The Keynes Vs Von Hayek Debate: A False Dualism With Malthusian Characteristics
(Originally published on The Last American Vagabond)
In my recent article ‘Steve Bannon and China’s Deep State’, readers were introduced to several operatives who are serving as controlled opposition with the intention of corralling the conservative groups of the USA and Europe into a weaponized anti-Chinese mob. This study took us into the corridors of the power within forces of the black nobility representing ancient power structures that gave rise to the Crusades, the synthetic cult known as the Jesuits and neo feudalist aspirations for global governance.
Just as the anti-religious Bolshevik left vs Catholic fascists of the Coudenhove-Kalergi Pan Europa right was orchestrated a century ago by oligarchical grand strategists yearning to corral humankind into a neo-feudal order, the same formula was used during the 20th century to create a false dualism in the economic field which has served to undermine any authentic anti imperial resistance to transhumanism – especially since World War II.
I am here referring to the pervasive influence of a polarization launched in 1932 as a “debate” between two London-based Malthusian economists.
One extreme that deeply sculpted the minds of “leftists” of the Trans Atlantic world was top-down economist named John Maynard Keynes (1883-1946) while the other extreme which went on to mold the thinking of the “conservative right” during the Cold War was found in the “bottom up” advocate of personal liberty, Friedrich von Hayek (1899-1992).
The constants among both apparent opponents (who remained friends throughout their lives) were that 1) neither believed that INTENTION or MIND should govern economic policy (Keynes believed in arbitrary “make work” which could not differentiate between the qualitative difference of a $100 paycheck to a digger of random holes vs $100 paycheck to an engineer building a dam), and 2) both believed equally in the universal validity of Malthus’ population theories, and of Bernard Mandeville’s satanic belief that personal vice creates public virtue. Both theories have underpinned British/Hapsburg imperial grand strategy for over two centuries.
It is also important to hold in mind that the 1932 Keynes vs Hayek debate emerged at a time that the world government agenda driven by the Bank of England and League of Nations were on the ascendency. This operation, in which both Keynes and von Hayek were thoroughly enmeshed, demanded fascist regimes control the world under a “scientifically managed” bankers’ dictatorship.
One month after the London Times October 17, 1932 publication began to print arguments from proponents of both schools of thought on how to best end the depression, Franklin Roosevelt was elected to the U.S. presidency.
As I outlined in How to Crush a Bankers’ Dictatorship, with Roosevelt’s presidential victory, a specific form of political economy was restored in the United States that had nothing to do with either school of Keynes or Hayek and everything to do with something uniquely embedded in the U.S. Constitutional traditions that petrified the hereditary empires of Europe’s old nobility.
In the years leading up to his victory, FDR had worked closely with a grouping of bipartisan American congressmen and senators to revive a form of political economy which involved the paradoxical coexistence of increased government involvement together with massive increase in entrepreneurism, and private sector growth[1]. The fact that FDR is attacked by communists for being a capitalist shill while being simultaneously attacked by capitalists for being a communist shill to this very day is a sign of this ongoing confusion and a testament to the effectiveness of British intelligence propaganda.
The systemic inability for modern Americans to resolve the ‘FDR paradox’ today is due entirely to a sleight of hand pulled by the very same imperial power that has never forgiven the USA for declaring its independence in 1776.
Contradicting the popular mythology that “FDR was a Keynesian”, US Secretary of Labor Francis Perkins recorded a 1934 interactionbetween the two men when Roosevelt told her[2]:
“I saw your friend Keynes. He left a whole rigmarole of figures. He must be a mathematician rather than a political economist.” In response Keynes, who was then trying to co-opt the intellectual narrative of the New Deal stated he had “supposed the President was more literate, economically speaking.”
Keynes the Fabian Eugenicist
Although Keynes is heralded as the guiding light of the New Deal (and, as such defended by modern Global Green New Dealers wishing to impose a top-down system of governance onto the world), the fact is that Keynes not only detested Franklin Roosevelt, but also humanity more generally.
This will be seen clearly in 1) his devotion to the theories of Thomas Malthus, 2) his promotion of eugenics as a science of racial purification and population control, and 3) his general devotion to World Government as a leading member of the Fabian Society.
From his earliest days at Cambridge where he rose quickly to become one of the select Cambridge Apostles[3], Keynes devoted himself to the service of empire, becoming Knight of the Order of Bath and Order of Leopold by 1919.
His early 1911 book on Indian Currency and Finance[4] (conducted during his five-year foray in the Empire’s Indian Office) ignored all actual political reasons for the famines plaguing India and argued coldly for a greater integration of the Indian banking system into the City of London controls which would somehow solve India’s problems. The provable reality was that Indian famines were coordinated tools of population control[5] by the Malthusian elite of the British establishment who considered “war, famine and disease” as the gifts nature gave the strong to manage the weak.
While his later 1919 Consequences of the Peace appeared to be a reasonably sympathetic warning that the draconian Versailles reparations would do incredible damage and lead to a new world war, in reality, Keynes was displaying a cold sleight of hand. Serving as British Treasury representative to the Versailles Conference, Keynes never opposed fascism: he merely argued that a more liberal pathway to global fascism could be established under the direction of the Bank of England. His opposition, though, to the more violent approach preferred by conservative imperialists among the British Intelligentsia, was one of form more than substance.
