“Critical Path“; R. Buckminster Fuller; St. Martin’s Press, 1981, 1st edition
I‘M GOING TO REVIEW my prehistory’s speculative assumptions regarding the origins of human power structures.
In a herd of wild horses there’s a king stallion. Once in a while a young stallion is born bigger than the others. Immediately upon his attaining full growth, the king stallion gives him battle. Whichever one wins inseminates the herd. Darwin saw this as the way in which nature contrives to keep the strongest strains going. This battling for herd kingship is operative amongst almost all species of animal herds as well as in the “pecking order” of flocking bird types.
I’m sure that amongst the earliest of human beings, every once in a while a man was born much bigger than the others. He didn’t ask to be—but there he was. And because he was bigger, people would say—each in their own esoteric language—”Mister, will you please reach one of those bananas for me, because I can’t reach them.” The big one obliges. Later the little people would say, “Mister, people over there have lost all of their bananas and they are dying of starvation, and they say they are going to come over here and kill us to get our bananas. You’re big—you get out in front and protect us.” And he would say, “OK,” and successfully protect them.
The big one found his bigness continually being exploited. He would say to the littles, “Between these battles protecting you, I would like to get ready for the next battle. We could make up some weapons and things.” The people said, “All right. We’ll make you king. Now you tell us what to do.” So the big man becomes king quite logically. He could have become so in either a bullying or good-natured way, but the fact is that he was king simply because he was not only the biggest and the most physically powerful but also the most skillful and clever big one.
Every once in a while along would come another big man. “Mr. King, you’ve got things too easy around here. I’m going to take it away from you.” A big battle ensues between the two, and after the king has his challenger pinned down on his back, he says, “Mister, you were trying to kill me to take away my kingdom. But I’m not going to kill you because you’d make a good fighter, and I need fighters around here to cope with the enemies who keep coming. So I’m going to let you up now if you promise to fight for me. But don’t you ever forget—I can kill you. OK?” The man assents, so the king lets him up.
But instinctively the king says secretly to himself, “I mustn’t ever allow two of those big guys to come at me together. I can lick any one of them, but only one by one.” The most important initial instinct of the most powerful individual or of his organized power structure is, “Divide to conquer, and to keep conquered, keep divided.”
So our special-case king has now successfully defended his position against two or more big guys who are all good fighters. He makes one the “Duke of Hill A,” the second “Duke of Hill B,” and the third “Duke of Hill C,” and tells each one to “mind your own business” because “only the king minds everybody’s business,” and he has his spies watch them so that they can’t gang up on him. Thus, our considered king is doing very well in his tribe-defending battles.
However, there are a lot of little nonfighting people who are not obeying the king regarding preparations for the next fighting period. The king says to his henchmen, “Seize that mischievous little character over there who is really being a nuisance around here.” To the prisoner the king says, “I’m going to have to cut your head off.” The man says, “Mr. King, you’d make a big mistake to cut my head off.” The king asks, “Why?” “Well, I’ll tell you, Mr. King, I understand the language of your enemy over the hill, and you don’t. And I heard him say what he is going to do to you and when he’s going to do it.” “Young man, you’ve got a good idea at last. You let me know every day what my enemy over the hill says he is going to do and so forth, and your head is going to stay on. In addition, you’re going to do something else you’ve never done before. You’re going to eat regularly right up here in the castle near me. And I’m going to have you wear a royal purple jacket (so that I can keep track of you).” The king now has that little man under control and useful. Then another little man makes trouble for the king. As he is about to be beheaded, he shows the king that he understands metallurgy and can make better swords than anybody else. The king says, “You better make a good sword in a hurry.” The man makes a beautiful, superstrong, and sharp sword—there’s no question about that. So the king says, “OK, your head stays on. You, too, are to live here at the castle.”
Next, under the threat of beheadment, another man making trouble for the king says, “The reason I am able to steal from you is because I understand arithmetic, which you don’t. If I do the arithmetic around here, people won’t be able to steal from you.” The king makes him court mathematician.
As each of these men are given those special tasks to do for life, the king says to all of them, “Each of you mind only your own business. You, Mr. Languageman, mind only your own business; and you, Mr. Swordmaker, mind only your own business; and you, Mr. Arithmetic, mind only your own business. Each one minds only his own business. I’m the only one that minds everyone’s business. Is that perfectly clear?” “Yes sir.” “Yes sir.” “Yes sir.”
The king now has his kingdom operating very well. He has great fighters, superior metallurgy, better arithmetic and logistics, better spying and intelligence. His kingdom is growing ever bigger. Years go by, and these experts are getting old. The king says, “I want to leave this kingdom to my grandson. Mr. Languageman, I want you to pick out and teach some younger person about language. You, Mr. Swordmaker, I want you to pick out and teach somebody about metallurgy. You, Mr. Arithmetic, I want you to pick out and teach someone about arithmetic.” And his total strategy became the pattern for the ultimate founding of Oxford University.
The way the power structure keeps the wit and cunning of the intelligentsia—who are not musclemen, who cannot do the physical fighting—from making trouble for the power structure (if the intelligentsia are too broadly informed, unwatched, and with time of their own in which to think) is to make each one a specialist with tools and an office or lab. That is exactly why bright people today have become streamlined into specialists.
Nobody is born a specialist. Every child is born with comprehensive interests, asking the most comprehensively logical and relevant questions. Pointing to the logs burning in the fireplace, one child asked me, “What is fire?” I answered, “Fire is the Sun unwinding from the tree’s log. The Earth revolves and the trees revolve as the radiation from the Sun’s flame reaches the revolving planet Earth. By photosynthesis the green buds and leaves of the tree convert that Sun radiation into hydrocarbon molecules, which form into the bio-cells of the green, outer, cambium layer of the tree. The tree is a tetrahedron that makes a cone as it revolves. The tree’s three tetrahedral roots spread out into the ground to anchor the tree and get water. Each year the new, outer-layer, green-tree cone revolves 365 turns, and every year the tree grows its new tender-green, bio-cell cone layer just under the bark and over the accumulating cones of previous years. Each ring of the many rings of the saw-cut log is one year’s Sun-energy impoundment. So the fire is the many-years-of-Sun-flame-winding now unwinding from the tree. When the log fire pop-sparks, it is letting go a very sunny day long ago, and doing so in a hurry.” Conventionally educated grown-ups rarely know how to answer such questions. They’re all too specialized.
If nature wanted humans to be specialists, she would, for instance, have given them a microscope on one eye, which is what nature has done with all other living organisms—other than humans. Each has special, organically integral equipment with which to cope successfully with special conditions in special environments. The low-slung hound to follow the Earth-top scent of another creature through the thickets and woods . . . the little vine that can grow only along certain stretches of the Amazon River . . . the bird with beautiful wings with which to fly, which bird however, when landed and in need of walking, is greatly hampered by its integral but now useless wings.
Humans are not unique in possessing brains that always and only are coordinating and storing for later retrieval the integrated information coming in from each and all the creature’s senses—visual, aural, tactile, and olfactory. Humans are unique in respect to all other creatures in that they also have minds that can discover constantly varying interrelationships existing only between a number of special case experiences as individually apprehended by their brains, which covarying interrelationship rates can only be expressed mathematically. For example, human minds discovered the law of relative interattractiveness of celestial bodies, whose initial intensity is the product of the masses of any two such celestial bodies, while the force of whose interattractiveness varies inversely as the second power of the arithmetical interdistancing increases.
The human mind of Bernoulli discovered the mathematical expression of the laws of intercovarying pressure differentials in gases under varying conditions of shape and velocity of gas flow around and by interfering bodies. The Wright brothers’ wing foils provided human flight, but not the information controlling the mathematics of varying wing foil conformations. Bernoulli’s work made possible the mathematical improvement in speed and energy efficiency of various wing designs. Human mind’s access to the mathematics of generalized scientific laws governing physical phenomena in general made possible humanity’s production of its own detached-from-self wings to outfly all birds in speed and altitude, while being able to loan one another those wings and modify them to produce even better wings.
Discovery of energetic principles, and human inventiveness in using those principles, such as the invention of catapults and mechanically contracted, steel-spring-coil arrow impelment, advanced the art of weapons. The human power structures that could best organize and marshal the complex of interessential “best” weapons and support an army of best-trained people with each of the special types of weapons were the ones who now won the battles and ran the big human “show.” The discovery of gunpowder by the Chinese and the invention of guns introduced the era of ballistics, or as the Navy terms it, “explosively hurled missiles.”
Going back to the stone-sling, bow-and-arrow, spear, club, and knife era of weapons, we find that territorial battles between American Indian nations were fought over the local hunting and fishing rights, but the land itself always belonged to the Great Spirit. To the Indians it was obvious that humans could not own the land. There was never any idea that the people could own land—owning was an eternal, omniscient omnipotence unique to the greatness, universality, and integrity of the forever-to-humans-mysterious Great Spirit. Until a special human-produced change in the evolution of power structures occurred, the ownership of anything being unique to the Great Spirit—in whatever way that might be designated by local humans—was held by all people around our planet.
In 1851 Seattle, chief of the Suquamish and other Indian tribes around Washington’s Puget Sound, delivered what is considered to be one of the most beautiful and profound environmental statements ever made. The city of Seattle is named for the chief, whose speech was in response to a proposed treaty under which the Indians were persuaded to sell two million acres of land for $150,000.
How can you buy or sell the sky, the warmth of the land? The idea is strange to us.
If we do not own the freshness of the air and the sparkle of the water, how can you buy them?
Every part of this earth is sacred to my people. Every shining pine needle, every sandy shore, every mist in the dark woods, every clearing and humming insect is holy in the memory and experience of my people. The sap which courses through the trees carries the memories of the red man.
The white man’s dead forget the country of their birth when they go to walk among the stars. Our dead never forget this beautiful earth, for it is the mother of the red man. We are part of the earth and it is part of us. The perfumed flowers are our sisters; the deer, the horse, the great eagle, these are our brothers. The rocky crests, the juices in the meadows, the body heat of the pony, and man—all belong to the same family.
So, when the Great Chief in Washington sends word that he wishes to buy our land, he asks much of us. The Great Chief sends word he will reserve us a place so that we can live comfortably to ourselves. He will be our father and we will be his children.
So we will consider your offer to buy our land. But it will not be easy. For this land is sacred to us. This shining water that moves in the streams and rivers is not just water but the blood of our ancestors. If we sell you land, you must remember that it is sacred, and you must teach your children that it is sacred and that each ghostly reflection in the clear water of the lakes tells of events and memories in the life of my people. The water’s murmur is the voice of my father’s father.
The rivers are our brothers, they quench our thirst. The rivers carry our canoes, and feed our children. If we sell you our land, you must remember, and teach your children, that the rivers are our brothers and yours, and you must henceforth give the rivers the kindness you would give any brother.
We know that the white man does not understand our ways. One portion of land is the same to him as the next, for he is a stranger who comes in the night and takes from the land whatever he needs. The earth is not his brother, but his enemy, and when he has conquered it, he moves on. He leaves his father’s grave behind, and he does not care. He kidnaps the earth from his children, and he does not care. His father’s grave, and his children’s birthright are forgotten. He treats his mother, the earth, and his brother, the sky, as things to be bought, plundered, sold like sheep or bright beads. His appetite will devour the earth and leave behind only a desert.
I do not know. Our ways are different from your ways. The sight of your cities pains the eyes of the red man. There is no quiet place in the white man’s cities. No place to hear the unfurling of leaves in spring or the rustle of the insect’s wings. The clatter only seems to insult the ears. And what is there to life if a man cannot hear the lonely cry of the whippoorwill or the arguments of the frogs around the pond at night? I am a red man and do not understand. The Indian prefers the soft sound of the wind darting over the face of a pond and the smell of the wind itself, cleansed by a midday rain, or scented with piñon pine.
The air is precious to the red man for all things share the same breath, the beast, the tree, the man, they all share the same breath. The white man does not seem to notice the air he breathes. Like a man dying for many days he is numb to the stench. But if we sell you our land, you must remember that the air is precious to us, that the air shares its spirit with all the life it supports.
The wind that gave our grandfather his first breath also receives his last sigh. And if we sell you our land, you must keep it apart and sacred as a place where even the white man can go to taste the wind that is sweetened by the meadow’s flowers.
You must teach your children that the ground beneath their feet is the ashes of our grandfathers. So that they will respect the land, tell your children that the earth is rich with the lives of our kin. Teach your children that we have taught our children that the earth is our mother. Whatever befalls the earth befalls the sons of the earth. If men spit upon the ground, they spit upon themselves.
This we know: the earth does not belong to man; man belongs to the earth. All things are connected. We may be brothers after all. We shall see. One thing we know which the white man may one day discover: our God is the same God.
You may think now that you own Him as you wish to own our land; but you cannot. He is the God of man, and His compassion is equal for the red man and the white. This earth is precious to Him, and to harm the earth is to heap contempt on its creator. The whites too shall pass; perhaps sooner than all other tribes. Contaminate your bed and you will one night suffocate in your own waste.
