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This article is the new introduction to Murray Rothbard’s Wall Street, Banks, and American Foreign Policy (1984; 2011).

The idea that corporate interests, banking elites, and politicians conspire to set US policy is at once obvious and beyond the pale. Everyone knows that the military-industrial complex is fat and corrupt, that presidents bestow money and privilege on their donors and favored businesses, that a revolving door connects Wall Street and the White House, and that economic motivations lurk behind America’s wars. But to make too fine a point of this is typically dismissed as unserious conspiracy theorizing, unworthy of mainstream consideration.

We have seen this paradox at work in the aftermath of the 2008 financial collapse. The left-liberals blame Wall Street and Big Finance for betraying the masses out of predatory greed and for being rewarded for their irresponsibility by Washington’s bailouts. At the same time, the Left appears reluctant to oppose these bailouts outright, seeing the spending as a necessary evil to return the global economy to stability, however inequitably. What’s more, left-liberals fail to call out President Obama and Democratic leaders for their undeniable hand in all this. They blame Goldman Sachs but see their president, who got more campaign money from the firm than from almost any other source, as a helpless victim of circumstance, rather than an energetic conspirator in corporate malfeasance on top of being the enthusiastic heir and expansionist of George W. Bush’s aggressive foreign policy.

The tea-party Right is also hesitant to examine the corporate state too closely. These conservatives detect an elitism in Obama’s governance but are loath to earnestly challenge the economic status quo, for it would lead to uncomfortable questions about the warfare state, defense contractors, US wars, the whole history of the Republican Party, and all the typical right-wing assumptions about the inherent fairness of America’s supposedly "free-enterprise" system. By refusing to admit that economic fundamentals were unsound through the entirety of the Bush years – by failing to acknowledge the imperial reality of US wars and their debilitating effect on the average household budget – the Right is forgoing its chance to delve beyond the surface in its criticism of Obama’s reign.

Many on the Right call Obama a "socialist" as many on the Left accused Bush of being a "fascist," neither group seeing the stark similarities in almost all of their policies. Meanwhile, the more mainstream forces on both left and right refuse to countenance such "extremist" rhetoric and insist that both political parties, for all their differences, have the best of America’s interests at heart. In the Left’s unflinching loyalty to social democracy and economic intervention and the Right’s invincible love for the military and support for corporate America we see why we are allowed to decry corruption and special interests, but not dig too much deeper than that, lest we be relegated to the periphery of respectable discussion.

Never afraid to slaughter sacred cows, Murray N. Rothbard goes far beyond the mainstream lamentations in his trenchant Wall Street, Banks, and American Foreign Policy. He analyzes over a century of US militarism and corporate cronyism, naming names, sparing no one, and demonstrating the continuity of imperialism regardless of the party in control, alongside the many overlapping and competing business interests behind the curtains. Rothbard’s account of the clash between the Morgans and Rockefellers, who had some interests in common and some in conflict, brilliantly homes in on the complexity of the story while also explaining generally the dynamics of power. The discussion of the "Cowboy" firms of the West (and their representatives in Washington) vs. the "Yankee" Northeastern Establishment is similarly illuminating:

While both groups favor the Cold War, the Cowboys are more nationalistic, more hawkish, and less inclined to worry about what our European allies are thinking. … It should be clear that the name of the political party in power is far less important than the particular regime’s financial and banking connections.

This fantastic written work is the definitive answer to many naysayers – those who boast great differences between Republicans and Democrats; those who insist the main engine behind US wars is concern for national defense or human rights abroad; those who dismiss "conspiracy theorizing" as oversimplified accusations of behind-the-scenes power-broking, devoid of nuance and sophistication; and those who myopically think all major decisions are made by the exact same clique of major players, rather than through a complicated confluence of sundry interests and forces.

Peddlers of oversimplified conspiracy theories will be uncomfortable with the level of detail in this book, as will the court intellectuals who regard any and all references to the duplicity of groups like the Council on Foreign Relations and the Trilateral Commission as the talk of paranoids completely divorced from reality. Furthermore, people who think that the elimination of corporate influence from the public sphere will finally end the wars and graft will be encouraged to rethink their assumptions about the state: it is not, after all, an organization for the public good that has been hijacked by the rich and powerful, nor an engine of corporate control that can be reformed toward liberal ends. The state itself is and always will be the problem, and so long as it has a military arm, it will be influenced by some private interests or others toward opportunistic warring, and at a minimum manipulated by politicians, even the most supposedly humanitarian and egalitarian of whom have a murderous and diabolical record in deploying its forces and dropping its bombs. Even large business interests can come and go, but the political apparatus itself, the most inherently corrupting of all institutions given its unavoidably coercive and monopolistic nature, will continue to inflict misery and loot the disadvantaged on behalf of the powerful.