Keynes and his fellow ‘pacifist’ Fabians H.G. Wells, Bertrand Russell and G.B Shaw preferred the “slow and steady” “long game”, reminiscent of the Roman general Quintus Fabius Maximus who famously fought his enemies by slow attrition rather than in full-scale confrontation[6]. Due to the public’s general ignorance of this strategy, we celebrate these Fabian Society luminaries for their pacifism, though in reality they were just as racist, fascist, and eugenics-loving as their more short-sighted, hard-stomached counterparts sir Oswald Mosley, Lord Alfred Milner and even Winston Churchill.
Where the real solution to the hyper-inflationary money printing and economic industrial shutdown of Germany during the post WWI years was to be found in the 1922 German-Russian Rapallo Agreement (destroyed with the assassination of American System Foreign Minister Walter Rathenau), Keynes and his ilk merely called for economic integration of the German banking and military system under Bank of England/League of Nations control.
Keynes: Disciple of Thomas Malthus
Defining his misanthropic belief in overpopulation, British East India Company economist Thomas Malthus (1766-1834) asserted a new “fundamental law” in his famous 1799 Essay on Population:
“The power of population is so superior to the power in the earth to produce subsistence for man, that premature death must in some shape or other visit the human race.”
How could this crisis be avoided? Malthus answers it like only a devout imperialist could:
“We should facilitate, instead of foolishly and vainly endeavoring to impede, the operations of nature in producing this mortality; and if we dread the too frequent visitation of the horrid form of famine, we should sedulously encourage the other forms of destruction, which we compel nature to use. In our towns we should make the streets narrower, crowd more people into the houses, and court the return of the plague.”
Although some apologists considered Keynes an anti-Malthusian, due to his theory that overpopulation might be overcome by encouraging spending rather than savings, which would, in turn, somehow create markets and thence new factories and more growth, the reality was the opposite. Keynes not only spoke gushingly of Malthus throughout his life as one of the greatest minds of all time, but even plagiarized many of Malthus’ own theories[7], for instance that of “demand deficiency causing unemployment and recession” outlined in his 1930 Treatise on Money. In his 1933 Essay on Malthus[8], Keynes wrote:
“Let us think of Malthus today as the first of the Cambridge economists—as, above all, a great pioneer of the application of a frame of formal thinking to the complex confusion of the world of daily events. Malthus approached the central problems of economic theory by the best of all routes.”
In his May 2, 1914 lecture Population[9], Keynes argued that government should “mould law and custom deliberately to bring about that density of population which there ought to be” and that “there would be more happiness in the world if the population of it were to be diminished.”
Saying that “India, Egypt and China are gravely overpopulated”, Keynes advocated using violence to defend the “superior white races” in this struggle of survival with the pacifist saying:
“Almost any measures seem to me to be justified in order to protect our standard of life from injury at the hands of more prolific races. Some definite parceling out of the world may well become necessary; and I suppose that this may not improbably provoke racial wars. At any rate such wars will be about a substantial issue.”
As Acting chair of the Neo-Malthusian League, Keynes stated in 1927:
“We of this society are neo-Malthusians… I believe that for the future the problem of population will emerge in the much greater problem of Hereditary and Eugenics. Quality must become the preoccupation.”
By 1946, Keynes, still a member of the British Eugenics Society (after serving as the agency’s Vice-President from 1936-1944) wrote in The Eugenics Review:
“Galton’s eccentric, sceptical, observing, flashing, cavalry-leader type of mind led him eventually to become the founder of the most important, significant and, I would add, genuine branch of sociology which exists, namely eugenics.”
This was not ivory tower theorizing, but concepts with very real-world significance.
By 1937, Keynes’ General Theory of Employment was published in Nazi Germany. If anyone wishes to defend the idea that the economist was somehow an anti-fascist defender of “liberal values”, let them read his own words in the preface and then either redefine “liberal values” or their naïve idea of Keynes:
“I may perhaps expect to find less resistance among German readers than among English ones, when I put before them a theory of employment and production as a whole… The theory of production as a whole which is the object of this book, can be much better adapted to the conditions of a totalitarian state, than the theory of production and distribution of wealth under circumstances of free competition.”
Hitler himself was not only a devout eugenicist (whose racial purification policies emerged through the funding of the Rockefeller and Carnegie Foundations as well as British establishment), but was also a devout Malthusian saying[10]:
“The day will certainly come when the whole of mankind will be forced to check the augmentation of the human species, because there will be no further possibility of adjusting the productivity of the soil to the perpetual increase in the population.”
Keynes Contaminates Bretton Woods
During the Bretton Woods conference held in New Hampshire between July 1-20, 1944, the two opposing paradigms clashed again, much as they had done in 1776 or in 1867 over the terms of the post-war world order. On the one hand the American System of anti-colonialism competed for a system of win-win collaboration and multipolarism, while on the other hand, the British System of zero sum Malthusianism pushed for a unilateral Anglo-Saxon dominance over the world.
This clash took the form of the battles waged by FDR’s trusted collaborator Henry Dexter White against John Maynard Keynes at Bretton Woods, where 730 delegates representing 44 nations gathered to settle the terms of the post-war order.
