Toward A New Era of Nation-States, Part V: Liberal Democracy in the Service of Global HegemonyAlgis Avižienis
If the architects of globalization succeed in establishing the New World Order, they will have obtained a magnitude of concentrated power unprecedented in history. The globalists’ steady accumulation of economic, bureaucratic, political, cultural, and many other forms of power has received determined support from the Western democracies. Policymakers of states which pledge allegiance to liberal democratic principles now regard the globalization process as synonymous with the national interest. It would not be an exaggeration to assert that globalization is advancing under the banner of liberal democracy.
Yet liberal democratic ideas were crafted to prevent the excessive concentration of political power. The principle of the separation of powers was incorporated into the US Constitution specifically to frustrate attempts at monopolizing power. We might therefore ask why liberal democracy continues to serve as the legitimizing agency of globalization, which is homogenizing the political will of disparate nations? Why have democratic governments failed to rein in the oligarchs, multinational corporations, and financial institutions that have appropriated our political process?
We will discuss how financial capital enthroned itself on the world stage in subsequent paragraphs. But at this point, it would be helpful to look more closely at the core mission of liberal democracy — which is the protection of individual liberty. The American Revolution of 1775-83 and the French Revolution of 1789 were all about freeing the individual from the oppression of British and French monarchs, aristocrats, and clerics, who had procured for themselves a centuries-long monopoly of power. The men who inspired these democratic revolutions were intent on creating an alternative system of government that would prevent a resurgence of tyranny.
Clearly, freedom has pride of place in liberal democracy; it is the highest ideal that we are enjoined to defend at all costs. Yet freedom, understood as the absence of restraint, is a derivative concept; it cannot stand on its own. The commitment to defend the concept of liberty depends on the presence of opposition to our will, the active functioning of restrictions, limitations, or oppression. The motive to stand up for freedom arises as a reaction to oppression. Hence we need an oppressive force to rouse ourselves in defense of liberty. Once the oppression ceases, however, we find ourselves in the middle of a great, open field. Where do we go from here?
Lithuania’s experience with liberal democracy
Lithuania’s struggle for independence 33 years ago provides a good illustration of the utility of freedom in overthrowing oppressive structures. The period following the attainment of formal independence, however, has been marked by a gross failure of policymakers to defend national interests. The last three decades of formal Lithuanian independence have highlighted the inadequacy of the abstract principle of freedom as a governing principle.
After 50 years of brutal Soviet occupation, the 3,7 million people of Lithuania were ready for a change, and the pro-independence Sajudis movement was born on June 3, 1988. In a few short years, the leaders of Sajudis succeeded in mobilizing nearly the entire Lithuanian population against Soviet rule and for freedom, national independence, and democracy. Hundreds of thousands of people enthusiastically joined in mass rallies, vigils, protest songs, processions, and demonstrations, at times willingly sacrificing their lives in the face of intermittent crackdowns. The Lithuanians were the first to put forward explicit demands for independence in the former Soviet Union; they played an important role in bringing down the USSR.
But the half-century of ideological domination by Marxism-Leninism had prevented the emergence of a competing political doctrine, which might have served as the ideological basis of a truly independent Lithuania. As a universal doctrine aiming for global domination, Marxism-Leninism naturally permitted no competing socially integrating ideas in its existing sphere of control in the USSR. It insisted on total and unswerving fealty to its doctrine. In other words, Soviet rulers had blocked off any serious attempts to prepare intellectually for an independent existence.
And, of course, the Sajudis leaders were truly ill-prepared to run the country. Once Moscow relinquished direct control in late 1991, Lithuanian political leaders seemed at a loss when confronted with the economic dislocation attending the cut-off of established trade relations with Russia and the other nations of the Soviet bloc. Instead of effectively dealing with pressing economic matters and consolidating the declared independence of Lithuania, the new heads fell to squabbling over government posts and maneuvering to gain access to the privatization process that was just then gaining momentum.
