Business as usual behind the slaughter.
In this exclusive interview for Asia Times Online, the economist Guido Preparata reviews how in the first half of the 20th century Anglo-American policy was designed from the beginning to eliminate Germany as an obstacle to Western domination aspirations. The result: a division of Eurasia along a specific major fault line. Preparata also talks about critical aspects of the current state of affairs in global finance, economics, and politics. He says: “It is the quest for power that drives history, not economics.”
“Truth would quickly cease to become stranger than fiction, once we got as used to it.”- H L Mencken
Lars Schall: Mr Preparata, could you give our readers some basic idea about the main thesis of your book Conjuring Hitler, and also why you took the step to write it at all?
Guido Preparata: Originally, when I began to work at the Bank of Italy, I chose to investigate Nazi finance as a fancy topic, some kind of divertissement to add to my future publication projects. Eventually the whole subject of Nazi Germany took up a life of its own, and I became engrossed with it for nearly a decade. The whole project ended up being very much shaped by the turn of events following 9/11.
What was happening to the collective psyche of the West under the aggressive leadership of the USA filled me with revulsion. And thus I drafted Conjuring Hitler also as an anti-war, anti-imperialist treatise. I somehow thought that if we debunked one by one the most militant myths of Liberal imperialism – the sudden and allegedly inexplicable rise to power of Hitler being the chief one – one could pull the wool off people’s eyes and fashion thereby, and gradually, a clime of informed dissent against the terrible mayhem of this “War on Terror”.
LS: At the beginning of your book you are stating that “there is something far worse than Nazism, and that is the hubris of the Anglo-American fraternities, whose routine is to incite indigenous monsters to war”. (1) How did you come to this conclusion that has very little in common with the perception of the general population, particularly in Great Britain and the United States?
GP: It’s the old dilemma. What is worse: being a criminal or putting deliberately an arsenal into the hands of a known criminal? I think the latter is worse, hence that statement.
LS: If one does accuse you of being a “conspiracy theorist” or a “revisionist”, what do you reply to those critics?
GP: It is notorious and beyond dispute that the Anglo-American elite – along with the Soviets – financed and supplied the Nazis before and even during the war. This fact is obviously so disturbing and confusing for all those who have been raised with the complex of Anglo-American moral superiority that the Establishment has been at greatest pains to rationalize it. The only rationale it has been capable of advancing – whenever it cannot avoid the issue altogether, which is what it logically prefers to do – is to assert that a few rotten corporate apples did business with the Devil (ie the Germans) behind everybody’s (ie, the state’s) back. This “explanation” is clearly untenable, yet anyone that dares to challenge it is ultimately bound to face what expresses itself as the wrath of devout believers. Their instinctive repartee is that anyone doubting the vulgate is self-evidently an unreasoning “fascist-revisionist-conspiracist”.
The tactic is so inane that it would be risible if the propagandistic stakes of this discursive set-up were not as decisive as they really are. It is their standard inquisitorial trump. Indeed, it is not directly aimed at the critic but at whatever audience might be listening to the debate: it is meant to scare away readers and potential supporters from the critic’s warnings by tarnishing him with the most unsavory label the system has devised for the purpose, that of the truculently stupid crypto-fascist. In the general arena of public opinion, any skeptical attack – carried out outside any conventional party line or schema – on the abuses of the power structure is likewise resisted by its discursive custodians (at all levels and of all political shades), who have been conditioned to brand reflexively the dissenter as an insufferable “conspiracy theorist”.
The fact that there is indeed out there a slew of amateurs who churn out a profuse amount of extravagant pamphlets full of wild speculation, referenced by threadbare bibliographies, certainly helps their case. But the question at hand does not pertain to those conspiracy theorists, but to the trahison des clercs: if you are perceived as breaking ranks with your former brothers-in-arms, they will make you pay. I am an Italian bourgeois who was raised in what used to be a staunchly pro-American household during the late stage of the Cold War; it has taken me 30 ears to detox myself (9/11 was the turning point) – that is what it’s about, allegiance, not “conspiracy theory”. Truth be told, moreover, this game is not without its comical undersides: I remember once hearing a rant on Italian TV by some mainstream intellectual who was pouring scorn on the paranoid imbecility of these eternal dolts who see complots everywhere, people, that is, who cannot think in nonlinear terms while fathoming the work of “the great forces of history”. “There is one in every family”, he concluded with a sneer. Very funny, I must concede.
So to respond to the question: what does one reply to the accusation of being a “conspiracy theorist”? I would answer the following: let the inquisitors 1) be prepared to take paper, quill and ink bottle and refute, black on white, my thesis point by point without the cover of anonymity, and allow me to reply, point by point; and 2) be subsequently prepared to argue their case, facing me, in a public debate. Then let the audience acclaim the winner.
LS: By and large Otto von Bismarck is still seen as a genius of foreign policy in German history. However, at the beginning of your book you point to the year 1887 and a very crucial mistake done by von Bismarck related to Russia. What has this mistake been all about and how was it exploited by the British going forward?
GP: If there is a spiritual future for us continental Europeans who believe not in “free” corporate markets, the prophet Darwin, and the iPad, but believe in Mozart, peace and cooperation, it can only come through a rebirth of an alliance between Germany and Russia (ideally a Paris – Berlin – Moscow – Beijing axis), and one approved by the Catholic and orthodox Churches. And, of course, none of this will come to proper fruition without the input of our like-minded brethren in Anglo-America – minorities all of us everywhere for the time being.
Bismarck, despite his strategic genius, failed to see that the Russo-German embrace was the key: in 1887, for instance, it seemed that Germany had a decisive chance of tying Russia’s fate to its own by underwriting the czar’s debt. But, again, some kind of damned, damning myopia made all such attempts abort; even on the eve of the war, in 1905 – when Bismarck had been long gone – Wilhelm and Nicholas attempted one last time some kind of pact, which also came to nothing. One missed opportunity after another. The rest, as they say, is history.
LS: At the beginning of the 20th century, Halford Mackinder from the London School of Economics stepped up on the scene with a remarkable geopolitical concept. What was this concept and why is it important to understand?
GP: As far as I can infer, Mackinder did not pioneer or invent anything; he just committed to paper what was plain to see, namely England’s maritime preoccupation: the imperial fear to lose control of the world if any kind of extensive political alliance coalesced on the Eurasian landmass. Mackinder’s, in effect, was but the academic statement of a notion that had been in the air for some time: a whiff of England’s imperial spirit, so to speak.
LS: Was Hitler’s “Drang nach Osten” (“Drive towards the East”) inspired by Mackinder’s concept?
GP: It’s a confounding issue, I cannot say, I doubt it. In any event, it was the triumph of British strategists, namely that they could sway the Germans against the Russians – twice in a row, most perfectly the second time around.
LS: Is Mackinder’s concept still relevant today?
GP: Of course, the agenda still stands, unaltered: just look at the ongoing deployments of the North Atlantic Treaty Organization (Northern Africa, Middle East, Persia, Central Asia, China, and, as always, Eastern Europe and Russia: viz the late missile controversy). This is the age-old strategy of the British Empire, pure and simple. Very little’s changed. NATO, quite obviously, is the chief aggressor, not the so-called rogue nations. But half the effort consists of staging these theatrics by which the Western psyche comes to believe that it is the constant victim of plots hatched by savage, fanatical brown/yellow people. Nonetheless the dynamics are subtler.
