There is a New World Order, but it is not the one envisaged by conspiracy theorists. Far from being covert, it is out in the open, a vast network of ideologues occupying the positions of power and influence in the Western world whose declared intent since 1945 has been to create a world fit for liberal internationalists to live in. From small beginnings it has grown to the point that there is a general acceptance by Western elites that liberal internationalism is the only acceptable political policy. This elite includes not only politicians, but also those who control the media, state institutions, academia and big business.
This NWO’s primary institutions are the UN and all its agencies, the IMF and the World Bank. Supporting them are a large and ever growing catalogue of treaties which formally commit great swathes of the world to elements of the liberal internationalist ideology, the organisations arising from such treaties (for example, NATO, the World Trade Organization, the North American Free Trade Area) and supra-national political entities (most notably the EU). In addition, there are the departments controlled by national governments which disburse and control the foreign aid given directly by states. Finally, there is a vast web of powerful non-governmental organizations whose activities dilute national and regional identity and autonomy in the name of ‘human rights’ environmental protection and the amelioration of poverty. All of these institutions, organizations and treaties hamstring nations in their political choices, in anything from the control of immigration to deciding what to do about the emissions of carbon dioxide and methane.
The destruction of democratic control
Democratic control vanishes as national elites adopt policies which dilute the power of national governments to make decisions. Potent examples of such policies are free trade, the free movement of labour and, most ambitiously, the creation of supra-national political entities like the EU. These policies are then enshrined in treaties which make the adoption of different policies difficult going on impossible. Domestic laws are also frequently passed to prevent honest public discussion of subjects which are disagreeable to the internationalist political elite.
The eventual consequence of this process of internationalisation is, in practice, to persuade all established political parties with a realistic chance of forming a government to agree
to work within the constricted political framework created by the treaty obligations and national laws which prevent free public discussion of whether the new status quo should be change. This also means that the political differences between the parties narrow, because by the act of accepting the constraints means that the range of possible policies is dramatically reduced.
Once the shift from national to supra-national politics is made the electorate are left with no meaningful choice between the established parties. Nor is there any realistic chance of a new party with different policies arising which can successfully challenge for power. This is because either the political system favours the established parties to the point where they cannot be overthrown (Britain is a prime example with its need for a party which wishes to be taken seriously as a contender for government to produce candidates and party organisations for 646 constituencies, a mammoth task ) or because there is a system of proportional representation which means that the electorate can never vote to elect a party to govern on a manifesto because governments are invariably coalitions (for example, Italy) .
The loss of democratic control is most advanced in the EU and nowhere is the loss greater than in Britain, which unlike all the other major EU states has no history of dictatorship in modern times.
The inevitable consequences of “inevitability”
Like Marxists, liberal internationalists imagined that their new socioeconomic order was inevitable. They could not conceive that anyone would not see the ‘superiority’ of their way of thinking if only they could be brought into close and sustained contact with it. They thought that if the West ‘engaged’ with the rest of the world, the large majority of which was (and is) under dictatorships of varying severity, the rest of the world would embrace liberal democracy as a matter of course.
To this end they developed the doctrine of ‘soft power’, whereby the West used aid and trade to seduce the rest of the world from its mistaken, old-fashioned ways – aid being the overt tool to force their values on others while trade was intended to foster capitalistic ways of business which, so it was believed, would inevitably force even the most hidebound and natural autocracies to adopt political systems akin to those in the West.
That this was pure fantasy was obvious from the start, because it ignored both human nature and the strength of individual cultures. The experience of post-war decolonisation should have taught the liberal internationalists that it is not possible consciously to create the institutions of liberal democracy – such as parliaments and an independent judiciary – in fact as well as name, nor the cultural norms which underpin them. These things are organic social growths which arise, if they arise at all, out of the general nature of a society. Sadly, the liberal internationalists did not learn the lesson. Like those who argue that communism has never failed because it has never been tried, they believed that if their ideas had not proved successful before that was not because they were unrealistic but because they had not been tried in conditions in which they would flourish.
