decide what that something is. If the state pays for your children’s education, for instance, it will largely be the state that decides what they are taught. If you pay a doctor for a private consultation, in contrast, he may advise you to reduce your alcohol consumption, but you will not be obliged to listen to him lecturing you on the subject. If you want to live your life the way you want, a sentiment which is central to liberal philosophy, you therefore have to be self-reliant, taking responsibility for yourself rather than being dependent on others.
This then leads to the second liberal argument against socialism, which is that government interventions and support lead to irresponsibility. For if there is always a helping hand there to catch you if you fall, you will not take quite the same care to stay on your own two feet. What’s more, you actually need to see others fall in order to be reminded to take more care. Cruel as it may seem, classical liberalism therefore needs some people to fail in life in order that others may learn from it. This doesn’t mean that you should not then lend them a hand. For once the lesson has been learnt, there is no point in extending their suffering. But to continually intervene to prevent people from falling means that people never learn.
Thus, the opposition to socialism by conservatives and liberals took completely different forms. What’s more, with respect to patronage, liberal opposition applied equally to both socialists and conservatives, making the idea that these three very different political outlooks could all sit on the same one dimensional axis completely absurd. In fact, a far more accurate geometrical model would be a triangle, with each point opposing the other two in some regard.
5. The Inexorable Spread of Socialism
Even this, however, doesn’t reflect the full complexity of the situation, not least because socialism, itself, has a number different forms depending on the role of the state.
The simplest role the state can play, for instance, is that of a mere conduit, channelling wealth from one group of people in the form of taxes to another group of people in the form of benefits and services. Because this kind of redistributive socialism is the easiest to implement, it is also the most common, although ease of implementation does not, in itself, fully explain why it has now more or less taken over the entire political landscape throughout the western world. This, in fact, has more to do with people’s naivety, lack of economic understanding and misplaced self-interest.
I say this because once redistributive socialism began to take hold after the second world war, people gradually stopped asking which party’s policies were best for the country and started to ask instead which party’s policies were best for themselves. As a result, such issues as the quality of hospitals and schools and the availability of childcare and low cost housing naturally began to take priority over such matters as how these things were going to be paid for or what effect higher rates of taxation would have on the overall economy. This then meant that health care, education, social housing etc. all had to be continually improved – at whatever the cost – or the party in government simply wouldn’t be re-elected.
As a result of this electoral logic, almost every political party in the western world, whatever they may call themselves, is now a redistributive socialist party and could not be anything else. Even the British Conservative Party, which once stood up against this tide of creeping socialism on the grounds that it would eventually destroy the economy is now more or less indistinguishable from all the other British political parties in this regard, with the further inevitable consequence that the party’s erstwhile prediction of economic disaster is fast coming true. Over taxation has killed off much of British industry or forced it to be offshored, while the excess borrowing needed to maintain public expenditure on reduced real-term tax base has resulted in a mountain of debt which can only be serviced and refinanced with the aid of constant money printing.
As self-destructive as redistributive socialism tends to be, however, it is nowhere near as economically catastrophic as the second most common form of socialism to be tried. For while redistributive socialism redistributes some of the income which privately owned wealth generates, for the most part it does not attempt to redistribute the wealth itself. The one exception is inheritance tax, which actually involves the seizure of capital assets by the state. In contrast, the confiscation and resulting public ownership of all the capital assets from which income is generated is at the very heart of communism.
This makes it inherently more difficult to implement and operate than redistributive socialism, not least because a communist state, unlike a redistributive state, still needs to generate an income from the capital assets it confiscates. This is because it can’t just sell them. For that would be to return them to private ownership. Nor can it rent them to a third party, in that this third party would then have to use them to generate an income from which to pay the rent, which would mean running a private business. A communist state has no other option, therefore, but to work or manage the confiscated assets itself.
The problem with this is that, while the state has an incentive to maximize the income generated by its assets – to pay its workers etc. – its workers have no such incentive. After all, they don’t own the assets and don’t get to keep the income generated by them. Yes, they have a job, which they may lose if they do not do it adequately. But this is a negative incentive rather than a positive one – a stick rather than a carrot – and only ensures that the workers involved do the minimum required. It does not ensure that they go the extra mile when necessary, especially as such precedents may actually raise the required standard of performance. Someone who owns their own farm and has a crop to get in before a storm hits, in contrast, will work all night if they have to, especially if it means being able to feed their family throughout the winter.
