Throughout the eighteenth and nineteenth centuries, France was the threat against which the balance of power was maintained. By the late nineteenth and early twentieth centuries, Germany and Russia became the primary threats. Great Britain, and later the United States, served as principal counterweights first to French, and then to German and Russian power.
The Westphalian system collapsed utterly in the horrors of the First and Second World Wars. The interwar period, 1919–39, saw efforts to build another world order based on multilateral organizations like the League of Nations. These efforts failed due to the legacy of a vindictive 1919 Treaty of Versailles. That treaty made Germany revanchist, and revenge inevitable.
After the Second World War, another world order emerged: the bipolar world of U.S. and Russian hegemony over their respective empires. The United States acted through alliances such as NATO supported by gold, nuclear weapons, and sea power. Russia acted through a land-based empire, the Union of Soviet Socialist Republics, and proxy states including Cuba, North Korea, and North Vietnam.
This postwar condominium included elements of the Westphalian system such as statehood, sovereignty, and diplomacy, now supplemented with more robust versions of the failed multilateral institutions of the interwar period. The United Nations, International Monetary Fund, World Bank, and later the G20 were a new multilateral metastructure imposed on the state system to maintain peace, promote growth, and instill monetary stability.
This overview is intentionally Occidental. Elsewhere Mongols, China, and Islam developed their own world orders. The Mongol Empire, which included China at its height, lasted through the thirteenth and fourteenth centuries. The Mongols amassed the largest coterminous empire ever before dissolving into smaller khanates and local cultures. China’s world order was based on the emperor’s divinity, and a closed culture that excluded foreign influence as barbaric. Islamic caliphates were based on submission to Allah’s will revealed through the prophet Muhammad and recorded in the Koran. Unlike China, Islam did not wall itself off from the world; it conquered with great success. By the eighth century, the Umayyad Caliphate stretched from Spain to the Indus River, while Islam itself eventually spread farther, from East Africa to Indonesia and beyond.
Despite the longevity and geographic reach of China and Islam, these world orders did not survive beyond the early twentieth century due to their technological backwardness, Western imperialism, and the advent of total war. The last major Islamic caliphate, the Ottoman Empire, finally collapsed in 1922 in the aftermath of the First World War. Ottoman remnants were carved up by European diplomats, first by the secret Sykes-Picot Agreement of 1916, and later by the 1919 Versailles Treaty. Chinese imperial order collapsed in 1912 with the fall of the Qing dynasty followed by a failed republic, warlordism, Japanese invasion, and Communist revolution. With no robust alternatives to face the West, China and Islam became marginal to the modified Westphalian bipolar world that emerged after 1945. For the first time in history, a world order existed that encompassed the world.
Henry Kissinger offers a brilliant overview of this process in his book World Order. Kissinger’s sweep is so extensive, he may be said to have identified an impulse toward order that pervades international relations, and stands opposed to the disorder of war and devastation caused by figures as diverse as Napoleon and Hitler. In the simplest terms, conquerors cause disorder while people and most rulers prefer order. The antipode to disorder is order in some form, be it empire like the Roman or Carolingian, or the Westphalian state system.
Order does not presuppose democracy. Order is a condition compatible with diverse value systems. Democracy and liberty are desirable, and combine well with capitalist economic modes. Yet these values are not universally prized. Interestingly, the failed world orders of China and Islam have reemerged in the twenty-first century, the former as a centralized Communist bureaucracy, and the latter in a radical form as a decentralized reign of terror. Neither China nor Islam promotes democracy or liberty. Liberal values will have to make their way in the world, if they can, through culture and education, without necessary assistance from a new world order.
Disorder has always manifested itself kinetically. The costs of disorder are counted in death and destruction. Through the replacement of bronze by steel, the invention of sail and stirrup, and the succession from sword to guns, one constant in the struggle between order and disorder has been its physical form. Wealth, a key complement to warfare, also existed in physical form as precious metals, jewels, fine art, livestock, or land in possession.
Yet contests among states and nonstate actors are increasingly conducted in digital realms. Obvious examples are computer system hacks by state cyberbrigades and criminal gangs. The line between enlisted cyberwarriors and criminals can be blurred to forestall retaliation. Distributed denial of service is the mildest attack mode. More serious are penetrations that take control of critical infrastructure in dams and power grids so floods and blackouts can commence on cue.
Most threatening are sleeper attack viruses planted deep in stock exchange operating systems awaiting activation as part of a larger attack. Such sleeper viruses also serve as a deterrent to attack by the nation hosting an infected system. One such attack virus, planted by Russian military intelligence, was discovered inside the operating system of the NASDAQ stock market in 2010. The virus was disabled. No one knows how many undiscovered digital viruses are lying in wait.
Viruses can erase customer accounts without trace. Used offensively, these viruses can create an uncontrolled flood of sell orders on widely held stocks such as Apple or Amazon.