In the midst of an impending cut-off of Russian energy supplies to municipal heating systems in late 1992, the Lithuanian people voted in parliamentary elections — and they performed a spectacular volte-face. They returned the reformed, liberalized Communists to power. Though hardly loved by the people, these former Communists at least seemed to be competent administrators, and they might come in useful in somehow getting through the approaching winter. Lithuania was thus the first country in the Soviet bloc to bring back the old cadres to power through democratic elections; many of the other former Eastern bloc nations soon followed suit.
The International Monetary Fund (IMF) comes to the rescue
Economic policy was quickly handed over to the control of Western international agencies. A Memorandum of Understanding with the IMF was signed in 1992, and Lithuania was well on its way towards absorption into the processes of international integration and globalization.
No consolidating idea has since emerged, in large part because Lithuanian political elites could not come up with an alternative to complete submission to the globalization agenda of the West. Having been subjected to a half-century of indoctrination in Marxist-Leninist internationalism, the local elites did not find the internationalism of the West to be an exotic innovation. The more self-serving bureaucratic and business elements soon found professionally useful contacts with their Western counterparts. The new compradors shunted aside the more idealistic Sajudis intellectuals so that they might not interfere with the profitable process of “integration into Western structures,” which is the term the political class often uses to describe the surrender of national independence.
Neither the new opportunists nor the early Sajudis ideologues ever gave serious thought to how declared political independence could be translated into even minimal economic sovereignty. Unfortunately, economic matters matter very much, and the result of this grave omission was renewed domination, but this time by international capital.
Lithuania’s recent history shows how the idea of freedom served as a potent mobilizing force in overcoming Moscow’s oppressive domination. But it was ineffective in building the foundation of a durable state capable of resisting future inroads on the sovereignty of the Lithuanian people. The victory of the principle of Individual freedom essentially meant that ordinary Lithuanians were free to disengage from common concerns, thereby creating a political vacuum, which was rapidly filled by sharp-eyed opportunists and greedy operators.
Neoliberalism remakes Lithuania’s economy and society
Thirty years of liberal democracy have facilitated a concentration of power in a bureaucracy and business class entirely devoted to the European Union, the US, and international institutions. The neoliberal “recommendations” of these major power centers have been eagerly implemented. The Lithuanian economy was made sufficiently “open” in accordance with neoliberal wishes.
At present, the financial sector is wholly dominated by foreign banks. Foreign capital controls most of Lithuania’s telecommunications, insurance, the news media, and the production and sale of automotive fuel. Local oligarchs have achieved a high level of concentrated ownership in retail trade, construction, and transportation services, i.e., in sectors where foreign capital has not yet consolidated its hold.
Lithuania and the other former Soviet-bloc countries experienced the full brunt of late capitalism, which involves highly centralized forms of ownership and control and unrestricted foreign trade. The retail sector is highly centralized (and often foreign-owned) with modern food supermarkets, shopping malls, furniture centers, and home hardware outlets dominating the urban landscape. Small family farms are rapidly losing ground to the consolidation of landholdings in order to accommodate extensive grain-growing enterprises. There is steady pressure to facilitate foreign land ownership, which would be the precursor to land consolidation by multinational agribusiness concerns.
Neoliberal reforms lead to demographic catastrophe
Lithuania’s total embrace of the Western free trade regime, which followed the signing of the IMF Memorandum, suddenly opened the gates to a flood of consumer goods from China and Western countries. The result was a rapid collapse of local manufacturing firms that did supply, or could have supplied, the local market with a great variety of consumer products. Hundreds of thousands of production jobs were sacrificed, and a mass emigration of working-age people ensued.
Lithuania lost about one million people, mostly younger citizens, which constitutes nearly half of the pre-independence labor force. The most dramatic demographic losses were registered in the small towns and outlying areas. By contrast, Vilnius, the bureaucratic and business capital, managed to increase its population and attract considerable wealth. To be sure, during the past five years the mass emigration of the workforce has eased somewhat.
If the US were to experience a demographic slump of similar proportions, it would translate into an outflow of approximately 80 million mainly working-age citizens over a period of about 25 years. No doubt this would be seen as a crushing indictment of a hopelessly incompetent government.