This game of persuasion is best effected when 1) the target – the ever-mysterious public opinion – is itself subjected to a studied process of spiritual debilitation: that is to say, when, as has conspicuously been the case for the past decade, it is barbarized by poor education, vanishing opportunities for self-realization, etc; and, no less importantly, when 2) the “rogues” lend themselves to the charade through bombastic grandstanding and televised bluster, without which the Anglo-American elites could in no way produce the show: eg, North Korea’s barnstorming and Mahmud Ahmedinejad’s cretinous anti-Israel and homophobic tirades are, alas, material from the same miserable screenplay.
So, in a sense we are in an Orwellian scenario once again. Possibly, we have never abandoned it. What is certain is that in this pornographic power-play, we, the Westerners, are the most obscene thespians of all – and this is because, if we so wished, we would have the wealth and the means to bring Eden to this planet. But, apparently, we do not wish it. And if that is really the case, maybe we do not deserve this earth after all.
LS: The path to the two world wars was never a straight line, but resulted partly from strange detours – for instance, caused by terrorists. You call them “useful idiots”. Why so? And did you discover a certain pattern at work that is still pretty much alive and kicking in our time?
GP: From Gavrilo Princip (the Black Hand in Sarajevo) to these bogus Islamists by way of, say, the Montoneros in Argentina, the RAF in Germany or the Red Brigades in Italy, all of them are useful idiots, by definition. The terrorist’s psycho-sociological typology is fairly consistent across time and space: s/he generally is of low middle-class/upper proletarian status, very young (well below 30), not particularly intelligent, and death-prone. S/he is by definition, again, an expendable: or, more specifically a manipulable mediocrity. These useful idiots may come at certain junctures to play a critical role, of course. Terrorism is (elite) politics, never the weapon of the voiceless, but the very opposite.
LS: Was the reason for the First World War basically a trap laid by the British and Russian elites – and the German leadership was stupid enough to step into that trap?
GP: A siege, yes, a mouse-trap. Yes, damningly stupid, indeed. Von Moltke’s (German) Chief of Staff had been invested in 1900 with political authority it did not know how to wield – and, in truth, it was not its role to exercise such power in the first place: it was as if by surrendering all might to the (dynastic and thus unfit) warrior caste of Prussia, Germania as a whole had spiritually abdicated. And by doing so it has cursed the whole of Europe ever since. A tragedy.
LS: How did Germany finance the war effort – and did this had some grave consequences later on?
GP: With its wealth, through debt, which the Allies left standing at Versailles – as [Thorstein Bunde] Veblen had understood – deliberately. And that was done with a view to causing an inflationary tsunami, which would have in turn occasioned a major, and strategically critical, bailout.
LS: Had the entry of the United States into the war something to do with the debts of the Triple Entente?
GP: Yes, but not primarily: the US intervened to play the imperial game as England’s junior partner – as the brawny, eager apprentice; the preservation of its credits was a solid incentive to embark on this path, but not the actual cause.
LS: At the end of that war both Germany and the Anglo-American allies were heavily influencing important events in Russia. Which of those forces gained more benefits from the Bolshevik revolution that took place in October 1917? And could you also tell us about the major players involved, please?
GP: The whole story of the USSR is a deep mystery, especially its beginnings. Official (Liberal) historiography has it that the birth of Bolshevist rule was for the most part a spontaneous – and wonderful, according to the Lenin-revering dinosaurs of Western academia – Russian affair, with just a little bit of (somewhat embarrassing, but easily dismissible) German gold. Nothing more. Any intimation that the Anglo-Americans had been involved in major “puppeteering” in the Bolshevik theater – to favor them, that is – is hissed away as conspiratorial speculation.
And yet I cannot resist the suggestion that it was so because, over and beyond only a handful of revelations which are referenced in the book (about, eg, England’s sabotage of the czar in 1916, when it seemed that Russia was inclined to seal a separate peace with Germany), every single historical development points in that direction. If only they opened all archives to us … If you study the deportment of the Soviet Union throughout its 70-year life, you notice that it kept up a major pretense that in one form or another facilitated the East-West world condominium, whose leadership was in any case solidly in the hands of the Anglo-Americans.
LS: After the war came the Treaty of Versailles, which enhanced the rise of Hitler’s pseudo-revolutionary movement in Germany. Someone who wrote back then a famous book about the Treaty of Versailles was John Maynard Keynes. Did he understand the “game” that was taking place?
GP: Not even remotely. Keynes is a fascinating thing. He has been erected into some kind of a colossal wax icon: he is one of those authors who, through posterity’s massive, torrential, relentless and extraordinarily abiding mythologizing effort, have come to lose all adherence to their historical, physical existence. And, deep down, Keynes was a mask of such fanatical vanity that this kind of modern sanctification must have been precisely the type of goal he had been striving to secure for his entire life.
Discursively – I mean propaganda-wise – Keynesianism is (or used to be) the sort of grand shibboleth that is systematically used and leveraged whenever the speaker needs to strike the Liberal pose. In other words, when you wish to appear as the sober, reasonable, competent, sharp and compassionate moderate, you begin to envelop yourself in Keynesian verbigeration: you start with, “as a Keynesian, I should say that …”, and then – to impress upon the audience a comforting image of your expert and humane “knowledge” – you go on dropping around abstruse nonsense such as “the liquidity trap” and/or “the investment multiplier” and the incontournable “deficit spending”.”
The objective of this standard psychical charade is to convey to those around you that: 1) quite evidently you understand perfectly and technically what is being discussed (when, in truth, you don’t); and 2) most critically, that you are a well-bred bourgeois who is possessed by no indecorous whim to challenge authority, but that you nonetheless have always taken a deepest and purest interest in the fate of the poor little folk – hence, “keynesianally”, you will always say that a little deficit-spending (plus a tad of inflation) would surely relieve the wretched “charwoman”. In this regard, to play the game in proper fashion, you always need, opposite from you, an obnoxious curmudgeon of the conservative Right, who’s cued to bark about the merits of toughness, competition and the naturally self – regulating markets presently overburdened by the mad stupidity of the “Socialists”. Simply said, the Keynesian stance is confected to play “good cop” when the economy falls on black days: the Keynesian is the leftist in good-standing expected to deplore the avidity of bankers and to invoke the sanative power of the state to redress the ravages of corporate abuse. It sounds and looks “good”, but it neither solves nor explains anything.
As for Keynes the man, from what we know, he seems to have cut a pretty despicable figure: arrogant, racist, a shameless thief of other people’s ideas, an exploiter of the underclass (for male prostitutes), and a speculator. But more to the point, as a theorist, he was a total nullity: he is the dottore of the commedia dell’arte, the pedantic character who knows everything without understanding anything thereof.