Economies which provide positive incentives thus tend to be far more productive than economies in which the incentives are merely negative. One can, of course, increase the disagreeableness of failure by making examples of those who are seen to perform badly. But this has a tendency to drive the most capable people out of the productive part of the economy, where there is always a chance that they may miss a target or fail to fill their quota, and into the distributive or administrative parts of the economy where failure is far less likely and where there may also be opportunities for personal gain.
This is because low productivity in the productive part of the economy almost invariably results in shortages. If one is working in that part of the economy which allocates and distributes that which is in short supply, therefore, one will almost certainly encounter those who are willing to pay a little more in order to receive a little more. Thus public ownership and low productivity almost invariably result in corruption. Worse still, low productivity and corruption have a tendency to reinforce each other, setting up a vicious circle in which more and more people expend more and more of their energy on whatever piece of grift they have got going for them than on anything genuinely productive until, eventually, the whole economy collapses, as happened in the Soviet Union.
By the second quarter of the 20th century, therefore, an intuitive understanding that a system based entirely on public ownership could never work led a number of nevertheless socialist-minded politicians to try a third form of socialism, in which populist governments attempted to direct the economy for the benefit of ordinary working people without actually taking over the means of production and distribution. Instead, they worked in partnership with the owners of corporations who, for the most part, were extremely happy to support this new form of government in return for lucrative government contracts.
The problem with this, however, is that it tends to give rise to what we now know as crony capitalism and the misallocation of resources, which almost inevitably occurs whenever governments get involved with business in this way. This is because, ordinarily, business owners will only invest in a project if they are fairly certain that it is going to make a profit. Even so, there is always a chance that it may fail, there being no such thing as a risk-free capital investment except when it is unwritten or paid for entirely by a third party with unlimited resources, most commonly a government. The problem is that when governments take the risk out of capital investment in this way, corporations are willing to undertake projects even when they are fairly sure that they would never make a profit on a purely commercial basis. In fact, many corporations actually come to prefer this arrangement and get so used to this risk-free way of doing business that they will only undertake projects when their return on investment is guaranteed by government in this way. This does not mean, however, that the projects are actually viable, which is to say self-sustaining. The corporations concerned make a profit out of them, but only because they are publicly subsidised. If a project needs to be publicly subsidised in order to be profitable, however, this means that it actually consumes more resources than it produces and is therefore actually destructive of the economy.
A good example of an alliance of this kind – between a socialist government on the one hand and compliant corporations on the other – and the devastating effect it can have on the economy is the regime of Juan Peron, who came to power in Argentina in 1946 having spent the previous three years as Minister of Labour, during which period he established the first national insurance system in his country’s history, settled numerous industrial disputes in favour of labour unions, and introduced a wide range of welfare benefits for unionised workers, all of which made him immensely popular with ordinary working people.
When, as a consequence, he was subsequently elected president, he then set about a programme of modernisation, working with both local businesses and multinational corporations to greatly improve the country’s transportation, communication and energy infrastructures, while nationalising the railways and several regional airlines, which he amalgamated to form a single national airline. He also built new schools and hospitals, raised the minimum wage and capped food prices.
All this was only possible, however, because, during the war, neutral Argentina had built up reserves of around $1.7 billion, mostly from the sale of canned food to the allies. By 1950, however, this was all gone. Worse still, all the infrastructure development had led to a massive increase in capital imports for the construction industry, which was further exacerbated by the fact that the improved standard of living experienced by most Argentinians had given them a taste for imported consumer goods, none of which was offset by an equivalent increase in exports.
Part of the reason for this was structural in that the Argentinian economy was still largely agrarian, being based on huge cattle ranches owned by a land-owning aristocracy whose basic outlook was traditional and conservative. As a result, the country’s manufacturing industry was dominated by food processing, which had very little scope for expansion. And although, as part of his modernisation campaign, Peron naturally encouraged diversification, he was greatly hampered in this by the fact that, due to so much of Argentina’s wealth being concentrated in the hands of rich land owners, the country had very little in the way of an entrepreneurial middle class. With all its capital reserves used up, very little foreign exchange coming in and huge amounts of dollars going out, the result was that, by 1950, Peron was forced to ask the USA for a loan of $125 million simply in order not to default on the country’s foreign debt.
Worse still, Argentina’s central bank, which Peron had also nationalised, then took the fateful but probably unavoidable decision to devalue the peso, eventually by an astonishing 70%, which, while it did not significantly expand exports – at least, not in terms of their now greatly diminish dollar value – it greatly increased the price of imports, with the further result that, by 1951, inflation had soared to over 50%, wiping out all of the increases in the standard of living enjoyed by Argentinian workers over the previous five years.