Until the end of the Cold War, proponents of liberal internationalism were constrained by two things. The first was the division of the First and Second Worlds into, for want of a better description, the liberal democratic West and the Communist East, with most of the rest of the world siding with one power bloc or the other. This meant that the reach of the liberal internationalists was limited to the developed world and those parts of the developing world which came under its aegis. Much of this problem dissolved, temporarily at least, when the
Soviet Union collapsed. The second constraint was the tiresome (to liberal internationalist minds) persistence of national sovereignty in the developed world, primarily through the maintenance of protectionist economic policies and the existence of national populations which enjoyed a high degree of racial and cultural homogeneity. Mass immigration into the West and state-sponsored multiculturalism became liberal internationalist policy during the early days of the Cold War, and have now seriously undermined the cultural solidarity of Western nations. But until the 1980s, national economic self-sufficiency remained high. Then along came Margaret Thatcher and everything changed. British Labour Party thinkers were among the first socialists to embrace laissez-faire economics. Initially, they did this because they were demoralised by the electoral success of Thatcher, and agreed to embrace the market as the price of regaining power. But what started as a venal political compromise soon became a prime ideological tool.
As Thatcherism unfolded and spread throughout the world, it dawned upon some on the Left that the removal of trade barriers and the further loosening of immigration controls in the name of creating a free market, far from being a capitalist device to entrench conservatism, was in truth a magnificent engine to destroy the nation state and allow the tenets of liberal internationalism to be widely disseminated and more thoroughly enforced. We have now arrived at a situation whereby the major parties in all Western countries have virtually identical economic views, which means they are unable or unwilling to deal with the ongoing global economic meltdown.
The economic consequences of globalism
Free trade, or at least freer trade, reduces the self-sufficiency of countries by forcing developed economies either to export industries to lower wage economies or simply give up trying to operate in certain industries. The result of this has been a serious narrowing of the economic base. Nowhere is this seen more dramatically than in Britain where the economy has become dependent on financial services, an economic activity which can be switched rapidly from one country to another if circumstances change, and which, as we have seen during the last year, is in any case a dangerously unstable kind of national economic foundation.
At the other end of the developmental scale, the aid policies of the developed world, the economic institutions they dominate (such as the IMF and World Bank) and the effective independence from any state control of Western multinationals, have driven many developing states towards economic practices which have radically altered their native economies for the worse. In the poorest, least developed states, the political policies with regard to international trade and consumer demand of the developed world (and latterly the developing world in the shape of the Chinese) has slanted their economies towards dangerously narrow economic bases, most commonly built on the extraction of raw materials, tourism and the production of food and horticultural products for export.
The less self-sufficient a country is, the more unstable its economy becomes. As the variety of its economy lessens, it becomes more susceptible to economic shocks in the rest of the world. A country with a narrow range of exports is at the mercy of a change in global demand for those products, while the increased imports which are needed because of its narrowed economic base leave the country vulnerable to wide fluctuations in their price and availability. The recent violent ups and downs of commodity prices, especially oil and gas, are a savage reminder of this fact. So much of the West’s industrial capacity has been shifted to the developing world, most particularly to China, that any substantial reduction in exports from that
these new sources of manufactured goods to the West would have severe and immediate effects on countries which now lack the industrial capacity to easily make up the shortfall. China alone could cause grave problems if she substantially restricted her exports. Such a reduction in exports is quite possible. First, China’s domestic consumer demand is growing rapidly as its population gets wealthier. Second, as China and much of the Third World industrializes, there may simply not be enough raw materials to go around and in the future China might not be able to obtain sufficient raw materials to supply both her home market and foreign demand. Third, there is a good deal of political tension inside China, between the dirt-poor countryside and the rapidly enriching urban population, between the 100 million or more ethnic minority population within China and the Han Chinese, between the Communist Party and the rapidly expanding entrepreneurial class. Fourth, China is deadly serious about regaining Taiwan and, notwithstanding growing trade links with the country, is naturally hostile to Japan. Fifth, there is also the question of the Russian far East. This vast region is rich in natural resources and populated by a mere six million Russian citizens – and that number is declining every year as Russians return to the more prosperous Western part of the country. The temptation for China to grab this territory is great.
