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ARCHITECTS OF POWER: HOW THE GLOBAL ELITE PROFIT FROM EXTREME INEQUALITY & PRE-EMPT THE BACKLASH

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By Dr. Tim Coles

Source: Waking Times

There is a new, mega-rich global elite consisting of a small number of billionaires and multibillionaires. Many of them made their money in the technology sector. Others play financial markets or inherit fortunes. They are wealthier and more powerful than some entire nation-states.

The British Ministry of Defence (MoD) says:

“Whilst there have always been differences between the wealthier, better educated and the less privileged, these differences appear likely to widen in the coming decades.”

The mega-rich deliberately order the world in ways that guarantee their wealth by institutionalising inequality. Occasionally, this is admitted. In 1997, a book published by the Royal Institute for International Affairs in the UK acknowledged:

“The present international order may not be the best of all possible worlds, but for one of the ‘fat cats of the West’ enjoying a privileged position in an international society that is structured and organised in ways which perpetuate those privileges, there are good reasons for not pursuing radical change.”

This is also true of internal policymaking. The third richest man in the world, Warren Buffett (worth over $80bn), confirmed this: “There’s been class warfare for the last 20 years, and my class has won.” This echoes his statement in 2006, just prior to the global financial crisis: “There’s class warfare all right… but it’s my class, the rich class, that’s making war, and we’re winning.” Around the same time, the liquidity firm Citigroup circulated an investor memo, stating: “Society and governments need to be amenable to disproportionately allow/encourage the few to retain that fatter profit share.” More recently, the UK MoD admitted: “In the coming decades, the very highest earners will almost certainly remain rich, entrenching the power of a small elite. Vested interests could reduce the prospect of economic reforms that would benefit the poorest.”

Consider the enormous concentration of wealth and power that results from this imbalance.

Ever-Increasing Power

Global and national inequality is staggering and getting worse. By 2011, a mere 147 – mainly US and European – corporations owned and controlled 40% of world trade and investment. Just four corporations influence the profitability and power of these 147: McGraw-Hill, which owns Standard & Poor’s ratings agency; Northwestern Mutual, owner of the indexer Russell Investments; the CME Group, which owns 90% of the Dow Jones market index; and Barclay’s bond fund index. Evaluative decisions by analysts at these firms affect the wealth and performance of each of the 147 giants.

That’s corporate wealth concentration. But what about wealth concentration among individuals?

There are 7.7 billion people in the world. Of those, just 2,153 are billionaires. According to Forbes, their combined wealth totals $8.7 trillion. The list of billionaires reflects where power is most concentrated: in the US. While China and Europe’s number of billionaires declined in the previous 12 months, the US and Brazil gained billionaires. The US is home to 607 billionaires or 0.000001% of the population. It is worth noting that President Donald Trump was a billionaire before he came to power. Trump has cut taxes for his fellow billionaires. As an indication of continued wealth concentration, consider the wealth disparity among the billionaire class itself. He Xiangjian, founder of the Midea Group, is the joint-50th richest person, worth over $19.8bn. Jeff Bezos, by comparison, the founder of Amazon, is the richest man in the world, worth over $131bn – more than six times He Xiangjian.

Part of the problem has been the US-led imposition of an economic dogma called “neoliberalism” (which is neither new nor liberal) on much of the rest of the world.

Neoliberalism can be roughly defined as:

1) Financialisation, i.e., allowing investors to make money from money as opposed to tangible things;

2) Deregulating financial services;

3) Taking out government insurance policies so that working people bail out financial institutions;

4) Cutting taxes for the wealthy;

5) Privatising public services to reduce social mobility;

6) Imposing austerity to make markets more attractive to investors.

Neoliberalism has cut taxes for the super-rich, enabling them to hold onto their wealth at the expense of others. According to Oxfam, the average rate of personal income tax for the wealthy was 62% in 1970. In 2013, it was 38%. In the UK, the poorest 10% pay a higher proportion of their income in taxes than the richest 10%. Global GDP, i.e., how much money there is in the world, is $80 trillion. But, of this, $7.6 trillion is untaxed. In the decade since the financial crisis, the number of billionaires doubled. This reveals that the system rewards greed. In 2017, 43 people owned as much wealth as half the world’s poorest. In 2018, the number was 26.