But in your perishing you will shine brightly fired by the strength of the God who brought you to this land and for some special purpose gave you dominion over this land and over the red man.
That destiny is a mystery to us, for we do not understand when the buffalo are all slaughtered, the wild horses are tame, the secret corners of the forest heavy with scent of many men and the view of the ripe hills blotted by talking wires.
Where is the thicket? Gone. Where is the eagle? Gone.
The end of living and the beginning of survival.”*
|*Chief Seattle’s speech was submitted by Dr. Glenn T. Olds at Alaska’s Future Frontiers conference in 1979.|
We have learned in the last decade from our behavioral science studies that aggression is a secondary behavior of humans—that when they get what they need, when they need it, Old are not overwhelmed, they are spontaneously benevolent; it is only when they become desperate that they become aggressive because what they have relied on is no longer working. There are two kinds of social behavior manifest today around the world—the benign and the aggressive. It is probable that this dichotomy occurred in the human-versus-animal confrontation in the ice age time.
When an ice age starts to recede, the horsemen start north—hunting with clubs and spears. At the same time, moving much more slowly, we have the beginnings of great tribes of humans following their flocks of goats and sheep as the latter lead them to the best pastures—sometimes high on mountainsides, sometimes on great plains. With the big man as king—the head shepherd—we have humanity migrating off into a wilderness that seemed to have no limits. The land belonged to the Great Spirit. The people lived on the flesh of their animals and the encountered fruits, berries, nuts, and herbs. They kept themselves warm with clothing made of the skins of the animals and also with environment-controlling tents made of local saplings and the animal skins.
We have a king shepherd, from the day of the giants, tending his people and his flock, when along comes a little man on a horse, with a club hanging by his side. He rides up to the king shepherd and, towering above him, says, “Well, Mr. Shepherd, those are very beautiful sheep you have there. You know, it’s very dangerous to have such beautiful sheep out here in the wilderness. The wilderness is very dangerous.” The shepherd responds, “We’ve been out in the wilderness for generations and we’ve had no trouble at all.”
Night after night thereafter sheep begin to disappear. Each day along comes the man on the horse. He says, “Isn’t that too bad. I told you it was very dangerous out here. Sheep disappear out in the wilderness, you know.” Finally, there is so much trouble that the shepherd agrees to accept and pay in sheep for the horseman’s “protection” and to operate exclusively within the horseman’s self-claimed land.
No one dared question the horseman’s claim that he owned the land on which the horseman said the shepherd was trespassing. The horseman had his club with which to prove that he was the power structure of that locale; he stood high above the shepherd and could ride in at speed to strike the shepherd’s head with his club. This was how, multimillennia ago, twentieth-century racketeers’ “protection” and territorial “ownership” began. For the first time little people learned how to become the power structure and how thereby to live on the productivity of others.
Then there came great battles between other individuals on horses to determine who could realistically say, “I own this land.” Ownership changed frequently. The ownership-claiming strategy soon evolved into horse-mounted warfare as each gang sought to overwhelm the other. Then the horse-mounted gangs, led by a most wily leader, used easily captured human prisoners to build them stone citadels at strategic points. Surrounded by prisoner-built moats rigged with drawbridges and drawgates, they would come pouring out to overwhelm caravans and others crossing their domains. “Deeds” to land evolved from deeds of arms. Then came enormous battles of gangs of gangs, and the beginning of the great land barons. Finally we get to power-structure mergers and acquisitions, topped by the most wily and powerful of all—the great emperor.
This is how humans came to own land. The sovereign paid off his promises to powerful supporters by signing deeds to land earned by the physical deeds of fighting in shrewd support of the right leader. Thereafter emperors psychologically fortified the cosmic aspect of their awesome power by having priests of the prevailing religions sanctify their land-claiming as accounted simply either by discovery or by arms.
In another set of events that opportuned the power structure the land barons discovered the most geographically logical trading points for caravaning: a place where one caravan trail would cross another caravan trail; where, for instance, the caravaners came to an oasis or maybe to a seaport harbor and transfer some of their goods from the camel caravans to the boats. The caravaners would say, “Let’s exchange goods right here. Fine. You need something; I have it.”
One day they’re exchanging goods when along comes a troop of armed brigands on horseback. The head horseman says, “It’s pretty dangerous exchanging valuable things out here in the wilderness.” The caravaners’ leader says, “No, we never have any trouble out here. We have been doing this for many generations.” Then their goods begin to be stolen nightly, and finally the merchants agree to accept and pay for “protection.” That was the beginning of the walled city. The horse-mounted gangsters brought prisoners along to build the city’s walls and saw to it that all trading was carried on inside the walls. The lead baron then gave each of his supporters control of different parts of that city so that each could collect his share of the “taxes.”
This is how we came to what is called, archeologically, the city-state, which was to become a very powerful affair. There were two kinds: the agrarian-productivity-exploiting type and the trade-route-confluence-exploiting type. These produced all the great walled cities such as Jericho and Babylon.
The agrarian-supported city-state works in the following manner: For example, we have Mycenae in Greece, a beautiful and fertile valley. It is ringed around with mountains. You can see the mountain passes from the high hill in the center of the valley. At the foot of the high central hill there is a very good well. So they build a wall around the citadel on the top of that mid-valley hill and walls leading down to and around the well so that they can get their water. When they see the enemy coming through the passes, the Mycenaeans bring all the food inside their walls and into their already-built masonry grain bins. What they can’t bring inside the walls, they burn—which act was called “scorching the fields.” The enemy enters the fertile valley, but there’s nothing left for them to eat. The enemy army has to “live on its belly”—which means on the foods found along their route of travel—and is hungry on arrival in the valley. The people inside have all the food. The people outside try to break into the walled city, but they are overwhelmed by its height and its successfully defended walls. Finally the people outside—only able to go for about thirty days without food—get weaker and weaker, then the people inside come out and decimate them.
This was the city-state. It was a successful invention for a very long period in history. At the trade-route convergences city-states operated in much the same way but on a much larger scale with the siege-resisting supplies brought in by caravans or ships. The city-states were approximately invincible until the siege of Troy. Troy was the city-state controlling the integrated water-and-caravaning traffic between Asia and Europe near the Bosporus. It had marvelous walls. Everything seemed to be favorable for its people.
Meanwhile in history, we have millennia of people venturing forth on the world’s waters—developing the first rafts, which had to go where the ocean currents took them; then the dugouts, with which they paddled or catamaraned and sailed in preferred directions; and finally the ribbed-and-planked ship, suggested to them by the stout spine and rib cage of the whales, seals and humans—stoutly keeled and ribbed, deep-bellied ships. With their large ships made possible by this type of construction, sailors came to cross the great seas carrying enormous cargoes—vastly greater cargoes than could be carried on the backs of humans or animals. Ships could take the short across-the-bay route instead of the around-the-bay mountain route.
The Phoenicians, Cretans, and the Mycenaeans, together, in fleets of these big-ribbed and heavily planked ships, went to Troy and besieged it. Up to this time the besiegers of Troy had come overland, and they soon ran out of food. But the Troy-besieging Greeks and Cretans came to Troy in ships, which they could send back for more supplies. This terminally-turned-around voyaging back to the supply sources and return to the line of battle was called their “line of supply.” The new line-of-supply masters—the Greeks—starved out the Trojans. The Trojans thought they had enough food but had not reckoned on the people besieging them having these large ships. The Trojan horse was the large wooden ship—that did the task of horses—out of whose belly poured armed troops.
At this time the power structure of world affairs shifts from control by the city-state to the masters of the lines of supply. At this point in the history of swiftly evolving, multibanked, oar- and sail-driven fighting ships, the world power-structure control shifts westward to Italy. While historians place prime emphasis on the Roman legions as establishing the power of the Roman Empire, it was in fact the development of ships and the overseas line of supply upon which its power was built—by transporting those legions and keeping them supplied. Go to Italy, and you will see all the incredibly lovely valleys and great castellos commanding each of those valleys such as you saw in the typical city-states, and you can see that none of those walls has ever been breached. Also in Italy—in the northeastern corner—is Venice, the headquarters of the water-people. The Phoenicians—phonetically the Venetians—had their south Mediterranean headquarters in Carthage in northern Africa. In their western Mediterranean and Atlantic venturings the Phoenicians became the Veekings. The Phoenicians—Venetians—in their ships voyaged around the whole coast of Italy and sent in their people to each castello, one by one. The Venetians had an unlimited line of supply, and the people inside each castello did not. The people inside were starved out. Thus, all of the regional masters of the people in Italy hated the Venetians-Phoenicians-Veekings who were able to do this.
There being as yet no Suez Canal, the new world power structure centered in the ship mastery of the line of supply finally forcing the Roman Empire to shift its headquarters to Constantinople some ten centuries after the fall of Troy. The Roman emperor-pope’s bodyguards were the Veekings-Vikings, the water-peoples’ most powerful frontier fighters. The line of supply from Asia to Constantinople was partially caravan-borne and partially water-borne via Sinkiang-Khyber Pass-Afghanistan or via the Sea of Azov, the Caspian and the Black seas. From Constantinople, the western Europe-bound traffic was rerouted from overland to waterway routes. Because the Asia-to-Constantinople half of the trading was more land-borne-via-caravans, whose routes were dominated by the city-state-mastering Turks, Constantinople in due course was taken over by the Turks who established the Byzantine Empire in the Aegean Sea and Asia Minor.
Before leaving the subject of the great power-structure struggle for control of the most important, greatest cargo-tonnage-transporting, most profitable, Asia-to-Europe trade routes, we must note that the strength of the Egyptian Empire was predicated upon its pre-Suez function as a trade route link between Asia and Europe via the Indian Ocean, the Red Sea, overland caravan to the Nile, and then water-borne to Alexandria, or via Somaliland, overland to the headwaters of the Nile, and thence to Alexandria. The latter route was not economically competitive but was the route of travel of the ship-designing and -building arts that in due course brought the stoutly keeled, heavily ribbed, big-bellied ships into the Mediterranean.
In our “Humans in Universe” chapter we spoke about the 600-200 B.C. Greeks’ discovery that our Earth is a sphere and a planet of the solar system. This was the typical scientific product of a water-navigation people. We witnessed also the originally horse-mounted Roman Empire’s destruction of such knowledge, as their earlier grand strategy sought to reestablish the Asia-to-Europe trade pattern via Constantinople and the inland, overland, Khyber Pass route. This explains why the power structure saw fit to Dark-Age-out the mariners’ spherical concept. It explains Ptolemy’s 200 A.D. conic map’s cutting off the around-Africa route mapped by Eratosthenes 400 years earlier.
With the world three-quarters water the bigger ship-producing capability was the beginning of a complete change in the control of human affairs. Bigger and better engineering was developed. The rival power structures were focused on the water supply lines. The Romans’ overland road to England became obsolete. The Phoenician ships sailing out through Gibraltar into the Atlantic outperformed them. This shifted the battles among the world trade-route power structures from on-the-land popular visibility to popularly unwitnessed seascape. Long years of great battles of the corsairs, the pirates of the Barbary Coast, and so forth were unwitnessed and unknown to the land people. Who the power structures might be became popularly invisible.
Finally, bigger ships got out of the Mediterranean and into the Atlantic, around Africa to the Orient, and then around the World. Thus, “those in the know” rediscovered that the world is a sphere and not an infinitely extended lateral plane. Great battles ensued—waged under the flags of England, France, and Spain—to determine who would become supreme master of the world’s high-seas line of supply. These great nations were simply the operating fronts of behind-the-scenes, vastly ambitious individuals who had become so effectively powerful because of their ability to remain invisible while operating behind the national scenery. Always their victories were in the name of some powerful sovereign-ruled country. The real power structures were always the invisible ones behind the visible sovereign powers.
Because the building of superior fleets of ships involved a complex of materials to produce not only the wooden hulls but the metal fastenings and the iron anchors and chains and the fiber ropes and cloth sails, and because woods from many parts of the world excelled in various functions of hull, masts, spars, oars, etc., large money credits for foreign purchase of these and other critical supplies brought control of the sea enterprising into the hands of international bankers.
The building of invisible world-power-structure controls operates in the following manner. Suppose you know how and have the ambition, vision, and daring to build one of these great ships. You have the mathematics. You have the positioning of numbers that enables you—or your servants—to calculate the engineering data governing the design of hulls, spars, rigging, etc., and all the other necessary calculations for the building of a ship capable of sailing all the way to the Orient and returning with the incredible treasures that you have learned from travelers are to be found there. One trip to the Orient—and a safe return to Europe—could make you a fortune. “There are fabulous stores of treasures in the Orient to be cashed in—if my ship comes in!”
The building of a ship required that you be so physically powerful a fighting man—commanding so many other fighting men as to have a large regiment of people under your control—that you must have the acknowledged power to command all the people in your nation who are carpenters to work on your ship; all your nation’s metalworkers to work on the fastenings, chain plates, chains, and anchors of your ship; all those who can make rope and all the people who grow fibers for your rope; all the people who grow, spin, and weave together the fabrics for your sails. Thus, all the skilled people of the nation had to be employed in the building and outfitting of your ship. In addition you had to command all the farmers who produced the food to feed not only themselves but also to feed all those skilled people while they built the ship—and to feed all your army and all your court. So there was no way you could possibly produce one of these great ships unless you were very, very powerful.