This man, who had been hailed by Time magazine in 1999 as one of the towering gods of the 20th century, failed miserably to comprehend every major event of his time: 1) Versailles, case in point; 2) Britain’s return to gold, which he denounced as the inane archaism that caused the Great Strike of 1926 (it was neither the former nor did it cause the latter); 3) the coming and severity of the Slump; and 4) the Nazi recovery. As for Versailles, he did not have a clue as to what was being devised: he stormed out of the conference moaning that Germany could not pay what was asked of her, not intuiting, as Veblen did, that those astronomical sums were never meant to be paid, but only, through the first series of “gold installments”, to burst the bubble of the German war debt.
But then again, it was not his role to predict, intuit anything; he did exactly what the commedia expected of him: a nice little Keynesian tantrum, followed by a book that told the story (nowadays it would have come with a bonus DVD … ) … And then in 1941 (if I remember correctly) to crown his remarkable dramatic career he was made a director of the Bank of England; yes, imagine him, gloatingly gabbing away at the very feet of the High Priest, Montagu Norman … That’s Keynes, the great Keynes, the champion of the enlightened middle-class.
LS: Someone you really like – and I think for very good reasons – is Thorstein Veblen. You are writing that he gave us in his review of Keynes’ book The Economic Consequences of the Peace the key to understand what was happening in Germany afterwards. Could you elaborate on this, please?
GP: Thorstein Veblen is the greatest social scientist of modernity – the only economist Einstein would bother to read … Given the going spiritual temperature of our times, Veblen is completely and logically neglected in academia. My older professors in the USA, who had never read him, were nonetheless wont to acknowledge Veblen as a “classic” (the newer academic generations have never even heard the name) and, for occasional display, pulled out of their deck the routine citation of “conspicuous consumption” without truly knowing what stood behind those two words.
In his review of Keynes’s post-Versailles book, Veblen foresaw the coming of a radicalized German regime, but not as an unintended and deplorable reaction against unconscionably extortionary reparations, which is what Keynes was praised for writing in his book, though that is not even what he actually contemplated (for the sake of sensationalism, Keynes briefly conjured the specter of an alliance between the disgruntled German generals of yesteryear with the Bolsheviks against the West – I will return to this crucial point below in connection with the Treaty of Rapallo).
Veblen argued that the gestation of a new militarized regime was the precise intent of the schemers at Versailles since their common plot was to steer these reinvigorated German dynasts against the Bolsheviks, for whom Veblen came, like many of his radical contemporaries, to cheer, romantically. He was mistaken in this: the true target of the scheme was Germany herself not the USSR, which would indeed be the key accomplice in this sophisticated game. But he deciphered the basic dynamics of the deception; he foresaw the invasion of Russia by this very creature of paroxysmal militarization (and for good measure, he had sketched in 1915 a portrait of its forthcoming leader, a chilling vision of Hitler himself) 20 years before it happened.
When I first read the review I felt dizzy: how can anyone not have recognized the paramount importance of this review long before I did? And all Veblen did was to leverage one basic economic clue: the failed sequestration by the Allies of the financial wealth of Germany’s absentee elite. Genius.
LS: The power structure within Germany wasn’t changed after the war, there was no real revolution. Why?
GP: Precisely because it was Britain’s plan not to change things at the top: in order to finish what could not be obtained with the siege of World War I, you had to push Germany’s dynastic malady to the extreme, eventually re-involving the Fatherland in war and finishing it off. Which is what happened. It took 30 years and scores of millions dead to defuse the German threat, and still to this day, the Anglo-American elite, though it feels it has done most efficacious work in “re-programming” the German psyche (and indeed it has), remains insecure and wary of the German – of what used to be his far greater spiritual sophistication – and the ever lurking menace of his possible swing to the East: how else would you explain the relentless admonishments to the German people by way of the Holocaust Industry and the chief reliance on Germany for every major plan of the Washington consensus, financial (viz the euro) and military (NATO)?
LS: You are writing in your book that Hitler’s party was a front organization for a religious cult that was embodied by the Thule society. What was the core belief of that secret society and where did it came from?
GP: All is religion. All history is a reflection of the battle that spiritual forces wage against one another on other planes. It is not economics – and least of all the survival instinct (whatever that is) – that drives history, but the quest for power, and power in its elaborate institutional manifestations is a form of (psychical) space that utterly transcends the relationship of production and distribution, let alone the basic dynamics of the wolf pack, or the more elaborate political economy of the beehive.
Power is a purely human suggestion. Suggested by whom? That is the question. The NSDAP [Hitler's National Socialist German Workers Party, or Nazis] thus appeared to have been a front for some kind of nebula of Austro-German magi, dark initiates, and troubling literati (Dietrich Eckhart comes to mind), with very plausible extra-Teutonic ramifications of which we know next to nothing. Hitler came to be inducted in a lodge of this network, endowed as he seemed with a supernatural gift of inflaming oratory.
This is a theme that I am still studying, but from what I gathered, the adepts of the Thule Gesellschaft communed around the belief of being the blood heirs of a breed that seeks redemption/salvation/metempsychosis in some kind of eighth realm away from this earth, which is the shoddy creation of a lesser God – the archangel of the Hebrews, Jehovah. It all sounds positively insane to post-modern ears, but it should be taken very seriously, I think.
LS: The corporate logo of the Nazi party was the ancient swastika – which is basically a vector diagram of rotation, spin and stress. Why was it chosen?
GP: I briefly mention in the book an 1) axis through Hyperborea – the mythical land of ancestors – whose spinning is symbolized by the cross; and 2) the dextrogyration as symbol of an active principle of altering a given course of cosmic development (whatever that truly signifies; I am no initiate, alas).
LS: One of the most tragic figures in German history of the 20th century is Walther Rathenau (and by the way, one of my favorite Germans of all time). Why was he a tragic figure?
GP: Yes he was. He incarnated all the contradictions of the German spirit before the great disaster of 1914-1918: a Jewish scion totally infatuated with the Blonde Beast, patriotic to the bone, and a Utopian visionary all in one. Weimar overwhelms him; it confounds him completely: he is a creature of the old order and fails to fathom entirely what is afoot after Wilhelm II vanishes in Holland. He thus takes the Republic at face value, with a good dose of presumption, thinking he can outplay Versailles, and is eventually eaten alive by it.
LS: Rathenau’s name is inextricably linked with the Treaty of Rapallo. How did that treaty came into existence and what content did it have?
GP: Rapallo is a pivotal articulation of our story and one that complicates the plot significantly, but behind the tangles of secrecy, the gist was fairly straightforward: given the deceit of Versailles – which was, I believe, spun mostly to confound the French (but that is just a guess) – , if Germany had to rearm to play Act II (World War II), this had to be done 1) in (semi-)secrecy, which it was; and 2) within an extra-legal space, so to speak: and in this connection Bolshevik Russia provided the perfect “haven” in which to lay the foundations of the new Reichswehr. It is a very tortuous story.
We know that this marriage of “thieves” lasted for certain until Hitler seized power. And, before then, with the Dawes bailout, some of that secrecy had also been shed, as US conglomerates had come to Germany with such fanfare that pouring some of that torrent of dollars in military expenditure was not bound to raise much suspicion. So Rapallo seems to be dying in 1933, but in truth Stalin, in evident collusion with the Anglo-Americans, would keep feeding the German eagle certainly until Barbarossa. Not for a moment do I believe the tale that he was doing so to deflect Hitler against the Allies. Those very Allies that left the Western front quiet for three years … It is a diabolical thing they all did to push Germany on a two-front mire again – no question about it in my view.
