“Nonetheless, the current situation represents the worst of all possible worlds.” – Chalmers Johnson, Dismantling the Empire, p. 106 

Under President Reagan, the U.S. government started to privatize the spheres of intelligence and military, a process that increased even more rapidly under Bill Clinton (Johnson, p. 101). This prehistory set the stage for the course our government would take after 9/11, wherein, already by 2006, “about 70 percent” of the money the U.S. government spent on intelligence was being directed towards private firms, and the number of contractors “seeking to do business with the [NSA] grew from 144 companies in 2001 to more than 5,400 in 2006” (pp. 96-7). In 2007, Mike McConnell, a former vice admiral in the US Navy who, after retiring in the 90s went on to work for government contracting and consulting firm Booz Allen Hamilton, returned to government, becoming “the first private contractor to be named to lead the entire intelligence community” (p. 98). In one of the umpteen confirmations that “behind closed doors” we will always simply find “the revolving door”, McConnell has since returned to a post at Booz Allen Hamilton. 

Although FDR may usually be remembered as the president who rescued the government from the moneyed interests responsible for the Great Depression, it may be more accurate to remember him, at least from a long-term perspective, as the president who initiated the process of leasing out the federal government wholesale to big business. In any mainstream discussion, the history of the era is typically framed wholly within the context of World War Two and the noble goal to overthrow fascism. Thus, it’s effectively lost from focus that initiatives like “Roosevelt’s use of public-private ‘partnerships’ to build up the munitions industry” were, at least in an economic sense, curiously similar to initiatives undertaken by the fascist governments themselves. In this vein, Johnson references Giovanni Gentile, the era’s “leading Italian philosopher of fascism”, who famously noted that fascism “should more appropriately be called corporatism because it was a merger of state and corporate power” (p. 94). 

While Johnson doesn’t address this, the merger of State and corporate power had already been fully achieved in the United States since World War One, wherein the great war put the recently-created Federal Reserve Bank (established December 23, 1913) to immediate use. Although the Federal Reserve isn’t sorry to see this go quite misunderstood amongst the masses, the central bank isn’t actually public, but rather a public-private “hybrid”, and it has always been fairly obvious that the largest banks maintain control over the Fed. So when, as Paul Atwood writes, “The investment banking firm of J.P. Morgan had become the official agent for Britain and France in American capital markets, loaning both governments over $2.3 billion itself and arranging for $3 billion in contracts with American exporters” (War and Empire: the American Way of Life, p. 111), Morgan was making loans that wouldn’t have been possible without the existence of the Federal Reserve. 

In doing so, Morgan made the loans that facilitated the First World War, loans that would ultimately be backed by the American taxpayer. Besides this, “Most of the most powerful political figures in both parties were also dependent on Morgan money, so Morgan interests were thus a pivotal force behind the scenes pushing the American government towards war” (Ibid.). Although it was for reasons far greater, at the very minimum Morgan interests would see to it that the Allies won the war, if only so the loans could be repaid. And, after the war, men like Charles Dawes, a banker who would later become Vice President of the United States during the Coolidge Administration, handled negotiations for Germany to pay war reparations to the Allies, essentially on behalf of Wall Street. For his efforts, Dawes won the 1925 Nobel Peace Prize. 

Whereas we don’t get the earlier perspective from Johnson, it’s nonetheless provided by Smedley Butler, the highly-decorated Marine general who supposedly foiled a fascist coup against FDR plotted by American industrialists, and who also wrote the 1935 pamphlet War Is a Racket. Concerning the concept of a “racket”, Butler states plainly that “Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many” (loc. 27). In World War One, Butler writes, 

And let us not forget the bankers who financed the great war. If anyone had the cream of the profits it was the bankers. …And their profits were as secret as they were immense. How the bankers made their millions…I do not know, because those little secrets never became public – even before a Senate investigatory body. (loc. 104)

If we take Charles Tilly’s view, from the article “War Making and State Making as Organized Crime” referenced in yesterday’s post, that States are “quintessential protection rackets with the advantage of legitimacy” (p. 169), then in the contemporary U.S. it is, in the first place, the backing of the Federal Reserve that confers that legitimacy. 

So, in the lead-up to World War Two, while on the surface everything seemed to be entirely about preparation for defeating “The Fascists” (who were fascists, to be sure, but were they the only ones?), “Beneath the surface,” writes Johnson, “was a less well recognized movement by big business to replace democratic institutions with those representing the interests of capital” (Dismantling the Empire, p. 95). Yet, what Johnson misses is that this had been just as true of World War One. 

There are many definitions of “fascism”, so many that it may often seem hardly worth it to use the term at all. But I’ve always been fascinated by Carroll Quigley’s definition, which he gave in the 1966 text Tragedy & Hope: A History of the World in Our Time: “…Fascism is the adoption by the vested interests in a society of an authoritarian form of government in order to maintain their vested interests and prevent the reform of the society.” This is somewhat vague, but it’s illuminated by the follow-up sentence: 

In the twentieth-century in Europe, the vested interests usually sought to prevent the reform of the economic system (a reform whose need was made evident by the long-drawn-out depression) by adopting an economic program whose chief element was the effort to fill the deflationary gap by rearmament. – p. 550 

In this sense, Quigley has just defined the economic program of the United States in the twentieth-century-beyond era; the only possible distinction can rest on Quigley’s reference to “an authoritarian form of government”, and Quigley puts a great deal of weight on his belief that such a descriptor did not apply to the Anglo-American form of government. That is, from a perspective like Quigley’s, a program of permanent warfare was decidedly not “fascist” if implemented under the aegis of Anglo-American hegemony, because Anglo-American hegemony represented “Liberal Democracy” and not “Fascism”. Those of us who are seated from the perspective of 2017 can make up our own minds, as to how much weight we attribute such a distinction. For what it’s worth, many commentators now acknowledge that the above block quote defines precisely the United States’ general economic strategy; they just refer to it as “military Keynesianism” (Johnson, p. 55) instead of “fascism”. In my mind, it’s at least quite clear that “the vested interests” in our society have perpetuated such a strategy for no other reason than “to prevent the reform of the society”. 

“This is definitely not the Way”: “the granaries are empty” yet “they wear silk finery”, these “thieving braggarts” in our culture who have done everything they can to ensure we’re on a path to global suicide. Peak oil may be the proximate material challenge, but it’s the mindset of financial militarization of all human life that paved the way for the trap of peak oil. Next week, we’ll start to explore possible ways of imagining a dismantled Empire, a demilitarized culture, and a politics of peace. Let’s try to find our way back to functionality.