To put all this into perspective, Jeff Bezos owns as much wealth as the poorest fifty countries. When it comes to more ‘developed’ nations, Bezos’s wealth equals the entire GDP of Hungary. Consider how Bezos makes his money. Amazon is a corporation that primarily advertises and delivers products. The innovation, design, and investment in and of those products is the work of others. Amazon treats “workers like robots” by spying on them, discouraging unions, offering insecure contracts, and encouraging long hours. Amazon is also notorious for paying little or no corporation tax. Amazon is an online retailer. The Internet was developed by the US Defense Department in the 1960s as ARPANET, with public money. The satellites that enable online transactions are first and foremost military hardware. Not only did Amazon take advantage of state-funded innovation, but it also rewards government investors by selling the CIA cloud technology and the Pentagon artificial intelligence.

Bezos is far from being the only one. Bill Gates’s Microsoft and the late Steve Jobs’s Apple, which became the first trillion-dollar company, also enjoy low taxes, technologies developed with government grants, and procurement contracts.

Consider also the immoral activities of other hi-tech nouvelle méga riche. Without making it clear to users, Facebook founder Mark Zuckerberg (worth $66bn) has made his money by selling personal data to insurers and advertisers. Scientists have used Facebook in social media experiments without the knowledge or consent of users in an effort to see how memes affect mood.

Other mega-rich, including the hedge fund manager Robert Mercer of Renaissance Technologies, used Facebook to market political candidates. Other tech billionaires include Google founders Larry Page and Sergey Brin. Google technology was funded by the CIA’s venture capital firm In-Q-Tel. Also relying on technologies developed by the Pentagon with workers’ tax dollars, the company cooperates with the National Security Agency to spy on citizens and it has even enabled US assassination programmes.

Consequences

How do the billionaires get away with it, and what are the social and political consequences? The examples below are from the US, but it should be noted that the US exports its mega-wealth model.

A study by Martin Gilens and Benjamin I. Page on plutocracy (government by the rich) notes that the rich buy political parties. Politicians draft and/or vote for laws that help the rich. The authors analysed 1,779 policy issues in the US and conclude that “average citizens and mass-based interest groups have little or no independent influence.” Unlike the public, “economic elites and organised groups representing business interests have substantial independent impacts on US government policy.” Other research into wealth inequality in the US finds that “[c]ertain policies, such as the decreased support for unions and tax cuts favouring the relatively well-off and corporations, have benefitted a small minority of the population at the expense of the majority and have thus contributed to widening income inequality.”

At the turn of the last century, 9% of American families owned 71% of the nation’s wealth. The elite of the day included familiar names: John D. Rockefeller (oil), J.P. Morgan (banking), W. Averell Harriman (industry), and so on. Things balanced out after the Second World War, with the majority of Americans becoming middle class. Gradually, state controls over the economy were removed, and the situation reverted to the inequality of bygone centuries.

Since the 1970s, the US middle class has been shrinking. Until recently, the middle classes of Asia grew, precisely because strong Asian economies (notably China, South Korea, and Singapore) either retained some state controls or refused to adopt the US neoliberal model.

Alan B. Krueger, a labour economist and key Obama advisor, explains that, “since the 1970s income has grown more for families at the top of the income distribution than in the middle, and it has shrunk for those at the bottom.” Between 1979 and 2007, the top 1% ((multi)millionaires and (multi)billionaires) enjoyed a 278% increase in their after-tax incomes. But 60% of Americans saw their incomes rise by just 40%, which when adjusted for rising living costs means stagnation. Krueger notes that during that period, $1.1 trillion of annual income was moved to the top 1%. “Put another way, the increase in the share of income going to the top 1% over this period exceeds the total amount of income that the entire bottom 40 percent of households receives.”

The exportation of this model means that Australia, Britain, and Canada became what the billionaire-dollar liquidity firm Citigroup calls “plutonomies,” economies in which the rich drive luxury goods markets such as jewellery, fashion, cruises, and sports cars: hence the recent entry of celebrity Kylie Jenner into the billionaire class. The Citigroup document also notes that in plutonomies the top 1% owns 40% as much wealth as the bottom 95%. No matter where you live, you can’t escape the institutional structures that create inequality.