Even then, in building ships, there were many essential materials that you didn’t have in your own nation and so had to purchase from others. You also needed working cash—money to cope with any and all unforeseen events that could not be coped with by use of muscle or the sword—money to trade with. It was at this stage of your enterprise that the banker entered into the equation of power.
Up until 1500 B.C. all money was cattle, lambs, goats, or pigs—live money that was real life-support wealth, wealth you could actually eat. Steers were by far the biggest food animal, and so they were the highest denomination of money. The Phoenicians carried their cattle with them for trading, but these big creatures proved to be very cumbersome on long voyages. This was the time when Crete was the headquarters of the big-boat people and their new supreme weapon—the lines-of-supply-control ship. Crete was called the Minoan civilization, the bull civilization, worshippers of the male fertility god.
The pair of joined bull’s horns symbolized that the particular ship carried real-wealth traders—that there were cattle on board to be exchanged for local-wealth items. The Norsemen with their paired-horn headdress were the Phoenician, Veenetian, Veeking (spelled Viking but pronounced “Veeking” by the Vikings). Veenetians, Phoenicians. (Punitians, Puntits, Pundits. Punic Wars. Punt = boat = the boat people. Pun in some African Colored languages means “red,” as in Red Sea.). The Veekings were simply the northernmost European traders. The Veekings, Veenitians, Feenicians, Friesians—i.e., Phoenicians, Portuguese—were cross-breeding water-world people.
Graduating from carrying cattle along for trading in 1500 B.C. the Phoenicians invented metal money, which they first formed into iron half-rings that looked like a pair of bull’s horns. (Many today mistake them for bracelets.) Soon the traders found that those in previously unvisited foreign countries had no memory of the cattle-on-board trading days and didn’t recognize the miniature iron bull horn. If metal was being used for trading, then there were other kinds of metal they preferred trading with people—silver, copper, and gold were easy to judge by hefting and were more aesthetically pleasing than the forged iron bull horn symbols.
This soon brought metal coinage into the game of world trading, with the first coin bearing the image of the sovereign of the homeland of the Phoenicians.
This switch to coinage occurred coincidentally at just about the same time as the great changeover from city-state dominance to line-of-supply dominance of the power-structure group controlling most of world affairs. This was the time when the Phoenicians began trading with people of so many different languages that, in need of a means of recording the different word sounds made by people around the world, the Phoenicians invented phonetic spelling—Phoenician spjelling—which pronounced each successive sound separately and invented letter symbols for each sound. With phonetic spelling human written communication changed very much—from the visual-metaphor-concept writing of the Orient, accomplished with complex idea-graphics (ideographs), several of which frequently experienced, generalized cartoons told the whole story visually. It was a big change from ideographs to the Phoenicians’ phonetic spelling, wherein each letter is a single sound—having no meaning in itself—and whereby it took several sounds to make a whole word and many such words to make any sense—i.e., a sentence. This is the historical event that Ezra Pound says coincides with the story of the Tower of Babel. Pound says that humanity was split into a babble of individually meaningless sounds while losing the conceptual symbols of whole ideas—powerful generalizations. You had to become an expert to understand the phonetic letter code. The spelling of words excluded a great many people from communicating, people who had been doing so successfully with ideographs.
This gradual alteration of world trading devices from cattle to gold brought about the world-around development of pirates who, building small but swift craft, could on a dark night board one of the great merchant ships just before it reached home, richly laden after a two-year trip to the Orient, and take over the ship and, above all, its gold. With the gold captured, the pirates often burned the vanquished ship.
As already mentioned in our Introduction, it was in 1805, 200 years after the founding of the East India Company, that the British won the Battle of Trafalgar, giving them dominance of all the world’s lines of supply. They now controlled the seas of the world. It was said by world people that the British Empire became the first empire in history upon which “the sun never set.” In order to get their gold off the sea and out of reach of the pirates, the British made deals with the sovereigns of all the countries around the world with whom they traded, by which it was agreed from then on to keep annual accounts of their intertrading and at the end of the year to move the gold from the debtor’s bank in London to the creditor’s bank in London to balance the accounts. In this way they kept the gold off the ocean and immune to sea pirate raiding. This brought about what is now called the “balance of trade” accounting.
The international trading became the most profitable of all enterprises, and great land-”owners” with clear-cut king’s “deeds” to their land went often to international gold moneylenders. The great land barons underwrote the building of enterprisers’ ships with their cattle or other real wealth, the regenerative products of their lands, turned over to the lender as collateral.
If the ship did come back, both the enterpriser and the bankers realized a great gain. The successful ship venturer paid the banker back, and the banker who had been holding the cattle as collateral returned them to their original proprietor. But during the voyage (usually two years to the Orient and back to Europe) the pledged cattle had calves, “kind” (German for “child”), and this is where the concept of interest originated, which was payable “in kind”—the cattle that were born while the collateral was held by the banker were to belong to the banker.
When the Phoenicians shifted their trading strategy from carrying cattle to carrying metal money, the metal money didn’t have little money—”kind”—but the idea of earned interest persisted. This meant that the interest was deducted from the original money value, and this of course depreciated the capital equity of the borrower. Thus, metallic equity banking became a different kind of game from the original concept.
In twentieth-century banking the depositors assume that their money is safely guarded in the vaulted bank, especially so in a savings bank, whereas their money is loaned out, within seconds after its depositing, at interest payable to the banker which is greater than the interest paid to the savings account depositor and, since the metal or paper money does not produce children—”kind”—the banker’s so-called earned share must, in reality, be deducted from the depositor’s true-wealth deposit.
The merchant bankers of Venice came to underwrite the Venetians’ (the Phoenicians’) voyaging ventures. Such international trade financing swiftly became the big thing in the banking game. The “Merchant of Venice”—Shylock and his “pound of flesh forfeit” of the debtor—was Shakespeare’s way of calling attention to the fact that the bankers’ “interest” was in reality depleting the life-support equity of both the depositors and the borrowers.
It was the financing of such international voyaging, trading, and individual travel as well as of vaster games of governmental takeovers that built the enormous wealth-controlling fortunes of early European private banking families. It was under analogous circumstances of financing inter-American-European trade that, in the late nineteenth century, J. P. Morgan became a man of great power. By having his banking houses in Paris and London, Philadelphia and New York, he was able not only to finance people’s foreign travel, all their intershipment of goods, and to give letters of credit, but also to finance and control major “new era” railroading, shipbuilding, mining, manufacturing, and energy-generating enterprises in general.
Such powerful banking gave insights regarding the degrees of risks that could be taken. The people doing the risking came to the banker for advice. In such a manner J. P. Morgan developed the most powerful financing position in America, as society went from wooden ships to steel ships and the concomitant iron mining, blast furnace building, and steel rolling mill development, as well as the making of boilers and engines, electric generators, and air conditioning systems.
To better understand the coming of world power structure into North American affairs, we will switch back from the nineteenth to the seventeenth and eighteenth centuries, to the opening up of North America and the American socioeconomic scene. The European colonization occurred in several major ways.
The Spanish way was accomplished with vast haciendas—grants from the king to powerful supporters. The hacienda development began in Central America and Mexico and expanded northward into California.
The British king also gave vast plantation grants to royal favorites on the North American southeastern coast, below the freezing line.
The French came to two parts of North America: (1) to the Gulf of Mexico-Mississippi delta, where exiled prisoners were dumped, and (2) to the St. Lawrence area of Canada, whence they moved westward via the Great Lakes, then southward on the Mississippi to join with these lower Mississippi colonists exploring northward and westward on the Mississippi.
British sovereign grants were also being given on the northeastern coast, where it was much colder and where existence was much more difficult. Because it was much more difficult to colonize, the royal favorites who received large land grants from the British king in the north did everything they could to encourage colonization of any kind by others, who bought their land from their landlords. The Pilgrims and other people of religious conviction found the freedom of thought-and-act to warrant hazarding their lives in that cold-winter wilderness. On the northeast coast of North America the individuals who did the colonizing were not the landowners, who remained safely in Europe. In the south the royal-favorite landowners themselves occupied and personally operated many of the great plantations.
Though motivated by distinctly different northern and southern reasons for doing so, we have the east-coast North American British-blood people breaking away from the Old World through the American Revolution.
In our tracing of the now completely invisible world power structures it is important to note that, while the British Empire as a world government lost the American Revolution, the power structure behind it did not lose the war. The most visible of the power-structure identities was the East India Company, an entirely private enterprise whose flag as adopted by Queen Elizabeth in 1600 happened to have thirteen red and white horizontal stripes with a blue rectangle in its upper lefthand corner. The blue rectangle bore in red and white the superimposed crosses of St. Andrew and St. George. When the Boston Tea Party occurred, the colonists dressed as Indians boarded the East India Company’s three ships and threw overboard their entire cargoes of high-tax tea. They also took the flag from the masthead of the largest of the “East Indiamen”—the Dartmouth.
George Washington took command of the U.S. Continental Army under an elm tree in Cambridge, Massachusetts. The flag used for that occasion was the East India Company’s flag, which by pure coincidence had the thirteen red and white stripes. Though it was only coincidence, most of those present thought the thirteen red and white stripes did represent the thirteen American colonies—ergo, was very appropriate—but they complained about the included British flag’s superimposed crosses in the blue rectangle in the top corner. George Washington conferred with Betsy Ross, after which came the thirteen white, five-pointed stars in the blue field with the thirteen red and white horizontal stripes. While the British government lost the 1776 war, the East India Company’s owners who constituted the invisible power structure behind the British government not only did not lose but moved right into the new U.S.A. economy along with the latter’s most powerful landowners.
By pure chance I happened to uncover this popularly unknown episode of American history. Commissioned in 1970 by the Indian government to design new airports in Bombay, New Delhi, and Madras, I was visiting the grand palace of the British fortress in Madras, where the English first established themselves in India in 1600. There I saw a picture of Queen Elizabeth I and the flag of the East India Company of 1600 A.D., with its thirteen red and white horizontal stripes and its superimposed crosses in the upper corner. What astonished me was that this flag (which seemed to be the American flag) was apparently being used in 1600 A.D., 175 years before the American Revolution. Displayed on the stairway landing wall together with the portrait of Queen Elizabeth I painted on canvas, the flag was painted on the wall itself, as was the seal of the East India Company.
The supreme leaders of the American Revolution were of the southern type—George Washington and Thomas Jefferson. Both were great land-owners with direct royal grants for their lands, in contradistinction to the relatively meager individual landholdings of the individual northern Puritan colonists.
With the Revolution over we have Alexander Hamilton arguing before the Congress that it was not the intention of the signers of the Declaration of Independence that the nation so formed should have any wealth. Wealth, Hamilton argued—as supported by Adam Smith—is the land, which is something that belonged entirely to private individuals, preponderantly the great landowners with king-granted deeds to hundreds and sometimes thousands of square miles, as contrasted to the ordinary colonists’ few hundreds of acres of homestead farms.
Hamilton went on to argue that the United States government so formed would, of course, need money from time to time and must borrow that money from the rich landowners’ banks and must pay the banks back with interest. Assuming that the people would be benefited by what their representative government did with the money it borrowed, the people gladly would be taxed in order to pay the money back to the landowners with interest. This is where a century-and-a-half-long game of “wealth”-poker began—with the cards dealt only to the great landowners by the world power structure.
Obviously, very powerful people had their land given to them by the king and not by God, but the king, with the church’s approbation, asserted it was with God’s blessing. This deed-processing produced a vast number of court decisions and legal precedent based on centuries and centuries of deed inheritances. Thus, landlord’s deeds evolved from deeds originally dispensed from deeds of war. Then the great landlords loaned parcels of their lands to sharecropping farmers, who had to pay the landlord a tithe, or rent, and “interest” out of the wealth produced by nature within the confines of the deeded land. The landlord had his “tithing” barn within which to store the grains collected in the baskets (fiscus is Latin for “basket”; thus the fiscal year is that which winds up within the basketed measuring of the net grains harvested). The real payoff, of course, was in regenerative metabolic increments of the botanical photosynthetic impoundment of Sun radiation and hydrocarbon molecules’ structuring and proliferation through other hydrogenic and biological interaccommodations. Obviously none of this natural wealth-regenerating and -multiplying process was accreditable to the landlords.
When I was young, there were people whom everybody knew to be very “wealthy.” Nobody had the slightest idea of what that “wealth” consisted, other than the visible land and the complex of buildings in which the wealthy lived, plus their horses, carriages and yachts. The only thing that counted was that they were “known to be” enormously wealthy. The wealthy could do approximately anything they wanted to do. Many owned cargo ships. However, the richest were often prone to live in very unostentatious ways.