This quite naturally led to enormous discontent as well as growing political opposition, not just from the communists, who had always seen Peron’s form of socialism as a cop out, but equally from the country’s traditional rulers, the land-owning aristocracy, as well as such unexpected groups as university professors and students. With nothing he could actually do to ameliorate the situation, however, Peron now made what was probably his biggest mistake. In what was rapidly becoming his standard response to dissent, he used the of Coordinación de Informaciones de Estado (State Intelligence Coordination, CIDE) to crush all opposition, killing hundreds of people and plunging the country into something approaching a civil war until, eventually, he was removed from office by a military coup in 1955.
What makes this such a tragedy, however, is that it was all entirely predictable. For if one consumes more wealth at home than one creates, and cannot sustainably obtain fresh inputs of capital from abroad, eventually one goes bust. It’s why the only country that has been able to maintain this kind of socialism for any significant period of time is the USA, which has only been able to do so because it issues the currency that is used in 80% of world trade. This means that the currency is in high demand and therefore has a higher value than would be the case if it was only used to buy goods and services from America. What’s more, being in such demand, its value is fairly stable, with the result that, for more than fifty years, central banks around the world have been happy to keep it as a reserve currency.
The bad news, however, as I have explained at greater length elsewhere, is that, because the dollar has a higher value than would be the case if it were only used to buy American goods and services, this makes those goods and services far more expensive than they would be if the dollar’s value were determined purely by the demand for American exports. Over the last fifty years, as a result, US exports have steadily declined, along with its manufacturing industry, with the further consequence that the country is now a net importer, effectively consuming more resources than it actually creates: just like Argentina under Peron. It is able to do this, however, because the dollar reserves held in the central banks of other countries are not actually held in dollars, on which no interest is paid, but in dollar denominated Treasury bonds, notes and bills, on which interest is paid.
That is to say that for much of the last fifty years, and certainly for the last thirty years, the USA has been able to provide a higher standard of living for its people than would otherwise be the case because other countries have been lending it the money it needs to make up the difference between the amount of wealth it consumes and the amount of wealth it creates.
This money is then used to meet two major requirements. The first is the need to subsidise people’s incomes with welfare payments. This is necessary because the offshoring of so much US industry due to the uncompetitive strength of the dollar has naturally led to a decline in well-paid manufacturing jobs and an increase in poorly paid jobs in retail and hospitality, for instance. In 2022, as a result, total federal spending on welfare reached an all-time high of $1.75 trillion, which does not include state welfare payments or state spending on such services as education.
The second major need for expenditure is on the military which consumed $850 billion in 2022 and, with so much support going to Ukraine, is likely to consume in excess of $1 trillion in 2023, even though the US is not directly engaged in any current war and certainly doesn’t need such a massive military establishment to defend itself. The purpose of this military establishment, however, is not to defend the American homeland, but the status of the dollar as the currency used for most international trade. For if it were to lose this status, other countries would no longer have a reason to hold US Treasuries as part of their reserves. They would therefore sell them, causing their value to fall and increasing their relative yield. This would mean that all future issuances of Treasuries would have to be at equally high rates of interest, thereby increasing the cost of US borrowing. Worse still, with so many unwanted US Treasuries flooding the market at knock-down prices, the Treasury may actually find it difficult to issue enough new bonds to redeem or even service its existing debt, which currently stands at $32.5 trillion. The chances are, therefore, that it would default, with almost unimaginable consequences.
This is why any world leader who even talks about using some other currency to conduct international business, especially in commodities, is very quickly and permanently removed, Saddam Hussein in Iraq and Colonel Gaddafi in Libya being prime examples. As I have also explained elsewhere, this is also the real reason for the war in Ukraine. For had Russia remained the principal supplier of Europe’s natural gas, eventually its case for being paid in roubles would have become irresistible, especially if Nord Stream 2 had been turned on, thereby increasing Russia’s dominance of the European gas market even further.
Given that this would have set a precedent which other suppliers of commodities around the world would have no doubt tried to emulate, it was absolutely vital to US interests, therefore, that Europe be decoupled from Russia by provoking the Russians into taking military action against a neighbouring country which many EU member states could be persuaded to regard as almost one of their own. The problem with this strategy, however, is that should Russia actually prevail in Ukraine, which is very possible, and should the EU then try to come to terms with Russia in order to save its own economy, it is very possible that the war in Ukraine will precipitate precisely what it was designed to prevent. For as part of the EU’s reconciliation with Russia, it is inconceivable that it would not agree to pay for Russian gas and other commodities in roubles.