Beauty is in the eye of the beholder
Incredibly, Lithuanian elites generally consider this phase of their country’s development as a success story. At first glance, this kind of attitude would seem absurd. But it might not seem ridiculous to someone who is an internationalist at heart or who believes in the supremacy of the principle of individual liberty.
To an internationalist, the loss of one million younger citizens could conceivably be dismissed as no loss at all, for the unemployed emigrants would still wind up working somewhere else in the global economy for the benefit of all mankind. A neoliberal internationalist might even welcome this channeling of supposedly surplus labor to more efficient economies. Someone who considers individual freedom as the highest good might regard labor migration across national boundaries as the exercise of individual freedom. By this logic, an unemployed worker would win out by finding better professional opportunities in another country. The creation of a common EU labor market would therefore be viewed as a positive step towards expanding the range of individual choices.
The importance of declared political principles
We can see from the above that declared political principles, far from representing merely empty rhetoric, are absolutely vital in the life of a nation. Declared political goals are one of the chief means by which the citizens of a country can evaluate the performance of their governing class.
In Lithuania’s case, its political class received a popular mandate to establish an independent state in which the Lithuanian people could finally have the power to run their country as they saw fit. This idea was the most potent in the modest arsenal of ideas that Sajudis possessed; it was what the masses wished for most ardently. The idea of national independence could have been infused with more positive content, especially by a more concrete formulation of national economic interests. But this would have assumed that local political elites had the will to resist the globalists’ agenda promoting an unrestrained flood of imports and the migration of labor from the poorer East to the affluent West.
Instead of charting an independent course, Lithuania’s political class opted for total assimilation into Western society, whose elites, as we know, have long cherished hopes of destroying nation-state sovereignty. The local elites interpreted Lithuanian independence as a negative concept, one that is nearly exclusively directed against Russian influence. They maintain a public position that boils down to the idea that anything that could help prevent a return of Moscow’s domination would be a blessing for national independence. Hence, the best way of banishing any prospect of a return of Russian control would be to become totally integrated into the West, which on account of its aggregate potency is more than a match for Russia’s power.
Lithuanian official propaganda trumpets the notion that the country’s independence is protected by membership in NATO, the EU, and integration into transatlantic structures and the global economy. In reality, Lithuanian independence is merely formal. Officials give lip service to independence as a way of placating public opinion, which still upholds patriotic ideals.
The key principles guiding Lithuania’s policies are the same as in the other Western states. Thus, the governing class has to a large extent succeeded in convincing ordinary citizens that the prevailing neoliberal policies, far from being disastrous with regard to the demographic viability of the Lithuanian nation, have been quite successful. Internationalist propaganda has effectively equated national independence with adherence to the newest permutations of Western liberal democratic notions. The political class asserts that fidelity to the current form of Western democracy represents the best way of protecting Lithuanian independence, ignoring the fact that today’s liberal democratic governments are steadily sacrificing national sovereignty to world governance.
The vicissitudes of Lithuania and the other former members of the Soviet bloc demonstrate how the abstract and ill-defined concept of individual freedom has been exploited by local bureaucratic and business classes to obfuscate the reality of economic exploitation. Individual freedom in Eastern Europe in effect means that millions of working-age citizens can exercise the right of abandoning family members, friends, co-workers, and neighbors in their native countries to find job opportunities in the wealthy, but rapidly aging Western states.
There they are regarded as useful supplements to declining local labor pools and shrinking tax bases. Although the migrant Eastern European workers often receive more than a decade of free education in their countries at the expense of their compatriots, once educated, the young emigrants work in the wealthy countries and pay taxes to their new hosts. Henceforth the emigrants do not support the welfare systems of their homelands, but rather they help to maintain the solvency of welfare systems in their new countries of residence. The older inhabitants of Eastern Europe who remain behind find that their pensions are risibly meager in large part because there are fewer younger workers to support them in their old age.
Lithuania should have concentrated on building up the elements of national strength
The average Lithuanian would now be better off had Sajudis not relied so much on the abstract and malleable idea of freedom. Instead, the leaders of the independence movement should have propagated the vision of a strong, cohesive, demographically, and economically viable nation, determined to defend its sovereignty. Individual freedom should have played an important role, but this principle would have been better placed within the context of a strong communal ethic. Sajudis should have emphasized that the welfare and freedom of the individual could only be ensured within a state that regarded its demographic stability, balanced economic development, and sovereignty as priority goals.