Although this conference is famously associated with the creation of the World Bank, International Monetary Fund, and General Agreement on Tariffs and Trade (GATT), it is falsely assumed to be a Keynesian creation. Keynes’ role as representative of the British Empire, much like his earlier role at Versailles in 1919, was again defined by the intention at all costs to shape the conditions of a post-nation state world order on behalf of the City of London. Like Bertrand Russell and other Cambridge Apostles before and since, Keynes was trained in the sophistical deployment of statistics and mathematical logic to cover for the imperial rape of target nations.
Lord Keynes was deployed to lead the British delegation to Bretton Woods and advance a Delphic plan that called for creating an International Clearing Union controlled by the City of London denominating all payments in a common accounting unit: the Bancor.
The Bancor would be used to measure all nations’ trade or surplus deficits, expropriating surpluses by the end of the year and taxing countries with deficits. The imposition of a “mathematical architecture” upon the physical (non-mathematical) systems of nations was the surest way to keep an invisible cage upon the earth under an ideal of “mathematical equilibrium.” The sadistic fiscal austerity demanded by mathematical economists and other technocrats in Brussels reflect the still active force of Keynes’ spirit haunting the world today.
The Bretton Woods as a Global New Deal
In opposition to Keynes, the anti-colonial program of FDR was represented by his close ally Harry Dexter White (1882-1948).
White (today slandered as a Soviet agent by CFR-affiliated historians) fought tooth and nail to ensure that Britain would not be in the driver’s seat of the new emerging economic system or the important mechanisms of the IMF that he would go onto lead. White ensured the colonial economic “preference” system Britain used to maintain free trade looting across its empire was destroyed, and that the pound sterling did not play a primary role in global trade. Instead, a fixed exchange rate system was set up to guarantee that speculation could not run rampant over national growth strategies and the dollar (then backed by a powerful PHYSICAL economic platform) was a backbone for world trade.
At Bretton Woods, Dexter White reached agreements to provide vast technology transfers to help South America industrialize[11]. At the same time, large-scale programs modeled on the New Deal were presented by delegations from India, Eastern Europe, and China[12]. It is noteworthy that the Chinese delegation introduced infrastructure plans first laid out by Sun Yat-sen in his 1920 International Development of China[13] which both Mao, and Zhou Enlai endorsed alongside the Kuomintang’s Chiang Kai-Shek. Had these plans not been sabotaged, it is amazing to consider what sort of progress might have opened up for the Chinese 70 years before anyone heard of the term “Belt and Road Initiative”.
At this early stage, Russia was still happy to be a founding member of the IMF and World Bank which were designed to act as cheap lending mechanisms for long-term, low-interest, high-tech global development.
Commenting on support for FDR’s post-war system of mutual interest, Stalin stated: “Can we count on the activities of this international organization being sufficiently effective? They will be effective if the Great Powers who have borne the brunt of the burden of the war against Hitler’s Germany continue to act in a spirit of unanimity and harmony. They will not be effective if this essential condition is violated”.
Just as the Reconstruction Finance Corporation (RFC) was used like a national bank to fund thousands of great infrastructure, transport, energy, and water projects during the New Deal and just as Glass-Steagall broke the monopoly of private speculative finance over the productive economy, these New Dealers wished to use the World Bank and IMF to issue long term, low interest productive credit for long term mega infrastructure projects around the world. The thought of only reconstructing Europe was never the plan in the minds of White or FDR.
Leading figures among this group included Undersecretary of State Sumner Welles, FDR’s confidant Harry Hopkins, and leader of the republican party Wendell Willkie who worked closely with his democratic rival by becoming an international ‘New Deal ambassador’. In 1942, after being deployed by FDR on a world tour to organize international New Deal projects in a race to end colonialism, Willkie wrote:
“In Africa, in the Middle East, throughout the Arab world, as well as in China, and the whole Far East, freedom means the orderly but scheduled abolition of the colonial system… When I say that in order to have peace this world must be free, I am only reporting that a great process has started which no man–certainly not Hitler–can stop… After centuries of ignorant and dull compliance, hundreds of million of peoples in Eastern Europe and Asia have opened the books. Old fears no longer frighten them… They are resolved, as they must be, that there is no more place for imperialism within their own society than in the society of nations.”
FDR’s battle with Churchill on this matter was well documented in his son/assistant Elliot Roosevelt’s book As He Saw It (1946):
“I’ve tried to make it clear … that while we’re [Britain’s] allies and in it to victory by their side, they must never get the idea that we’re in it just to help them hang on to their archaic, medieval empire ideas … I hope they realize they’re not senior partner; that we are not going to sit by and watch their system stultify the growth of every country in Asia and half the countries in Europe to boot.”
This vision was expressed continually by FDR in his hundreds of speeches, as well as by his Vice-President Henry Wallace, in the creation of the Atlantic Charter, and Four Freedoms. It was embedded in the defense of national sovereignty in the UN Constitution (conspicuously non-existent in the British-directed League of Nations earlier). It was meant to be the governing spirit animating the world as mankind entered a matured age of creative reason.
So What happened?