Why free enterprise cannot be left to its own devices
I have no doubt that the market is the most efficient means of conducting the vast majority of economic activity, especially within a sensibly protected domestic market, but it flies in the
face of reality to believe that Adam Smith’s famous “invisible hand” will produce the most desirable result in all circumstances. Indeed, Smith himself acknowledged that certain projects, such as road building, should be undertaken by the state because they would never be adequately provided by private enterprise – and that strategic activities, such as the native”
manufacture of armaments, should be ensured by the state for reasons of national safety and security. Here is Smith on the Navigation Acts:
“…the Act of Navigation by diminishing the number of buyers [means]…we are thus likely not only to buy foreign goods dearer, but to sell our own cheaper, than if there were a more perfect freedom of trade. As defence, however, is of much more importance than opulence, the Act of Navigation is, perhaps, the wisest of all the commercial regulations of England.” 1
It is also a fact that private enterprise relies on the state to maintain a system of law which both allows contracts to be enforced and public order to be maintained, two things vital to the working of private business. Moreover, what is commonly called a free market is in fact a state-controlled market, being dependent on anti-monopoly laws enacted by the state and enforced by the state, the natural end of a truly free market being monopoly or at least greatly reduced competition.
The problem with private enterprise is that it is essentially amoral – Stalin pungently described the mentality of those driven by the profit motive with the brutal sentence “When we hang the capitalists they will sell us the rope.” That is not so far from the truth as to be ridiculous. Those who are driven by the profit motive will satisfy that before anything else. Such behaviour is not simply or even primarily the sating of individual greed – although in individual cases it can be just that – but a simple consequence of trading in a competitive market.
At the most basic level, the need in private business to maintain a sufficient cash flow to keep the business running concentrates the mind wonderfully to the exclusion of other concerns. Publicly quoted companies are expected as a matter of course to try to grow their share price, pay healthy dividends and expand the business. What may seem to be selfish and damaging behaviour can be no more than a struggle for survival, even if the mentality of those who command private companies often contains a good helping of self-advancement, greed and ego. (Gordon Gecko’s “Greed is good” mantra in the film Wall Street did not come from thin air but reflected reality, albeit hyperbolically).
Of course, history shows many instances of capitalists behaving philanthropically and with concern for the general good, but the catalogue of such acts is infinitesimal compared with examples of capitalists behaving selfishly for short-term gain without concern for the societal consequences. A classic British example occurred after the Great War when Stanley Baldwin called for private businessmen who had profited from the conflict through reduced foreign competition and massive government contracts – those “hard faced men who had done well out of the war” – to make voluntary donations to the Treasury, his family leading the way with a donation of several hundred thousand pounds. The response to his call was negligible.
Because unrestrained capitalism will naturally tend to look to its own narrow and frequently short-term interests, governments need to regulate it sufficiently to restrain its pernicious effects. The more competitive a market, the more ruthless and reckless the behaviour of those competing within it. The more ruthless and reckless the behaviour becomes, the greater the need for the state to restrain it. Except in a few areas, such as aerospace, where the entry cost to the industry is prohibitively high, the freer international trade is the more competitive the market will be.
Nowhere is government regulation more needed than in the field of finance, as the present crisis vividly reminds us day by day. This is because banks and allied undertakings are the prime drivers of the money supply through their offering of credit (when a loan is made the money supply increases by the amount of the loan, because the lender still owns the money and the borrower has the use of it). Their creation of credit dwarfs the amount of coins and notes in circulation and credit created by government borrowing. The lack of proper controls over lending through simple and readily understandable measures such as credit controls has effectively privatised control of money, with the financial institutions being allowed to contaminate the economy by creating money of widely varying quality; a good analogy would be with a currency based on gold with the government minting to a consistent standard, while allowing private companies to mint coins to whatever standard they chose.