Of course, money was coined and the paper equivalents of metallic coinage were issued by the officers of banks of variously ventured private-capital-banking-type land systems. Enterprises were underwritten by wealthy landowners, to whom shares in the enterprises were issued and, when fortunate, dividends were paid. “Rich” people sometimes had their own private banks—as, for instance, J. P. Morgan and Company. Ordinary people rushed to deposit their earnings in the wealthy people’s banks.
For all the foregoing reasons nobody knew of what the wealth of the wealthy really consisted, nor how much there was of it. There were no income taxes until after World War I. But the income tax did not disclose capital wealth. It disclosed only the declared income of the wealthy. The banks were capitalized in various substantial amounts considered obviously adequate to cover any and all deposits by other than the bankers involved in proclaiming the capital values. These capital values were agreed upon privately between great landowners based on equities well within the marketable values of small fractions of their vast king-deeded landholdings.
“The rich get richer and the poor get children” was a popular song of the early 1920s. Wages were incredibly low, and the rich could get their buildings built for a song and people them with many servants for another song. But, as with uncalled poker hands, nobody ever knew what the “wealthy” really had. I was a boy in a “comfortably off” family, not a “wealthy” family—not wealthy enough to buy and own horses and carriages. To me the wealthy seemed to be just “fantastically so.”
This brings us to World War I. Why was it called the First World War? All wars until this time had been fought in the era when land was the primary wealth. The land was the wealth because it produced the food essential to life. In the land-wealth era of warring the opposing forces took the farmers from the farms and made soldiers of them. They exhausted the farm-produced food supplies and trampled down the farms. War was local.
In 1810, only five years after Malthus’s pronouncement of the fundamental inadequacy of life support on planet Earth, the telegraph was invented. It used copper wires to carry its messages. This was the beginning of a new age of advancing technology. The applied findings of science brought about an era in which there was a great increase of metals being interalloyed or interemployed mechanically, chemically, and electrolytically. Metals greatly increased the effectiveness of the land-produced foods. The development of nonrusting, hermetically sealed tin cans made possible preservation and distribution of foods to all inhabited portions of our planet Earth. All the new technology of all the advancing industry, which was inaugurated by the production of steel in the mid-nineteenth century, required the use of all the known primary metallic elements in various intercomplementary alloyings. For instance tin cans involved tin from the Malay straits, iron from West Virginia mines, and manganese from southern Russia.
The metals were rarely found under the farmlands or in the lands that belonged to the old lords of the food-productive lands. Metals were found—often, but not always, in mountains—all around the world, in lands of countries remote from one another. Mine ownerships were granted by governments to the first to file claims.
It was the high-seas, intercontinental, international trafficking in these metals that made possible the life-support effectiveness of both farming and fishing. The high-seas trafficking was mastered by the world-around line-of-supply controllers—the venturers and pirates known collectively as the British Empire. This world-around traffic was in turn financed, accounted, and maximally profited in by the international bankers and their letters of credit, bills of exchange, and similar pieces of paper. International banking greatly reduced the necessity for businessmen to travel with their exported goods to collect at the importer’s end. Because the world-around-occurring metals were at the heart of this advance in standards of living for increasing numbers of humans all around the world, the struggle for mastery of this trade by the invisible, behind-the-scenes-contending world power structures ultimately brought about the breakout of the visible, international World War I.
The war was the consequence of the world-power-structure “outs” becoming realistically ambitious to take away from the British “ins” the control of the world’s high-seas lines of supply. The “outs” saw that the British Navy was guarding only the surface of the sea and that there were proven new inventions—the submarine, which could go under the water, and the airplane, which could fly above the water—so the behind-the-scenes world-power-structure “outs” adopted their multidimensional offensive strategy against the two-dimensional world-power-structure “ins.” The invisible-power-structure “outs” puppeted the Germans and their allies. The invisible-power-structure “ins” puppeted Great Britain and her allies. With their underwater strategies the “outs” did severely break down the “ins’ ” line of supply.
J. P. Morgan was the visible fiscal agent for the “in” power structure, operating through Great Britain and her allies. The 1914 industrial productivity in America was enormous, with an even more enormous amount of untapped U.S. metallic resources, particularly of iron and copper, as backup.
Throughout the nineteenth century all the contending invisible world power structures invested heavily in U.S.A.-enterprise equities. Throughout that nineteenth century, the vast resources of the U.S.A. plus the new array of imported European industrial tooling, the North American economy established productivity. The U.S.A. economy took all the industrial machinery that had been invented in England, Germany, France, and Europe in general and reproduced it in America with obvious experience-suggested improvements.
In 1914 World War I started in the Balkans and was “joined” in Belgium and France on the European continent. The British Isles represented the “unsinkable flagship” of the high-seas navy of the masters of the world oceans’ lines of supply. The “unsinkable flagship” commanded the harbors of the European customers of the high-seas-line-of-supply control. If the line of supply that kept the war joined on the European continent broke down completely, then the “outs” would be able to take the British Isles themselves, which, as the “flagship” of the “ins,” would mean the latter’s defeat.
In 1914, three years before the U.S.A. entered the war, J. P. Morgan, as the “Allies’ ” fiscal agent, began to buy in the U.S.A. to offset the line-of-supply losses accomplished by the enemy submarines. Morgan kept buying and buying, but finally, on the basis of sound world-banking finance, which was predicated on the available gold reserve, came the point at which Morgan had bought for the British and their allies an amount of goods from the U.S.A. equaling all the monetary bullion gold in the world available to the “ins’ ” power structure. Despite this historically unprecedented magnitude of the Allied purchasing it had only fractionally tapped the productivity of the U.S.A. So Morgan, buying on behalf of England and her allies, exercised their borrowing “credit” to an extent that bought a total of goods worth twice the amount of gold and silver in the world available to the “ins.” As yet the potential productivity of the U.S.A. was but fractionally articulated. Because the “ability to pay later” credit of the Allied nations could not be stretched any further, the only way to keep the U.S.A. productivity flowing and increasing was to get the U.S.A. itself into the war on the “ins’ ” side, so that it would buy its own productivity in support of its own war effort as well as that of its allies.
By skillful psychology and propaganda the “ins” persuaded America that they were fighting “to save democracy.” I recall, as one of the youth of those times, how enthusiastic everyone became about “saving democracy.” Immediately the U.S.A. government asked the British and their allies, “What do you need over there?” The “ins” replied, “A million trained and armed men, and the ships to carry them to France, and many, many new ships to replace the ships that have been sunk by submarines. We need them desperately to keep carrying the tanks and airplanes, weapons, and munitions to France.” The “ins” also urgently requested that the U.S. Navy be increased in strength to equal the strength of the British Navy and therewith to cope with the German submarines, “while our British Navy keeps the German high-seas fleet bottled up. We want all of this from America.”
America went to work, took over and newly implemented many of the U.S. industries, such as the telephone, telegraph, and power companies, and produced all that was wanted. For the first time in history, from 1914 to 1918, humanity entered upon a comprehensive program of industrial transformation and went from wire to wireless communications; from tracked to trackless transportation; from two-dimensional transport to four-dimensional; from visible structuring and mechanical techniques to invisible—atomic and molecular—structuring and mechanics.
Within one year the million armed and trained U.S.A. soldiers were safely transported to France without the loss of one soldier to the submarines. Arrived in France, they entered the line of battle. With the line of supply once more powerfully re-established by the U.S. Navy and its merchant fleet, it became clear that the “ins” were soon going to win.
J. P. Morgan, now representing the “allied” power structures’ capitalist system’s banks as well as serving as the Allies’ purchasing agent, said to the American Congress, “How are you going to pay for it all?” The American Congress said, “What do you mean, pay for it? This is our own wealth. This is our war to save democracy. We will win the war and then stop the armaments production.” Morgan said, “You have forgotten Alexander Hamilton. The U.S. government doesn’t have any money. You’re going to pay for it all right, but since you don’t have any money, you’re going to have to borrow it all from the banks. You’re going to borrow from me, Mr. Morgan, in order to pay these vast war bills. Then you must raise the money by taxes to pay me back.”
To finance these enormous payments Mr. Morgan and his army of lawyers invented—for the U.S. government—the Liberty Loans and Victory Loans. Then the U.S. Congress invented the income tax.
With the U.S. Congress’s formulating of the legislation that set up the scheme of the annual income tax, “we the people” had, for the first time, a little peek into the poker hands of the wealthy. But only into the amount of their taxable income, not into the principal wealth cards of their poker game.
During World War I, U.S. industrial production had gone to $178 billion. With only $30 billion of monetary gold in the world, this monetary magnitude greatly exceeded any previously experienced controllability of the behind-the-scenes finance power structure of the European “Allies.”
World War I over, won by the Allies, all the countries on both sides of the warring countries are deeply in debt to America. Because the debt to the U.S.A. was twice that of all the gold in the “ins’ ” world, all the countries involved in World War I paid all their gold to the U.S.A. Despite those enormous payments in gold all the countries were as yet deeply in debt to the U.S.A. Thereafter all those countries went off the gold standard.
All the monetary gold bullion paid to the U.S.A. was stored in the mountain vaults of Fort Knox, Kentucky. International trade became completely immobilized, and the U.S.A. found itself having unwittingly become the world’s new financial master. Swiftly it arranged vast trading account loans to the foreign countries. This financing of foreign countries’ purchasing by the U.S.A. credit loans started an import-export boom in the U.S.A., followed by an early 1920s recession and another boom; then, the Great Crash of 1929.
The reasons for the Great Crash go back to the swift technological evolution occurring in the U.S.A. between 1900 and the 1914 beginning of World War I and the U.S.A.’s entry into it in 1917. Most important amongst those techno-economic evolution events are those relating to electrical power. Gold is the most efficient conductor of electricity, silver is the next, and copper is a close third. Of these three gold is the scarcest, silver the next, then copper. Though relatively scarce, copper is the most plentiful of the good electrical conductors. Copper is also nonsparking and therefore makes a safe casing for gunpowder-packed bullets and big gun shells. As a consequence of these conditions, in the one year, 1917, more copper was mined, refined, and manufactured into wire, tubing, sheet, and other end products than in the total cumulative production of all the years of all human history before 1917.
With the war over all the copper that had been mined and put into generators and conductors did not go back into the mines nor did it rot.
World War I was not an agrarian, but an inanimate-energy and power-driven, industrial-production war—with the generating power coming from Niagara and other waterfalls as well as from coal and petroleum. For the first time the U.S.A. was generating power with oil-burning steam turbines.
When the war was over, all this power-production equipment was still in prime operating condition. There was enormous potential productivity—a wealth of wealth-producing capability that had never before existed, let alone as a consequence of war. The production capacity that had been established was so great as to have been able to produce, within a two-year span, all those ships, trucks, and armaments. What was the U.S.A. economy going to do with its new industrial gianthood? It was the vastness of this unexpected, government-funded production wealth and its ownership by corporate stockholders that generated many negative thoughts about the moral validity of war profiteering.
There were many desirable and useful items that could be mass-produced and successfully marketed. Young people wanted automobiles, but automobiles were capital equipment. In 1920 capital equipment was sold only for cash. There were enough affluent people in post-World-War-I U.S.A. to provide an easy market for a limited production of automobiles. In 1920 there were no bank-supported time payment sales in the retail trade. The banks would accept chattel mortgages and time payments on large mobile capital goods, such as trucking equipment, for large, rich corporations. Banks would not consider risking their money on such perishable, runaway-with-able capital equipment as the privately owned automobile.
Because the banks would not finance the buying of automobiles and so many money-earning but capital-less young people wanted them, shyster loaners appeared who were tough followers of their borrowers when they were in arrears. Between the ever-increasing time-payment patronage and the affluent, a market for automobiles was opening that could support mass production.
In 1922 there were about 125 independent automobile companies. They were mostly headed by colorful automobile-designing and -racing individuals for whom most of the companies were named. They survived by individually striving each year to produce an entirely new and better automobile, most of which were costly. Many accepted orders for more than they had the mechanical capability to produce. Their hometown financiers would back these auto-designing geniuses so that they could buy better production tooling and build larger factories. Wall Street sold swiftly increasing numbers of shares in auto companies. More and more of them went broke for lack of production, distribution, and maintenance experience on the part of the auto-designer managements.
In 1926 the Wall Street brokerage house of Dillon, Read and Co. made a comprehensive cost study of the auto-production field. They found that 130,000 cars a year was, in 1926, the minimum that could be accounted as mass production and sold at production prices. Any less production had to carry a much higher price tag. To warrant the latter, the cars had to be superlatively excellent. The English-built Rolls-Royce brought the highest price on the American market. There was fierce competition among Packard, Peerless, Cadillac, Pierce-Arrow, Locomobile, Lozier, Leiand, and others for the top American car. All of those premium cars’ frames, bodies, engines, and parts were manufactured within their own factories. There were several in-between classes, such as that of the Buick. Most of the 100 or so cars in this intermediate range were assembled from special engines, frames, and other parts made by independent manufacturers.