Clearly, the Western institutions charged with engineering Lithuania’s integration into the EU and the global economy would have opposed policies that could be labeled as “protectionist.” The globalists naturally pressed for a maximum of concessions, and the former Eastern bloc governments complied in varying measure. Regrettably, Lithuania’s authorities were gripped by a kind of frenzy to join the EU faster than the other candidate countries during the accession period from 1994 to 2004. Partly this was because the Russian threat was artificially puffed up, and EU membership was consistently advertised as a vital security guarantee. Lithuanian officials cast aside any thoughts about saving jobs or protecting Lithuanian companies against unfair foreign competition and saw only one priority — namely “integration into the Euro-Atlantic community” as soon as possible and at all costs.
Having carelessly abandoned an alternative governing principle, i.e., the national interest, Lithuanian negotiators made a virtue of making as many concessions as possible when it came to speeding up the 10-year process of EU accession. The absence of any kind of ideological basis in competition with globalization gravely undermined Lithuania’s bargaining position. The predictable result was that Lithuania achieved European supremacy in at least one field — the export of working-age citizens, i.e., the demographic catastrophe outlined above.
If the citizens of this country would have been guided more decisively by the political principle of national strength, rather than individual freedom, they would have been better equipped intellectually to evaluate the first years of Lithuania’s economic reforms. Confronted with policies that were depopulating large swathes of their homeland, more Lithuanians would have clearly perceived the need to mobilize against their officials’ obtuseness, opportunism, and betrayal.
Alas, the population was lulled into passivity by the globalist apologists who argued that Lithuania, despite appearances, was in reality putting into place the components of an economic model universally recognized as superior to all other models, namely the free market economy. The government and the systemic media painted the massive hemorrhaging of educated young Lithuanians in optimistic colors. The EU’s support for labor mobility was supposedly creating wonderful, new opportunities for personal and professional development. And perhaps, one day, the young emigrants might return, probably older, but certainly richer in terms of Western experience and material wealth.
Hence faith in the latest permutations of Western liberal democratic policies blinded many to the enormity of the damage inflicted on Lithuania’s country. Some elements of the ruling class even regard protecting local markets or Lithuania’s demographic potential as irrelevant, given that the salient reality is the EU common market and the globalized world economy.
But many influential people in Lithuania who wish to emulate current Western economic and political policies are unaware that they are not the policies that gave impetus to the development of strong Western European and American economies. As economic historians well know, the US, UK, Germany, France, Japan, and other industrially powerful nations developed their economies behind a protective wall of high tariffs and state assistance. The adoption of free trade policies followed later, only after the economic players of these states had become strong enough to compete internationally.
How concentrated commercial and financial power appropriated liberal democracy in the West
Here we may shift the focus of our investigation to the broader issue of how financial and corporate oligarchs managed to subvert liberal democracy since its inception over two centuries ago. We are mainly interested in determining how liberal democracy became a façade for the approaching tyranny of the New World Order.
The key to understanding modern politics is the concept of individual freedom and its development in the past 200 years. Freedom seemed to occupy the pre-eminent position among declared values in Western political thought until political correctness began steadily narrowing its operating sphere.
The pre-eminence of individual liberty is not surprising, given the supreme value Christianity placed on the individual soul. In religious doctrine the individual soul assumed a supernatural aspect, becoming detached from the physical limitations of earthly existence. Thus freed, the individual soul stood alone — infinite and priceless.
Although the Roman Catholic Church upheld family life and paid homage to temporal authorities, the emphasis of its saving mission was on the individual soul. Protestantism later sharply accentuated the individual, rational aspects of the Christian’s obligation to commune with the Deity on a personal basis. Human associations like family, clan, and nation were given their due, but their importance clearly receded in the face of the ultimate goal — accession of the individual soul to heaven. In the final analysis, the choice between salvation and perdition was an individual affair.
