In the final days of May and the first day of June, 2005, two remarkable events took place: one in France and the other in Holland. A large majority of voters voted against the 332-page Constitution of the European Union. To get the Constitution ratified, there had to be 100% acceptance by member nations.

This means that the EU’s Constitution is dead, although we may see some Dracula-like resurrections. This means that an 85-year conspiracy — no other noun will suffice — has suffered its largest setback so far.

I can hear the responses from the mainstream media and the mainstream professorate: “Conspiracy? How can you say that? Why, nothing has been more aboveboard, more open, than the creation of the United States of Europe.”

Oh yeah?

Most people have never heard of Raymond Fosdick. More people have heard of Jean Monnet (“Zhawn MoeNAY”), but not a lot more. Fosdick had been a minor city official in New York City when he was hired by John D. Rockefeller, Jr., to act on Rockefeller’s behalf. That was in 1913. Rockefeller began paying him $10,000 a year, which was the equivalent of $200,000 a year today, except that 1913 was the first year of the income tax, with rates for most people well under 6%.

Fosdick’s career blossomed. By 1919, he was the American Undersecretary General of the Versailles Peace commission/League of Nations. He worked closely with Monnet, who was France’s Undersecretary. The League of Nations had just been formed, although the United States was not yet part of it, and never would be.

In 1919, Fosdick sent a letter to his wife. He told her that he and Monnet were working daily to lay the foundations of “the framework of international government.” [July 31, 1919; in Fosdick, ed., Letters on the League of Nations (Princeton, New Jersey: Princeton University Press, 1966), p. 18.]

This was no idle boast. Fosdick returned to the United States in 1920 when the Senate refused to ratify the League of Nations treaty. He immediately went to work full-time for Rockefeller as the head of the Rockefeller Foundation. In 1958, he wrote the only official biography of Rockefeller. His brother, Harry Emerson Fosdick, became Rockefeller’s pastor in 1925, for whom Rockefeller built the Riverside Church.

In Europe, Monnet became the driving force behind the creation of the European Common Market and the New European order. His connections to the American Establishment had made this possible. [Francois Duchene, Jean Monnet: The First Statesman of Interdependence (New York: Norton, 1994), p. 63; Richard J. Barnet, The Alliance: America-Europe-Japan, Makers of the Postwar World (New York: Simon & Schuster, 1983), ch. 3.] Monnet died in 1979.

Monnet’s strategy was to conceal from the public the long-run political goals of the planners: a common European government possessing final sovereignty over the member nations. Instead, he persuaded Western European governments to enter into a free-trade organization. The first major step was taken in 1951: the creation, by the Treaty of Paris, of the innocuous-sounding European Coal and Steel Community. In the preamble of the treaty, the authors did hint at the broader implications of the treaty.

CONSIDERING that world peace can be safeguarded only by creative efforts commensurate with the dangers that threaten it,

CONVINCED that the contribution which an organized and vital Europe can make to civilization is indispensable to the maintenance of peaceful relations,

RECOGNIZING that Europe can be built only through practical achievements, which will first of all create real solidarity, and through the establishment of common bases for economic development,

ANXIOUS to help, by expanding their basic production, to raise the standard of living and further the works of peace,

RESOLVED to substitute for age old rivalries the merging of their essential interests; to create, by establishing an economic community, the basis for a broader and deeper community among peoples long divided by bloody conflicts; and to lay the foundations for institutions, which will give direction to a destiny henceforward shared,


Then in 1957 came the Treaty of Rome, which established the European Economic Community, better known as the Common Market. Step by step, this organization added layers of regulatory agencies, to “level the playing field,” so that producers in member nations countries could not compete solely on price. It was never free trade, always managed trade — managed by trans-national agencies with the power to impose economic sanctions on recalcitrant member states.


A preliminary outline of this economic/political strategy was published in 1912 in an anonymous novel, Philip Dru: Administrator. It was written by a Texas political boss, “Col.” E. M. House. Dru established zero tariffs, social security legislation, a regional government for North America, and international cooperation. We read in Chapter LI, regarding U.S.-Mexico relations:

All custom duties are to be abolished excepting those uniform tariffs that the nations of the world have agreed upon for revenue purposes, and which in no way restrict the freedom of trade. It is our further purpose to have a constitution prepared under the direction and advice of your most patriotic and wisest men, and which, while modern to the last degree, will conform to your habits and customs.

The acronym NAFTA comes to mind.

This book is better known today than it was in 1912, because House became Wilson’s senior advisor in 1913 and in 1919 ran the American delegation to Versailles — “The Inquiry” — until Wilson actually arrived at the peace conference.

