Every January, the richest people in the world get together to meet at Davos, Switzerland, at the World Economic Forum.
Also present are the best and the brightest in the Keynesian community, whose plane fares and hotel rooms are taken care of. These are the hired hands.
Every year, everyone hopes he is going to hear some great speech that will transform his business or his career. Everybody thinks at the end of the sessions that he must have missed the big speech, once again, the same way he missed it last year.
Austrian school economists are not invited to the festivities. That’s because they don’t think that Keynesian central planning and Keynesian central banking have much of a future. They keep saying so, and this message is not congenial to the World Economic Forum.
This year, the preliminary press releases about some of the major speeches indicate that the New World Order really is bordering on the New World Disorder. The acolytes of central planning are losing control, and they are now admitting it.
NETWORKS: PERSONAL VS. DIGITAL
The international old boy network is figuring out that they are being replaced by digital networks. They are like the specialist traders in the commodity futures pits, who for over a century screamed and used hand signals to communicate their buy and sell decisions. These people have been replaced by computer networks. The same thing is now happening to the New World Order.
You may think I am exaggerating. So, let me quote from an article from a representative of the New World Order, the Director of the European branch of the Council on Foreign Relations.
The Keynesian model is based on the idea that committees of specialists are in a position to make better decisions than market forces are. Market competition just cannot get the job done, the Keynesians insist. Their problem is this: market competition now is based on computer networks, and the grand designs of the central planners and welfare state advocates are steadily losing ground. This has created great consternation in high places.
For example, labor markets are being revolutionized by computerization and robots which are funded by the very people who are showing up at Davos, and who are getting rich off of this development.
True revolutionary change is a rapid, fluid, and inherently indeterminate process. But there has been no indication so far that transformative economic change will lead to the types of policies — for example, a minimum basic income, greater investment in public goods, heightened multilateral cooperation, and closer regional integration — that would promote political stability.
In other words, computerization is creating international economic cooperation. Digital networks are spreading across geographical borders. But, horror of horrors, there is no international agency with sanctions comparable to those possessed by national governments. So, as trade, digital money, information, and almost everything else that makes the world go round is becoming multinational, the central planners are losing control. Central planning has always been limited to national sovereignties, and national sovereignties are losing control over the flow of funds, the flow of goods, and the flow of information.
Simultaneously, in reaction to this, a new domestic nationalism is upset about international trade. It is upset about open borders. So, instead of turning over power, as in the past, the representatives of the voters have decided to reclaim power from the old boy multinational network. The NWO sees this coming.
On the contrary, rather than embrace the new global connectivity, there is a yearning to build fences and walls, resist trade deals, and restore national independence.
So, on the one hand, internationalization is taking place outside the boundaries of Keynesian central planning. It is taking place in tax havens, and this process is accelerating. Keynesianism does not have much ability to allocate assets across national borders. Meanwhile, those forces politically that are gaining strength today are doing so at the expense of the multinational worldview of the kinds of people who show up at Davos.
In short, the New World order is damned if it does, damned if it doesn’t. The internationalism of the free market is undermining national control by national political and bureaucratic government planning agencies. Meanwhile, political forces are moving in the direction of undermining the international institutional arrangements that had been the tools of multi-nationalism used by Keynesian international planners and opponents of national sovereignty.
These people do not know how to deal with this twofold problem. To the extent that the economy goes multinational, the New World Order loses power. Why? Because there is no international agency that possesses anything like the ability to impose sanctions across national borders. So, the digital economy is working against them. It is working against central banking, too.
But the politics of nationalism is no longer based on the kinds of chummy connections that have characterized the Council on Foreign Relations and its various clones in other nations. The nationalism that is rising up around the world is not New World Order Keynesian nationalism, but rather an older nationalism that favors national sovereignty, not sweetheart deals across borders that were initiated by government-employed bureaucrats on behalf of multinational conglomerates.