The US military exists, in part, to maintain the unjust status quo. Yet, it acknowledges the dangers of dominance: “A global populace that is increasingly attuned and sensitive to disparities in economic resources and the diffusion of social influence,” thanks in part to the very technologies that enrich the rich, “will lead to further challenges to the status quo and lead to system rattling events,” like Brexit or the Yellow Vest protestors in France.

The mega-rich and international think tanks and forums they sponsor are beginning to reluctantly accept that their status quo political puppets might get voted out of office and give way to so-called far-left or far-right parties unless they address wealth inequality.

New Paradigms of Control

The question, then, is how to deal with the restless and disaffected majority while not radically altering the system and taking away the privileges of the elite. In 1961, US President John F Kennedy said: “If a free society cannot help the many who are poor, it cannot save the few who are rich.” In the 1980s, World Economic Forum founder Klaus Schwab said: “Economic globalisation has entered a critical phase. A mounting backlash against its effects… is threatening a very disruptive impact on economic activity and social stability in many countries… This can easily turn into revolt.” More recently, he said: “Today, we face a backlash against that system and the elites who are considered to be its unilateral beneficiaries.” Likewise, the billionaire Johann Rupert of Cartier jewellery (one of the many luxury services driving plutonomies) said: “We are destroying the middle classes at this stage and it will affect us.” Similarly, the British MoD discusses “[m]anagement of societal inequalities,” as opposed to the elimination of social inequality.

Many of the new elites make people redundant by automating the workplace. While Amazon still relies on human shelf-stackers and delivery drivers, it uses an increasing number of physical robots to stack shelves and algorithmic robots to assist online customers. Likewise, Facebook and Google’s content filters rely on heavy automation. This is creating precarious employment conditions. According to the Washington Post (which is owned by Bezos): “…the modern emerging workforce of tech, urbanised professionals, and ‘gig economy’ labourers all represent an entirely new political demographic.” Politicians then “focus more on education, research and entrepreneurship, and less on regulations and the priorities of labour unions.”

But there are many problems. For one thing, the financial services economy, which markets everything, has made “education” a form of unsustainable debt. The quality of US education is notoriously low by world standards, and many young people are “overqualified” for menial jobs, like delivering for Uber or stacking shelves in Amazon warehouses. The UK MoD acknowledges that, “Freelance work is… often low-paid, lacking the benefits and security of formal employment and, therefore, the growth of the gig economy could increase inequality.”

The crisis of what to do with a young, indebted, restless population automated out of steady work by – and competing with – algorithms and physical robots has been considered for at least 50 years.

Traditionally, ‘education’ meant brainwashing children to work in menial jobs for life in adulthood. But as the economy changes and employment becomes less stable, new methods of ‘education’ for re-skilling adults are required. In the late 1960s, future political advisor Zbigniew Brzezinski authored a book in which he advocated for lifelong learning as a way of re-skilling an aging population that finds its employment opportunities diminished, as small-to-medium-sized businesses get overtaken by tech giants. Around the same time, the British Labour Party (when it was a real labour party) introduced the Open University with the aim of providing lifelong learning. Likewise, in the 1980s, futurist Alvin Toffler envisaged an “electronic village” in which flexible working hours and lifelong learning would be required in a hi-tech economy.

To keep the poor from rioting while trapping them in a system that works for those who design it, today’s multibillionaire elites help to privatise public services and education by offering scholarships and infrastructure investments. In doing so, they train poor people to work for their system by developing others’ technology skills while hiding their own taxable wealth in charity foundations.

Howard G. Buffett is the son of Warren. While enjoying largely tax-free wealth that further impoverishes the global poor, the Buffetts, via Howard’s foundation, invest in dams and irrigation in the poorest nations of Africa. Bezos’s foundation awards scholarships for STEM courses (Science, Technology, Engineering, Mathematics). Zuckerberg’s foundation seeks “to find new ways to leverage technology, community-driven solutions, and collaboration to accelerate progress in Science, Education, and within our Justice & Opportunity work.”