The Inquiry became the Council on Foreign Relations in 1921.

The economic/political outline in House’s novel was extended in the 1930s by John Foster Dulles, a fabulously wealthy New York lawyer, who had attended Princeton a few years after Raymond Fosdick graduated. Both men had attended during Woodrow Wilson’s era as president of Princeton (1902—10). Both men left their personal papers to Princeton.

Dulles’s grandfather had been Secretary of State under Benjamin Harrison. His uncle had been Secretary of State under Wilson, replacing William Jennings Bryan, who had resigned in protest in 1915 when he realized that Wilson was moving America into a war against Germany. Dulles was a member of House’s team of young men at the Versailles peace conference in 1919. He served as counsel to the U.S. Peace Commission. Dulles would later serve as Eisenhower’s Secretary of State. His brother Allen ran the CIA under Eisenhower, was fired by Kennedy after the Bay of Pigs fiasco, and ended his public career as chairman of the Warren Commission’s investigation of the Kennedy assassination.

Dulles wrote in the 1930s about creating an international free trade zone in which corporations chartered by the League of Nations would enjoy the advantage of tariffs set at zero. They would pay the League a tax for the privilege. Variations of this outline were disseminated within the foreign policy Establishment and multinational corporate community.

[Side note: Dulles served as legal counsel for Harry Emerson Fosdick in Fosdick’s 1924 heresy trial by the Presbyterian Church, which Fosdick settled by resigning as a preacher in a New York City Presbyterian Church, which was not a great sacrifice on his part, since (1) he had always been a Baptist; and (2) John D., Jr., got his local Baptist church to hire Fosdick. Harry had been on the Rockefeller Foundation’s board ever since Junior took over in 1917.]

Raymond Fosdick was a long-term strategist. In the 1940s, he financed the best free market economists he could locate to promote the ideal of free trade. Ludwig von Mises and his disciple Wilhelm Roepke each published a book that had been financed by the Rockefeller Foundation. Yet neither of them believed in setting up a world government. This did not bother Fosdick. He and Monnet adopted the same strategy: first free trade, then the creation of a regional government that possesses judicial sovereignty. This plan has been systematically promoted by the Trilateral Commission, created in 1973 by John D. Rockefeller, Jr.’s son, David.

As yet, the plan has not taken root in the Western hemisphere. NAFTA (North American Free Trade Association) is the equivalent of the old Common Market, but it has been granted only provisional regulatory powers, not actual sovereignty. In Europe, the European Union (EU) does possess considerable sovereignty. Final sovereignty was to have been established by means of the EU’s Constitution. But the European ship of state has now hit two icebergs. The scraping sound was heard above decks. There are enough lifeboats on board for the passengers, but not for the crew.

Will the crew graciously go down with the ship? Not this crew! Women and children had better watch out for themselves.


The Eurocrats can hardly believe it. They are in shock. They are staggering around like a mole that has been hit on the head with a shovel.

The International Herald Tribune is the English-language newspaper of international record. Until late 2002, it was jointly published by The New York Times and The Washington Post, when the Times bought full ownership. It reported the following on June 2:

The ratification of the European Union constitutional treaty must go on, Europe’s leaders declared on Wednesday even after the Netherlands followed France and overwhelmingly rejected the treaty in a national referendum.

Seeking to play down the sense of crisis, the European Union refused to pronounce the constitution dead.

“The debate must continue,” said Jean-Claude Juncker, prime minister of Luxembourg and the current holder of the rotating EU presidency.

I keep thinking of the bumper sticker: “Which part of ‘no’ don’t you understand?” They cannot believe it. They refuse to accept it.

The ratification process should continue in other member states, Juncker said, because “we want other member states to have the opportunity to tackle the same debate.”

Barroso called this “a difficult moment for Europe but it is a moment we think Europe will get through.”

“Europe is not the problem,” Barroso said. “Europe is the solution to the problems of European citizens.”

For these people, “Europe” means the final installment of trans-national political sovereignty. For them, “Europe” is not a common culture with multiple traditions. “Europe” for them is a bureaucratic system that would have been imposed by a Constitution so lengthy that nobody except lawyers could understand it, or at least parts of it. “Europe is the solution to the problems of European citizens.” This is not the way that large majorities in France and Holland saw the Eurocrats’ Europe. On the contrary, they saw the Eurocrats’ Europe as their number-one problem. They went to the polls and solved it. They voted no.

The Eurocrats cannot believe that they got so close, after at least 85 years of carefully laid plans, only to see the final ratification process go down to a resounding defeat, not once but twice in the same week.

What the French really need is another chance, the French voters are assured. The Dutch voters, too.