Here the Almighty revealed a totalitarian streak in his personality by insisting on one-on-one dealings with the individual. He will admit those deserving of his grace to heaven, but they must enter alone — leaving behind lifetime friends, beloved spouses, treasured children, in short anyone who might dilute the individual’s devotion to God. The successful applicants to heavenly paradise might eventually be reunited with their loved ones, or they might not. And this state of affairs could last no less than an eternity!
Over time, the concept of the individual soul underwent substantial revision in the period when European civilization was freeing itself from the dead hand of Catholic control over intellectual inquiry. European writers of the Age of Reason and the Enlightenment, such as Galileo, Newton, and John Locke, began indirectly challenging Church doctrine concerning the physical world in the 17-18th centuries.
The evolution of the notion of individual freedom
Nevertheless, the social thinkers among them remained unconsciously attached to the Christian concept of the supernatural soul. In accordance with the rational character of the age, these writers substituted for the religious aspects of the soul its conscious, rational essence, or reason. To these rationalists, it seemed that unfettered reason would unlock the door to unending progress, or infinite possibilities for good. It was assumed that any agent which held so much potential for good, could not, in justice, be repressed.
The individual and his unbounded potential were therefore deemed worthy of freedom in the same way that the infinite soul of Christianity was believed to be worthy of salvation. Although the European intellectuals of this period gradually applied empirical investigation to virtually the totality of the natural world, they were unable to break free of Church assumptions concerning the exceptional character of the individual soul as an object beyond physical phenomena.
What eventually emerged was the concept of the individual as an infinite potentiality, with a God-given right to freedom. This divinely-inspired dignity and freedom of the soul, comprehended in our time as the ideal of individual freedom, still more or less remains the axis around which many Western political ideas revolve. Thus we must thank Christianity for having given a strong impetus to later notions about the supremacy of the individual in society, the idea that societies exist to protect the rights and property of the individual member.
The concept of individual liberty arose as a challenge to the divine right of hereditary monarchs and aristocrats to exercise absolute state power over their subjects. It opened the way to the French Revolution of 1789, which gave birth to the democratic form of government that is still considered the norm in our time.
The framers of what came to be called liberal democracy conceived of a form of government in which state power would be intentionally diminished by splitting it into executive, legislative, and judicial branches. The well-known system of the separation of powers envisaged a kind of controlled anarchy in which perpetual opposition between the three branches of government would prevent the domination of one against the others. A free press, independent of the state, would provide additional protection to the individual from excessive state power.
Individual freedom tempered by the idea of the common good
Despite their love of liberty as an absolute value, the crafters of the liberal democratic idea declined to concede absolute liberty to the individual, just as they opposed the absolute power of kings and emperors. The age of pure individualism had not yet dawned. It would have to wait until the rise of consumerism in the post-World War II period had taught the individual his supposed primacy over society.
A century earlier it was still recognized that the unbridled egoism of one individual would transgress the rights of others, thereby undercutting the basis for cooperation and social life. Man’s social nature and the existence of mutual obligations were acknowledged as a fact. The state was to act as a kind of referee in adjudicating private disputes and maintaining a balance of power and rights among its citizens.
Some of the original authors of the modern concept of individual liberty like Rousseau and Jefferson believed that freedom could prosper only in small, homogenous political units, in which great disparities in income and power would not exist. The citizens of independent republics should preferably be free tillers of the soil, masters of their own economic destinies. A republic bound together by the principles of equality, liberty, and fraternity would create a durable and cohesive community, hopefully strong enough to defend itself against external enemies.
The incompatibility of freedom with empire
A continuous thread running through the writings of the creators of liberal democracy was a suspicion of great concentrations of power appropriated not only by individual rulers, but also by individual states. The more insightful thinkers believed that great empires could not serve as the home of democracy and individual freedom.
Nevertheless, during the 19th century, the ruling classes of the United Kingdom and France proceeded with the expansion of their respective overseas empires, confident that their democratic forms of government would remain intact. But when their colonial subjects gained access to literacy, the British and French found it impossible to maintain control so long as democratic principles remained the ideological foundation of the mother countries. The Europeans’ African and Asian subjects naturally claimed their rights to live by these same universal principles — and the British and French empires were no more.