The mortality in auto companies was great. Dillon, Read led Wall Street out of its dilemma by buying several almost bankrupt companies, closely located to one another, such as those of the Dodge family, whose joint production capacity topped the 130,000 units per year mass-production figure. They named their new venture the Chrysler Company. Dillon, Read fired the auto company presidents, who were primarily interested in new-car-designing, and replaced them with production engineers. Wall Street followed suit and put in production engineers as presidents of all the auto companies—except Ford, who owned his company outright and had no obligation to Wall Street and its legion of stock buyers. Old Henry himself was already the conceiver, initiator, and artist-master of mass production.
Because the American public was in love with the annual automobile shows, the Wall Street financiers who had thrown out all the colorful auto-designer presidents started a new game by setting up the Madison Avenue advertising industry, which hired artists who knew how to use the new (1920) airbrush to make beautiful drawings of only superficially—not mechanically—new dream cars. They made drawings of the new models, which required only superficial mudguard and radiator changes with no design changes in the hidden parts. Parts were purchased by the big companies from smaller, highly competitive parts manufacturers operating in the vicinity of Detroit.
This was the beginning of the downfall of the world-esteemed integrity of Yankee ingenuity, which was frequently, forthrightly, and often naively manifest in American business. Big business in the U.S.A. set out to make money deceitfully—by fake “new models”—and engineering design advance was replaced by “style” design change.
In the late twenties first Ford and then General Motors instituted their own time-financing corporations. The bankers of America said, “Let them have it, they’ll be sorry—autos, phew! We don’t want to go around trying to recover these banged-up autos when the borrower is in default.” The bankers said, “It is very immoral to buy automobiles ‘on time.’ They are just a luxury.”
What the bankers did like to support in the new mass productivity was tractor-driven farm machinery. Farm machinery was easy to sell. As the farmer sat atop the demonstration plowing or harvesting equipment, with its power to go through the fields doing an amount of work in a day equal to what had previously taken him weeks, he said to himself, “I can make more money and also take it a little easier.” So the bankers approved the financing of the production and marketing of the farm machinery. They held a chattel mortgage on the machinery and a mortgage on the farmland itself and all its buildings. The bankers loved that. There was enthusiastic bank acceptance of the selling of such equipment “on time” to the farmers. The bankers did not consider this “immoral.” The farmer was “producing food wealth.” The automobilist was “just joy riding.”
Then there came a very bad hog market in 1926. Many farmers were unable to make the payments on their power-driven equipment. The local country banks foreclosed on the delinquent farmers’ mortgages and took away their farms and machinery. The bankers had assumed that the farms were going to be readily saleable. It turned out, however, that there were not so many nonfarmers waiting to become farmers, and most of the real farmers had been put out of business by the bank foreclosures so they couldn’t buy back their own farms. There were no city people eager to go out and buy one of those farms. “How you gonna keep them down on the farm, after they’ve seen Paree?” were the words of a popular World War I song.
So the dust bowls developed as the upturned, unsown soil began to blow off the farms. It is relevant to note that, in 1900, 90 percent of U.S.A. citizens were living and working on the farms; in 1979 only 7 percent were on the farms, mostly as local supervisors for big, absent-ownership corporations. The owners of the farmlands today are no longer “farmers” or even individual humans—they are the great business conglomerates. What began in 1934 as government subsidies and loans to farmers for farm machinery, later to keep acreage out of production, would by 1978 result in President Carter making enormous payments to appease big corporations for cutting off vital grain and other strategic shipments to Russia. Next, the U.S. government would make enormous subsidies to bail out large corporations such as Lockheed and Chrysler, which as basic military suppliers the U.S. government could not allow to go bankrupt. Eventually the U.S. taxpayers will be asked to make “free-of-risk” bail-outs of “private” enterprises, corporations with initial physical assets worth over a billion dollars classifed as risk enterprises.
We now return to the 1926-’27-’28-’29 sequence of events developing from selling the farmers’ machinery on the bankers’ drop-dead terms (mortgage means “on death terms”). In 1927 and 1928 the bigger Western city banks began to foreclose on their local country banks that had financed the farm machinery sales and had been borrowing from the bigger city banks to cover their unprecedentedly expanded loaning. First the little and then the successively bigger banks found that they had foreclosed on farmhouses that had no indoor toilets, many with roofs falling in, barns in poor condition, with the replevined farm machinery rusting out in the open—and no customers.
Word of the bad news gradually went around; small bank “runs” began; and in 1929 came the Great Crash in the stock market. All business went from worse to worser. Unemployment multiplied. Prices steadily dropped. Nobody had money with which to buy. Bigger and bigger banks had to foreclose on smaller banks, until finally in early 1933 there came one day in which 5000 banks closed their doors to stop “the run” on their funds.
People were dismayed and both individually and collectively helpless to do anything to combat the economic collapse. The economy had gone to pieces. People did not parade and protest. They became so low in spirit and listless that they just sat around silently in their homes or in public places. The New York subway stations were filled with people sleeping on the concrete platforms and stairways. No religious organizations were willing to let people sleep in their churches.
There came a “pecking-order” point when the central Chicago banks foreclosed on all the other big Western city banks—followed by the big New York City central banks foreclosing on Chicago’s central banks. Finally came the denouement, when the big New York banks found themselves about to close because they were already behind-the-scenes insolvent. This occasioned the U.S. Congress voting to accelerate by four months the presidential inauguration of Franklin Delano Roosevelt who, minutes after taking his oath of office, signed the Bank Moratorium, which momentarily suspended the acknowledgment of the death of the wealthy landowners’ banking system that had lost all or much of its depositors’ money. About a month later Congress voted to the President of the U.S.A. the ability to control all money. Months later again the U.S. Supreme Court upheld that legislation. The U.S.A. citizens themselves and their government had become the wealth resource “of last recourse.” The underwriting wealth belongs to all the people and not to the few. That happened also to be the description of socialism.
The 150-year-long “infinite wealth” poker hand and its uncalled blufimg was over. The called hands were suddenly down. It turned out that the “wealthys’ ” wealth was nonexistent. Their marble-walled, steel-barred, visibly vaulted banks had been psychologically attractive to the depositors, who preferred to have their earnings and savings deposited along with the wealth of the powerfully rich. What the banks had been doing was to loan the people’s deposits to other people. The banks had no money themselves. What they had done was to capitalize their land at their self-asserted value and had been credited with that value of stock in the bank’s ownership.
In 1933, for the first time ever, the hands of the U.S. American wealthy were exposed (and by inference, all land-based capitalism everywhere around the world)—most were money empty. Their land and multiservanted mansion values dropped to almost nothing. Nobody had the almost-nothing amount of money to buy those richly housed estates. There was one exception to the last statement—the Vatican-administered Roman Catholic Church’s world organization, which for a pittance acquired many extraordinary properties at that time, which it converted into monasteries and convents, colleges and schools.
The game of “deedable land wealth” had been a bluff from its very beginning—multimillennia ago, when that little man on a horse, armed with a club, first rode up to the giant shepherd leader of a tribe and said, bluffingly, “It’s very dangerous out here in the wilderness for beautiful sheep such as yours,” and the shepherd leader’s ultimate coercion into accepting “protection” from the claiming and proclaiming “owner” of the land.
Landownership did not go back to an act of God. All the kings always had their priests present when the land claimage was made by their explorers. The priests planted their crosses to confirm that the king’s ownership was blessed by God. The Roman Catholic Church, starting in its emperorpope days, has been in the deeded-land business for “going on” 2000 years. It is as yet the world’s largest real estate owner. Real, a Spanish word, means “royal”—the succession of king-deeded estate lands.
With the bluff of wealth over in March 1933, almost all business in America stopped. On the inauguration of Franklin Delano Roosevelt the emergency was so absolute that Congress voted unanimously for whatever corrective measures the New Deal administration prescribed.
Roosevelt and his advisors said, “One thing is clear. Despite the emergency America abhors socialism. Americans don’t like the assumption that everybody is equal. Americans are so independent, they don’t feel at all equal. They don’t like socialism, but,” said the New Deal leaders, “the fact is that we, the American people, are going to have to guarantee our own bank accounts. People don’t like to keep their money under their mattresses and prefer to put it into a bank, so we will have to do what we can to rehabilitate the banks. We the people acting unanimously through our government are going to have to guarantee the safety of each deposit in the banks to a convincingly substantial amount—$5000. We will leave the bank in ownership of the management of the stockholders of those banks that, by virtue of the presidential moratorium, are as yet theoretically alive, and hope that, with our guaranteeing, regulation, and supervising, many of them will reopen and will be able to progressively accredit their depositors with some percentage of their original deposits.
“But let us not deceive ourselves. With the government of the people guaranteeing the bank accounts, it becomes, in operating fact, socialism. On the other hand people themselves know so little about banking, credit concepts, and the history of power structures that they will not know that they have adopted socialism, since the government has not taken ‘possession’ of the banks. Society will think well of ‘we the people’ as the government, guaranteeing the new deposits in the banks up to $5000.”
Society likes the idea of a bank as a safekeeping device. People have always believed that when they put their money in the bank, it stayed there. They had no idea it went out on loan within minutes after it came in. They were completely hoodwinked by the appearance of the banks as safe, fireproof, and robberproof depositories of their earnings. Even today, in the last twenty years of the twentieth century, people know little more about banks than they did during the 1929 Crash or at the depth of the Depression in 1932, when all they knew was that they had lost their deposits in most of them.
In 1933, ’34, ’35, and ’36 the New Deal and the U.S. Congress diligently investigated the banking system and the practices of its most powerful leaders. They found many malpractices, which we will discuss later. Most prominently they found the banks loaded with worthless mortgages on properties that were unsaleable because uninhabitable—mortgages on buildings without roofs, bathrooms, etc.
The government said, “The first thing we must do is make those mortgages we’ve inherited worth something.” At this point the American government dictated the banking strategy and started refinancing of the building industry. The so-called building “industry” was already 2000 years behind the arts of building ships of the sea and sky, which ships of the sea and sky are, in fact, environment-controlling structures in exactly the same sense that land buildings are environment-controlling structures.
While the design of the seagoing and airgoing environment controls are floatably and flyably weight-considerate and semiautonomous because they generate their own power, desalinate their own water, etc., there is no weight consideration in the designing of the land-anchored environment controls. They don’t have to float or fly. They are utterly dependent on sewers, waterlines, electric lines, highway maintenance. They are utterly controlled by the prime landowners, their building codes and readily imposable legal restrictions—all based on the real estates’ ownership and control of the highways-sewers-waterlines—the metabolic “guts” of all U.S.A. towns and cities.
When the government owns the wealth and controls the issuance of its money, it is socialism. The New Deal was not trying to deceive the people but was engaged in a rescue operation of the first order and was hopeful of not irritating the people psychologically by what it seemed was critically mandatory to accomplish.
Paradoxically, the first people they irritated—greatly—were yesterday’s rich, in particular those who were as yet living on the dividends and interest of as yet solvent industrial corporations’ stocks and bonds. In fear of the New Deal they sought to discredit Roosevelt by a word-of-mouth campaign. From 1933 to 1940 individual members of rich gentlemen’s clubs of New York were ostracized from membership in the rudest manner by “the members” if they were not heard to speak frequently of “that son-of-a-bitch in the White House.”
Franklin Roosevelt and his advisors said, in effect, “We’ve got to do what we feel is best for the people by whatever name the ‘best’ may bear. We’ve got them depositing again in the banks and are rehabilitating all those mortgaged properties which we have inherited by loaning the new owners of the properties funds at negative interest provided they will rehabilitate the property—reroof or put in a bathroom, etc.”
To those who understood some of its intricacies, everything was now out in the open about the world of banking. The New Deal said it was going to prohibit usurious rates of interest—”the banks must earn enough to keep themselves going, but only can charge 1 1/2 percent for interest.” Banks were regulated just like the Post Office. No banker had authority beyond that of a postmaster. The New Deal completely separated from banking what Morgan and many of the private banks had been doing—taking deposit money and putting it into common stocks and even into the bankers’ own highly speculative private ventures. Thus came the New Deal’s Securities and Exchange Commission and the complete separation of banking and initial risk financing—or, at least, supposedly so. Banks’ trust departments could as yet buy and sell corporate venture stocks for clients’ accounts however.
There were a number of individual bankers who went far beyond unwise banking practices and who, as individuals, took personal advantage of the information they had of individual depositors’ affairs and of their privilege as top bank officers to do truly inimical things to enrich their own positions. Few today remember that a half-century ago a number of New York and Chicago’s top bankers were sentenced into penitentiaries—the New Yorkers into Sing Sing—the senior partner of J. P. Morgan and Company, the president of the National City Bank, the president of Chase Bank. Every one of them had been found to be doing reprehensible financial tricks. They were selling their own friends short. They were opening their friends’ mail and manipulating the stock market. They were manipulating everybody. They were way overstepping the moral limits of the privileges ethically existent for officers in the banking game, so a great housecleaning was done by the New Deal.
