Editorial Note: This is the text of a speech given at the Casey Research Summit, 2014, “Thriving in a Crisis Economy.” Part I was posted here on Monday: the second and final part is published here today.
Ticking at the heart of American society all through the 1920s was the mechanism of false prosperity, which was blowing great quantities of air into a bubble of gigantic proportions. The Federal Reserve system set up before the war made financing the war possible – but at what price? The price was setting up a financial oligarchy with near absolute power over the economy – and also setting up the country for the Great Crash of 1929.
The rise of the totalitarian ideologies as challengers to Western liberalism was made possible, first of all, by the Great War, and by the Crash, which was also caused by the very system that had made the prosecution of the war possible. National Socialism and militant Marxism were "blowback" from World War I just as the jihadists of today are blowback from the cold war era. And these two great enemies of liberty, abhorred by today’s liberals, were at first greeted with something approaching admiration by the progressives of the time. The subsuming of private interests to the collective good under the Italian system drew admiring glances from our liberal professors: Herbert Croly, first editor of The New Republic and champion of Teddy Roosevelt’s "New Nationalism," touted Italian corporatism as the wave of the future and ended his days as the Duce’s chief apologist outside of Rome. No matter what else they disagreed about, ideologues of both the right and the left agreed on one thing: capitalism was doomed and some form of state-controlled economy was destined to succeed it. The only question was: would it be communism, or fascism?
The same factors that led to our fatal intervention in the first world war were brought to bear in order to have us enter the second. The messianic world-saving doctrines originating in the realm of theology had by this time thoroughly penetrated the secular mainstream and had become the default ideology of the political class and the intellectuals. The Kingdom of God on earth – without God, but with various substitute gods – and every ideological grouplet had their favored gods. The advocates of Technocracy, a group founded naturally enough by an American engineer, wanted to put the technocrats – scientists, and other "experts" – in charge of things. The Communists, the followers of Huey Long, the advocates of the so-called Townsend Plan, which called for a guaranteed annual income and ice cream for everyone, the various small fascist groups with their colored shirts and crude appeals to ethnic and religious prejudice – everyone had a Grand Plan that would defeat the Depression and lift the world out of the abyss into which it seemed to be falling deeper by the day.
Once again, the intellectuals were in the forefront of the war hysteria, the first to call for blood and the last to volunteer. While public opinion in general was opposed to US intervention right up until the bombing of Pearl Harbar, as usual our intellectuals were in the vanguard of the War Party – and, yes, The New Republic was back in action. As were the same financial interests whose fate was now even more closely aligned with British interests. To our Yankee Anglophile elite, snatching England’s chestnuts out of the fire amounted to a sacred duty.
British intelligence played a very active role in the United States during the run-up to Pearl Harbor, planting pro-interventionist articles in the media and actively seeking to undermine the large and vocal America First Committee and allied individuals who were organizing to keep America out of the war. A massive British propaganda effort was undertaken, much of it covert, with their agents in the media feeding the American people a steady diet of interventionist agit-prop. They also acted through groups like the Committee to Aid the Allies, the more militant "Fight for Freedom" group, and the elite Century Group, whose wealthy and well-connected members did much of War Party’s fundraising.
And again, there were elite financial interests pushing for intervention abroad in one direction or another. As Murray Rothbard pointed out in his brilliant monograph, Wall Street, Banks, and American Foreign Policy:
"During the 1930s, the Rockefellers pushed hard for war against Japan, which they saw as competing with them vigorously for oil and rubber resources in Southeast Asia and as endangering the Rockefellers’ cherished dreams of a mass ‘China market’ for petroleum products. On the other hand, the Rockefellers took a noninterventionist position in Europe, where they had close financial ties with German firms such as I.G. Farben and Co., and very few close relations with Britain and France.