As long as FDR was in office, this British-run hive was kept at bay, but as soon as he died, the infestation took over America and immediately began undermining everything good FDR and his allies had created.
Upon the president’s death, Harry Dexter White was ousted from his position as director of the IMF and labelled a communist agent. Henry Wallace was ousted for similar reasons and worked with White on a 1948 presidential bid as third party presidential candidate. William Willkie (who had discussed creating a new party with FDR) died in October 1944, and FDR’s right hand man Harry Hopkins who did the most to initiate a US-Russia alliance, died in 1946. Elliot Roosevelt interviewed Stalin a few years later, and recorded that Stalin always believed that Elliot’s father was poisoned [14]“by Churchill’s gang.” By 1946, Churchill ushered in the Cold War setting former allies at each other’s throats for the remaining 70 years while dropping nuclear bombs on a defeated Japan. Stalin bemoaned Roosevelt’s death saying “the great dream has died”.
In the wake of FDR’s death, Keynes’ model of governance which permeated the operating system of the post-war age, ensured that the sorts of INTENTION-driven large-scale projects that could finally end colonialism would not see the light of day.
While Keynesianism went on to infect the trans-Atlantic left/labor parties, another parallel infiltration of an imperial economic doctrine was infused into the “conservative minded” zeitgeist.
The Rise of the Hapsburg Austrian School
Throughout the 1930s and 1940s, Mellon-Morgan-Rockefeller interests ran a multifaceted psychological war against the population. After their coup plans failed in 1934, these groups created a think tank calling itself the “American Liberty League” nominally headed by former Democratic Party Chairman John Jacob Raskob. The irony of the word “Liberty” used by an organization whose controllers sponsored fascism before and even during WWII should not be lost on anyone.
Through powerful oligarchs like William Randolph Hearst, Henry Luce, the Morgans, the Warburgs, the Duponts, and the Rockefellers, the Liberty League controlled the majority of mainstream media outlets, radio stations, and publishing houses in the USA. At the same time, these same forces co-ordinated closely with the newly re-organized FBI under the helm of J. Edgar Hoover. This powerful network worked hard to paint Roosevelt as a Keynesian who only created inflationary “make work jobs” without any concrete intention for the future productive powers of labor. Through this sleight of hand, FDR’s enemies were able to invent a straw man that they could then refute by promoting the anti-Keynesian model known as the “Austrian School” that had formerly grown out of the British-inspired theories of Carl Menger (retainer for the Habsburg empire) and his aristocratic disciples Ludwig von Mises, Friedrich von Hayek, Frank Knight, and Sir John Clapham.
By 1940, the American Liberty League formerly disbanded. However, with FDR’s 1945 death, its cabal of controllers spawned dozens of new think tanks that were enmeshed with the Council on Foreign Relations and Mont Pelerin Society mothership founded in 1947 by von Hayek and a group of eugenics-loving oligarchs whom we will soon encounter.
Over the coming decades, the Liberty League morphed into hundreds of new think tanks which began with the American Enterprise Association (AEA) [later known as the American Enterprise Institute] founded by Liberty League leader Raymond Moley and sponsored by General Mills, Chemical Bank, and Bristol Meyers.
Other think tanks built up by this network over the years included the Heritage Foundation, Cato Institute, Hudson Institute, Mises Institute, Manhattan Institute etc… which would set the groundwork for the later “conservative revolution” of the 1970s. This “Austrian School” revolution would spring to life once the 1945-1971 Keynesian perversion of Bretton Woods ended with the 1971 floating of the dollar off of the fixed exchange rate gold reserve system.
One of the primary god-heads of this new doctrine that dominated the deregulation, money worshipping bonanza of 1971 to the present collapse was Keynes’ old rival and lifelong friend: Friedrich von Hayek.
Introducing Friedrich von Hayek
In his 1944 The Road to Serfdom[15], Hayek lays out his inability to resolve the freedom-law paradox when he discusses the problem of governments who plan for the future:
“In order to achieve their ends, the planners must create power – power over men wielded by other men … Their success will depend on the extent to which they achieve such power. Democracy is an obstacle to this suppression of freedom which the centralized direction of economic activity requires. Hence arises the clash between planning and democracy”
In a nutshell, Hayek asserts that ALL forms of national planning lead inexorably to tyranny. In this, Hayek does not differentiate between George Washington, Lincoln or JFK’s use of national power to do things vs fascist anti-humanist ideologues who believed in top-down controls with no regard for individual freedom.
Hayek also argues that all progress of human history is the result of unconstrained individualism liberated from all top-down intention (“spontaneous self organization”) and that all value originates from individual passions to satisfy pleasures and avoid pain.
Neither Hayek nor his teachers Ludwig von Mises and Carl Menger created these ideas themselves, but derived all of it from the earlier works of two British Imperial strategists: 1) Adam Smith (1723-1790) and 2) Smith’s Hellfire Club predecessor Bernard Mandeville (1670-1733).
Both Mandeville and Smith were celebrated not coincidentally by both von Hayek and John Maynard Keynes as great geniuses, and yet both were provably political agents whose ideas were crafted to undermine the American revolutionary ideals which erupted in the wake of America’s declaration of independence. The patronage of both Mandeville and Smith by the highest echelons of the British Empire (Prime Ministers Walpole and Shelburne) is thus not a coincidence.