The banking story is best told by a poem that was, at that time, allegedly composed by Ogden Nash but was never to my knowledge formally published and copyrighted. It was, however, memorized and widely recited from copies often typewritten by those who remembered it:
I’m an autocratic figure in these democratic states,
A dandy demonstration of hereditary traits.
As the children of the baker bake the most delicious breads,
As the sons of Casanova fill the most exclusive beds,
As the Barrymores and Roosevelts and others I could name
Inherited the talents that perpetuate their fame,
My position in the structure of society I owe
To the qualities my parents bequeathed me long ago.
My father was a gentleman and musical to boot.
He used to play piano in a house of ill repute.
The Madam was a lady and a credit to her cult,
She enjoyed my father’s playing and I was the result.
So my Daddy and my Mummy are the ones I have to thank
That I’m Chairman of the Board of the National Silly Bank.
CHORUS: Oh, our parents forgot to get married. Our parents forgot to get wed. Did a wedding bell chime, it was always a time When our parents were somewhere in bed. Then all thanks to our kind loving parents. We are kings in the land of the free. Your banker, your broker, your Washington joker, Three prominent bastards are we, tra la, Three prominent bastards are we!
In a cozy little farmhouse in a cozy little dell
A dear old-fashioned farmer and his daughter used to dwell.
She was pretty, she was charming, she was tender, she was mild,
And her sympathy was such that she was frequently with child.
The year her hospitality attained a record high
She became a happy mother of an infant which was I.
Whenever she was gloomy, I could always make her grin,
By childishly inquiring who my daddy could have been.
The hired man was favored by the girls in Mummy’s set,
And a traveling man from Scranton was an even money bet.
But such were Mother’s motives and such was her allure,
That even Roger Babson wasn ‘t absolutely sure.
Well, I took my mother’s morals and I took my daddy’s crust,
And I grew to be the founder of the New York Blankers Trust.
CHORUS: Oh, our parents forgot, etc.
In a torrid penal chain gang on a dusty southern road
My late lamented daddy had his permanent abode.
Now some were therefor stealing, but my daddy’s only fault
Was an overwhelming tendency for criminal assault.
His philosophy was simple and quite free from moral taint;
Seduction is for sissies, but a he-man wants his rape.
Daddy’s total list of victims was embarrassingly rich,
And one of them was Mother, but he couldn’t tell me which.
Well, I didn “t go to college but I got me a degree.
I reckon I’m the model of a perfect S.O.B.,
I’m a debit to my country but a credit to my Dad,
The most expensive senator the country ever had.
I remember Daddy’s warning—that raping is a crime,
Unless you rape the voters, a million at a time.
CHORUS: Oh, our parents forgot, etc.
I’m an ordinary figure in these democratic states,
A pathetic demonstration of hereditary traits.
As the children of the cop possess the flattest kind offset,
As the daughter of the floozie has a waggle to her seat,
My position at the bottom of society I owe
To the qualities my parents bequeathed me long ago.
My father was a married man and, what is even more,
He was married to my mother—a fact which I deplore.
I was born in holy wedlock, consequently by and by,
I was rooked by every bastard who had plunder in his eye.
I invested, I deposited, I voted every fall,
And I saved up every penny and the bastards took it all.
At last I’ve learned my lesson, and I’m on the proper track,
I’m a self-appointed bastard and I’M GOING TO GET IT
CHORUS: Oh, our parents forgot to get married. Our parents forgot to get wed. Did a wedding bell chime, it was always a time When our parents were somewhere in bed. Then all thanks to our kind loving parents. We are kings in the land of the free. Your banker, your broker, your Washington joker, Three prominent bastards are we, tra la, Three prominent bastards are we! * * *
To accomplish their restartings in all areas of the U.S.A. economic system the New Deal also set up the Works Progress Administration (to get people jobs) and the Reconstruction Finance Corporation (to get the big industries going).
Amongst the first of the New Deal’s emergency acts of 1933 was the establishment of the Works Progress Administration, which provided jobs for approximately anyone who wanted them—artists, mathematicians, etc., as well as all white- and blue-collar workers and, of course, all day laborers and such.
Then, pressed by the labor unions and the political urge to avoid the characteristics of socialism and get the heretofore unemployed millions off WPA—the New Deal’s Works Progress Administration—the government financed new buildings and granted mortgages for longer and longer periods to encourage people to undertake the production of much-needed homes and other buildings. It must be noted that the rejuvenated building industry was reset in motion as a concession to the building trades and a move to increase employment, not as a much-needed evolutionary advance in the art of human environment controlling. The unions were so strong as to be able to push the New Deal very hard in the direction of resuming only yesterday’s multifoldedly inefficient “one-off” building design techniques and materials as the activity in which they could establish maximum employment. Technically ignorant bank officers became the authorities who alone judged the design validity of the structures and architectural acceptability of the building projects, funds for the building of which they authorized as mortgage-secured loans of their bank depositors’ money.
The New Deal went on to rationalize its strategic acts by arguing to itself, “In order to continue as a nation we must have our national defense. Since it is established that there is nowhere nearly enough life support to go around in this world, if we don’t have a formidable national defense, we’re going to be successfully attacked by hungry enemies. Our national defense can’t carry on without steel and the generation of electricity, the production of chemicals, and other imperative industrial items.”
The FDR team soon concluded that the industries producing those absolute “defense” necessities were to be called our “prime contractors.” The prime contractors must be kept going at any cost. “So we’ll give war-production orders to the prime contractors to produce such-and-such goods. The contractors with signed government contracts can then go to the banks and borrow the money to pay their overhead and to buy the materials and power and to pay the wages to produce the goods. Then we the government will pay the producers for those finished goods and services, and they can pay off their loans from the bank. The money paid by the prime contractors as wages will give people buying power, which will allow them to start other economic production systems going.” This became a monetary irrigation system (still in use today in 1980 U.S.A. affairs), which works at a rate providing about ten recirculations in a year following upon each major war order initiated by and paid for by the government.
In the depths of the Depression in 1932, when you could buy a meal for five cents and the finest of shirts for one dollar, the Reconstruction Finance Corporation went much further. It gave U.S. Steel $85 million worth of new rolling equipment (in 1980 U.S. currency that would be close to a billion dollars), etc., etc.
The U.S.A.’s Reconstruction Finance Corporation had a secondary government machinery-owning outfit that loaned all these prime contracting companies new equipment with which to fill their government orders. What the New Deal did in fact was to socialize the prime contractor corporations instead of the people. This hid the fact of socialism from the world in general. Socializing the prime contractor corporations indirectly benefited the people themselves. In this way the New Deal seemingly didn’t give money to the corporations—just orders. The U.S.A.-established and -financed RFC loaned the prime contractors all the money they needed to buy all the equipment. But in the end the government rarely collected on the loans and finally just forgave the machinery borrowers altogether, selling them the equipment for very low “nominal” sums.
The New Deal had also pledged itself at outset to take care of the “forgotten man.” The government voted minimum-wage limits of a substantial magnitude. The economy was going again. People were getting more and more jobs—how many depended upon how many prime contracts the government gave out. World War II was clearly looming ahead. The New Deal said, “We have to be prepared” . . . and their “preparedness” ordering increased. Jobs increased rapidly. Empty buildings filled.
There were a number of great corporations whose businesses had practically stopped by 1933, but those businesses had now been set in healthy motion once more under the New Deal’s socializing of the prime contractors. Franklin Roosevelt said to the heads of the great corporations that had not gone “bust,” “Every one of you has a large surplus that you held on to, in fear, through the Depression. We want you to spend your surpluses in research and development of new equipment. Since the early clipper ship days, it has always been a function of a ‘fundamental risk enterprise’ that the enterprise use some of its profits to buy itself new and better equipment—a new and better ship—with the enterprise that is doing the prime risk-taking by investing in the new equipment, thereby requalifying for the privileges and rewards granted by governments for wise risking, daring execution, and good management.”
FDR said, “We want you enterprisers to ‘modernize.’ ” But U.S.A. big corporate management said, in unison, “We won’t do that. It is much too risky a time to use any of our surplus.” They knew the oncoming World War II was forcing the government to see that their plants were modernized, so by holding out they forced the government to take over both the risk and cost of modernizing. Heretofore in the history of private enterprise research and development—of more efficient new plants and equipment—had been funded from the enterprise’s “surplus” earnings—i.e., from earnings prudently withheld from distribution to stockholders to ensure the continuing strength of the enterprise.
Then FDR’s U.S.A. Treasury, with all FDR’s lawyers’ advice, ruled that the large private-enterprise corporations could make their new plant expansion and equipment improvements and charge the costs to operating expenses, which expenses were then to be deducted from new earnings before calculating income taxes. This amounted, in fact, to an indirect subsidy to cover all new-equipment acquisition. The U.S.A. Treasury next ruled that all research and development—”R and D”—was thereafter also to be considered by the U.S.A. Treasury Department as “an operating expense” and also to be deducted from income before calculating income taxes. The U.S.A. thereby eliminated almost all the “risks” of private enterprise.
Next Henry Luce, representing news publishers in America—the newspapers and magazines—went to Roosevelt and said, “Your democracy needs its news. You have to have some way for the people to know what’s going on.” “Yes,” said FDR. Luce went on, “We publishers can’t afford to publish the news. The prices people are willing to pay for the news won’t pay for the publications. The newspapers and magazines are only paid for by advertising, and the New Deal has no allowance for advertising in its operating procedures.” The New Deal then ruled that advertising was henceforth to be classified as research and development, therefore deductible from gross income as an operating expense before calculating taxes. Thus advertising became a hidden subsidy of very great size—about $7 billion a year at that time—hidden in tax-calculation procedures. The subsidy was so great as to cover the founding of what has come to be known as “Madison Avenue.”
While the government was doing all this, the Congress passed strict and comprehensive rent controls, bank-loan-interest controls, and price controls of every kind. It was pure socialism. It had to be done that way. There was no question.
The Securities and Exchange Commission reforms removed J. P. Morgan’s two directors from the boards of almost every one of the U.S.A.’s great corporations—except Henry Ford’s—whose interlocking directorships had formerly given Morgan prime control over U.S.A. industry. With the termination of Morgan’s control of all the major corporation boards such as those of U.S. Steel and General Motors, these great corporations’ managements found that they were no longer beholden to J. P. Morgan, and only to their stockholders. “All we have to do now to hold our jobs is to make money for the stockholders.”
At this moment the U.S.A. had evolved into a managerial capitalism, in contradistinction to the now-defunct, invisible “finance capitalism” of which J. P. Morgan had been the master.
What became noticeable at this time was the uniformity of position taken by all the great corporation managements in respect to actions taken by the New Deal—for instance, the great corporations’ across-the-board refusal to expend surplus on research and development.
To discover how that came about it first must be realized that the industrial-enterprise underwriting and expansion-financing of the private banking houses of Wall Street could not have been carried on without the advice, contract-writing services, and legal planning of the world’s most powerful and most widely informed legal brains. As a consequence the corporation law firms of Wall Street, New York, were peopled with the most astute thinkers and tacticians of America—if not of the whole world. When the Great Crash of 1929 came and events of the Depression occurred, as already related (and the great poker hands were called, and the New Deal had prosecuted the guilty and housecleaned the system and socialized the prime contractors, etc.), it was the counsel of Wall Street lawyers that governed the positions taken by the new, self-perpetuating, industrial-giants’ managements. It was the former J. P. Morgan’s and other financiers’ lawyers who now counseled all the as-yet-solvent big-industry managements to guard their surplus and refuse to cooperate with the New Deal.
Furthermore the Wall Street lawyers could see clearly what the public couldn’t see—i.e., that while the New Deal was unilaterally socializing the system, it was doing so without exacting any contractual obligation on the corporations to acknowledge the government’s economic recovery strategies. The corporations gave no legal acknowledgment of their socialized status. It was clear to the Wall Street lawyers that without such contractual acknowledgment the government socializing was a one-sided, voluntary commitment on the part of the political party in power. Therefore, in fact, none of the big corporations had lost their free-enterprise independence by accepting the enormous government rehabilitation expenditures.
Since the Wall Street lawyers and brethren in other parts of the country were called upon to fill the Supreme Court bench from which body they could determine the province of “free enterprise,” the lawyers reasoned somewhat as follows: “A socialized system—as clearly manifest by the U.S.S.R.—cannot tolerate free enterprise’s freedom of initiative. There is no lucrative law practice in socialized states—ergo, if we are to survive, we lawyers on Wall Street had best figure out how to go about keeping the fundamentals of capitalism alive amongst the few great industrial corporations that as yet remain solvent despite the 1929 and 1933 Depression events.”
The Wall Street lawyers saw clearly that it was those surviving corporations’ undistributed surplus which certified that capitalism had not gone entirely bankrupt despite its banking system’s failure.
Operating invisibly behind the “skirts” of the as-yet-live corporations, the Wall Street lawyers very informally, but very seriously, organized far-ahead-in-time research-and-study teams consisting of the most astute corporation lawyers to be found in America. From these teams’ realistic conceptioning they formulated a grand strategy that would keep capitalism’s private enterprise alive and prospering indefinitely as run invisibly but absolutely legally by the lawyers.