LS: The Weimar Republic for its part is inextricably linked with the hyperinflation of 1919 to 1923. What were the singular circumstances of that hyperinflation, and why is it very unlikely that at least a hyperinflation a la Weimar will ever happen again?
GP: The mystery resides in Germany’s war debt. I don’t remember where exactly or when the controversy began, but radical voices – especially from the right end of the spectrum, if I recall correctly – intimated this much early on; Hitler himself abetted this contention. Therefore, needless to say, mainstream historians often begin their exposition of this episode by denying in the most categorical fashion that there could be fibers of truth to the claim: they support their rebuttal by showing that redemption and inflation had in less than two years virtually eaten away the amount due on that debt. So, for them, end of story; the inflation, they say, was Germany’s crazed egress from what seemed a despaired situation (the reparations), itself dictated by the malevolent obtuseness of the Allied gerontocrats (Keynes again). The rest is, natuerlich (of course), cheap conspiracy theory.
Well, not so fast. Indeed, the principal of that debt vanished quite fast, but it didn’t just evaporate like summer rain: it was systematically poured, when it stayed in Germany, in shorter-term T-bills, and/or liquidated and converted in foreign exchange when exported out of Germany (capital flight) – and this last was one of the chief factors of the inflationary dynamics: the massive depreciation following the conversion. For evident geographical reasons, Holland seems to have been the principal haven for the hidden fortune of the German absentees. And, indeed, it was via a Dutch outfit that the clique of Harriman – of which Prescott Bush was a steward – was caught red-handed, funding the Hitlerites, by a US Senate investigation.
To return to the hyperinflation, the joint effect of shortening the debt’s maturity (easily convertible into cash on short notice) and capital flight caused/primed the soaring inflation, which exploded into full-scale runaway hyperinflation, via mass redemption of those bills, when the fate of the Weimar Republic seemed sealed after France’s invasion of the Ruhr in early November 1923 (in fact, this only sealed the first of a very Hollywoodesque three-act structure: a) pre-1923, b) the Dawes Bailout, 1924-1929, c) the crisis, 1930-1933. (France’s showing in all this story, I must add, was an utter, horrifying, and unqualified disaster: and it pains me much to say this considering how deeply I love and admire that nation.)
Seen thus – ie, in its geopolitical context – the hyperinflation of 1923 loses much of its catastrophic, aleatory mystique: there were precise mechanisms at work here. In my view, on the basis of Veblen’s prophecy, the British were expecting the meltdown and fully prepared for it. Indeed, the “best” was yet to come: a bailout, and, then … the Nazis.
LS: Who were the winners of the Weimar hyperinflation?
B>GP: The wealthy absentees, as always (and the speculators). It was a veritable economic fratricide, via the intangible slings and arrows of finance: Germans turned against (less affluent and poor) Germans.
LS: After the hyperinflation came the Dawes plan. What was this all about?
GP: A full-scale investment binge with a sort of dollar-peg (the New Gold-Mark), the basic like of which we have witnessed repeatedly in the past 60 years or so; in this last stretch, this sort of colonizing-strategic operation has been done under the aegis of the International Monetary Fund, but it is always the same players following the lead of the same Anglo-American strategists – strategists who chiefly operate by way of the City and Wall Street.
LS: Another famous plan was the one named after Owen D Young. With it, the world saw the creation of the Bank for International Settlement (BIS) in Basel, Switzerland. Related to the BIS, there is this famous quote by the outstanding historian Carroll Quigley in Tragedy and Hope:
The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. … The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. (2)
What’s your take on this?
GP: Yes, a disquieting chapter, which has exercised the minds and pens of scores of conspiracy theorists. The Owen Plan is not that important in that it lasted a mere year and a half: it was annulled by the Crisis. As for the erection of the BIS as the mother apex of a giant network of central banks, each one controlled by the banking brethren is a disquieting image. Honestly, I don’t know how dominant the BIS is today in the game; I don’t know if it ever rose to wield the coordinating role that many attribute to it.
What is certain is that it was the extra-territorial venue, the off-shore haven where the warring parties – and that is to say the representatives of Nazi Germany, too, of course – sat across the same table to allocate repayments, interest and dividends amongst each other. This supposedly went on until 1944 … Or to put the disturbing truth in simpler relief: that is where the Nazis honored their ongoing debt to fuel the war (for supplies and provisions, given Germany’s poverty of raw materials), face to face with their very enemies, while an American banker, McKittrick, officiated.
Unbelievable. We have yet to know what was really being done in Basel in those days. For instance, while conducting archival research, I was denied access to certain folders of the Bank of England that contained information on the shareholders of the BIS. Everything about this entire affair is revolting. And what has troubled me even more about it is that all those that have looked into this understand very well that the various pieces of the tale we have been sold do not add up, but, out of fear and some kind of deeper psychological conditioning, keep an air of obsequious composure about it all. So long as this sort of forma mentis, coupled with fear, prevails there is no future for a reformed world.
LS: Two men who played an important role in those years were Montagu Norman and Benjamin Strong. Why should people pay attention to their activities?
GP: It is a very interesting bond, not so much as seen from Strong’s view point (he will die of cancer in 1928; fairly early in this story), but rather from Norman’s. What is of interest is how the British managed to entangle the American apparatus so deeply into this affair despite substantial isolationist feeling – isolationist feeling, it is true, which had been severely lamed since America’s commitment to World War I (one should read [US novelist John Roderigo] Dos Passos [1896-1970] for the chronicling of America’s patriotic metamorphosis at that time). In essence, through an endless strategizing effort punctuated by frequent and highly secret visits to the Fed and indefatigable negotiations via banking and diplomatic channels, Norman managed to feed the German boom – read: rearmament – with American dollars for five years (1924-1929). Strong was a subaltern ally in this British operation – of that there is no doubt.
LS: What counterproductive role did gold play in the 1920s-1930s?
GP: Complex question, hardly exhaustible in a few lines. Let us say that a particular organization of the gold standard was used as a device, or rather, it was the economic device employed to steer the world along a particular direction. The targeted and programmed allocation or withdrawal of money is clearly capable of precipitating a variety of political outcomes. Speaking of counterproductive, the art of withdrawing credit – ie the “crunch” – is clearly the standard strangulating technique, whose disastrous impact on the social texture is patent: mass unemployment, stagnation, social despair, etc.
For the pre-war era, I have come to read, interpret everything in the key of Germany’s destruction. Economists, even good ones (whom you may count on one hand; think of Karl Polanyi [1896-1964], for instance), tend to read everything, instead, in the key of business, but that is a severe limitation, a sin of over-specialization: they lose focus entirely. I have studied enough economics in my life to know that it is merely an auxiliary – a key one, for sure – in the game of power, which is the sole and decisive drive of events. In this sense you see how gold operations followed precise strategic directives. The Bank of England is indeed the Bank of the Empire, not the other way around.
LS: What happened in Germany between 1929 to 1933 in terms of “financial investments”? Was the German rentier class benefiting big time from the Great Depression?