On the other hand, unlike moderate libertarians who regard businessmen conspiring with government to be at worst mere accessories to political crime made inevitable by the mixed economy, Rothbard does not temper his indictment of these junior members of the public-private partnerships of imperialist plunder. Free will exists under the Rothbardian conception of both political and economic theory, and if there’s blame to go around, the bankers, lobbying CEOs, and saber-rattling policy wonks deserve a considerable share along with the generals and presidents.

In many writings, Rothbard scrutinized the unseemly relations between policy makers and business interests. He championed a revival of libertarian class analysis, reclaiming the exercise from the Marxists and leftists who had transformed it from the study of the tax-consuming political class against the taxpaying subjects into a narrative of the dialectical struggle between producers and workers. Although Marx and his followers correctly attacked the modern state for securing privileges for the most influential business interests, the leftist conception has turned the classical liberal concept of class analysis on its head in its advocacy of proletarian capture of the state apparatus and its casting of producers and entrepreneurs as the inevitable enemies of the common man. Nevertheless, leftist scholars, particularly of the New Left variety, have tended to "follow the money" in their examination of government graft, corruption, and war, a task greatly appreciated by Rothbard and his fellow travelers.

In Wall Street, Banks, and American Foreign Policy, however, the reader is treated to more nuance and detail as well as a more coherent narrative than are common in the leftist works. This is because the theory behind Rothbard’s analysis, unlike the leftist theories, is sound. One general point bears this out. In failing to grasp basic economics, the Left falls for the military Keynesianism that often sees war as a blessing for the economy, if not in all other ways. In January 2008, left-liberal economics guru Paul Krugman (who had years earlier called for a Fed-induced housing bubble), complained on his New York Times blog:

One thing I get asked fairly often is whether the Iraq war is responsible for our economic difficulties. The answer (with slight qualifications) is no …. The fact is that war is, in general, expansionary for the economy, at least in the short run. World War II, remember, ended the Great Depression.

Even the radicals sometimes mistake neomercantilist wars as being in the interest of average American taxpayers – Noam Chomsky has often intoned that the American economy at large relies on these wars – leading to an incomplete critique and a flawed class analysis. This has guided the Left in misconstruing George W. Bush’s wars for oil as crude attempts to conquer oil fields on behalf of US consumers, rather than as efforts to benefit some firms at the expense of others. (Also largely neglected, compared to the oil angle, were the possible monetary motivations involved, as Iraq had begun pricing its oil in Euros in late 2000, in defiance of American-dollar supremacists.) Bad economic theory also meant that when the George H.W. Bush’s secretary of state, James Baker, said the first Gulf War was about "jobs, jobs, jobs," the population was helpless but to take it at face value.

Flawed economic comprehension coincides with a poor reading of history. The Left is still largely proud of its heritage in the Progressive Era, when supposedly altruistic politicians stood up for the common man against big business. Rothbard unravels this fraud completely. The revered Teddy Roosevelt "had been a Morgan man from the beginning," with family, business, and political ties to the banking giant. Roosevelt’s "first act after the election of 1900 was to throw a lavish dinner in honor of J.P. Morgan," and many of his policies, from the 1903 Panama coup to the trust busting of Standard Oil, were huge blessings for Morgan interests. The 1912 Progressive Bull Moose Party, far from being an attempt to challenge the probusiness Taft administration for reasons of egalitarian idealism, was also a Morgan plot. The winner of the 1912 election, Woodrow Wilson, far from attempting to rein in the banks via the Federal Reserve Act, was a great champion of the wealthiest of banking elites, especially the Morgans. The Fed itself "enabled the banking system to inflate money and credit, finance loans to the Allies, and float massive deficits once the United States entered the war."