This makes the war in Ukraine that much more dangerous for the entire world. For it is now vital to US interests and, indeed, the USA’s very existence as a unified nation state, that the Ukrainian’s do not lose the war. This means that if they are seen to be losing, the US and NATO may feel constrained to intervene directly, turning a local, relatively contained conflict into a global war which could quite easily then become a nuclear war.
6. The Rise of Internationalism
That most people do not appear to understand this risk is due, in no small part, to the fact that the truth about what is at stake in Ukraine has been deliberately withheld from them. Instead they have been told that this entirely ‘unprovoked’ war was started on a whim by a deranged, tyrannical dictator who has to be removed in order to save the civilised world. Not only is geopolitics seldom that simple, however, but the national politics underlying the geopolitics is seldom that simple.
I say this because the US constitution has the same philosophical roots as the English Bill of Rights. In fact, John Locke, whose writings were the basis for the latter, also helped to write the constitution of Carolina, upon which much of the US constitution is based. For much of the USA’s history, therefore, US politics was firmly grounded in Locke’s liberal ideals of freedom and responsibility, combined with traditional conservative values based on Christianity, thereby raising the question as to when the USA stopped being a liberal democracy and turned into the imperialist oligarchy it would appear to be today, comprising establishment politicians who promise all kinds of free stuff to people who can’t get well paid jobs because all the well paid jobs have been offshored, and the crony capitalists of the military industrial complex who are the primary beneficiaries of this offshoring.
To understand how this happened, however, one first has to understand another unfortunate consequence of our strange misconceptions about the nature of politics, which is again rather well illustrated by the example of Juan Peron, who, despite his quintessentially socialist policies, is not generally regarded as a socialist, but a fascist. In fact, Spruille Braden, who was US Ambassador to Argentina in 1946 and who spoke at political rallies during the presidential election opposing Peron’s candidacy, actually published a white paper, known as the ‘Blue Book’, in which he openly accused Peron of fascist tendencies. Nor was this simply because he gave asylum to ex-Nazis such as Josef Mengele and Adolf Eichmann and used the CIDE to ‘disappear’ political opponents, particularly communists. It was more because he was a charismatic populist, much in the style of Mussolini or Hitler.
As I also pointed out in ‘Freedom & Identity’, however, before the first world war, Mussolini also regarded himself as a socialist. In fact, he never thought of himself as anything else. In collaboration with the Marxist Hegelian philosopher Giovanni Gentile, he only created fascism because he had learnt from World War I that ordinary working people, whether or not they are in uniform, identify far more with others from their own town or village, region or country – people who speak the same language and share the same culture – than they are ever likely to identify with an international proletariat. His conclusion, therefore, was that, if a socialist state was ever to be truly realised, it had to be based upon such nationalistic and cultural foundations rather than on pure Marxist ideology.
Because we are burdened with this strange notion that all ideologies are situated on a one dimensional spectrum that runs from left to right, however, it is very difficult for us to get our heads round this. After all, socialism is an ideology of the left, whereas fascist is an ideology of the far right. That, however, is not how Mussolini or Hitler or, indeed, Juan Peron saw it. To them, fascism was a form of socialism. It’s why Hitler called his party the Nationalsozialistische Deutsche Arbeiterpartei or NSDAP, which, in English, is the National Socialist German Workers' Party.
Seeing how fascists and communists were everywhere in opposition, however, it was as if we couldn’t take the ‘socialist’ or ‘workers’ elements within this title seriously and just assumed, therefore, that it was the ‘nationalist’ part that was dominant. We also assumed that it was the nationalist aspect of National Socialism that was the problem: that it was this that had caused Hitler to make war on his neighbours. We did not stop to consider the fact that Britain, France and the USA – where some Americans still fly the Star-Spangled Banner above their front lawns each morning – were equally as nationalistic or that the real difference between these countries and Nazi Germany was that none of their economies were centrally planned by a state which consumed more resources than its economy actually produced, meaning that, if it didn’t want to end up like Argentina and couldn’t borrow money like the USA, it had very little choice but to plunder the economies of its neighbours.
Of course, it may be argued that the grandiose nature of so many of Nazi Germany’s infrastructure projects was the real problem in this regard, rather than a its spending on social services, for instance, and that if it hadn’t been so puffed up with national pride it would not have found itself so short of money. While this is very probably true, however, it does not negate the fact that if the Nazis hadn’t believed in a centrally planned economy and had left it up to private enterprise to only invest in projects that business owners believed would make a profit, the state treasury would not have wasted billions on building autobahns which remained largely empty, and the country would not have been more or less bankrupt within five years of Hitler coming to power, much in the same way that Argentina was bankrupt within five years of Juan Peron becoming president, not because of his nationalism, but because of his socialism. The only difference was that whereas the Argentinian military decided to depose Peron, Hitler invaded Poland.