Conclusion

By using free online services, we have allowed ourselves to be the products that tech giants sell to advertisers. By not organising to raise taxes on the mega-wealthy, we have underfunded our public services. By not keeping an eye on who’s funding what, we’ve allowed our political parties to hoover up donations from elites. By failing to understand the economy, we’ve allowed a new normal of instability and political uncertainty to flourish to the advantage of asset managers and hedge fund investors. As the US pursues global domination, this model will continue to be exported. It’s time to wake up.

How the West eats its children

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By Thierry Meyssan

Source: VoltaireNet.org

The cause of Western recession

International relations experienced a profound change with the paralysis of the Soviet Union in 1986, when the State was unable to control the civilian nuclear incident in Tchernobyl [1], then with the revocation of the Warsaw Pact in 1989, when the East German Communist Party [2] destroyed the Berlin Wall, and finally, with the dissolution of the USSR in 1991.

At that time, the President of the United States, George Bush Sr., decided to demobilise one million soldiers and devote the efforts of his country to its own prosperity. He wanted to transform US hegemony within its zone of influence, and expand it into that of the leader of the world, the guarantor of world stability. With that, he laid the foundations for a « New World Order », first of all in the speech he gave side by side with British Prime Minister Margaret Thatcher, at the Aspen Institute (2 August 1990), then during his speech to Congress (11 September 1990), announcing operation « Desert Storm » [3].

The world of the après-Soviet Union is one of free circulation, not only of merchandise, but also world capital, under the unique control of the United States. In other words, the passage from capitalism to financialisation – not the triumphant culmination of free exchange, but an exacerbated form of colonial exploitation of the whole world, including the West. Within the space of a quarter of a century, the major US fortunes have multiplied many times, and the global wealth of the world has increased considerably.

By allowing capitalism to run wild, President Bush Sr. hoped to extend prosperity to the world. But capitalism is not a political project, it is simply a system of logic designed for creating profit. The logic of the US multinationals was to increase their profits by delocalising production to China, where it is now possible, and where workers are the lowest paid in the world.

Those who were prepared to measure the cost of this advance for the West were few and far between. New middle classes began to appear in the third world, and although they were, of course, far less wealthy than those in the West, they enabled new, mainly Asian states, to play a rôle on the world stage. But simultaneously, Western middle classes began to disappear [4], meaning that it became impossible for the democratic institutions they built to survive. Above all, the populations of entire regions were to be entirely crushed, starting with those of the African Great Lakes. This first regional war caused 6 million deaths, in Angola, Burundi, Namibia, Uganda, the Democratic Republic of Congo, Rwanda and Zimbabwe, and was met with general incomprehension and indifference. The aim was to continue to seize the natural resources of these countries, but to pay less and less for them, which meant dealing with gangs rather than with the States who had to feed their populations.

The sociological transformation of the world is happening very fast and is clearly without precedent, although we do not have the statistical tools available today to evaluate it with precision. However, everyone can witness the increase in power of Eurasia, (not in the Gaullist sense of « Brest to Vladivostok », but that of Russia and Asia without Western and Central Europe), which seeks liberty and prosperity, while the Western powers, including the United States, are slowly and progressively declining, limiting individual freedom and ejecting half of their population into zones of poverty.

Today, the percentage of imprisonment in China is four times inferior to that of the United States,while their purchasing power is slightly higher. Objectively therefore, with all its faults, Chine has become a freer and more prosperous country than the United States.

This process was predictable from the beginning. Its application was studied for a long time. So, on 1 September 1987, a US forty-year-old published a page of counter-current publicity in the New York Times, the Washington Post and the Boston Globe. He warned his compatriots about the rôle that President Bush Sr. was planning to allocate to the United States – to assume and finance out of their own pockets the responsibility for the developing « New World Order ». People read it and laughed. The author of these texts was real estate promoter, Donald Trump.

