Recently by Gary North: Ben Bernanke: The Official Counterfeiter
One of the most alluring temptations that face men is the desire to enter the inner ring. C. S. Lewis wrote a wonderful essay with this title. It should be part of every person’s rite of passage into adulthood.
The desire to enter the inner ring is closely related to the desire to maintain a New World Order. There is always an institutional claimant to New World Order status. It is always structured in terms of a series of concentric rings. These rings are always vertical. They are part of a pyramid of power. They are best represented by a stepped pyramid. (See Genesis 11.)
Every empire has been founded in the name of – on behalf of – some version of a New World Order. Empires all have this in common: they are eventually replaced. There is nothing more defunct than a New World Order that has failed. Think “Ottoman Empire.” Think “Thousand-Year Reich.” Think “British Empire.” Think “Soviet Union.”
When they are riding high, they seem unbeatable. What could possibly replace them? Most people cannot imagine anything. But there are always a few who can. They get together informally to help arrange the transition. Then they get together formally. They screen access to meetings. They set up a new inner ring.
In our day, the cry is “Next year, in Davos!” The best book on this is an insider’s book, David Rothkopf’s Superclass. It is not a conspiracy theory-type book. It is a “look how we’ve made it” book. It’s a “top of the world, Ma!” book. He also sees that this superclass is vulnerable to changes outside of its control: in Asia, in the Third World. “We’ve made it” can become “we’ve lost it.”
Count on it.
You may not have time to read his book. You do have time to watch a couple of his videos. They are posted here.
In summary, here is his thesis. About 6,000 people, 94% male, average age 61, meet from time to time to set the agenda for the rest of us. Here is the central fact: about 30% of them attended one or more of about 20 elite universities.
Here, I want to focus on this final point: elite universities. Another book spoke of this, a book that became an instant pariah in the liberal Establishment: The Bell Curve. It was published in 1994.
THE BELL CURVE
The book is important enough to warrant a Wikipedia entry. Here is the latest Wikipedia summary. It’s close enough for my purposes.
The Bell Curve is a best-selling and controversial 1994 book by the Harvard psychologist Richard J. Herrnstein (deceased before the book was released) and political scientist Charles Murray. Its central argument is that intelligence is substantially influenced by both inherited and environmental factors and is a better predictor of many personal dynamics, including financial income, job performance, chance of unwanted pregnancy, and involvement in crime than are an individual’s parental socioeconomic status, or education level. The book also argues that those with high intelligence, the “cognitive elite”, are becoming separated from those of average and below-average intelligence, and that this is a dangerous social trend with the United States moving toward a more divided society similar to that in Latin America.
Much of the controversy concerned the parts of the book in which the authors wrote about racial differences in intelligence and discuss the implications of those differences. The authors were reported throughout the popular press as arguing that these IQ differences are genetic, and they did indeed write in chapter 13: “It seems highly likely to us that both genes and the environment have something to do with racial differences.” The introduction to the chapter more cautiously states, “The debate about whether and how much genes and environment have to do with ethnic differences remains unresolved.”
The book created a firestorm of controversy. Not at all controversial was its statement that Ashkenazi Jews have statistically abnormal high intelligence. Everyone assumes this in academia. What drew the attention of critics were its statements about African-Americans’ lower IQ level. That debate drowned out the central claim of the book, namely, the common worldview fostered by the nation’s elite universities.
The book also argues that those with high intelligence, the “cognitive elite”, are becoming separated from those of average and below-average intelligence, and that this is a dangerous social trend with the United States moving toward a more divided society similar to that in Latin America.
The book discussed Rothkopf’s point. The elite in the United States attend a handful of academically superior universities. These universities have a common worldview. The authors did not label it as secular humanism. They did not have to. The secular humanists who read the book and who went ballistic over its politically incorrect racial implications shared this worldview. They did not perceive the crucial theme of higher education as a screening system. Why not?
I noticed something early in life. Each of my friends’ homes had a distinct smell. Mine, of course, did not. In short, it is hard to notice what is under our noses.
We all notice other people’s accents. We, of course, have no accents. You do not notice what is normal, and what we are is normal.
