Recent LRC Blog posts surrounding the classical liberal roots of Marxist class analysis reminded me that we have rarely had a clearer portrait of the two dominant heads of the exploiting class hydra. In the past two years, even with central bank stonewalling and opaque government deals it is obvious that the main exploiters are those individuals managing the political system and those individuals who own the financial system’s central conduits.
When the Treasury Department’s managers and the Federal Reserve System’s managers collude behind closed doors, and the lowliest scam that emerges is a lottery-winner level of financial fraud…one that the SEC miraculously can’t fathom…it is pretty obvious who is getting rich at our expense.
Before everyone gets all "conspiracy theory" on me, let’s recognize the obvious, which is that people with similar aims and who benefit from the same set of conditions need not have each other on speed dial in order to coordinate their actions.
Just as the market spontaneously organizes the efforts of individuals laboring in a voluntary system to generate vast productivity, the political system coordinates the efforts of the exploiting class to inexorably change the rules so their exploitive efforts produce more loot. The clown in the White House need not hold a conference call with the heads of the major banking families and the clowns running Congress in order to get all their plans set.
This raises an interesting conjecture.
Has the centuries-long spontaneously-organized labor of the major banking cartel families been the dominant force that gifted us with this hydra political economy that is stealing us blind?
Here’s my line of thought:
We know from Professor Hoppe and other Mises Institute contributors that monarchies tended to be less war-loving than the modern state. Wars generate stunning levels of financing demand, so from this we can infer that the owners of banking cartels would see a transition from monarchy to modern klepto-democratic states as a means of growing the market for their services.
Shifting education to the public sector where Fabian socialism could be taught as a state religion was also highly constructive to financiers’ profits. Once individual citizens are trained to think about the abstraction we call "government" as something magically distinct from the people who manage it, the state is seen as an extension of society rather than a vehicle for exploitation of producers by parasites.
Unprecedented capital then flows from producers into the hands of the political system’s managers and their financiers (especially once production is so crippled that people begin borrowing to artificially maintain their standard of living).
This process required no more explicit coordination than has the advancement of the computer industry since the invention of the printed circuit. All that was necessary was a relative few people who gravitated to loci of power due to their willingness to exploit others, combined with a great increase in wealth allowing productive individuals to support a vast increase in the burden of individuals exploiting them.
Regardless of the specific desires of individuals in the exploiting class, their paths were largely parallel. Exploiter-class occupations proliferated, with celebrity posts in "news" media, entertainment, and the state apparatus itself. During the latter stage of this two-century development, even some of the banking cartel managers came out of the shadows to gain notoriety and celebrity, to be treated like they have a direct line to Divinity.
State and financial institutions spread like rot in a landfill, attracting exploitation-minded people like roadkill attracts flies.
Across the spectrum of human endeavor, once exploiting-class individuals got a toehold in something, in little time their cancer spread and choked most of the voluntary life from previously healthy market-based activities. The involvement of the state’s coercion in education turned to dominance and with the seeming removal of market discipline from schooling it became a free-for-all for the exploiters.
Is it shocking that grade school kids can identify mass murderers like Lincoln or Sherman but have never heard names like Bastiat, de La Botie, or Say? Is it a surprise that college coeds wear Che Guevara t-shirts but would respond, if you told them about the man who explained in 1922 unequivocally why the USSR would fail, "Ludwig von-what?"
It’s no wonder that exploitation of the productive became the dominant process at universities. The majority of people teaching in many departments "sell" things that have no market value. Of course they attack the pillars of peace, property ownership, and non-coercion that might impede their desire for more power, prestige, or whatever else their exploitation might yield. The tick, the flea, and the mite have different aims and occasionally compete for host resources, but all wish to stop the horse’s tail from swatting at them.
So here we stand at the edge of the abyss, observing what this perverse anti-market’s coordination has wrought. Over a century of systematic crippling of individual liberty and the free market it generates have strip-mined whole societies of capital. In this final act productive people even mortgaged everything they own to the financiers and are being driven from their homes as politicians sell their tax liabilities to…political entrepreneurs.
What should we expect now?
First we should see the exploiters blame their nemesis, liberty, for the very ills they and their forbearers bequeathed us through war, inflation, regulation, and above all, debt.
Second, it seems that the true exploiter-class captains are ideology-free. They’re not Marxists. They believe in only one form of private property: theirs.
Revolutionary Language Best Price: $4.48 Buy New $13.27 (as of 03:45 UTC - Details)
We should expect the great financiers and banking cartels to divest themselves of their highly profitable financial cons that are now ready to collapse. Trillions of dollars worth of debt and paper assets will flow from the banksters into the "hands" of the public through Treasury Department guarantees, bailout schemes, pension and 401(K) plan purchases, and the like just in time to see it all collapse in value.
Then, once the collapse is complete and all defaults have occurred, those same captains of finance (perhaps helming firms sporting new faades) will swoop in and buy it all back up at fire-sale prices when there’s blood running in the streets. For instance, look for all those mortgages in default to be bundled up and sold for a fraction of a penny, so the banking cartels will succeed in owning vast swaths of real estate, ready to sell it back to the dispossessed at a healthy markup.
They, their grandparents, and their great-great-grandparents have done it before. How do you think they accumulated most of the world’s wealth, by inventing useful things? The only entrepreneurship they know is the political kind.
This murderous form of exploitation will end or at least shrink considerably someday. This won’t occur, however, until there’s a widespread appreciation of the malignant alliance between finance and the state, and a new period of prosperity is begun by eliminating the exploiting class’ revolving door (starting here) between them.
David Calderwood [send him mail] a businessman, artist, and author of the novel Revolutionary Language, selected January 2000 Freedom Book of the Month at Free-market.net.