In the 18th and 19th centuries, liberal democracy was allied with the idea of nationalism and periodically came into conflict with dynastic, multinational empires, such as Czarist Russia, Habsburg Austria, and Ottoman Turkey. The creators of modern democracy assumed that a single person could only be free so long as his country was free. National independence was considered a prerequisite for individual liberty. Following the armistice of World War I, a dozen or so new national states emerged from the ruins of the European and Asian multi-national empires. Their appearance was celebrated by the West as a triumph of democracy and national self-determination.
Similarly, in the field of international relations, a balance of power among the major players was generally considered to be an optimal state during the 19th and early 20th centuries. In the same way that the unchecked egoism of one man undermines the freedom of other individuals so, too, does the unrestrained national egoism of one state compromise the liberty of other countries. A balance of power among states would ensure the continued independence and freedom of each country and its citizens.
It can be seen from the above that the fathers of liberal democracy regarded power and freedom as generally opposing concepts. Elaborate safeguards against state power were devised because, at that time, it was assumed that the greatest threat to personal liberty originated from oppressive governments run by absolutist monarchs and aristocrats.
The ideal of freedom appropriated as a political weapon
As so often happens in history, the abstract ideal of freedom proved admirably suited to demolishing existing, oppressive structures. But victory often was accompanied by an interregnum, a political vacuum, which ruthless men, keen on monopolizing power for themselves, quickly filled. French revolutionary leaders embraced freedom, equality, and fraternity, and then proceeded to inaugurate the terror, which swallowed up the lives of tens of thousands in their own country. A few years after the overthrow of the monarchy, the new ruling class discovered Napoleon, a charismatic dictator who managed to put an end to revolutionary upheaval in France. The latter seduced the champions of liberty in satisfying his thirst for personal power and glory and his foreign military adventures that would expand French influence abroad.
Napoleon, who carried the ideal of liberty in his saddlebags during his military campaigns, saw that it could serve as an admirable means in attracting popular support among peoples tired of oppression from local princes and dukes. Hundreds of thousands of lives were sacrificed in the name of freedom.
Likewise, the United States won its war of independence against England, and began a 170-year period of economic expansion, territorial conquest, and acquisition of overseas possessions that ultimately propelled it into the status of a superpower. To maintain its preponderant position in the world, the US intervened militarily in foreign countries more than one hundred times since it achieved independence from British rule. Of course, all of these interventions could be justified as having been undertaken selflessly in defense of freedom.
The ascension of the new industrial, commercial and financial elites
The rising middle class of Western Europe and North America seized on the principle of freedom as a way of mobilizing the masses against aristocratic rule. Freedom became a battering ram of the new industrial and commercial elites fighting the old order that blocked access to the new riches and power of the coming age of industrialization.
Unfortunately, the framers of democracy could not adequately appreciate the consequences of the rise of the new industrial, commercial and financial elites in the 19th and 20th centuries. The latter found in liberal democracy a useful means to weaken the hold of the old order and provide legitimacy for their entrance into active political life. The industrial revolution gave rise to previously unimagined levels of production and wealth, which in the course of the 19th century, became concentrated in the hands of the new elites — monopolist industrialists and financiers. By the beginning of the 20th century, these moneyed interests clearly had become the dominant political force in the most powerful industrial countries: Great Britain, the United States, Germany, and France.
At the beginning of the industrial revolution, the source of the new wealth derived mainly from the production of commodities such as textiles, iron, coal, and machinery. Production at first was carried out by a relatively large number of competing firms. Over time, however, the stronger producers bought up or pushed out many of their competitors, thus permitting greater control over prices and profits. By the second half of the 19th century, the industrial landscape was characterized by cartels, in which small numbers of consolidated firms accounted for the bulk of turnover in such vital spheres as coal, steel, chemicals, railroads, and shipping. Finance capital was rising in importance relative to industrial capital.