The latter’s research discovered that they would not soon be able to popularly and legally overthrow the New Deal. It was clear that not until World War II was over might they find conditions suitable for untying all the economic controls established by the New Deal.
It is appropriate at this point to do some reviewing of evolutionary changes that had been transpiring in the nature of capitalism.
It all starts with the land-based capitalism, a capitalism maintained by whoever seized, successfully defended, and controlled the land—ergo, owned the land. Those producing food and life support on the lands were all subservient to, and paid tribute to, the great landowners. In land capitalism whoever owned the fertile fields controlled all the wealth to be made from that land. Land capitalism dealt with nature’s own metabolic productivity.
Then private enterprise and finance capitalism came to discover what could be done with mass-produced metals to multiply the value of the land-produced, life-support metabolics.
In the mid-nineteenth century mass production of steel, for the first time in history, suddenly gave humans the capability of producing long-span beams, whereby they were able to produce large-enough, semifireproof, and powerful structures to move more and more wealth-production work under cover. Western-world capitalism began to produce wealth under cover in addition to that produced out in the field. To make the tin cans in the factory to can the food produced in the fields, or to take the cotton produced in the fields and mass-produce cotton cloth, became known as “value-added-by-manufacture.” Value-added-by-manufacturing was accomplished primarily with metals—metal buildings, metal machinery, metal tools, metal sea and land transportation systems, and, ofttimes, metal end products.
As already mentioned, it was the new, world-around, metals sources that brought about the name World War I.
Suddenly we had a completely new form of capitalism, which required both the large-scale financing and integration of metals, mines and mine-owners, metals refining and shaping into wholesaleable forms, all to be established around the world by the world masters of the great line of supply. The world line of metals-and-alloy supply was essential in producing all the extraordinarily productive new machinery and that machinery’s delivery system, as was the generation and delivery of the unprecedentedly vast amounts of inanimate energy as electricity.
This new form of the world power structure’s capitalism—by ownership of the mines and metals working all around the world—we call the metals and mining capitalism. Whoever owned the mines had incredible power, but never as great as those who controlled the line of their supply. Combining the two, (1) the mines and metals-producing industry and (2) the line of supply, we have the world power structure that operated as the first supranational, world-around-integrated, metals cartels. They were out of reach of the laws of any one country, in a metals cartels capitalism. Combining these two with (3) the absolute need of the large financing and credit at magnitudes rarely affordable by any one individual, we find finance capitalism integrating the world operation.
At any rate we now understand why the 1914-18 war was called World War I. It was inherently a war for mastery of the world’s metallic resources and their world-around physical integration, controlling, and exploitation.
The amount of metal productivity of World War I was so great that, after the war, as the arms products became obsolete and were displaced by new design products, the metal contained in the ever vaster amounts of obsolete products began to come back into circulation as scrap. The scrap resources swiftly increased. The Morgan-escaped managerial capitalists said, “I’m going to keep my job if we pay our stockholders dividends—the rate at which we can pay dividends is directly dependent upon the rate at which our production wheels go around. To keep our wheels going around, we don’t care whether we are using scrap metals or mined metals. As a matter of fact, the metals-as-scrap are usually more refined than the metals coming out of the mines. They cost less, so we’re better off using the scrap—whether from obsolete buildings, machinery, armaments, railways, or ships.” Formerly Morgan had insisted on all his controlled manufacturing corporations acquiring all their metal stocks only from newly mined, refined, and wholesale “shaped” stocks.
The mining companies found that industry would not buy ingots of their metals. They found that they had to turn their metals into tubes, bars, sheet, plate, wire, and a great variety of sizes and shapes. Wall Street’s finance capitalism, therefore, underwrote the development of a host of metals-shaping industries who were the automatic customers of the only-ingot-producing, metals-mining corporations.
The post-World War I mineowner-capitalists began gradually to be washed out of the game by virtue of the Morgan-emancipated managerial capitalists saying, “Our job is to keep the wheels going around.” Wheels-going-around producing saleable goods from scrap metals became strategic.
Up to the time of World War I the owners of the factories (Mr. Morgan et al.) said, “We put you in as management to make a profit out of this factory.” If the management said, “Give us a new piece of machinery,” the owners said, “New piece of machinery! What are you talking about? We put you in to make money out of our machinery. You are fired.” Change was anathema to the J. P. Morgan-type of financier. Scientists would come to Mr. Morgan and say, “Mr. Morgan, I can show you how to make steel so that it won’t rust.” “Young man! The more it rusts, the more I sell. How crazy you must be! Get the doctor to look this man over, he’s obviously a lunatic—take those mad papers out of his pocket and put them in my desk drawer.”
But change was welcomed by the late-1930s’ managerial capitalism. New designs called for more whirling of their production wheels. The change came in the form of many new armament designs for the clearly approaching World War II. The new designs released as “scrap” the metals from obsolete designs.
Concurrently, with the New Deal’s reforms and controls, the wage-earners were now getting a fairer share of the national income, and the economy was prospering—particularly so as the New Deal began officially to remember the “forgotten man.” Congress put a dollar cellar under the wages and elevated worker earnings enough to produce minor affluence and security for labor in general.
Just before the U.S.A. entered World War II, the Wall Street lawyers instructed the heads of great corporations to say to Roosevelt, “We heads of the corporations of America were not elected by the American people. We were chosen by our stockholders. Our job is to make profits for our stockholders. At the time of World War I a lot of business people were called ‘profiteers.’ As we enter into World War II war production, we don’t want to be called ‘immoral profiteers.’ If you want cooperation from us, Mr. Roosevelt, you as government are going to have to be the one to initiate our corporations’ being properly rewarded for our cooperation.”
Mr. Roosevelt said, “I agree. You are beholden to your stockholders, so you are going to have to pay them dividends.” Coping with this dilemma, the United States Treasury Department agreed that it was legitimate for the industrial corporations to make up to 12-percent profit per each product turnover. The New Deal said, “We the people, as government, are, however, going to renegotiate with you all the time, continually inspect you, to be sure you are really earning your profits.” As a consequence of all the continuous renegotiation by the government, those U.S.A. corporations earned an average of 10 percent on every turnover. This meant that in World War II for every annual war budget—running at first at $70 billion per year—10 percent, or $7 billion, was earmarked for distribution to the stockholders of the corporations. Complete socialization of the stockholders of the prime U.S.A. corporations was accomplished.
Amongst the prime contractors identified by the New Deal were all the leading automobile companies. For example, Chrysler was picked out to produce the war tanks. With their powerful position established with the government, the U.S.A. automobile manufacturers, on being asked to convert all of their productivity to war armaments, agreed amongst themselves to put into storage all of their production tooling and to resume their post-war auto production with the models they were last producing at outset of war. New production tooling would cost them several billions of dollars. They had their Madison Avenue companies grind out advertisements showing the G.I. soldiers saying, “Please keep everything the same at home until I return.”
Because Germany’s, Italy’s, and Japan’s production equipment was destroyed during World War II, they were free after the war to start using the newest war-advanced technology in both the designing and the production of their automobiles. That was the beginning of the end for the U.S.A.’s prestige as the world’s technological leader. The U.S.A. post-World War II cars were inherently seven years passe in contrast to the smaller, faster foreign cars. The “Big Three” American auto producers undertook to manufacture while keeping the foreign cars off the market and while they themselves exploited America’s market need for a geographically expanding economy’s transportation.
In the late 1960s the “Big Three” automobile companies of America found that their distributors were disenchanted with decreasing financial returns and with frequent bankruptcy. To hold their distributors G.M., Ford and Chrysler deliberately manufactured a few of their mechanically well-designed parts with inferior materials that were guaranteed to deteriorate electrolytically or otherwise. The replacement of these parts guaranteed that all the distributors’ car buyers would have to return to them for service on a high-frequency basis, at which time the distributor would replace the parts catalogue-priced so high that the distributor was guaranteed a profitable business. This continuing deceit of the customers—we the people—was the beginning of the end of the American automobile business and the once-great world esteem for Uncle Sam. U.S.A. discreditation has been brought about without the U.S.A. people’s knowledge of the money-maker-world’s invisible cheating.
Throughout all pre-World War II years employers had maintained that unemployed people were unemployed because they were unqualified for survival, socially expendable. Then World War II saw young people deployed on war tasks all around the world. In view of this loss of labor vast amounts of automation were incorporated in the U.S.A.’s home-front war production. With the war over, the government found the cream of its youth all unemployed, and because of the automation there were no jobs in sight. Because they were the proven “cream of the youth,” no one could say they were unemployed because they were unqualified, so the as-yet-operative New Deal created the G.I. Bill, which sent all those young people to prepaid college and university educations.
By World War II’s end labor was earning so much that, for the first time, it was feeling truly secure, affluent, and successful. Emulating the pattern of the rich, individuals of labor were becoming little capitalists, with many enjoying the realization of their own home and land, with two shiny new post-World War II cars in the garage, their kids going to college, and some savings in the bank. The workers began buying shares in IBM and other superpromising private enterprise companies.
The Wall Street lawyers, being astute observers of such matters, realized that this labor affluence had brought about a psychological reorientation of the body politic. People no longer remembered or felt the depression of spirit that was experienced in the Great Depression of social economics following the Great Crash. The Wall Street lawyers’ grand strategists saw this as the time for breaking through the New Deal’s hold on government, an event which, up to that time, seemed impossible. The lawyers said, “Whoever can get the victorious, supreme-command American general of World War II as their candidate for President will be able to get the presidency.” They captured Eisenhower. Eisenhower had no political conviction, one way or the other. His vanity was excited at the idea of becoming president of his country.
The Wall Street lawyers explained to Eisenhower the prevailing new psychology of affluence and convinced him that the new affluent majority would elect a Republican. Thus they successfully persuaded him to be a Republican. With the healthy economy the new wage-earner capitalists, with a vested interest in maintaining the status quo, readily voted for Eisenhower on the Republican ticket. Elsenhower’s Wall Street lawyer-managers explained to him that he had been able to win the war because of the vision, courage, and ingenuity and the productive power of American free enterprise. They convinced Eisenhower that “the U.S.A. is, in fact, free enterprise.” They also convinced him that the Democrats’ New Deal was socialism and therefore the inherent enemy of free enterprise.
As soon as the Wall Street lawyers had Eisenhower in office in 1952, they instructed him to break loose all the economic controls of the New Deal. They had him cut all price controls, all rent controls, all interest-rate controls; they had him terminate anything that was stymieing the making of big money by big business. For instance, they persuaded Eisenhower to allow the insurance companies to invest their vast funds in common stocks. Before Ike’s liberation of the insurance companies they were allowed to put their funds only in “Class A” bonds and similar investments. Cheered by the capitalist-owned sector of the press, his Wall Street lawyer-advisors for a long time had Ike feeling like a great liberator.
The Wall Street lawyers’ grand strategists put the Wall Street lawyer John Foster Dulles in as Ike’s Secretary of State to dictate the American foreign policy of “Soviet containment,” and Foster Dulles’s Wall Street lawyer brother Allen Dulles was put in as head of a new brand of absolutely invisible, U.S.A.-financed, capitalistic welfare department, the CIA, established ostensibly to cold-war-cope with the secret-agent operations of our enemies. So secret was their operation that the people of the United States and its Congressional lawmakers had no idea of the size of the unlimited funds given to the CIA, nor for what those unknown funds were expended. The CIA and Allen Dulles had a U.S.A.-signed blank check for X amount of money to do X tasks. I call the CIA, “Capitalism’s Invisible Army.”
The great U.S.A. corporations, having been saved in 1933 by being only “unilaterally socialized,” and having in the subsequent fifteen years become powerfully healthy from enormous war orders, immediately after Eisenhower’s election started escalating prices. Their logic was that the first corporation head to increase prices in a given field of production would be the first to be able to distribute that “upping” as profits to his stockholders and thereby to gain for himself greater economic management status and personal wealth.
The ramifications of my studies in foreign investments in America and elsewhere are wide. An example of my findings included discovery of the swift, post-American Revolution investment in U.S.A. ventures by the British (East India Company-advised) financial world as already mentioned. I found a similar situation to be existent in World War II. As head mechanical engineer of the U.S.A. Board of Economic Warfare I had available to me copies of any so-called intercepts I wanted. Those were transcriptions of censor-listened-to intercontinental telephone conversations, along with letters and cables that were opened by the censor and often deciphered, and so forth. As a student of patents I asked for and received all the intercept information relating to strategic patents held by both our enemies and our own big corporations, and I found the same money was often operative on both sides in World War II.
The East India Company, whose flag I have shown to be the origin of ours, was a private enterprise chartered by the British. Quite clearly the East India Company didn’t lose the American Revolution. The British government lost the Revolution, and the East India Company swiftly moved large amounts of its capital into U.S. America.