Analysts and diplomats said they did not expect countries to abandon the treaty at the June summit meeting. If they could not agree together to kill the treaty, leaders would probably delay the ratification process, they said.

This would give France and the Netherlands the chance to put the treaty before their electorate once more — perhaps in an amended form — before other countries went ahead with their own ratification.

“The overwhelming majority of countries will want to continue the process of ratification,” said John Palmer, political director of the European Policy Center in Brussels.

We have seen all this before. Two boys in a schoolyard flip a quarter for possession of a bag of really choice agate marbles. One guy calls “heads.” The coin comes up tails. His immediate response: “Two out of three!” The Eurocrats just lost the highest-stakes coin toss of our generation. Now they want two out of three. But the day that they get a “yes” vote of 50.001%, the voting will be over. Forever, if they get their way.

I do not think they will get their way.


The defeat of the proposed Constitution calls into question that most precious of political resources, legitimacy. From now on, every attempt by Eurocrats to centralize administrative power will be met by organized resistance. Those opposing the Eurocracy will have this on their side: “the people” have spoken. They have said “no” to the final conclave of the secular cardinals. They have sent the Eurocrats a message: “Enough!”

The Eurocrats since 1951 have dressed themselves in the wardrobe of political legitimacy by dipping into the economic cornucopia provided by increased trade. They have wrapped themselves in the cloak of economic prosperity that has been produced by an increasingly free market, and have said: “The reason why we have prosperity is because we have a regulated market, administered trade, and the rule of law.”

Yet the basis of the growing prosperity was not the layers upon layers of Common Market and European Union bureaucracy. Economic growth came because the European trade zone operated to reduce the restrictions on producers and consumers against working out mutually beneficial exchanges. It was not the Eurocrats’ layers of administration that provided the expanding wealth; rather, it was the free market’s ability to provide opportunities for individuals to create wealth on their own.

From Jean Monnet’s original efforts until the present, the Eurocracy was a gigantic bait-and-switch operation. The Eurocrats sold the idea of political union by heralding the benefits of free trade.

The great irony is that voters in France and Holland decided that they did not like free trade, because it imposes too much pressure on producers to meet the competition. They decided to sink the ship of state because they still refuse to believe in economic liberty. Given the threat to liberty of the looming political leviathan, I say, “Hooray for economic ignorance!” Europeans will be a lot better off with today’s relatively low tariffs and no Constitution. Better to have less bait and no final switch.

The erosion of political liberty will continue in Europe. But now this erosion process has been successfully challenged in the one currency unit that officially matters to the Eurocrats: votes. For the political cardinals, there is only one official sacrament: voting. They came up short twice in four days.

Of course, voting is really a means to an end. The real sacrament is power, but the Eurocrats dare not say this publicly. They have lost two crucial referenda; now they want another chance. They want two out of three.

Even if they get another chance, even if winning means rigging the computers, they will never get what they want: legitimacy. No matter what happens next, they have failed. The public will always suspect skullduggery if there are more referenda and different outcomes. The Eurocrats may win some future referenda; they will not win legitimacy. They need legitimacy, for legitimacy is what every ruler needs if he is go gain widespread voluntary compliance to his edicts. Without voluntary compliance, no ruler can implement his plans, because it takes too many policemen to force the population to comply.


This turn of events may turn out to be as important as August 19—21, 1991, when the Communists’ attempted coup against Yeltsin went belly-up.

There have been four major political movements in the West since 1776: the French Revolutionary tradition (Rousseau), which died with the Soviet Union; the limited political sovereignty movement, which I call the right wing of the Enlightenment (Adam Smith/Jefferson/Jackson); the Fabian socialist/social democracy political tradition, beginning in the late nineteenth century, which also went down with the Good Ship Marx in 1991; and managed market/political bureaucracy (Rockefeller/Keynes/Monnet). The fourth movement has just suffered its biggest setback since the defeat of Wilson’s League of Nations treaty in 1920.

I call the process EUthanasia. The voters of France and Holland stuck a needle into the arm of the sclerotic Eurocracy. Next step: the final injection. I hope I’m still around to see the death throes of that pretentious experiment in social engineering. But even if I’m not, I can see it coming.

The question is: Who will inherit? The spiritual heirs of Adam Smith or the spiritual heirs of Muhammed? Long-term, I’m betting on Adam Smith’s heirs, but probably with Chinese accents. I call it EU-then-Asia. Price competition works cultural wonders. So do container ships.

June 4, 2005

Gary North [send him mail] is the author of Mises on Money. Visit He is also the author of a free multi-volume series, An Economic Commentary on the Bible.

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