More recently, the left-liberal criticisms of Bush suggested that he had broken with an honorable American past in the way he waged war – and in particular condemned his economic motivations as though they were something new or uniquely Republican. Very few critics saw Bush as following a tradition that goes back at least to Franklin Roosevelt’s entry into World War II – a war, Rothbard reminds us, the banking elites were pressing for throughout the late 1930s. That war is still sanctified as a testament to human altruism and a struggle of good against evil. But World War II might also "be considered, from one point of view, as a coalition war: the Morgans got their war in Europe, the Rockefellers theirs in Asia." Henry Stimson, the war secretary, had been a Wall Street lawyer with as many corporate ties as any modern warmonger, and his assistant John J. McCloy, whom Rothbard exposes for the particularly horrific policy decision of Japanese Internment, went on to a lucrative career in the Rockefeller orbit with a side gig as chairman of the CFR for 17 years. If the military-industrial complex did not exist beforehand, it was a reality by the end of World War II. The ménage à trois among the arms merchants, the US war machine, and New York’s financial powerhouses became fully consummated even before George W. Bush was born.

Beloved liberal presidents Truman, Kennedy, Johnson, and Carter all saturated their defense leadership posts with banking elites. In particular, Rothbard shows that beginning with the Kennedy administration an unsettling influence on foreign policy was enjoyed by representatives from Lehman Brothers and Goldman Sachs – firms whose nefarious impact is not lost on Americans reading the financial news today. The cozy connection between Lehman Brothers and the Pentagon was an especially "fascinating aspect of the Johnson administration." Lehman and other major finance houses also dominated Carter’s top brass. Somehow, the Left generally regards these presidents as, at worst, pushovers for corporate influence, rather than criminals guilty of premeditated looting and warring on behalf of their cronies.

The financial collapse and bailouts are only the latest example of the near incoherence of the liberal critique. We are to believe that the CEOs of major financial institutions are devoid of compassion, the regulators are neglected heroes mysteriously deprived of power since the Reagan years (although exactly how this was done is never compellingly explained), and the president is at worst a well-intentioned dupe. This formulation is partisan, but even the anticorporate criticism of Bush betrays a strange faith in government itself, as it accused Bush of failing to "do enough" and insisting on retrenching his own executive branch’s power over the economy. All this even after Sarbanes-Oxley and Bush’s other major expansions of the regulatory state, far beyond what happened under Bill Clinton.

Today’s wars, too, seem to confound the left-liberal who sees corporate interests and conservative agitation behind all policy failures. The war in Iraq, we were told, was a break with American traditions of diplomatic prudence. It is true that the neoconservatives represented an ideological school unusually bent on democratization by force – hyper-Wilsonians, almost – who indeed signified a shift from the "realist" school that had been economically oriented around the Rockefellers that bestrode policy at least since World War II. For what it’s worth, much of the economic establishment was conspicuously more wary of the Iraq war than most US military adventures. This seems something of an anomaly but there was a parallel situation in 1968, when, as Rothbard tells it, even many of the "elite figures" of the Johnson administration "had swung around to a firm opposition to the war," joined by much of the establishment and Wall Street.

We can only dream of how Rothbard would have reacted to the temporary triumph of the neocons over the realists in Iraq. But needless to say, the general trajectory of US foreign policy – presidential wars of aggression, neomercantilism, Fed-financed bombings, trade sanctions, exploiting the UN and NATO when expedient – has been fairly consistent from the Progressive Era to Obama, Bush’s aberration notwithstanding. And now the United States is solidly back in the "realist" tradition with Obama, who is using international coalitions to obscure the aggression against Libya, and who is continuing the imperial project in Afghanistan that originated with the meddling of Carter’s national-security adviser, Zbigniew Brzezinski, a practical paragon of the realist school. More than a decade after Rothbard wrote this book, identifying Brzezinski as a Trilateral executive director and "recently selected director of the CFR," this establishment poster boy claimed credit for intentionally baiting the Soviets into invading Afghanistan – a fateful intervention that has changed US policy in the Muslim world irreversibly.

When the Left attacked the neocons over Iraq – echoing, whether they knew it or not, critiques of neoconservatism that can be traced to Rothbard and his Old Right tradition – they did not really understand what they were attacking. They neglected almost completely the left wing and particularly Trotskyite origins of neoconservatism, and tended to downplay the centrality of Israel. They somehow conflated a condemnation of Bush’s "privatization" of war, his reliance on military contractors, and his alleged desire to seize Arab oil with their critique of neoconservatism, even though economics and corporate cronyism were never major interests of this foreign-policy school.