The Sick Mind of Bernard Mandeville
In 1966, Hayek delivered a lecture[16] in praise of Bernard Mandeville (1670-1733) whose ideas, he argued, laid the foundation for British Liberalism of Adam Smith and his own Austrian school.
What did Mandeville say that Hayek considered so innovative and wonderful? Mandeville argued that while people should try to behave ethically, the truth is that morality itself has no intrinsic existence (beyond being a useful regulator of commoners). Moreover, progress only happens when people are free to pursue their vices without limit. In his Private Vices Public Benefits (1725)[17], Mandeville even argues that a killer who steals money and buys time with a prostitute, is doing a service to society since the prostitute will use that money to buy new buttons for her dress which employs a button maker, who feeds his family etc…
Mandeville defines human nature as fundamentally lustful and selfish saying: “One of the greatest reasons why so few people understand themselves, is that most writers are always teaching men what they should be, and hardly ever trouble their heads with telling them what they really are… I believe man to be a compound of various passions, that all of them, as they are provoked and come uppermost, govern him by turns whether he will or no.”
Mandeville’s famous 1705 poem The Grumbling Hive demonstrated his vile theory with a bit of creative edge:
“Vast numbers thronged the fruitful Hive;
Yet those vast Numbers made ’em thrive;
Millions endeavouring to supply
Each Other’s Lust and Vanity. …
Thus every Part was full of Vice,
Yet the whole Mass a Paradise
Flatter’d in Peace, and fear’d in Wars
They were th’ Esteem of Foreigners. …
Such were the Blessings of that State;
Their Crimes conspired to make ’em Great;
And Virtue, who from Politicks
Had learn’d a thousand Cunning Tricks,
Was, by their happy Influence,
Made Friends with Vice: And ever since
The Worst of all the Multitude
Did Something for the common Good.”
If “vice = good” then one must ask what becomes of “evil” in Mandeville’s strange world?
The answer is simple. Evil occurs when nation states attempt to regulate or direct the economic behavior of society according to a moral principle.
As a leading figure of Britain’s Hellfire Clubs, Mandeville’s secret societies were the Epstein islands of the 18th century where all the perverse whims and passions of the oligarchy were satisfied without limit and all of the elite who wanted to take part in this early Bohemian Grove happily took part in the forbidden festivities.
Like today’s Satanists, “the Greater Good” is merely the sum total of small acts of individual evil.
Adam Smith Continues Mandeville’s Legacy
In the face of the spread of French dirigisme (protective tariffs, public credit, manufacturing and public works) during the 18th century American colonies threatening independence, another British operative was employed to generate a sanitized version of Mandeville’s system.
This new social engineer’s name was Adam Smith (1723-1790).
In his Theory of Moral Sentiments (1759), Smith asserts that economic systems should remain subject to the random animal passions of the markets. What are the guides for wealth and creativity if not goals, or intentions? Smith says it clearly: hunger, sex and the fear of pain:
“Nature has directed us to the greater part of these by original and immediate instincts. Hunger, thirst, the passion which unites the two sexes, the love of pleasure, and the dread of pain, prompt us to apply those means for their own sakes, and without any consideration of their tendency to those beneficent ends which the great Director of nature intended to produce by them.”
With his 1776 Wealth of Nations, Smith argued that no nation, especially not the new USA, should ever regulate its own economic affairs, use national banking, develop native industries, use protectionism or direct credit for internal improvements. Instead, Smith explained that nations should remain agrarian in order to maximize their profits. Every nation would do what it was good at and simply “cash crop”, but under no case develop full spectrum economies.
Like Mandeville earlier, Smith asserted that the unconstrained passions of the mob seeking to maximize their pleasure would cause progress, and invisible hands would keep this spontaneous order somehow moving forward.
While some Americans indeed drank Smith’s Kool-Aid, like the democratic feudalist Thomas Jefferson, others continued to fight to defend full spectrum economics. Throughout the 19th century these American System proponents found their champion in Henry C. Carey (1793-1879)[18].
The American System vs British Free Trade
Carey argued that his fellow Americans must not “surrender their reason to wild, ridiculous, and absurd theories on morals, religion, politics, or science which have domineered over mankind… As a preliminary step we propose to establish the utter fallacy of some maxims, supported by the authority of the name of Adam Smith, author of the Wealth of Nations, but pregnant with certain ruin to any nation which they may be carried into operation… The influence of these maxims has been most sensibly and perniciously felt in our councils; has deeply affected our prosperity; and has been the main source whence the prevailing distress of the nation has flowed.”
Before becoming Lincoln’s economic advisor, Carey acted as leading Whig advisor to Presidents Harrison and Taylor alongside Henry Clay, and later became a founding member of the Republican Party shaping Lincoln’s economic program throughout the Civil War.[19]
By 1876, Carey organized the Centennial Exhibition in Philadelphia[20] which was a major watershed moment for the global adoption of the American System.
International networks stretching from Russia, Japan, Germany, France, Italy, and beyond, brought leading scientists and political economists to the USA where they were exposed to the miracles of science, engineering, and industrial progress that allowed the young nation to outproduce every European state in only one century.