The new industrial and financial magnates soon acquired many of the trappings of the aristocracy, including palatial homes, country estates, extensive art holdings, yachts. Scores of servants catered to their personal needs and physical comfort. The Krupps, Rothschilds, Vanderbilts, Mellons, and Rockefellers were courted by painters, actors, dancers, writers, academics, and politicians, who saw in their fabulous wealth the means to accomplish their own non-material ends. The super-rich founded colleges and universities or purchased newspapers, thereby acquiring new dimensions of social power.
At the beginning of the 20th century, the US had acquired its first officially recognized billionaire in the person of John D. Rockefeller, the oil magnate. His personal holdings alone were estimated to equal about 3 percent of the US GDP in 1913.
Private companies hired as many as tens of thousands of industrial and clerical employees, who were dependent on the new elites for their livelihood and who thus were obliged to treat the owners’ will as law. No democratic spirit was in evidence either in the internal workings of the new investment banks, corporations, or factories or outside in the markets which were dominated by the cartels. The rising industrial and financial oligarchs soon became accustomed to their power over their employees and their expanding influence over broader social spheres.
New technological processes greatly increased the diversity and quantity of commodities produced by industrial firms, while also intensifying the velocity of wealth creation. At the same time, industrial activity required an ever-growing variety and quantity of inputs such as raw materials, machinery, and labor. All this provided an impetus to exchange relations over an ever wider territorial base, which meant that the importance of money rose.
The rise of money power
Money is an abstract, represented form of wealth and power, which, as a representation, is seemingly detached from the limitations of real physical power such as land, raw materials, or peasant labor. Freed from physical limitations, unburdened by the physical weight of concrete objects, money facilitates exchange and movement. It can fairly easily and quickly be transformed into raw materials, machinery, energy, labor power, foreign exchange, and back into its original self again. Being a portable, mobile, and transmutable form of wealth, money also lends itself more easily to accumulation, not only vertically within a specific sphere of industrial or investment activity, but also horizontally over an ever wider geographical sphere.
As a detached form of wealth, money power therefore feels less of a moral obligation to a community or even a country in which it chooses to operate. Petroleum, mining, and timber corporations, financed by the growing investment banks, descended on African and Asian colonies to plunder their raw materials, and then departed for other objects of exploitation.
By contrast, the traditional aristocracy derived its wealth and power from concrete, fairly static, and geographically circumscribed sources, namely landed estates, forests, bodies of water, and, of course, peasants. The production cycle of the estates was incomparably slower than industrial output, often coinciding with the growing seasons of major crops or the natural maturation of forest stands.
As a result, the power base of the aristocracy was more stable and fixed, hence harder to expand or consolidate than bank deposits or stocks and securities. Generations of aristocrats and their peasants lived on the same land, and could not be easily moved to another location. Landed estates could not be sold or exchanged as quickly as a trainload of coal or a ton of cotton fiber because a long-established community depended on it for existence.
Banks, which at first merely acted as intermediaries and facilitators of industrial and commercial activity, took advantage of their strategic position to quickly accumulate holdings of industrial and commercial enterprises. By the mid-19th century, the French banker James de Rothschild, a member of the legendary Rothschild dynasty with branches in England, Germany, and Italy, had amassed assets totaling 600 million francs by investing heavily in France’s surging railroad and mining sectors. This sum reportedly exceeded the aggregate wealth of all other French bankers at the time.
In Germany at the beginning of the 20th century, the nine largest Berlin banks had succeeded in appropriating over 80 percent of that country’s total bank capital. These financial institutions had also through stock ownership and extended loans obtained effective control over wide sectors of German industry and commerce. German, French, British, and US banks also exercised enormous influence at home and abroad by providing credit to sovereign governments.
Capitalism breaks out of its national confines
Newly-acquired financial power of unprecedented magnitude allowed the nouveau riche to buy influence through ownership of the press and contributions to political parties. The super-rich eventually dominated national governments, although political power was supposedly controlled by the citizenry as a whole.
As the power of the corporations, trading houses, and financial institutions steadily grew, their owners became international players who soon considered national markets too petty for their ambitions. Industrial, mining, steel, railroad, and shipping magnates ranged over the globe in search of raw materials and markets. Close behind followed their national governments, which in the 19th century established for the benefit of banking, mining, industrial, and shipping interests vast colonies in Africa and Asia, and incorporated them into their respective national economic areas.