GP: Everything stood frozen, as it always does in times of crisis (think of today); bank coffers are filled with cash but disconsolate graduates live with their parents. I can’t say if and how much German rentiers profited during the rough hiatus of 1929-1933; what is certain is that they were waiting for a political signal from the “international community”, and when Hitler was sworn in, the green light was given. That is a fact. The rentiers would not pay under [Franz] Papen (Chancellor of Germany in 1932 and vice-chancellor under Hitler in 1933-’34), an emblem of the old aristocracy, not to mention Hitler’s immediate predecessor as chancellor, [Kurt von] Schleicher (Army) , whom they feared, but with the Nazis, they eagerly forked out their “savings”. Strange, and yet, the Veblenian prophecy, again, is of help: it will be a new radicalized regime that will be swayed against Bolshevism not the dynasts of yesteryear. Once you hold the interpretative key, the main difficulties melt down and the pieces easily click into place.
LS: Where did the money came from to finance the brown shirts and Hitler’s spectacular “cult of personality” election campaigns?
GP: The German absentees, of course, especially those with international connections.
LS: Were the financial backers of Hitler’s NSDAP from abroad more important than those within German borders?
GP: I don’t know; it seems to be one and the same compact group.
LS: Two important banking houses for the rise of Hitler were Schroeders and Brown Brothers Harriman. Why so?
GP: Schroeders happened to be 1) one of the oldest banking houses in London handling Anglo-German high-level financial relationships, and one of the few privileged institutes that, possibly because of this role, 2) had direct, institutional access to the directorate of the Bank of England. As for Brown Brothers Harriman (in whose London subsidiary Norman had indeed begun his banking career), I don’t quite recall what brought it deep into the financing tangle of the Nazis, possibly its strong ties to the City.
As mentioned, it was through one of its outfits that Prescott Bush, the father and grandfather of the 41st and 43rd presidents of the US, conveyed money to Hitler via Rudolf Hess, if I remember correctly. This he did not in the name of some kind of “fascist affinity”, as some Leftists have foolishly contended of late, but as (a small) part of the greater design of propping up the Nazis the better to raze Germany to the ground in the forthcoming conflict – conflict for which the Germans had been well supplied by the Americans, under British politico-financial direction, thanks to the Dawes investment boom of 1924-1929.
LS: When Hitler came to power, he worked very closely with Hjalmar Horace Greeley Schacht. Schacht introduced a new form of money creation by artificial credit that served as a medium for the creation of jobs and to finance the rearmament of Germany. How did the so called “Mefo-Wechsel” work?
GP: The Mefo-Wechsel was variation on the general “Work-Creation” (Arbeitsbeschaffung) theme orchestrated at the Reichsbank under Hjalmar Schacht. To jump-start the anemic economy, the state paid commissions for public works with this peculiar paper, these bills. Thereafter businesses took these bills for discount to commercial banks, behind which stood the corporate interests of German absentees, and obtain thereby the much awaited cash, which had lain dormant for three years. Commercial banks then had the option to rediscount these bills with the central bank. The idea was simply to revive business, and, by creating sufficient cash-flow, repay progressively via taxation the debt to the private banks, which systematically came to endorse these emergency bills-of-exchange. It is a basic loan circuit.
Its success and swift annihilation of unemployment, however, was due to a singular fact, and this was that the dynamics of indebtment mimicked those of a zero-percent interest loan: it was as if the Reich merely repaid depreciation on its debt and postponed the repayment of the principal until after the war, which, they were sure of winning. There lay the simple recipe to Hitler’s first five glorious years. No inflation, no unemployment. That is the lesson of that singular episode: that money should always be lent at zero interest.
Of course, the success of that interlude was predicated on the global holocaust of World War II, those were the (utterly pernicious) premises. The future of money reform lies, instead, in engineering the conditions whereby money may be automatically lent at zero interest and naturally accompany growth and prosperity. And the ideas are there to make it happen – but that is another story.
LS: Related to the rearmament of Germany, the Nazis worked hand in hand with Anglo-American financial interests, for example in connection to the German Steel Trust, which produced half of the steel that was needed by the German war machinery. Those financial interests also supported IG Farben – in fact, both things were actually inter-linked from the financial side of the equation. Why is this significant?
GP: The story of Farben is central because American participation in the combine was conspicuous, and also because Farben was one of the main contractors of the concentration camps.
LS: Would it have been possible for Hitler’s Germany to conduct the war without a willing supply of raw materials such as petroleum and other strategic materials from abroad?
LS: When Hitler attacked Poland in September 1939, would it have been possible for France and England to end the war within a few weeks or months if they would have attacked Germany at its western borders?
GP: Military historians have to answer this question. My understanding is that they certainly could have done so, but that is an imaginary “if”; because if Hitler had known that the Allies would have certainly intervened from the outset, as the various defense (and bogus) pacts they had underwritten commanded them to do, he would have never struck. So …
LS: Even though the Soviet Union also violated the integrity of the territory of Poland, France and England did not declare war towards the Soviet Union. Why not?
GP: Because these were all rehearsed moves to get the Germans eventually involved on two fronts. For three years, the Allies let the Western border sleep, why? The big “why” of World War II … and the carnage they allowed to happen in those three years (1941-1944) … Nobody likes to broach that topic, for obvious reason – patriotic delicacy, noblesse oblige …
LS: To talk in terms of chess: was the “castling” between Neville Chamberlain and Winston Churchill in May 1940 a real change of British policy?
GP: They make it appear so, but it’s a deception. The English power elite is a monolithic bastion: fissuring in currents and seemingly antagonistic blocs to adapt to the shifting exigencies of any power game is a tactical device older than prostitution itself.
LS: What was actually the reason for Hitler to begin “Operation Barbarossa”?
GP: He acted as though he thought he had an agreement with Britain: Eurasia to Germany, the seven seas and the rest of the world to Britain. It is indeed mind-boggling how Germany’s General Staff could have fallen for such a gargantuan deceit. In principle, Anglo-America, which is a maritime imperial league (buttressed by missile and air power), will fight tooth and nail to keep Eurasia sundered until, that is, it finds a way to own it entirely itself …
LS: One thing I do not understand is why the Allies never bombed the train tracks that lead to Germany’s extermination camps in the occupied territories of Poland, even though the leadership of the Allies had solid information of what was going on there. Can you give me an answer to this haunting question?
GP: Haunting, indeed. I do not know.
LS: According to Charles Higham, the member nations of the Allies and the Axis were doing during World War II more or less business as usual at the BIS as if there were no global conflict going on between them.  What does this tell us?
GP: It tells us that even the most extreme of so-called conspiracy theorists are still three layers short of the truth on the actual nature of power game. It seems a suggestion of George Orwell’s perennial war, with business as usual behind the slaughter. It is as if the theatrics of the Cold War had been launched already in the final stages of World War II, at a the time when the Hitlerites were notoriously finished (after Stalingrad) and dying of a slow but certain death, and the final phases of the fight were steered to accomplish other kinds of consolidations in view of the stage that was being set up vis-a-vis the grand, mangy circus of the USSR. The mere fact that all the big players were meeting in Bretton Woods in 1944 – that is, when the conflict was not even concluded (!) – to design the financial architecture of the Pax Anglo-Americana is revealing in this regard.