In Germany the American System’s greatest champion was Friedrich List (1789-1846)[21] architect of the Zollverein and enemy of the British System. In his National System of Political Economy (1841), he wrote:
“The motto, ‘laissez faire, laissez passer’ is one that sounds no less pleasant to robbers, cheaters, and thieves than to the merchant, and therefore one ought to regard this maxim with suspicion…. This perversity, to surrender the interests of manufacturing and agriculture to the unfettered demands of trade, is a natural consequence of that theory, which universally looks only at prices, never allowing for the work required to produce, and views the entire world as one single and indivisible republic of merchants. This school of thought [Adam Smith’s] does not see that the merchant can achieve his purpose — obtaining profits by trade, even at the expense of agriculture and manufacturing, at the expense of the productive forces — just as easily through the independence and autonomy of nations. It’s all the same to him, and it is in the nature of his business and his aspirations that he cannot give a fig about the effect that the way in which he imports or exports goods might have upon the morality, the prosperity, and the power of the nation.”
Although Chancellor Otto von Bismarck (1815-1898) was ousted by a soft coup in 1890 (putting into motion Germany’s later plunge into WWI[22]), his support for List’s reforms united Germany and catapulted it into a pre-eminent position of industrial productivity fast outpacing even the British Empire in only decades. Announcing his protective tariff policy in 1879, Bismarck stated:
“We were, up to this point, the dumping ground for the surplus production of other countries, because of our open-door policy. In my view, this wrecked the prices in Germany. It has prevented the growth of our industries and the development of our economic life. We must close this door, and erect a higher barrier. And what I now propose is that we create for German industry the same market that we up to now have benevolently allowed foreigners to exploit. If the risks of protectionism are as great as is claimed by the adherents of free trade, then France would have been impoverished long ago, because they have gone with this theory since the time of Colbert.”
Similar reforms had been applied under Czars Alexander II and III in Russia under the guidance of “American System” follower Sergei Witte which drove the construction of the Trans Siberian Railway. It was also occurring in Japan during the Meiji Restoration, in Ireland with the Carey network that launched Sinn Fein, and in France where the American System school arose with President Sadi Carnot and Gabriel Hanotaux. This emerging new system of win-win cooperation represented a mortal threat for the decaying system of the British Empire and only a dense period of assassinations, color revolutions, and war derailed that development.
The Origins of the Austrian School
It was amidst this climate of electric potential that Adam Smith’s system was repackaged by an Austrian intellectual named Carl Menger (1840-1921) on behalf of the Hapsburg empire which still maintained an alliance with other oligarchical families of Europe’s nobility. These oligarchical networks desperately wanted to keep Europe de-industrial, feudal, and undeveloped.
Menger himself was the retainer of the Royal Houses of Hapsburg and Wittelbach acting as personal tutor to Crown Prince Rudolph von Hapsburg[23]. Just as Smith was commissioned by Lord Shelburne to attack the French dirigiste economic school in his 18th century treatise, Menger was deployed to do the same thing in the 19th century.
After the fires of WWI had settled, the “peace” became little more than an interlude in preparation of a new form of world order to be run by fascist strong men. Though it is often overlooked today, “corporatist fascist economics” did not make its first appearance in Italy as is commonly believed, but rather in Austria after the dissolution of the Austro-Hungarian empire in 1919.
At this time, von Hayek worked as the aid to Ludwig von Mises who then served as chief economic advisor to Austria’s new government, under the direct control of the Bank of England’s new governor Montagu Norman and the League of Nations’ Arthur Salter (head of the League’s Supreme Economic Council). Mises was also the leading advisor to Austrian fascist and leading member of the Pan European Movement Engelbert Dollfuss (Austrian Chancellor from 1932-34) and also a leading advisor to Otto von Hapsburg (heir to the Hapsburg throne) who headed the Pan European Movement for decades.
Under Mises’ direction, the post-war Austrian government-imposed cuts to services, government spending, and wages leading to mass starvation and poverty. These acts would serve as a template for what Italians and Germans would soon face.
At the height of Weimar’s 1923 Hyperinflation, and in direct response to the London-Wallstreet funded Bolshevik movement, a new organization called The Pan European Union (PEM) was created led by Count Richard Coudenhove-Kalergi, and later Archduke Otto von Hapsburg.
This organization was funded by Louis de Rothschild, and Max Warburg while its members included Benito Mussolini, Walter Lipmann, and Nazi Finance Minister Hjalmar Schacht. The PEM would aim to replace nation states with a “benign feudalist system” that became the guiding template for the later European Union years later. Von Hapsburg’s dual role as leader of both this organization and several Austrian School think tanks is not a coincidence.
As Cynthia Chung outlines in her book ‘The Empire on Which the Black Sun Never Set’, Coudenhove-Kalergi admits in his multiple autobiographies that his primary allies among the American elite were entirely to be found in the Rhodes-Milner Council on Foreign Relations with special emphasis on John Foster Dulles. And while Kalergi complains that Franklin Roosevelt would never grant him even a minute of time, the moment FDR died, his access to the White House became literally unbounded. Expressing his joy at finding a partner in Sullivan and Cromwell’s Nazi-supporting fifth columnist, Coudenhove Kalergi reflected in 1948: “There were… only very few Americans who, at that time, had real faith in the creation of a United States of Europe on democratic lines. One of the men who had this faith was John Foster Dulles whose acquaintance I made shortly after my arrival in New York. As chairman of the Council of Protestant Churches of America, Dulles took his stand firmly on the side of a Pan-European peace programme.”