The application of the economic model to international relations

One month after the attacks of 11 September 2001, US Secretary of Defense Donald Rumsfeld nominated his friend Admiral Arthur Cebrowski as Director of the new Office of Force Transformation. He was tasked with changing the culture of the entire US military in order to enable it to respond to a complete change in its mission

There was no longer question of using US armies to defend principles or interests, but to use them for a reorganisation of the world by dividing it into two parts – one one side the states integrated into the globalised economy, and on the other, the others [5]. The Pentagon would no longer fight wars in order to steal natural resources, but to control access to those resources by the globalised nations. A division directly inspired by the process of globalisation which had already trashed half of the Western populations. This time, it was half of the world’s population which was to be excluded [6].

The reorganisation of the world began in the political zone known as the « Greater Middle East », that is to say stretching from Afghanistan to Morocco, with the exception of Israël, Lebanon and Jordan. This brought about the alleged epidemic of civil wars in Afghanistan, Iraq, Sudan, Libya, Syria and Yemen, which has already caused several million deaths.

Like a monster eating its own children, the global financial system based in the United States faced its first crisis in 2008, when the subprime bubble burst. Contrary to a commonly-held belief, this was absolutely not a global crisis, but a Western problem. For the first time, the NATO states experienced the first consequences of the policy they were supporting. Yet the upper Western classes changed nothing in their behaviour, as they witnessed with compassion the wreck of the middle classes. The only notable modification was the adoption of the « Volcker rule » [7], which forbade banks from profiting from information obtained from their clients in order to speculate against their interests. But while conflicts of interest enabled a number of crooks to get rich fast, they are not the root of the problem, which is far more wide-reaching.

The revolt of the Western populations

The revolt of the Western middle and working classes against the globalised upper class began two years ago.

Aware of the Western recession as compared with Asia, the people of the United Kingdom were the first to attempt to save its life-style by leaving the European Union and turning to China and the Commonwealth (referendum of 23 June 2016) [8]. Unfortunately, the leaders of the United Kingdom were unable to conclude the agreement they hoped for with China and experienced great difficulty in reactivating their links with the Commonwealth.

Then, witnessing the collapse of their civil industries, a part of the United States voted, on 8 November 2016, for the only Presidential candidate who was opposed to the New World Order, Donald Trump. He spoke of a return to the « American dream ». Unfortunately for his voters, although Donald Trump began to question the rules of globalised commerce, he had no team with him apart from his family, and was only able to modify, but not change, the military strategy of his country. Almost all of the general officers had adopted the Rumsfeld-Cebrowski ideology, and could no longer imagine themselves in any other role than defenders of financial globalisation.

Aware of the collapse of their national industry, and certain that they would be betrayed by their upper class, the Italians voted, on 4 March 2018, for an anti-system party composed of the Ligue and the 5-star Movement. These parties built an alliance in order to implement social policies. Unfortunately, they were rejected by the European Union [9]. In France, tens of thousands of SME’s (small and medium-sized enterprises), subcontractors of industry, had gone bankrupt over the last ten years, but their compulsory tax deductions, already among the highest in the world, increased by 30 % over the same period.

Several hundreds of thousands of French people suddenly took to the streets to demonstrate against abusive financial measures. Unfortunately for them, the French upper classes have been contaminated by the very idea that was rejected by the United States, and therefore did their best to adapt their policies to the popular revolt, but not to change its basic causes.

If we look at each of these four countries separately, we will find four different explanations for what is happening there. But if we analyse the situation as a single phenomenon affecting different cultures, we will discover the same mechanisms across the board. In these four countries, consecutive with the end of capitalism, the middle classes disappeared more or less rapidly, and with them the political system that they incarnated – Democracy.

So either the Western leaders abandon the financial system they have developed and return to the productive capitalism of the Cold War, or they will have to invent a different organisation that no-one has so far been able imagine. Failing that, the West, which has directed the world for five centuries, will sink into a long period of internal chaos.

The Syrians were the first non-globalised People capable of surviving and resisting the destruction of Rumsfeld-Cebrowski’s infra-world. The French were the first globalised people to rise up against the destruction of the West, even if they are not aware that they are fighting the same unique enemy of all of humanity. President Emmanuel Macron is not the man for the situation, not because he has any responsibility for the system that preceded him, but because he is pure product of that system. In response to the riots in his country, he spoke from the G20 in Buenos-Aires, declaring that the meeting was a success in his eyes, (which it was not), and that he intended to advance more efficiently than his predecessors – in the wrong direction.