Military doctrine calls for attacks to conjoin with force multipliers. An attacker will wait for a day when stocks are already down 5 percent, say 900 points on the Dow Jones Industrial Average, then launch an attack to amplify the downward momentum. The result could be a single-day 5,000-point Dow decline and an emergency New York Stock Exchange closing. This near instantaneous lost wealth does more damage to civilian morale than conventional bombardment.
Digital threats have not displaced physical violence. Recent events in Ukraine, Syria, and Libya show that physical destruction and horrific violence remain as means to achieve political or religious goals. Kissinger’s admonition to use diplomacy, and only rarely resort to warfare from necessity, is still relevant.
Yet virtual warfare, especially in financial space, has moved from fantasy to sophisticated reality with stunning speed.
What are the prospects for order and disorder, war and peace, in a digital age?
In the elite view, the new reality demands a new world order that is postsovereign and postnational. This order regards sovereignty and the balance of power—the classic Westphalian framework—as obsolete. As the new world order emerges, new financial arrangements and new governance structures are needed to support it. This new world order provides a framework within which world money and world taxation can be implemented.
Climate change is a convenient horse for elites to ride in the implementation of a new world order. Debating the science of climate change is beside the point. There are heated views on both sides; some science is settled, some not. Global elites treat the debate as settled to mask a larger project. For elites, a global problem once defined conjures a global solution. Climate change is the perfect platform for implementing a hidden agenda of world money and world taxation.
Climate change initiatives are centered in the United Nations, particularly the UN Framework Convention on Climate Change and protocols emerging from the convention. Taken in isolation, climate change seems to have little to do with world money. In fact, the two are closely linked in the new world order.
Every G20 leaders’ summit communiqué since the series started in November 2008 makes reference to climate change. Every IMF semiannual meeting, and numerous statements by the IMF managing director, reference climate change and the need to address it on a global basis.
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br /> The United Nations launched a project to capture the financial system and redirect capital toward what it defines as sustainable development. In October 2015, the UN issued a 112-page report titled “The Financial System We Need.” One report recommendation includes advice on “Harnessing the Public Balance Sheet.”
On April 25, 2016, UN project adviser Andrew Sheng laid bare the elite world money plan in an article he coauthored entitled “How to Finance Global Reflation.” The article states:
Investment in global public goods—namely, the infrastructure needed to meet the needs of the developing world and to mitigate climate change—could spur global reflation. An estimated $6 trillion in infrastructure investment will be needed annually over the next 15 years just to address global warming. . . .
With the US, the issuer of the world’s preeminent reserve currency, unwilling or unable to provide the liquidity needed to close the infrastructure investment gap, a new supplementary reserve currency should be instituted—one whose issuer does not have to confront the Triffin dilemma. This leaves one option: the International Monetary Fund’s Special Drawing Right. . . .
An incremental expansion of the SDR’s role in the new global financial architecture, aimed at making the monetary-policy transmission mechanism more effective, can be achieved without major disagreement. This is because, conceptually, an increase in SDRs is equivalent to an increase in the global central bank balance sheet (quantitative easing). . . .
Consider a scenario in which member central banks increase their SDR allocation in the IMF by, say, $1 trillion. A five-times leverage would enable the IMF to increase either lending to member countries or investments in infrastructure via multilateral development banks by at least $5 trillion. Moreover, multilateral development banks could leverage their equity by borrowing in capital markets. . . .
The IMF and the major central banks should take advantage of this newfound knowledge, and provide equity and liquidity against long-term lending for infrastructure investments. . . .
The linkages among climate change, SDRs, the IMF, World Bank, and the need for global coordination could not be more explicit.
The transition to this new world order based on digital wealth and world money rather than Westphalian sovereignty has some rough edges. Important states like Russia and Iran are actively hostile to the West. Tensions are rising between the United States and China. Rogue states like North Korea, and failed states like Venezuela, remain exceptions to the elite plan.
U.S. digital dollar dominance enables unacceptable U.S. hegemony from the perspective of these confrontational and rogue nations. Led by China, emerging economies are building alternative digital payments systems to avoid dependency on the United States. They are also acquiring physical possession of thousands of tons of gold—a nondigital asset that the United States cannot hack or freeze. These rival gold hoards are less than 10,000 tons today; not yet a match for the 22,000 tons of gold held collectively by the United States, Europe, and the IMF. Gold will continue its move from West to East in coming years to even the scales.
A bipolar financial world may emerge in which Asia, Africa, and South America, led by China and Russia, supported by Iran and Turkey, use one digital payments system, while the United States, Europe, and former Commonwealth nations use another. Each system will be backed by about 20,000 tons of gold, an eerie echo of struggles for missile parity in the cold war, and even older struggles for a balance of power.