"The Morgans, in contrast, as usual deeply committed to their financial ties with Britain and France, once again plumped early for war with Germany, while their interest in the Far East had become minimal. Indeed, US ambassador to Japan Joseph C. Grew, former Morgan partner, was one of the few officials in the Roosevelt administration genuinely interested in peace with Japan.
"World War II might therefore be considered, from one point of view, as a coalition war: the Morgans got their war in Europe, the Rockefellers theirs in Asia."
The real turning point in public and elite opinion came when Hitler attacked the Soviet Union and the "workers’ fatherland" came under threat. That’s when left-wing opinion in this country – and at the time an important component of the New Deal coalition – turned on a dime and suddenly the cry for intervention was heard from all sorts of former peaceniks who just happened to be friendly to the Soviet Union. Communist Party "peace" fronts were converted into pro-war front groups overnight: the change in the party line was immediate and carried out with impressive discipline.
World War II was liberty’s darkest hour, a time when patriots who warned of what was coming were derided as traitors and silenced, when libertarians were largely forced to go underground and the full dictatorship of thought and deed that is the rule in wartime took complete command, stamping out all public vestiges of dissent.
Government control of economic life, which had begun its assault during the early days of the New Deal, was now complete: with a system of wage and price controls in place, and total command of production, the collectivist juggernaught, fueled by the war, was going full speed ahead. Roosevelt’s wartime dictatorship extended throughout American political life, with an elaborate apparatus of repression set up to deal with the "problem" of dissent. We all know about the massive round up of Japanese-Americans and their imprisonment in camps not to mention the shameful looting of their property. Similar methods were used against Germans and Italians on both coasts, albeit on a smaller scale. Newspapers were banned from the mails, and groups deemed "subversive" of the war effort were dragged into court on phony charges of "sedition."
It was the liberals who were the worst: it was they who demanded the prosecution of the so-called "isolationists," and the Communist party was the loudest in demanding that the leaders of the old America First Committee, since disbanded, be tried for treason. It was only after the war, when the tables were turned on the Communists, that we suddenly began to see an appreciation for civil liberties by some on the American left.
With the Americans again taking their cues from their British elder brothers, the Truman administration ushered in the cold war era in response to Churchill’s infamous "Iron Curtain" speech. Having handed over half of Europe to the Soviet Union we now turned on our former allies and suddenly the question of "Who lost China?" was a major foreign policy issue. Who lost China, indeed! The destruction of Japan meant the destruction of the only regional counterweight to the Communists outside of Taiwan.
And in a French Indochinese colony few had heard of, a native rebellion was stirring and the French were asking their American allies for help.
The cold war era brought a whole new dimension to the War Party, which had previously lacked a consistent intellectual leadership. In the ideological wars that split the left during the cold war era a faction arose out of the unorthodox Trotskyist tradition that was to play a key role in ginning up the wars of our own time. These were ex-Communists of one sort or another who had come to hate their old comrades with all the passion of a rejected lover: although many still claimed to be socialists, or even "true communists," in effect they became fanatical anti-communists, calling for a hard line in "rolling back" communism abroad as well as taking a hard line position on outlawing all manifestations of communism here in the United States.
The defectors from communism, both the official Stalinist variety and the various Trotskyite flavors, had become so numerous by the late 1940s and early fifties that they constituted their own political faction. Indeed, they had their own organization in Max Shachtman’s Independent Socialist League, which later became Social Democrats, USA. Shachtman had been Leon Trotsky’s chief intellectual advocate in America at one point, but he broke with the Old Man over the nature of the Soviet Union. The old-fashioned Trotskyites still defended the Soviet Union, even during the Hitler-Stalin Pact, but the newfangled variety, headed by Shachtman, said the pact showed that the Soviet Union was no longer defensible from a socialist point of view. What existed in Stalin’s Russia wasn’t socialism, it was what they called bureaucratic collectivism – a danger just as deadly and even more oppressive than capitalism.