By 1914, Great Britain had acquired a total of 33.5 million square kilometers of colonial territory while France possessed 10.6 and Germany had 2.9 million. Millions of colonial subjects toiled for the profits of the super-wealthy. The capitalists’ growing rivalry over colonies and access to overseas trade and markets was one of the chief causes of World War I. The immense consolidation of private economic power unceremoniously shoved aside the prevailing idea of balance, and opened the way to the drive for global hegemony in the 20th century, which we today recognize as globalization.
Although the second half of the 20th century was marked by extensive decolonization, which ended formal rule of European states over their colonies, the largest investment banks and corporations did not relinquish economic control over the economies of many newly-independent African and Asian countries. As national state control over the colonies further receded, many large national companies became multinational corporations through the sale of company stock to foreign subjects and mergers and acquisitions. In the period of dramatic economic expansion after World War II, these multinationals continued to grow, becoming so large in many cases that their operating budgets exceeded the revenue totals of governments of former colonies, or even their GDP levels.
In Western Europe itself during the post-war era, multinational corporations and banks began working diligently to weaken national control over the movement of goods, services, persons, and capital across national boundaries. In the process of stimulating trade and investment without regard to national economic interests, the new multinational elites progressively undermined the power of democratically elected governments and ultimately the reason for being of national states.
Globalization is gradually supplanting individual freedom
The rise of the European Union and the free trade association under the United States-Mexico-Canada Agreement (USMCA) are prime examples of how international business interests are undemocratically shaping the economic, social, and political destinies of hundreds of millions of inhabitants of Europe and North America. This process of undercutting the power of nation-states, and simultaneously consolidating private economic and political power on an international scale, is the essence of globalism. Although the outward forms of national sovereignty and democratic consultation have still been preserved, the most important decisions are reached by the international financial and business elites meeting in private boardrooms, clubs, and conferences.
It is apparent that globalism and its architects will not rest until the whole of mankind is herded into a world community administered by a world government avowedly concerned with global welfare, but in reality subject to the control of unchecked international business interests. Over two hundred years after its establishment as a ruling ideology, liberal democracy has essentially become a cloak behind which powerful corporate and financial interests are making a serious bid for world hegemony.
The original concept of individual liberty, anchored in egalitarian, self-sufficient republics and possessing sovereign rights vis-à-vis other nations, has lost its bearings in the age of globalism. Unrestricted capital and labor mobility, held up as essential preconditions for economic progress, have produced an atomized individual who is losing his ability to consolidate power in durable associations and communities. Without the support of stable, self-confident associations and communities, the individual is powerless against the concentrated might of international business interests and their agents in international organizations.
If the earlier defenders of individual liberty resolutely opposed excessive accumulation of government power, then in our time the ideologues of pseudo-freedom have unconditionally surrendered to the concentrated private power of international money interests. The concentration of financial power continues relentlessly in our day, as could be seen by the emergence of three investment management corporations (BlackRock, Vanguard, and State Street), which together have not less than 15 trillion USD in assets under management, which equals 75 percent of the total US GDP. These three financial institutions have significant holdings, and thus a powerful influence, in 88 percent of the 500 largest companies traded on American stock exchanges.
Caution has been thrown to the winds, and a new course has been set — the subordination of mankind to the unrestrained power of moneyed interests. To be sure, the apologists of globalism continue to pledge loyalty to the principle of individual freedom. But they have begun the process of diluting its potency as the pre-eminent governing principle. It is not yet clear what slogans or principles the hegemonists will embrace to supplant or complement freedom as the legitimizing idea of state power. For now, the globalists insist that only global economic and political integration can ensure that the individual will have the widest possible scope of freedom in which to work, trade, invest, study, travel and vacation.
Thus the notions of global unity, peace, and prosperity have emerged as indispensable preconditions for the advancement of the individual, the protection of his rights, and, ultimately, the securing of his freedom, at least formally. Faith in internationalism is fortified by rosy visions of heaven on earth, in which national antagonisms and war will be banished, and the resources of the earth will become available to all races.
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Oye, ¿dónde están las mujeres blancas?