Yet this is not the most likely scenario because of its potential for disorder. The Chinese want to join the Western club on equal terms, not destroy it. A more likely scenario is the application of a technique called the shock doctrine. The United States, caught up in the next financial panic, no longer able to defend the dollar’s privileged position, will rapidly turn to a reformed IMF with greater voice for China. This new IMF, under G20 direction, will reliquefy a world in panic with massive SDR printing. Climate change priorities will speedily be implemented. Global tax schemes to finance climate infrastructure solutions will be imposed. Information sharing and global cooperation will leave corporations and wealthy individuals without shelter. Coordinated action in the form of global wealth extraction will displace the former practice of sovereign economic competition. Global power elites will share the spoils.
The elite agenda is settled. Elites now await a new shock.
The Shock Doctrine
Naomi Klein’s 2007 book, The Shock Doctrine, popularized a technique elites use to advance hidden agendas. Elites formulate plans for the world order they wish to see. They wait for an exogenous shock, a natural disaster or financial crisis, then use fear created by shock to advance their vision. New policy is presented to mitigate the fear. The policy is a way to advance the plan for world order. The idea is simple, yet applying shock doctrine involves decades of persistent effort. Shocks come randomly; the elite plan never goes away.
Klein revealed this process from an outsider’s perspective. Still, the ultimate insider, President Obama’s first chief of staff, Rahm Emanuel, acknowledged the shock doctrine when he said, “You never want a serious crisis to go to waste.” This was in reaction to the 2008 financial panic.
President Obama and Emanuel used the 2008 crisis to push through an $813 billion “stimulus” spending package signed into law on February 17, 2009. This was a textbook case of shock doctrine. The program provided no stimulus; the recovery since 2009 is the weakest in U.S. history. The spending program did provide a grab bag of goodies for favored constituents including teachers, unions, and government workers. These constituents had waited eight years, the length of the Bush administration, for their handouts. When it comes to the shock doctrine, patience pays.
Another highly consequential example of the shock doctrine was enactment of the USA Patriot Act on October 26, 2001, in the aftermath of the 9/11 attacks. The Patriot Act contained needed improvements in information sharing among the FBI, CIA, and grand juries. Some surveillance standard easing was urgent at the time.
Still, the Patriot Act was also the codification of a surveillance state wish list percolating below the policy surface for some time. Patriot Act provisions advanced by the U.S. Treasury to block bank mergers and require asset forfeitures had less to do with Al Qaeda and more to do with the Treasury’s ongoing war on cash. These provisions were taken down from the shelf where Treasury keeps its wish list, and added to the expanded powers under the act. The Patriot Act is now an overly broad and permanent menace used for state surveillance of political enemies. Under the shock doctrine, all Treasury needed was a shock, which 9/11 provided.
The new world order is tailor-made for application of the shock doctrine. As with all applications of the shock doctrine, elements of the desired end already exist, waiting to expand and be made permanent in response to a new shock. The IMF is a world central bank in all but name. The SDR is world money in a form that everyday citizens cannot comprehend. The G20 is a de facto board of governors for this new order. The elimination and criminalization of cash, even when held by innocent parties, ensures that there are no alternatives to digital payments. Virtual wealth can be tracked, taxed, and turned off based on compliant behavior as defined by global elites. The system is primed for a shock doctrine use case.
The shock doctrine is a ratchet; it turns in one direction, then locks in place. It can turn again in the same direction, but can never be reversed. Policies enacted under the shock doctrine remain long after the emergency that enabled them. The trend is persistently toward more state power, more taxation, and less liberty.
Shock doctrine is an ideal tool for what philosopher Karl Popper called piecemeal engineering. George Soros is Popper’s principal champion today. Soros’s principal instrument for social engineering, the Open Society Foundations, is named in honor of Popper’s best-known book, The Open Society and Its Enemies.
Elites are aware that their views are not widely accepted in
democratic societies. Elites realize their programs must be implemented in small stages over decades to avoid backlash. Shock doctrine is punctuation to otherwise anti-elite sentiment. When shocks strike, the elites move immediately to implement a new stage of their program. The critical task is to act quickly before the shock fades. The ratchet ensures that elite gains are not soon surrendered. The process goes into remission until the next shock.
Thus the global elite’s true typology: a structure of floating, intersecting spheres. Communication courses through conferences and supercarriers who channel concepts between spheres. Content comes from public intellectuals. Their glue is like-mindedness. Their strength is patience. Their method is piecemeal social engineering. Their scalpel is the shock doctrine. Their final success is ensured by the ratchet. This is all employed in obeisance to the agenda: one money, one world, one order.
CHAPTER 3
DESERT CITY OF THE MIND
Keynes asked me what I was advising my clients.
“To insulate themselves as much as possible from the coming crisis and to avoid the markets,” I replied.
Keynes took the opposite view. “We will not have any more crashes in our time,” he insisted. . . . “And where is the crash coming from in any case?”
“The crash will come from the gap between appearances and reality. I have never seen such stormy weather gathering,” I said.
1927 conversation with Keynes recounted by Felix Somary in The Raven of Zurich (1986)
The Road to Ruin Page 10