LS: With “Operation Paperclip”, the US imported a lot of war criminals after World War II into the US to work for the former enemy.  Furthermore, major players from Wall Street worked extremely closely with the “Gehlen Organization” in order to build up the Central Intelligence Agency and the Bundesnachrichtendienst.  Is that surprising?
GP: This is a chapter of which I do not know much; I have read a series of (academic) books on Gehlen and “Paperclip”, all of them extremely poor, which were all bent on denying Gehlen and recycled Nazis any kind of importance: the usual minimizing, exculpatory arguments of patriotic archivists, which justify the practice of importing Nazis into the US as a comprehensible reaction against the “vicious threat from the Soviets” … The usual rhetorical platitudes. Per se, this saga does not interest me a great deal. By 1945, Nazi-fascism as it had risen in the previous two decades, whatever it strangely was, had vanished from the spiritual space. Whatever its survivors were, more or less mischievously, doing thereafter is not captivating in my view.
LS: Given the support of some certain Anglo-American financial interests for the Bolshevik revolution, how do you see the period of the Cold War?
GP: For the scholar, the Cold War is a period of maddening complexity. I have been attempting to plumb it for the past several years, lately by focusing especially on Italian terrorism in connection with the decisive biennium of 1979-1981, which, in the chronology of the Cold War, marks the transition from uncertain condominium to the disposal of the USSR as lead supporting actor in the game. It is a work in progress; I hope I will be able to come with something substantive on this in the future.
There is no doubt in my mind that the Cold War was a colossal pretense orchestrated by the US in collusion with Russia to divide between themselves the planet (the Chinese unknown aside) while allowing the allocation / composition of local conflicts by proxy. As said earlier, the beginnings with Bolshevism are still enveloped in deep mystery, but the entire era is one giant cookie jar of mystery murders, from Korea to the attempt on the life of John Paul II, by way of the Bay of Pigs, JFK, terrorism, Watergate, Vietnam and Cambodia, the Middle Eastern wars, etc. In the context of what I have come to designate as the “Cold Game”, it also seems as though Britain entirely vanishes, but she is there, and her steps must be re-traced if one is to understand this essential third act of the 20th century power-play.
In short, it appears that from 1946 to the late 60s, we are in an Orwellian setting of carefully orchestrated perennial war. The reliance on the USSR seems to falter in the early 70s as, more importantly, American leadership itself is severely damaged by the failure in Vietnam and the subsequent suspension of Bretton Woods in 1971. The role and legacy of Richard Nixon are in this regard crucial, as is his demise through Watergate. There follows the uncertain quinquennium of 1974-1979 – a period, as said, of absolutely central significance – during which the forefathers of globalism – the Democrats of the Trilateral Commission – attempt in vain to salvage the situation by attempting to create the global order in the cumbersome presence of a moribund Soviet empire. They will fail; it will be Ronald Reagan’s neo-con hawks, instead, that would rise to resolve the Cold Game by pulling the plug on the USSR (1981-1991).
Now, if one is able to arrange all this into one coherent narrative, then and only then will we be able to move on and provide a serious analysis of what has been happening since 9/11 (terrorism, geopolitics etc). Few things to me are as irritating as the academic complaisance that glosses over that era affirming that it was a genuine spiritual conflict between East and West, and that all has been perfectly understood. There was no spiritual conflict and precious little has been understood.
LS: Fast forward to our time. The financial crisis of 2008-09 is said by many to have its origins in the sub-prime mortgage crisis in the United States. What is your opinion?
GP: Not at all. The subprime lever was, locally, just the magnifying device that triggered a collapse that was logically in the making ever since this last bubble was visibly and massively inflated, that is, in the spring of 2002. I have described in broad outlines in “On Money, Heresy and Surrender Part I” the imperial scheme of taxation.  Ever since the Neo-Liberal swerve of 1979-1981 under the chairmanship of Paul Volcker at the Federal Reserve, the US empire, which had been at a near loss for nearly a decade to find a find a proper replacement for its post-war shattered gold scheme, shifted gears and switched to the current purposeful procedure of inflating speculative bubbles. The one that popped in 2008 is, in historical succession, the third of such engineered financial expansions/ implosions.
The logic behind them is always the same. The first speculative swell covered the quinquennium of 1982-1987, marking the beginning of an era, Yuppyism: sparked under Reagan, it was eventually daisy – chained to Alan Greenspan’s great dot-com bubble of 1994-2001. This last, too, a defining epoch, which is still conditioning us, rose to feature the sublime absurdity of the IPO of the internet company, ie the booster fire-sale of virtual outfits, such as Google, and now, the even more preposterously inconsistent and moronic Facebook – “things” devoid of any economic tangibility. By the time the dot-com was losing steam in March 2001, not to lose momentum, the financial markets began pumping real estate, which, as a proximate, diffusive effect of the dot.com bubble, had already begun to overheat. There followed another mini-cycle of five years, driven in part by the subprime sellout, and, then, crash.
Why all this? In the past – that is, up to 1968-1971 – the US was able to pay for its budget and military expenditures (the cost of imperium) by foisting on its trading partners, who eventually lost their appetite to accumulate them, reams of dollars. The dollar was (and still is) the world’s reserve currency, but Bretton Woods’ gold redemption clause was eventually broken by America’s loss of manufacturing competitiveness. Thereafter, in order to preserve America’s capacity to pay for empire by printing dollars, Nixon set out systematically to browbeat industrial rivals with the joint threat of devaluations, protectionism, and price wars. The vicissitudes of the ’70s chronicled the tortuous, thorny sub-optimality of such a progression, whose unmanageability under Jimmy Carter became such that, as said, at the turn of the new decade, the system was entirely overhauled: de facto, America came to dismantle once and for all its once-glorious manufacturing system, all the while converting itself into a full – fledged service economy, turbo-driven by finance.
It was a masterstroke: the (affordable) industriousness of the Far East came to pick up the manufacturing slack, while the serial bubbles proceeded to attract world capitals to Wall Street, procuring thereby the extra resources needed for diffuse imperial administration. This has been recognized: Germany and China, for instance, owe their exporting success to their privileged access to, and partnership with, the US, for which, on the other hand, they pay handsomely by investing in US securities, wherewith, in turn, the US feeds, among other things, its military bases all over the world (including Germany, and all around China, of course). It’s fantastic.
LS: Do you see the crisis in the euro zone as purely home-made or is there in your view some reasonable suspicion that the Anglo-American financial capital wants to keep the rival EU / Germany small? In other words, does the financial crisis in the euro zone originate in the shortcomings of its construction, or is the crisis being manufactured for an ulterior motive?
GP: French economist Alain Cotta explained the euro set-up very well in a recent book (Sortir de l’Euro ou mourir a petit feu, Plon, 2011). The euro is as un-European as could be: it is evidently the brainchild of Anglo-American interests. The intent, as ever, is to constrict Europe financially so as to render it politically incapable of striking out on its own, and eventually asserting itself once more as the chief continental rival.