Because we did not understand this, however, and thought that nationalism was to blame for the second world war, we then made the even worse mistake of thinking that the post-war world had to be rebuilt on a far more internationalist basis, in which, instead of competing for limited resources, nation states worked together in a far more cooperative way to increase resources and make them go further. Thus, in Europe, ancient rivals France and Germany became bound to each other in the European Coal and Steel Community (ECSC), which later became the Common Market and then the European Union. At a global level, the United Nations was formed with all its associated and affiliations agencies, such as the International Monetary Fund (IMF), the World Health Organisation (WHO), the General Agreement on Tariffs and Trade (GATT), which later became the World Trade Organisation (WTO) and, more recently, the Intergovernmental Panel on Climate Change (IPCC).
What no one seems to have realised, however, is that, in creating all these international organisations, not only was power being gradually transferred from elected national governments to unelected officials, but that the separation of powers between the executive and the legislature within national governments was also being undermined. For while most countries require that their legislatures ratify all international treaties, it is the executives, of course, who appoint representatives to the international forums at which these treaties are negotiated and from which they are then handed back down to national legislatures for ratification. By this stage, however, not only are most treaties already a ‘done deal’, making ratification a mere formality, but the representatives of the more powerful national governments negotiating these treaties will have usually done some deal between themselves, thereby making alliances between the executives of each nation state far more important than the relationship between the executives and their legislatures and the people they represent.
Ever since the end of the second world war, as a result, all meaningful power has been slowly but systematically handed over to a cabal of powerful world leaders and their appointed bureaucrats, with the result that democracy, itself, has been effectively side-lined. No one in Britain, for instance, has ever voted for the abolition of fossil fuels, a move to all electric vehicles and an electricity grid powered entirely by renewables. In fact, I’m not even sure how we got to this point. Presumably, we agreed something at the IPCC which was then passed into UK law in line with our treaty obligations under the Paris Accords. This, however, is precisely the kind of top-down autocratic government which the 1689 Bill of Rights was designed to prevent.
Worse still, our determination to ensure that nation states cooperate with each other rather than compete has now made it very difficult for most nation states to defend themselves against unfair competition. For not only do WTO rules state that, without a recognised trade deal, all signatories to the WTO must treat all trading partners equally, thereby making discriminatory tariffs illegal under international law, but our deregulation of financial markets has made it more or less impossible to impose capital controls on multinational corporations, making it all too easy for them to relocate their manufacturing operations to countries with lower labour costs and then import the resulting products back into their home market at lower prices than those of their domestic competitors, thereby forcing these competitors to do the same thing or go bust.
The inevitable result has been a steady offshoring of manufacturing from which the only people to gain are multinational corporations, themselves, and the various financial institutions which own them. For while it is routinely argued that consumers gain from lower cost imports, this would only be the case if they still had the well paid manufacturing jobs that would allow them to buy them. As it is, they are now forced to rely on government support in one form or another, which governments are obliged to provide in order to be re-elected but can only afford by borrowing money from the same financial institutions that own the multinational corporations and which, together with them, are part of that same cabal of world leaders and international technocrats which now rules the world, not for the benefit of any of its citizens but solely for the benefit of themselves.
For the simple truth is that they do not care about us, only about our continued submission to their rule. We saw this during the Covid pandemic, when all opposition to lockdowns and being injected with inadequately tested, experimental vaccines was ruthlessly suppressed. We are also now seeing it with regard to the war in Ukraine, where hundreds of thousands of people are being killed simply to preserve this deceitful world order, but where the truth has been so hidden under a smokescreen of propaganda that hardly anyone knows what is really going on. For the same group of people who now rule the world also, of course, own most of the mainstream media. Not only do they therefore control most of what we see, hear and read but they also do everything they can to censor what few independent media outlets exist.
This makes it all the more vital, however, that we break their spell: that we stop thinking about the world in the overly simplistic terms in which they want us to think, especially with respect to politics. For if we stopped thinking about politics in terms of left and right, and stopped assuming, among other things, that it is merely about the competing interests of different groups, we might start thinking instead about what politics is really about – or, at least, what it ought to be about – which, as John Locke understood, is the implementation and exercise of government according to those values and principles which reason and experience tell us are most likely to ensure that a society both flourishes and lives at peace with itself. For only if we return to these fundamentals do we have any chance of restoring democracy and creating a world which is not ruled from above by a globalist elite with their own agenda, but is grounded in the real interests of free people, who, by reason of being given the right to make their own choices, know that they also have to take responsibility for whatever they decide.