The present global financial crisis is probably the prime example of governments failing to exercise necessary regulation since the Great Depression, the consequence of this failure being that the financial institutions were able to offer credit incontinently and so contaminate the whole financial system.
For those who believe that the market is all, let them think upon these facts. Laissez-faire first gained practical expression as an elite economic ideology in Britain in the 1840s when Robert Peel began dismantling the protectionist system which had served England and then Britain so well for three centuries (it was under this economic regime that the Industrial
Revolution occurred). Since these changes the periods of great economic upheaval have been when laissez-faire has been the ‘official’ ideology. Economic crises regularly arose from the 1860s until the Great Depression of the 1930s. Between 1931 and the election of the Thatcher government in 1979 Britain experienced no economic upheaval equivalent to what we are currently undergoing, let alone the Great Depression. That was the period of unabashed state involvement in the economy and protectionist policies.
In short, every major economic crisis for the past century and a half has come during times when laissez-faire policies were in the ascendant. That alone makes a strong case for state intervention. I hasten to add that the sort of state intervention which is necessary is not a wholesale nationalisation of industry, but commonsense regulation such as credit controls and the protection of strategic industries such as food and energy.
The day of liberal internationalism is probably almost done. As in the latter days of the Soviet Union, the visible discrepancy between reality and the ideology has become so vast that it has moved from being sinister to absurd. Even Francis Fukuyama, the man who famously claimed that the fall of the Soviet Union meant that capitalism and democracy had beaten all its ideological competitors out of sight is no longer so sure of his ground, although he still believes that capitalist democracy is the best game in town. Here he is writing very recently:”I wrote an essay in 1989, The End Of History, and in it argued that liberal ideas had conclusively triumphed at the end of the Cold War. But today, US dominance of the world system is slipping; Russia and China offer themselves as models, showing off a combination of authoritarianism and modernisation that offers a clear challenge to liberal democracy. They seem to
have plenty of imitators…..
“A critical issue that will shape the next era in world politics is whether gains in economic productivity will keep up with global demand for such basic commodities as oil, food and water. If they do not, we will enter a much more zero-sum, Malthusian world in which one country’s gain will be another country’s loss. A peaceful, democratic global order will be much more
difficult to achieve. Growth will depend more on raw power and accidents of geography than on good institutions. And rising global inflation suggests that we have already moved a good way towards such a world” (2)
The skeleton of liberal internationalism will remain for a while in institutions such as the UN and in the rhetoric of its disciples who continue for the moment in positions of power and influence, but the hard reality of changing circumstances will make it impossible to sustain it as an active philosophy.
The present financial crisis has seriously discredited laissez-faire economics, while the resurgence of Russia and the rise of China, India and other large Second World countries such as Brazil will radically change the patterns of geopolitical influence in most of the world. The West, especially the United States, is increasingly in hock to China and the various non-Western sovereign wealth funds and looks ever more tired of international entanglement.
The big winner from globalism to date has been China, which has swallowed up much of the manufacturing work of the developed world, is running a truly colossal trade surplus and has foreign reserves exceeding a trillion pounds. Most tellingly, she has not gone down the laissez-faire route, being still very much a command economy with Chinese control of businesses in China maintained by an insistence that in joint ventures with foreign companies the Chinese are the majority shareholder.
This does not necessarily mean that that the West will end up being dominated by China (or Russia and India). Just like Western nations, China and other potential global rivals all have serious internal problems of their own which could at any time plunge them into political and economic disaster. And the financial crisis may mean that Western countries begin to take a more responsible attitude towards their economic assets The only thing certain about the future is that the world will be a more uncertain place than it was between 1945 and 1990, when the competing Western and Communist power blocs produced an abnormal degree of international stability.
The stability produced by the Cold War is extremely important. As an under graduate in 1970 I wrote an essay which pointed out that this stability was greatly to the advantage of the West because it produced general stability, greatly reduced the opportunity for mass migration and shielded the West from a great deal of economic competition.