How to save privilege

It appears that the British ruling class has its solution – if London in particular and the Western nations in general are no longer capable of ruling the world, it will be necessary to cut one’s losses and divide the world into two distinct zones. This is the policy implemented by Obama in the final months of his presidency [10], then by Theresa May, and now by Donald Trump, with their refusal to cooperate and their ready-made accusations, first of all against Russia and now against China.

It also seems that Russia and China, despite their historical rivalry, are aware that they will never be able to ally themselves with these Westerners who have never ceased trying to carve them up. This is the source of their project, the « Eurasian Economic Union » – if the world must be split in two, each participant will have to organise its own. In concrete terms, for Beijing, this means abandoning half of its « Silk Road » project and its redeployment with Moscow only in Greater Eurasia.

How to determine the line of demarcation

For the West and Greater Eurasia, it will be necessary to determine the split line as fast as possible. For example, what side will Ukraine choose? The construction by Russia of the Kertch bridge was aimed at separating the country, absorbing the Donbass and the Azov Sea basin, then Odessa and Transnistria. On the contrary, the incident at Kertch, organised by the Western powers, is aimed at enrolling all of Ukraine into NATO before the country fractures.

Since the ship of financial globalisation is sinking, many people are beginning to save their personal interests without any care for others. For example this is the source of the tension between the European Union and the United States. As far as this game is concerned, the Zionist movement has always had a length’s lead, which explains the mutation of Israëli strategy, which has abandoned Syria to Russia, and turned to both the Gulf States and East Africa.

Perspectives

Taking into account what is at play here, it is obvious that the insurrection in France is only the beginning of a much wider process which is going to spread to other Western countries.

It would be absurd to believe that at a time of financial globalisation, a government, whatever it might be, could resolve the problems of its country without first of all questioning international relations and at the same time regaining its capacity for action. But precisely, foreign policy has been kept on the sidelines of the democratic field since the dissolution of the Soviet Union. It is both necessary and urgent to resign from almost all of the treaties and engagements of the last thirty years. Only the states which are able to re-affirm their sovereignty can hope to recover.

Translation
Pete Kimberley

[1] According to Michaïl Gorbatchev, this was the event that made possible the dissolution of the Warsaw Pact and the Soviet Union in so far as it delegitimised the State.

[2] Contrary to a commonly-held belief in the West, it was the nationalists from the East-German Communist Party (and the Lutheran churches), and not the anti-Communists (and pro-US movements), who broke down the symbol of Soviet domination, the Wall.

[3] The main purpose of the invasion of Iraq was not to liberate Kuwaït, but to use this affair to build the strongest coalition possible under US command, including the USSR.

[4] Global Inequality. A New Approach for the Age of Globalization, Branko Milanovic, Harvard University Press, 2016.

[5] “The US military project for the world”, by Thierry Meyssan, Translation Pete Kimberley, Voltaire Network, 22 August 2017.

[6] It is obvious that the wars of Bush Jr. and Obama were never intended to expand the Empire. First of all because by definition, democracy can only come from the People, not imposed by bombs. And then because the United States was already a plutocracy.

[7] The ex-president of the US Federal Reserve, Paul Volcker, is on the other hand, one of the architects of global financialisation. It is Volcker who took legal action on behalf of the UNO against the people and entities who had helped Iraq to bypass the UN embargo (the « oil for food » affair). Volcker is one of the principal personalities of the Pilgrim’s Society, the trans-Atlantic club presided by Queen Elizabeth II. As such, he became the main economic advisor to President Barack Obama, and organised part of his cabinet.

[8] “The new British Foreign Policy”, by Thierry Meyssan, Translation Pete Kimberley, Voltaire Network, 4 July 2016.

[9] Replacing the European Common Market, which was originally a system for cooperation between states, the European Union, as defined by the Treaty of Maastricht, is a supranational

[10] “Two separate worlds”, by Thierry Meyssan, Translation Pete Kimberley, Al-Watan (Syria) , Voltaire Network, 8 November 2016.