So common in American academia are the presuppositions of the humanist elite that its members are incapable of thinking in terms of rival presuppositions. They cannot imagine alternatives. So, to be anti-Darwin is to be anti-scientific. To be anti-Keynesian is to be anti-economics. Milton Friedman spoke for the guild in 1965: “We are all Keynesians now.” No, we weren’t. And still aren’t. They may be. We aren’t.
My father-in-law R. J. Rushdoony identified these presuppositions in his 1963 book, The Messianic Character of American Education. The title says it all. He examined carefully the confessions of faith made by the two dozen intellectual founders of tax-funded K-12 education in the United States. When you combine this book with John Taylor Gatto’s The Underground History of American Education. you have the basic picture.
Rushdoony followed the confessions. Gatto followed the money. Both men concluded that the public school system is a means of political control of the voters by a self-conscious elite. Rushdoony correctly identified the system of public education as America’s only established church. The teachers constitute a priesthood. Gatto, a self-defrocked priest, does not dispute this claim.
A COMBINATION OF ACTIVE INGREDIENTS
The heart of today’s superclass is the combination of three factors: money, political power, and an old boy network. These three characteristics are the foundations of every New World Order is history.
If today’s New World Order is to be displaced, this must include a re-structuring of the educational system. Why? Because this is the heart of the elite’s old boy network.
It is not money, which is based on the satisfaction of customer demand, and is therefore always shifting: new customer tastes, new customers with money, and new technologies. Wealth in a free market economy is based above all on price competition. In contrast, the superclass’s wealth is based on political and bureaucratic control over markets. No such control can withstand price competition. Price competition is the acid that undermines every elite that is based on money
Politics is not crucial, because politics is based on a shared worldview and access to tax money. When new money replaces old money, new political alignments replace old ones. Politics is based on votes. Votes can change, and do.
So, the core battle is over education: its presuppositions, its content, and its delivery system. It is a battle over the political delivery of education vs. the free market delivery of education. It is also a battle over accreditation.
TWO RIVAL SYSTEMS
The modern war for political power is a war over two systems of control: democracy vs. bureaucracy. Democracy counts votes. Bureaucracy counts exams. Democracy screens access to power by vote-getting. Bureaucracy screens access by examination, followed by tenure. Politics secures power by patronage funded by tax money. Bureaucracy secures power by enforcing rules that are written by the bureaucracy, interpreted by the bureaucracy, and enforced by the bureaucracy. The term for this process is “administrative law.” This thesis was laid out by Harvard legal historian Harold Berman in the Introduction to his book, Law and Revolution (1983). I regard this introduction as the most important essay I have ever read. He argued that the West is losing its liberty because of the relentless spread of administrative law, which is undermining the Western legal tradition.
Bureaucracy is based on substituting examinations and academic criteria for votes. We begin to get to the heart of the matter when we look at the steady replacement of democracy by bureaucracy. When a Civil Service system replaced the spoils system in the United States, the Old World Order of politics was itself replaced. The culmination of this process was the New Deal. It came to power by votes. Its legacy, secured by Truman, was massive bureaucracy.
This process has happened all over the West. The original Anglo-American model was based on two things: family connections and access to the two major universities, Oxford and Cambridge. The elite sent their sons there, not for formal education, which everyone knew was irrelevant, but for contacts: the old boy network. In the United States, Harvard, then Yale, then Princeton served as the equivalents.
The rival model to England’s was Prussia’s. It began in the aftermath of Napoleon’s defeat of the Prussian military in 1806. It was an imitation of the French system, which Napoleon was developing: the premier academies. Passing exams was crucial to entry into power. The University of Berlin was the central institution, but there were other universities with influence.
In the United States, the English model served the elite from 1636 to 1960. The elite, trained in a handful of elite universities, have controlled the common people by means of the tax-funded Prussian school system. The sons of the elite go to the prep schools and the 20 elite universities. The masses go to public schools, K-graduate school. A handful of elite graduate schools, law schools, and business schools let a few carefully screened “Prussians” enter the elite. Think “the Clintons.” They got to go to Yale Law School. They were outsiders. The two Bushes, father and son, weren’t.