This helps to explain the current confusion, for Obama has greatly increased the presence of military contractors, expanded the war in Afghanistan, bombed Pakistan, Yemen, Somalia, and Libya, and seems generally on board with almost all of the Bush program, including the withdrawal schedule in Iraq. Oil politics and the planned construction of pipelines through Afghanistan are still in the background. The economic and imperial interests behind America’s response to 9/11 go far beyond the neocons and their diversion in Iraq.

Of course, the war leaders of the supposedly anomalous Bush years had been establishment luminaries for decades. National Security Adviser and Secretary of State Condoleezza Rice was on the first Bush’s National Security Council and later served on the board of Chevron. Vice President Dick Cheney (along with Defense Secretary Donald Rumsfeld) had begun his rise under Nixon. Cheney was a director of the Council on Foreign Relations in the late 1980s and, infamously, served in the late 1990s as CEO and Chairman of the Board of Haliburton – the oil-services firm that was awarded significant contracts under Clinton during his interventions in the Balkans, became a major beneficiary of Bush’s war in Iraq (as well as constructing holding cells for the prison camp at Guantánamo Bay), and still maintains such ties to the empire.

Cheney, it might be noted, was also a member of the Trilateral Commission – that elite club founded by David Rockefeller that came to dominate the halls of power beginning in the Carter administration. Writing in 1984, Rothbard concludes that regardless of the next election we could expect this organization to be well represented. In addition to Cheney, Trilateral members who have risen or remained high in American government since 1984 include Fed Chairman Alan Greenspan, George H. W. Bush, his national-security adviser Brent Scowcroft, Bill and Hillary Clinton, and Clinton cabinet members Lloyd Bentsen (Treasury), Warren Christopher (State Department) and William Cohen (Defense). Fewer Trilateral members have appeared more recently, although aside from Vice President Cheney they include George W. Bush’s Treasury Secretary, Paul O’Neill, Obama’s economic adviser, Paul Volcker, and his foreign-policy adviser and ambassador to the United Nations, Susan Rice.

The corporate state’s continuities transcend partisanship. Ben Bernanke, Bush’s economic adviser and later choice for Fed Chairman, was reappointed to this high seat by Obama. Another holdover from the Bush years is Bush’s second defense secretary, Robert Gates, whose checkered past includes urging Reagan to sell weapons to Iran in 1985, heading the CIA under George H. W. Bush, and serving on boards for such giants as Fidelity Investments, NACCO Industries, and Brinker International.

When Obama chose as treasury secretary the young Timothy Geithner, the man was already a precocious fixture of the establishment. He worked for Kissinger Associates in DC and then joined the US Treasury Department’s International Affairs division in 1988. He went on to work for the US embassy in Tokyo, served as an assistant in monetary and financial policy for years, always with an international focus, and became undersecretary of the Treasury for International Affairs in 1998. In 2002, he was a senior fellow in the International Economics department at the Council on Foreign Relations, while also serving as director of the Policy Development and Review Department at the International Monetary Fund. In late 2003, he became the president of the Federal Reserve Bank of New York and then the vice chairman of the Federal Open Market Committee. In March 2008 he was intimately involved in the bailout and sale of Bear Stearns. In the wake of the financial meltdown, Obama’s choice of Geithner to head Treasury was surreally touted far and wide as a pragmatic, responsible move. But even the minor appointments demonstrate the irony of Obama’s reputation as a champion of the common man against big business – the president’s pick of General Electric CEO Jeffrey Immelt to oversee the effort to curb unemployment rhymes nicely with FDR’s pick of GE CEO Gerard Swope to head the National Recovery Administration.

Of course, Obama himself is deeply in the pocket of the finance industry. Goldman Sachs accounted for over $994,000 of Obama’s war chest. Lehman Brothers was the origin of $395,600, a record amount for the company second only to what Hillary Clinton received. Out of 20 of his biggest sources of campaign money, 11 were investment banks or closely associated law firms. Justin Raimondo noted in 2008 that Obama’s fat-cat donors included top executives from Wachovia, Washington Mutual, Citigroup, Deutsche Bank, Merrill Lynch, Bank of America, J.P. Morgan, Chase, Morgan Stanley, and Countrywide.