The Mont Pelerin Society: Fascism with a Liberal Face
Before creating the Mont Pelerin Society in 1947, Hayek had earlier founded the Society for Renovation of Liberalism (SRL) in 1939. Nearly all of the founding members of this group were found among the 37 original Mont Pelerin members. Among this Fabian Society-dominated group were Milton Friedman’s teachers Frank Knight and Henry Simons, Fabian Society member Walter Lipmann, George Soros’ mentor Karl Popper, Ludwig von Mises, and Sir John Clapham.
With the untimely death of the Franklin Roosevelt, Keynes’ system of fascist controls were infused into the governance of the Bretton Woods institutions as FDR’s anti-colonial dream was suffocated.
While Keynes’s doctrine promoted top-down controls, the Mont Pelerin Society created a counter pole of “bottom up” free markets.
It is noteworthy that this group was also run by Pan Europeanists Otto von Hapsburg, Count Richard Coudenhove-Kalergi, and Max von Thurn und Taxis (heir to the powerful Venetian family that migrated to Germany in the 15th century). One of Otto von Hapsburg’s last projects before his 2011 death was the creation of the Dignitatis Humanae Institute, now led by Steve Bannon with the mandate of “uniting the right-wing movements of the world” under an anti-Chinese, anti-Muslim perspective.
Although it took nearly 30 years (and several dozen coups and assassinations of nationalist leaders from 1946-1971), the industrial growth of the Bretton Woods system was ultimately killed when the U.S. dollar was floated onto the speculative markets.
After patiently waiting for decades, their time had finally come.
The hundreds of international Austrian School think tanks spread across the Trans Atlantic went speedily to work applying the “solution” to the problems created by the central planning of Keynesianism. Under this “remedy”, a new age of de-regulation, privatization, and “monetarism” was unleashed under a new “greed = good” ethos that would have made Mandeville and Smith smile proudly.
To give an air of legitimacy to this economic paradigm shift, Hayek and Milton Friedman were awarded Nobel Prizes, and theirs quickly became the “new gospel” that infused itself into the conservative right of the world as the “conservative revolution” was launched.
Hayek’s Supranational Police Force and Population Control
It is here that the image of the “lover of freedom” disintegrates and the actual cold fascist soul of Hayek will show its ugly head.
Even though he is sold as an anti-Malthusian (promoting the idea that totally free markets will magically create the creative changes needed to overcome our carrying capacity), Hayek put his views on record saying in 1981:
“Over the next 20 years, the world population is expected to double again. For a world that is founded on egalitarian ideas, the problem of overpopulation is unsolvable. If we guarantee that everyone who is born will be supported, we will soon no longer be able to fulfill that promise [since growth will outstrip resources- ed]. There is only one break for overpopulation, namely that the only ones who may survive and procreate are those who can support themselves.”[24]
The source of this sleight of hand is located in another false dualism that had been created in the late 19th century by two associates of Thomas Huxley’s X Club: Herbert Spencer (the innovator of bottom up laissez fair ‘social Darwinism’) and his nominal rival Sir Francis Galton (the founder of the top down pseudo science of eugenics).
The question now arises: who does Hayek believe should grant permission for those self-supporting alphas to procreate and revoke the right to procreate of those who cannot support themselves? He answers this question in the last chapter of his 1944 Road to Serfdom[25]:
“There must be a power which can restrain the different nations from action harmful to their neighbors, a set of rules which defines what a state may do, and an authority capable of enforcing these rules. The powers which such an authority would need are mainly of a negative kind: it must, above all, be able to say “No” to all sorts of restrictive measures.”[26]
Hayek goes onto state: “The need is for an international political authority which, without power to direct the different people what they must do, must be able to restrain them from action which will damage others…. An international authority which effectively limits the powers of the state over the individual will be one of the best safeguards for peace.”
It is interesting to consider how a radical individualist incapable of resolving the elementary “Duty/Freedom” paradox of human existence, so quickly concludes that for world peace to exist, a global international police force must be created to control nations and judge who may or may not procreate in order to stop overpopulation (or any action which social engineers judge to be harmful to society for that matter).
The Morals of This Story
John Maynard Keynes was not the architect of the New Deal or even Bretton Woods, although he did want world government and population control from the top.
Friedrich von Hayek was never the defender of true freedom from tyranny but just another peon for empire who created a “false opposition” to Keynes and still promoted a supranational leviathan run by experts from the top.
Both operatives were steered from British Intelligence (aka: the new priests of Apollo at Delphi) which wanted you to fall into a false left vs right, top-down vs bottom-up, mind vs emotion debate which has confused humankind for millennia.
Both Hayek and Keynes repackaged the core anti-humanist axioms of Bernard Mandeville and Thomas Malthus into their systems and both obscured the true existence of the American System of Political Economy.