This conflict between “Britain” and “Prussia” has gone on in the United States ever since the 1840s: the coming of tax-funded schools in New England.
The Prussian system is now winning. This became visible around 1960, when Harvard began opening access to formal exams. This came at the expense of “legacies.” It was a zero-sum game. The legacy candidates could not compete intellectually with the outsiders.
The most readable account of this transition is David Brooks’ book, BoBos in Paradise. Don’t let the book’s humor fool you. It is a profound book, despite the covering of pop sociology. He has identified the shift, although he does not identify it as Prussian. It was a shift that Brooks, as a secular Jew, could see clearly. When exams replaced legacies, Jews won. More to the point, non-practicing Jews won.
Brooks does not discuss the European roots of this conflict. It began under Napoleon and his bureaucratic revolution, which gave citizenship to Jews. It culminated in the Dreyfus affair in the late 1890s, when the military falsely accused and convicted a Jewish officer of treason, and then got caught. The political battle split the nation. This same conflict in Germany culminated with the Nazis: a revolt of the German masses against Prussia and all things Prussian except war. That revolt ended in 1945.
Brooks refers to what was really the first skirmish in the United States, which took place in the 1920s. Jews were getting into Harvard by exams. This was self-consciously blocked by the president of Harvard, A. Lawrence Lowell, who imposed quotas against them. This was the gentlemen’s agreement where it really mattered: at the entry point. This quota system lasted until the late 1930s.
There is always a system of screening access to positions of power and influence. If a system does not screen by money bids, then it screens by other kinds of bids. Here is the universal rule in all systems: high bid wins. In the Prussian system, the currency for bidding is the score on an examination.
The ultimate model is medieval China’s system of examination-based bureaucracy, which screened out legacy bureaucrats. The ultimate model of its displacement may turn out to be post-1978 China. The Communist engineering school graduates at the top are caught in the crossfire of rival systems. I think they will lose.
The central pillar of the New World Order is education in the broadest sense. I will go even further. If this single pillar of the New World Order is displaced – not destroyed, merely displaced – then the existing New World Order will not survive.
The existing model for education is Prussian. It is access by examination. Rich men can get in, but they are screened. Very smart men can get in, but they are screened. By what are they screened? By a theological confession: “salvation by law.” The system rests on political-bureaucratic control over free markets. Why? Because of the acid of the free market: price competition.
The free market does not reward people in terms of their family connections, or their alma maters, or their class rings. It does not reward secret handshakes. It rewards the ability to meet customer demand at a price more favorable than the competition.
This ability involves skills that are inherently beyond the ability of exam-takers to codify and master. As Ludwig von Mises’ student Israel Kirzner has shown for over four decades, if entrepreneurship were governed by a formula, it would become insurance. It would move from uncertainty-management to statistical risk-management. It would become a formula. Profits would disappear, So would losses. Both would be replaced by insurance contracts and normal rates of return.
All old boy networks are inherently anti-market networks. In The Wealth of Nations (1776), Adam Smith made this observation:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary. (Book I, Chapter X, Part II)
These words have come down through history as a condemnation of every would-be New World Order. What Rothkopf describes as a superclass, Smith described as a conspiracy. Rothkopf refuses to use this word. That’s because the superclass is a conspiracy: the largest, richest, and most powerful conspiracy ever seen.
It rests ultimately on a single pillar: a system of screening based on formal education.
That pillar has begun to crack.
What A. Lawrence Lowell did to Jews in the 1920s, the superclass and its Prussian-based educational system do to the practicing confessionalists of every rival confession. It sets quotas on entrance into the inner circles. It screens them out. It sets the agenda.
This agenda is clear: political power. Its confession is clear: “Collective man is the measure of all things.” It has this corollary: “It is a moral imperative for those who know what is really best for others to get access to badges and guns and use them for a higher purpose.”
The mortal enemies of the superclass are those people who have a seven-word offer: “I can sell it to you cheaper.” Jews and Armenians have been saying this for a thousand years. Scots and Dutchmen have been saying it for 300 years. Now Asians are saying it.
This is the soft underbelly of the superclass. This is why, in the immortal words of Mr. T, it’s going down.
February 4, 2012
Copyright © 2012 Gary North