Recent events demonstrate the pervasive denial of the banking and foreign-policy nexus. In February 2010, Congressman Ron Paul caused a stir in the House of Representatives when, confronting Bernanke, he noted that "it has been reported in the past that during the 1980s the Fed actually facilitated a $5.5 billion dollar loan to Saddam Hussein, and then he bought weapons from our military-industrial complex." Bernanke found the allegation too absurd to warrant a serious response. Paul later cited University of Texas professor Robert D. Auerbach, author of the 2008 book Deception and Abuse at the Fed and professor at University of Texas, to defend his statement. Whether or not Bernanke was sincere in his disbelief of this nefarious connection between the Fed and US diplomacy, many onlookers were similarly incredulous.

In March 2011, as the Obama administration was bombing Libya, Senator Bernie Sanders wrote an open letter to Bernanke, asking why the Fed provided 45 emergency loans at nearly zero interest, totaling over $26 billion, to the central bank of Libya from December 2007 to March 2010. He further asked why the bank and its two New York branches were exempted from US sanctions on Libyan businesses.

Meanwhile, the media celebrated the supposed success of TARP, the $700 billion bailout package passed at the tail end of the George W. Bush presidency. At that time we had been told it was necessary or else the financial collapse would swallow the economy whole. Most Americans were skeptical, suspecting they were being robbed by the very forces responsible for the crisis in the first place. The AP reported on March 30, 2011, amidst the official vindication of TARP: "Some banks will use money from a government program aimed at increasing small business loans to repay their federal bailouts, according to the Treasury Department official who oversees the bailout program." The headline was more concise: "Banks will use Fed funds to repay Fed bailout."

Since the publication of Wall Street, Banks, and American Foreign Policy a number of other works have emerged in the Rothbardian tradition of tracing the history of the central banking elite and its warfare state conspirators. G. Edward Griffin’s extensive book The Creature from Jekyll Island (1994), addressing economic theory and history predating the material covered here by Rothbard, is particularly worth mentioning. Robert Higgs’s 2007 book Depression, War, and Cold War examines the defense industry’s role in World War II and the Cold War. For the definitive treatment on World War I corporatism, with an emphasis on arms merchants as well as the banks, see T. Hunt Tooley’s "Merchants of Death Revisited: Armaments, Bankers, and the First World War," from the Winter 2004 edition of the Journal of Libertarian Studies. It includes a bibliography of many great references.

As for the issues of the 21st century, there are not many survey works on the connections between the war machine and the banking establishment. John Perkins’s Confessions of an Economic Hitman (2004) tells his story as an agent of international finance with ties to the US security state, convincing Third World nations to accept crushing loans. William D. Hartung’s How Much Are You Making on the War Daddy? A Quick and Dirty Guide to War Profiteering in the Bush Administration (2003) and Nick Turse’s The Complex: How the Military Invades Our Everyday Lives (2008) are decent treatments on military corporatism. On the financial collapse and frauds, the investigative journalism of Matt Taibbi, who writes in Rolling Stone with a focus on Goldman Sachs, has culminated in his 2010 book Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. Finally, one article in the Huffington Post deserves mention for daring to show the relationship between the central bank and America’s court intellectuals: Ryan Grim’s "Priceless: How The Federal Reserve Bought The Economics Profession," which appeared in October 2009.

What’s missing from most accounts of 21st century war and banking, however, is a sound, Austrolibertarian class analysis combined with a grasp of the business cycle, the meaning of human action in the military-industrial complex, and the inherently predatory nature of the state. Joe Salerno’s 2006 work, "Imperialism and the Logic of Warmaking," helps to set the theoretical grounding that war, like all purposeful human activities, has an economic logic to it and can be understood in terms of what its perpetrators seek to gain. For an Austrian treatment of the housing crisis and the corruption in defense spending, Tom Woods’s 2011 book Rollback: Repealing Big Government Before the Coming Fiscal Collapse provides some helpful chapters. Ron Paul’s End the Fed has a section on inflation and war. Plenty of articles on different facets of the imperial corporate state can be found on Mises.org, LewRockwell.com, Antiwar.com, and elsewhere.

But it would be great to see something like a sequel to Wall Street, Banks, and American Foreign Policy, a comprehensive and detailed but concise history starting where Rothbard left off during the Reagan administration and bringing us up to date for today. Until then, we can be satisfied to read this wondrous work of revisionist economic history, class analysis, and antiwar journalism all packed into one. To understand modern America, the banking masters and warmongers who’ve run the show for well over a century must be exposed. To this day, no one has done it as well as Rothbard.

Anthony Gregory [send him mail] is research editor at the Independent Institute. He lives in Oakland, California. See his webpage for more articles and personal information.

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