The idea of the euro is as follows: first, assign the lead to Germany as chief partner / banker / accomplice of the plan, chief economic force of the Union, and chief exporter; then let all the other weaker players (PIGs, Spain, Italy), who produce virtually nothing, indebt themselves vis-a-vis Germany and Anglo-American banks, which, in turn, make good money from the yield on these eurobonds (the debt spiral). Concomitantly, any kind of manufacturing / artisanal potential on the part of Europe’s minor partners is systematically wrecked and incapacitated by the flood of Chinese imports (China: the other key accomplice in this triangular crippling of Europe), which are themselves crafted by laborers slaving for wages that are less than a tenth of the West’s.
Thus Europe, partly through Anglo-America’s strategic savvy and mostly through her own despairing fecklessness, is perennially fettered, constipated, anemic, moribund. That Greece would have been the first link to snap was known far and wide ever since this dismal show was launched 10 years ago. Funny to see how, for the past year or so, The Economist has been shrieking hysterically over the euro crisis, depicting in apocalyptic brushstrokes the prospects of its eventual collapse: funny, and revealing, to see British interests wailing so loudly, they, who are not even members of the euro. Eh bien, justement.
LS: The agreement of Germany to enter the monetary union was achieved among other things by the threat of Francois Mitterrand that a triple alliance build by Great Britain, France and the Soviet Union would encircle Germany. So does David Marsh write in his book Der Euro (“The Euro”) related to the EU summit of December 8, 1989, in Strasbourg (a few days after then Chancellor Helmut Kohl had published his 10-point plan for the reunification of Germany).  Was there a time bomb laid by establishing a common monetary policy for different developed economies (culminating in the accession of Greece) that could be brought to an explosion at any time?
GP: I have yet to read this book. It could be, I don’t know; it is an interesting thesis, for sure.
LS:David McWilliams wrote not so long ago vis-a-vis the euro crisis and Germany’s role in it:
“It wants to do with banks what it couldn’t – historically – do with tanks. It wants a Europe that looks and feels democratic, but in which Germany really rules the roost and makes the final decision in all the big calls. This it will achieve by financial dominance.” 
Do you think this is true?
GP: I wish we were governed by a true Germany, a eurocentric Deutschland, that is. What we have, instead, is always the same old German postwar Anglo-American captive. So, no, I would disagree with this contention.
LS: Do you see the possibility that, if the eurozone and EU fail to integrate, Germany and France will go their separate geopolitical ways, with Germany gravitating more into the BRICS orbit?
GP: I don’t see how that could happen. It would be a catastrophic inanity. Germany and France must stick together, and together, again, look to the East. Short of that, and in the event of a (liberating) euro break-up, Europe’s traditional geopolitical rivals would be intent, as ever, to balkanize the region as much as possible.
LS: What do we see actually in the United States and elsewhere in the West, given the popular labeling these days: a predator capitalism, some sort of socialism, or rather corporatism/fascism? In other words, are Mussolini’s words of interest here: “Fascism ought more properly be called corporatism because it is the perfect merger of power between the corporation and the state.”
GP: None of these things. Fascism’s corporativismo was something altogether different – the corporazioni were state-mandated guilds; it’s another story, entirely. What we have in the US, instead, is a system governed by an ever-more oligarchically diseased, and outwardly aggressive, bureau-technocracy, which, internally, presides over a gradual privatization of public functions, a sweeping commercialization of all spiritual endeavors (higher learning and the arts), and a virtual monopolization (corporatization) of all economic activity. The combined impact of this insectifying / privatizing / monopolizing devolution has so indentured and enfeebled the nation’s middle-class as to have transformed American society into a pervasively barbarized termitary with the highest crime, brutality, and incarceration rates of the post-industrialized world.
One of the prominent cultural (viz devotional) derivatives of such a disquieting process is a now ominous and televised worship of violence in all its forms – eg, from the grotesque realm of wrestling and the downright savagery of the Ultimate Fighting Championship, to slasher/dismemberment horror (the Saw saga), an avalanche of porn of the most degrading forms channeled inter alia by GM and AT&T, and the glorification of industrialized holocaust as well as a crass pulp-mythologizing of ancient Sparta or Imperial Rome cut for semi -illiterate audiences. In its main outlines, America’s present socio-economic and cultural model is to be analyzed in depth so as to prevent its adoption by, and diffusion to, the rest of the world.
LS: Why do you think the US and the West are on this path?
GP: It’s a million dollar question – you are asking me about cosmic evolution. The superficial answer is that 10 years after the demise of the Soviet Union and in the face of a major geopolitical gridlock, the usual Anglo-American strategic centrals needed a jolt to re-deploy, re-tune, re-launch in grand style the conquest of the world, and what more obvious gambit than planting the red, white and blue banner smack into the omphalos of the landmass itself, Afghanistan? I mean, it’s Kipling’s Great Game all over again.
The deeper, cosmic answer is that I do not know. All I know is that after 9/11, psychically speaking, I have witnessed a dramatic transformation. True, the seeds were there, had one looked more carefully, but the shift was nonetheless astounding, especially to my (more objective) outsider’s eyes. It really made me feel as though I were in Ionesco’s play Rhinoceros: all of sudden, everybody around me began to grow a horn on the snout. But maybe the horn had been there all along; or maybe it was I who then morphed into a rhino …
LS: Does the financial crisis we’re in enhance this development?
GP: No, the crisis is just a setback.
LS: Is the austerity meme of today a repetition of the Bruening program before Hitler came to power?
GP: In other words, is ours, too, a time of Nazi incubation, and/or do we find ourselves in the classic depression-plagued lull before world war? I don’t see any Nazi spiritual look-alikes around, though I, like everybody else, have heard of speculative scenarios according to which all the conditions are being set for NATO to drag the West into a major war by way of an Israeli strike against Iran.
This line of thinking would suggest that 1) the failure (viz deliberate postponement) hitherto to inflate another vital bubble is most likely due to Anglo-America’s resolution to teach the world a lesson with a major conflict in the face of 2) the BRICs’ (and South Africa’s) recent joint declaration of wanting to abandon the dollar; 3) America’s enormous debt; and 4) its no less enormous army, which is chomping at the bit. Apparently China, presently the largest holder of America’s “unpayable” debt, has stated it will stand by Iran, should a North Atlantic coalition decide to move against it.
It all sounds fairly outlandish, but not downright implausible. Obviously, China has risen as the arbiter of the situation, and I don’t see why it would irresponsibly trade off wise diplomatic sailing for entrenching itself in a passive – aggressive stance behind Iran by kicking this funny house of cards we all live in nowadays. But, it all looks positively disturbing. Something has got to give soon, that is for sure.
LS: One critical aspect of the wars that we experience is to me that bankers are at the top of the list of beneficiaries of wars (or the “rackett” that Smedley Butler was talking about) – insofar for example:
“The US Federal Reserve creates money to fund the war and lends it to the American government. The American government in turn must pay interest on the money they borrow from the Central Bank to fund the war. The greater the war appropriations, the greater the profits are for bankers.” 
Isn’t it therefore reasonable to expect much more of that business model going forward?
GP: I fundamentally disagree with this interpretative approach, which is, de facto, the standard leftist, anti – corporate reading of history. Again: it is power that moves history, not economics. And it has been like this at least since the era of the crusades: as explained by Germany’s once celebrated Institutionalist school, joint stock companies were invented and incorporated by the Venetians to provide the expeditionary corps with the necessary supplies and logistical provisions. Corporations/banks are indeed essential auxiliaries, but auxiliaries nonetheless.