While Keynes was more overtly of a Galton eugenics “hands on” approach to population control, von Hayek could be more supportive of the Herbert Spencer “hands off” approach to the natural weeding out of the unfit. The Darwinian assumptions to both social theories being identical.
To the degree that we fail to recognize the false dualisms that have been placed into the zeitgeist as cognitive traps, we will not be able to recognize the pathway that has shaped the anti-oligarchist battle which has been waged continuously for several millennia. More importantly we won’t be able to recognize or use those tools available to citizens enshrined in the sovereign nation state as a power to do battle with said feudal oligarchists attempting to corral humanity into a new depopulated Great Reset and dystopian end-of-history era.
Additionally, to the degree that we fail to understand what Plato was actually doing as a cultural warrior seeking to outflank the imperial cults of Persia then operating through the Temple of Apollo at Delphi during his life and exhibited throughout all of his dialogues, we will never come to know what Benjamin Franklin understood as he prepared the groundwork for the world’s first Democratic Republic in 1776.
Franklin knew that this would be neither a monarchy nor a mob democracy.
The leading founding fathers had, after all, studied Plato and strove to finally resolve the “freedom vs duty” paradox by forming a government based simultaneously on the sacredness of the individual as outlined in the Declaration of Independence and the General Welfare of the whole as outlined in the Constitution.
Whether this American experiment will prove to have been a failure or a success will depend on the morality, courage, and honesty of citizens both in America itself and globally to confront the lies of the past and the needs of the future as we move into a new phase of civilization.
Footnotes
[1] This story is recounted in depth by this author in Clash of the Two Americas vol 2: Open vs Closed Systems Collide, Canadian Patriot Press, 2021
[2] The Roosevelt I Knew by Frances Perkins, Viking Press, 1946
[3] Keynes, the Man by Murray Rothbard, Von Mises Institute, 2010, p.13
[4] Indian Currency and Finance, John Maynard Keynes, MACMILLAN AND CO, 1913
[5] Inglorious Empire: what the British did to India, by Shashi Tharoor, London, Hurst, 2017
[6] For a fuller exposition of the origins, aims and accomplishments of the Fabian Society, see: What is the Fabian Society and to What End was it Created? By this author, Canadian Patriot Review, 2013
[7] Keynes’s plagiarism of Malthus and McCracken by Steve Kates, History of Economic Ideas, 2010
[8] Thomas Robert Malthus by John M. Keynes, Essays in Biography, 1933
[9] The full transcript of Keynes’ 1914 speech is re-published as an appendix in Keynes on Eugenics, Race, and Population Control by Jay Taylor, Von Mises Institute, Nov. 2019
[10] The Enduring Influence of Thomas Malthus by Renee Nal, RAIR Foundation, November 14, 2019
[11] New Understanding of the Bretton Woods Agreements Opens the Door to the Four Powers Dialogue by Gerry Rose, EIR, August 21, 2020
[12] From Great Depression to Great Recession: The Elusive Quest for International Policy Cooperation Editor: Mr. Atish R. Ghosh and Miss Mahvash S Qureshi, IMF, March 30, 2017
[13] The International Development of China by Sun Yat-sen, Shanghai Commercial Press, 1920
[14] Stalin Admitted Knowledge Of English, Roosevelt’s Son Says
By Rick Hampson, Associated Press, February 6, 1986
[15] The Road to Serfdom, Friedrich von Hayek, London : George Routledge, 1944
[16] R. BERNARD MANDEVILLE, A mastermind by F. Hayek. Lecture held on 23 March 1966 for The British Academy
[17] The Fable of the Bees: Private Vices Public Benefits by Bernard Mandeville, London : Printed for J. Tonson, 1725
[18] Collected works by Henry C. Carey can be accessed here: https://risingtidefoundation.net/henry-charles-carey-1793-1879/
[19] Although smoking gun evidence has been buried in the sands of time both Harrison and Taylor were also the first two presidents to die while in office under incredibly suspicious circumstances in 1840 and 1851.
[20] The ‘Land-Bridge’: Henry Carey’s Global Development Program
by Anton Chaitkin, EIR, vol. 24, no. 19, 1997
[21] Select works by Friedrich List can be found here: https://risingtidefoundation.net/friedrich-list/
[22] The Triple Entente: the British-led Conspiracy that sparked World War I by an EIR Research Team, vol. 23 no. 17, 1996
[23] Carl Menger’s Lectures to Crown Prince Rudolf of Austria, Edward
Elgar: Aldershot and Brookfield, 1994, pp.228
[24] Business Week, No. 11, 1981.
[25] The Road to Serfdom, Friedrich von Hayek, London : George Routledge, 1944
[26] Ibid. p.243
Matthew is the co-founder of the Rising Tide Foundation. He is the Editor-in-Chief of Canadian Patriot Review, Senior Fellow at the American University of Moscow, and host of The Great Game on Rogue News. He has authored the the four volume Clash of the Two Americas and in 2022 he co-authored Breaking Free of Anti-China Psyops: How the Cold War is Being Revived and What You Can Do About It.
Another brilliant historical analysis that won't be found anywhere else!
Malthus came to his conclusion about humanity by studying...
...Insects.
That's all you really need to know about Malthus.