Shachtman’s tiny organization never had more than 1500 members, but it was vastly influential on the left and aside from that had top level connections in the labor movement, where Shachtman’s cronies acted as advisors to some of the biggest union bosses of the day.
The fabled creatures known today as neoconservatives came out of this milieu . Irving Kristol, the neocon "godfather," spent his storied youth in a Trotskyite sect, and was no doubt well-acquainted with Shachtman, who loved to hold forth among his youthful followers. And Kristol wasn’t the only young Trotskyite to become an ardent anti-communist. Platoons of them flooded into the conservative movement starting in the 1950s, including among the founding editors of National Review – senior editor James Burnham was once an ardent Trotskyite. Frank Meyer, a close associate of William Buckley’s and a top editor at the magazine, was a former Communist Party theoretician and teacher at their Jefferson School. Willi Schlamm, former editor of the Communist party’s German newspaper, Rote Fahne, was also a founding editor. The transformation of Commentary magazine from a liberal journal to a neoconservative opinion organ limns the trajectory of a whole generation of "liberals who’ve been mugged by reality," as one definition of a neoconservative phrases it.
In everyday usage the term neoconservative – neocon, for short – has become a synonym for those who advocate a foreign policy of aggressive intervention on a global scale. The neocons are all over the map when it comes to tax policy, social issues, and government regulation, but when it comes to foreign policy they are ruthless in their consistent support for military action, no matter what the context.
Although they started out as left-wing Democrats, and in many cases socialists of one sort or another, their evolving foreign policy views soon drove them so far to the right that they eventually left the Democratic party – after it was taken over by Vietnam war opponents – and joined up with the Republicans. They also moved into the conservative movement, which suffered from a lack of intellectuals, which they very quickly took over by, first, getting a lock on the money, and then getting a lock on the institutions. From there the neocons moved naturally into government, where, during the Reagan administration, they found a niche at the National Endowment for Democracy.
Not even Ronald Reagan was interventionist enough for them: when Reagan withdrew from Lebanon, they compared him to Neville Chamberlain. When he negotiated with the Russians and signed a treaty limiting nuclear weapons they compared him to … yes, Neville Chamberlain. For decades they had traded in their alleged "expertise" on communism, its history and its methods: when the communist empire imploded and went out of existence they were in shock for years. In spite of their supposedly extensive knowledge of the subject, they never saw the end of communism coming. Indeed, they took quite the opposite tack in claiming that communism, far from being on its last legs, was on the march. They were constantly warning that the West was falling behind in the arms race: we were suffering, they said, from a "missile gap," with the Russians way ahead. When this turned out to be phony-baloney, they resorted to the old "will to power" argument: the Communists, they argued, were imbued with a fanatical devotion that the softhearted democratic powers couldn’t match. The communists knew what they wanted and they acted decisively to get it. The vacillating West couldn’t hope to stand against them unless we adopted some of their methods: clandestine efforts to overthrow enemy governments, funding proxies throughout the world, and even launching a military assault on the Soviet Union itself.
As it turned out, none of this was necessary: the Soviet system imploded, suddenly, in 1989, and did so with stunning rapidity.
This was something the neocons were totally unprepared for: their knowledge of – and respect for – economics was negligible. They were former socialists, for the most part, who still retained their faith in the power of government: they had no idea the Soviets were on their last legs.
Of course, the great libertarian economist, Ludwig von Mises, had predicted the fall of communism back in the 1920s, with his famous paper on the impossibility of economic calculation under socialism. Libertarians knew Soviet communism was doomed to fail: they therefore saw no threat emanating from the Soviet Union, which was playing a defensive game at any rate. Stalin wasn’t as interested in exporting communism as he was in preserving his own rule on the home front. We handed him eastern Europe at Yalta but beyond that he did not go.
And now his heirs weren’t going anywhere, except onto the dust heap of history.