LS: Which function plays the “free press” in this?
GP: Essential, as known: it fashions the scripts that will predispose the crowds to align themselves according to an established set of grooves in view of whatever power-play is about to unfold. How the scripts are crafted and how the crowds react to them are themes (eg, the nature of propaganda) linked to the great sociological mystery of “public opinion”: tough phenomenological material, not for the faint of heart – something we might discuss on a future occasion.
LS: Is the “science” of economics in a profound crisis of its own?
GP: The state of economics as a discipline and its academic treatment would require, per se, a separate conversation. In the past decade, a small part of the profession has sort of “rebelled” by founding a so – called heterodox sub-branch. It is a positive development, whose course I have followed sporadically of late. We would need a similar movement in all fields of the social sciences.
Be that as it may, it is not enough and whatever is being done is too timid, constricted as it unfortunately is by the pedigree of most “rebels”, ie economists who have formed themselves on a varying brew of neo-classical, Chicago, Keynesian economics, and to a minor degree, old-school British political economy (which includes Marxian porridge, in my view). All of which is to say, again, that, foundationally, they, like myself and all those who were cursed enough to have several economics degrees, have no understanding of economics whatsoever. It is, again, a detox process, which starts with doubt and catch-up, night-reading; it’s like reassembling the brain after they have attempted to turn it into pulp/mush during the most formative years of one’s intellectual development.
As for the euro and the concomitant state of academic economics, it appears like a full-on colonizing pincer maneuver: on the one hand you have the strait-jacket of the euro, on the other, in the halls of discourse, you have economic curricula entirely dominated by American rhetoric.
Take the case of economics departments in the Latin countries: Spain, Italy or France. The particular configuration prevailing in these countries, which anyway is pretty much the same as everywhere else, entails a contingent of instructors rolling on the mystique of their (worthless) US-stamped PhD and/or on their American connections, standardized textbooks all of them originating in the Ivies (Harvard, MIT, Columbia, Cambridge, etc); lobotomized students, who are drilled to “maximize utility functions” without having the faintest notion of what they are actually doing; and a guild of European professionals who, at the psychical level, are completely bulldozed by the Anglo-American aura so much so that they administer promotions and advancements on the basis of the applicants’ publishing record in a series of journals, themselves hierarchized by a scale of prestige, which is ultimately determined by the most powerful American associations.
From what I have personally heard – and this might extremely subjective – Spain is possibly the most despairing case: for one, Catalonia, which used to be one of the holy lands of anarchism, at present hosts some of the most ultra-conservative, ultra-capitalist athenaeums, venues in which deacons of micro-economic hogwash such as Chicago-ite and Nobel laureate Gary Becker are received by adoring crowds of prostrate disciples. Positively unsettling. In some of the Spanish economic schools, the state of intellectual prostration and cipayo-mania (extreme sepoy infection Spanish-style) is so consuming that some professors have even instated the practice of the “brown-bag seminar”: the very American practice of talkin’ “science” while munchin’ on a Turkey sandwich … Where is all this going? Italian economics departments, too, are wholesale appendices of the same apparatus.
The power structure in this sense appears solid, monolithic; truly ungrazed by the crisis and ferociously determined not to cede an inch to anything or anyone challenging it. That is evident. The only way out is to break the chokehold all around, 1) by reforming dramatically the schooling establishment and 2) by breaking away from the euro and re-bestowing on each partner its own monetary sovereignty. Easier said than done, of course. Spain, indeed – that otherwise wonderful country – with its 50% youth unemployment rate, its reckless real estate bubble, and US-cloned universities is yet another pathological case in point of the present European debacle …
LS: One final question. You are calling for a radical monetary reform. Why so? And how does your model look like?
GP: Free associationism of free producers gathered in free communes, federated with one another in one extensive, brotherly and cooperative alliance, all over the world; and the means of payment to move it all: perishable money. (10)
LS: Thank you very much for taking your time, Mr. Preparata.
GP: My pleasure.
1. For Veblen interview, see here
2. For newcomers to Veblen, his ”indispensables” – to cite just two titles – would be The Theory of the Leisure Class (Macmillan, 1899), and Essays in Our Changing Order (posthumous collection of essays, NY: The Viking Press, 1934).
1. Compare Guido Preparata: “Conjuring Hitler: How Britain and America made the Third Reich”, Pluto Press, 2005, page xix.
2. Carroll Quigley: “Tragedy and Hope: A History of The World in Our Time”, Macmillan Company, 1966, page 324.
3. For the historical fact that the Allied Powers were not reluctant to make “business as usual” before and during World War II with Nazi Germany, compare the history of the Bank for International Settlements in Basel, Switzerland, in Charles Higham’s “Trading with the Enemy. The Nazi-American Money Plot 1933 – 1949,” iUniverse Inc., Lincoln, 1983, 2007, pp. 1- 19, Chapter 1: “A Bank for All Reasons.”
4. See for instance Eric Lichtblau: “Nazis Were Given ‘Safe Haven’ in US, Report Says”, The New York Times, November 13, 2010.
5. Compare Peter Dale Scott: “The Road to 9/11. Wealth, Empire, and the Future of America”, University of California Press, Berkeley, 2007, page 12, and Peter Dale Scott: “American War Machine. Deep Politics, the CIA Global Drug Connection, and the Road to Afghanistan”, Rowman & Littlefied, Lanham, 2010, pp. 163 – 164.
6. See Guido Preparata: “On Money, Heresy and Surrender Part I“
7. See David Marsh: “Der Euro: Die geheime Geschichte der neuen Weltwไhrung”, Murmann Verlag, 2009, page 203.
8. David McWilliams: “Let’s talk about Germany“, May 7, 2012.
9. J S Kim: “Inside the Illusory Empire of the Banking Commodity Con Game“, The Underground Investor, October 19, 2010.
10. For further details see Preparata’s essay “On Money, Heresy and Surrender Part II“
Guido Giacomo Preparata was born 1968 in Boston, Massachusetts, and raised in the United States, France, and Italy. He has obtained a BS in Economics at the Libera Universitเ degli Studi Sociali (LUISS, Rome, Italy), an M-Phil in criminology at the University of Cambridge (UK), a Master’s degree in Economics, and a PhD in Political Economy & Public Policy, both from the University of Southern California (USC, Los Angeles, USA).
Preparata is the author of Conjuring Hitler: How Britain and America made the Third Reich (Pluto Press, 2005) and The Ideology of Tyranny: The Use of Neo-Gnostic Myth in American Politics, (Palgrave Macmillan, 2011).
From 2000 to 2008 Preparata was an Associate Professor of Political Economy at the University of Washington, USA. He worked as a research associate at the Electric Power Research Institute, Palo Alto, California), and the research division of Bank of Italy’s Department of Supervision and Regulation. In 2005, as a visiting professor of economics and Fulbright Scholar at the University of Jordan, in Amman, he conducted research on Political Islam, terrorism and Islamic economics. At present he serves as a lecturer in criminology at Kwantlen Polythechnic University in Vancouver, Canada. His website is www.guidopreparata.com.
(Copyright 2012 Lars Schall)