With the fall of the Kremlin, the neocons decided that what Charles Krauthammer dubbed the "unipolar moment" was at hand. This was our big chance, now that the Soviets were out of the way, to establish a "world order" with Washington – of course! – as its center, but also incorporating Western Europe and Japan into one vast superstate. This was all part of the flurry of discussion that followed the publication of Francis Fukuyama’s "End of History" essay, in which he related that the Soviets’ demise and his reading of Hegel had revealed to him an astonishing fact: history had come to an end. Liberal democracy had triumphed over all other competitors and was fated to be "the final form of human government." A World State was not only in the making, it was the inevitable outcome of the Spirit of History!
The old 19th century post-millennial pietism burns brightest in the hearts of our neocons. The urge to conquer, to remake, and purify the world of sin, to impose some kind of authoritarian "world order" out of what is a natural, beneficial, and self-regulating spontaneous order – this is the essence of the interventionist credo.
The neocons were lost for a while after the communist collapse: no one was listening to them anymore. The Kosovo war was a bust as far as Republicans were concerned: indeed, when a Republican House of Representatives voted down Clinton’s Kosovo war budget, Bill Kristol threatened to leave the GOP. If only he had followed through on his threat the Republican party might have been spared much – but, alas, it was not to be.
September 11, 2001 was the Neoconservative Moment, and in the months and years to come their star would rise until they had effectively seized control of the government. As Bob Woodward said in his book, Plan of Attack:
"[Colin] Powell felt Cheney and his allies – his chief aide, I. Lewis ‘Scooter’ Libby, Deputy Defense Secretary Paul D. Wolfowitz and Undersecretary of Defense for Policy Douglas J. Feith and what Powell called Feith’s ‘Gestapo’ office – had established what amounted to a separate government."
There’s no real need to go into this in much detail, since the story of their deception is well-known. They manipulated the "intelligence" and after lying us into war they presided over the worst military disaster in American history, with the blowback still coming at us right up to the present day.
At the end of the cold war, as the neocons were flailing about looking to gain some traction, Bill Kristol and Robert Kagan co-wrote an essay on a new foreign policy agenda for America in the post cold war world in which they stated that the goal of American policymakers ought to be the creation of a "benevolent global hegemony." This is the world state envisioned by Fukuyama: a global government with a world central bank backed up by a multinational military force and a system of universal surveillance – with nowhere to hide from the all-seeing eye of the Empire.
That is their goal – and they have come much closer to achieving it in the past few years. Already they have overrun much of the Middle East, and now they have their sights fixed on the lands of the former Soviet Union. In partnership with the EU, they are moving in on Russia. And while China may seem too vast a country to absorb, Western penetration of that formerly isolated and hostile land has been impressive.
The frontiers of the empire are moving outward so fast that one can hardly keep up with their progress. Could this turn out to be the fatal weakness that brings the whole thing tumbling down?
All empires fall. But each case is different. No one knows when the cracks will begin to appear in the façade, or how long the will take to fatally weaken and split the foundations once thought to be invulnerable. My best guess, however, is that whenever it starts, it will take quite a while to bring the whole thing down. The Soviet empire disintegrated in a little over a year – the Mayans, almost overnight. In the case of the American empire, the foundations are a lot stronger to begin with: I think we are going to go the Roman way, with ups and downs, long declines followed by brief revivals.
And finally, I want to say that I’ve gotten more optimistic as I’ve gotten older, and that the pessimism of my youthful vision of a rotten system collapsing under its own weight no longer seems either desirable or imminent. What I do see as a very real possibility is a political movement in this country that will restore our old republic, dismantle the empire, and return the Constitution to its rightful place at the very center of the American system. I see that a man with the last name of Paul is now the frontrunner for the Republican presidential nomination and suddenly I am a teenage libertarian all over again. You know, we had a slogan back then, in the 60s, when the libertarian movement first began to organize itself. It was: "Freedom in our time." Back then, it seemed like a distant promise. Today, it seems like a real possibility. And that is, in itself, a great victory.