With World War II over I began to watch very closely the foreign investments patterning and the strategic metals movements, especially of copper, but those of silver and gold as well. In 1942 America had all the monetary bullion gold in the world in the Kentucky hills. During World War II what was called “the China Bloc”—which was the Sung family and others backing Chiang Kai-shek—were able to persuade the American Congress that China had always been corrupt and was eternally corruptible; to completely avoid communism in China Congress should let them have $100 million worth of gold bullion ($2 billion at January 1980 gold pricing) to be taken out of the Kentucky hills. Personally I don’t think that gold ever went anywhere near China. I think it went right into the Swiss bank accounts of some clever thieves. But with that much gold out of the Pandora’s box of the U.S.A. Kentucky hills vaults, it provided a “gold lever” with which to progressively pry loose more and more gold to be reintroduced into the “lifeblood” of world economic accounting.
After World War II, with only the one exception of the $100 million worth of monetary gold bullion of the China Bloc, all the rest of the world’s international monetary gold bullion was residing in the Kentucky hills, U.S.A., vaults. All countries outside America had gone off the gold standard. In the course of international monetary negotiating that accompanied the U.S.A.’s post-World War I inadvertent ascendency into being the master economic state, and the U.S.A.’s post-World War II attempts to rehabilitate the leading economies around the world by rehabilitating the economies of its vanquished nations and thereby increasing international trading, the U.S.A. was persuaded to re-establish the gold standard for accounting the international balances of trade.
Gold is the super-helicopter of the open world-market-trading stratagems of the makers-of-money-for-self by the legalized manipulation of the money equity of others, all unbeknownst to the initial wealth equity-owning others. In 1934 Roosevelt’s New Deal prohibited the further use of gold by U.S.A. citizens or U.S.A. businesses.
By 1953 it became apparent that the Wall Street lawyers were moving the major American corporations out of America. Of the 100 largest corporations in America four out of five of their annual investment dollars in new machinery and buildings for 1953 went exclusively into their foreign operations. This four-fifths rate persisted for a score of years.
The Wall Street lawyers told Mr. Eisenhower that they didn’t like the overaltruistic social viewpoint of the Marshall Plan for helping underdeveloped countries. They liked foreign aid, but not exclusively for the development of underdeveloped countries. The Wall Street lawyers approved of the “foreign aid” wherefore the U.S.A. continued with annual foreign-aid commitments by Congress. The average annual foreign-aid appropriation has been $4 billion (1950 value) per year over the twenty-seven-year period from 1952 to 1979, which amounted to a $100 billion total. Each new year’s foreign-aid bill had a rider that said that if American companies were present in the country being aided, the money had to be spent through those American companies. In the foreign countries the corporations and individuals could again deal in gold.
Foreign aid paid for all the new factories and machinery of all the American corporations moving out of America. This became a fundamental pattern: first the 100 largest corporations, then the 200 largest corporations followed, then what Fortune calls the 500 largest corporations. Moving out of America could be done readily because a corporation is only a legal entity—it is not a human being. It had no physical body to pass through immigration or emigration. You and I cannot move out of America because we are physical—we need a passport. A corporation does not.
So the Wall Street lawyers simply moved their prime corporate operations elsewhere. It was clearly evident that with only 7 percent of the world’s population in the U.S.A., and with two cars already in many U.S.A. garages, by far the major portion of further exploitation of the world’s peoples’ needs and desires would develop outside of the U.S. of America. But the main objective of the Wall Street lawyers was for the corporations to get out from under the tax control of the American government. In 1933 the American people had saved the corporations by subsidizing them; then, twenty years later, the Wall Street lawyers moved them out of America, getting the American people to pay for the move. This allowed the corporations to acquire gold equities while the U.S.A. citizens and small domestic businesses could not do so.
Soon after Elsenhower’s 1952 election to the presidency, the lawyers reminded him once more that America clearly had won the war only through his brilliant generalship backed up by American free enterprise, and said, “We want you to stop the welfare-state-inclined American government from competing with free enterprise. You must cut out all the navy yards and the arsenals. They compete against the free-enterprise corporations, which are quite capable of doing the same work as the navy yards, but of doing it much more efficiently. You must turn all such production over to private industry, cut out the U.S.A. post office and turn that over to private enterprise, cut out the Federal Deposit Insurance Corporation and turn that over to the insurance industry.” Although much of this transfer of production from government to private enterprise control was never completed, Eisenhower goaded on by his lawyers initiated the flow of taxpayer-financed, highly trained personnel and especially their technical know-how to private enterprise. This irreversible trend continues on to the present day, as can be shown by the history of the whole of the atomic energy field.
Those acquainted with the story of the atomic bomb development remember the momentous occasion when theoretical fission was discovered in 1939 by Hahn and Stresemann in Germany and secretly communicated by them to American physicists, who checked out their calculations and found them correct and then persuaded Einstein to go to Roosevelt to tell him that this was so and that Hitler’s scientists were hot on the trail.
Franklin Roosevelt, exercising war powers given him by Congress, in effect instantly appropriated $80 billion for what became known later as the Manhattan Project. Later, that initial $80 billion appropriation was supplemented by an additional $75 billion for a total of $155 billion of the American people’s money that went into developing atomic energy.
All that was necessary to correct the situation was to give contracts to private enterprise to carry on the atomic work and to let the government’s scientists go to work for the private-enterprise corporations.
At this point the Wall Street lawyers and Strauss persuaded Eisenhower that the United States Bureau of Standards’ scientists were in competition with private enterprise and must be curbed. Strauss assured Eisenhower that the corporations would take on all the bureau’s discarded scientists. What the Wall Street lawyers’ grand strategists realized was something momentous—to wit . . . that in the new 99.9-percent invisible reality of alloys, chemistry, electronics, and atomics, scientific and technical know-how was everything. Physical land and buildings were of no further interest to capitalism. Metaphysical know-how was the magic wand of the second half of the twentieth-century world power structures. Physical properties were subject to deterioration, taxable, and cumbersome. Advised to do so by their lawyers, capitalism and private enterprise set about after World War II to monopolize all strategic technological know-how—i.e., all metaphysical properties—and to dump all physical properties. They called for an economic program by which people would be forced to buy the apartments and houses—to get all physical properties off capitalism’s hands.
The post-Eisenhower era becomes most suitably identified as that of lawyer capitalism and of “no-risk,” sure-thing, free enterprise.
The whole of atomic development was know-how. Scientists had the know-how, and anybody without their technical information could not even speak their language. The Know-How Club, monopolized by lawyer capitalism, was a very tight club. Furthermore, the nonmember four billion plus human beings on planet Earth knew nothing about the invisible micro-macro, non-sensorially-tune-in-able reality. Large private enterprise had now hired all the know-how scientists and engineers. They seemingly could keep the public out of their affairs forever. The world power structure had the U.S. government completely emasculate the Bureau of Standards. There was an earnest and concerned battle by a few responsible scientists to keep the bureau intact, but they were overwhelmed. Henceforth all science must be done by the private corporations themselves or under their subsidized university-college and private laboratory work. To appreciate the extent of this know-how monopoly of the big corporations, one need only look over the wording of the scientist and engineering help-wanted advertisements of the big corporations in the many pages of The New York Times Sunday business section or of their counterpart publications in other big cities.
In the invisible, esoteric world of today’s science there is no way for the American government or public, without the U.S.A. Bureau of Standards’ scientists, to follow the closely held technical secrets of the big, profit-oriented corporations. To a small extent such popular journals as Scientific American help people follow details of this-and-that special case science without learning of the significance of the information in respect to comprehensive socioeconomic evolution.
No economic accounting books list metaphysical assets. Metaphysics is held to be insubstantial—meaning in Latin “nothing on which to stand.” Patents can be granted only for special cases—i.e., limited physical-practice applications of abstract generalized principles, which principles alone are inherently metaphysical and unpatentable, being only “discovered” and not “invented.” But physical patents are capital.
We have two fundamental realities in our Universe—the physical and the metaphysical. Physicists identify all physical phenomena as the exclusive manifest of energy: energy associative as matter or disassociative as electro-magnetic behavior, radiation. Both of these energy states are reconvertible one into the other. Because there is no experimental evidence of energy being either created or lost, world scientist-philosophers now concede it to be in evidence that Universe is eternally regenerative.
The physicists have found that energy will always articulate levers electromagnetically, gravitationally, chemically by reactive forces, by vibratory waves, etc. Metaphysics consists only of weightless, dimensionless, abstract thoughts and mathematical principles that cannot lever physical needles in respect to instrument dials. Energy in either of its states, being physical, can be entered into the capital account ledgers.
The large issue today is the technical know-how that governs the transformations of energy between its two states. “Know-how” is metaphysics. Metaphysics now rules. When the head of one of the U.S.A. ‘s largest banks was asked what “commodities” were involved in that bank’s import-export dealings with the rest of the world on behalf of the Chinese government, he answered that know-how was the prime commodity being acquired by the Chinese through that bank.
I have spent a great deal of time since World War II in Japan, dealing with their industrialists, and have personally witnessed the Japanese acquisition by contracts of a whole complex of exquisitely specific packages of industrial know-how, together with the respective follow-through educational services—all acquired from, and performed by, engineering and business-administration teams of many of the leading American corporations.
The post-World War II Japanese had already perceived that they did not need to own the physical mines of metallic ores because they had learned also how to carry on exclusively with the melting down and recirculating of the world’s metals, particularly those poured into the Orient and Western Pacific islands by the U.S.A. during World War II in the form of now-obsolete—ergo, “scrapped”—armaments. The essence of Japan’s recent decades’ economic success has been the acquisition and realization of the industrial-technology-know-how wealth existent exclusively in metaphysical know-how, in contradistinction to strictly physical land properties, tools, and end products. With all their pre-World War II machinery smashed the Japanese and Germans acquired new, vastly improved industrial equipment with which to realize their know-how production, whereas the World-War-II-winning U.S.A. and European Allies using their old technology became more preoccupied with making money than in producing superior products.
Because of the foregoing it was now possible to maintain that hidden know-how capability within private corporate walls. Since 99 percent of humanity does not as yet understand science’s mathematical language, less than 1 percent of humanity is scientifically literate—ergo, the lawyers’ strategy of tight monopolization of scientific know-how within the scientifically staffed corporations was highly feasible.
In 1929, at the time of the Great Wall Street Crash, only about 1 percent of the U.S.A.’s big corporations had research departments. Now, half a century later, all the big corporations have all the powerful research departments, other than those in which pure scientists are engaged in academic work under some corporate or government subsidy. Through the national defense budget’s armaments development, all the once risky research and development costs of enterprise are paid for by the public through taxation.
The big oil companies knew long ago that humanity would ultimately run out of an adequate supply of petroleum and other fossil fuels, though coal may last a thousand years. That’s why, by the means we have reviewed, the oil companies acquired control of the know-how on atomic energy as well as all the atomic plants and equipment paid for originally by the U.S.A. government. The power structure’s only interest is in selling energy—and only energy that they can run through a meter. They’re not in the least interested in anyone getting windpower—except themselves. Very rich men love having their sailing yachts wind-driven to Europe or the South Seas, but this is not for the people. People’s power must be piped or wired to them only through meters.
When in 1972 all the power-structure capital had converted its dollars into gold, oil, or other highly concentrated and mobile equities, then-President Richard Nixon severed the U.S.A. dollar from its government-guaranteed gold equity value of $35 per ounce, the U.S.A. people’s dollar buying power plummeted—now, in 1980, being worth only 5 cents of the 1971 U.S.A. dollar.
By 1974 much of the world’s buying power landed in the lap of the Arabs, who also sat atop the chief petroleum source of the world. In effect they had both the money with which to buy their petroleum and the largest reserves to be bought. If someone wanted to buy their petroleum, often they couldn’t do so, because few in the world had the monetary resources remaining with which to do so. The Arabs realized they would have to lend out their money to work, but they had no experience in such investment matters. The Arabs had no knowledge of the vast industrial production and distribution technical and administrative requirements. Nor had they any experience in the exploitation of the world-energy industry prior to their own lands’ exploitation by others before the onslaught of the petroleum company giants. The Arabs had not known how to discover, drill for, refine, and distribute the petroleum upon which they had been sitting unwittingly for thousands of years.
So content were the Arab monarchs with the gratification of their every physical desire—artfully heaped upon them personally by the capitalist world’s foreign-oil-exploiting functionaries—that they would never have taken over the direct mastery of their petroleum affairs had not the psycho-guerilla warfare between the capitalist and communist powers deliberately aroused the Arabian peoples themselves, bringing pressure upon their leaders to take over the foreigners’ operations. Since their subsequent epochal enrichment, the Arabs’ political leaders as well as the monarchs and sheiks have bought everything of which they could dream, as stimulated by the affluent acquisitions patterns in other economies. After vast stock and bond investments, real estate and new building ventures in foreign countries, they found that they could expend only a fraction of their monetary wealth. The Arabs have now reached the dilemma of how to turn their monetary gold fortune to important and lasting advantage.
In 1977 the king of Saudi Arabia said to a leading American banker with large oil interests, “My banks don’t know anything about international banking and major industrial accommodation.” The American banker said, “Would you like me to run your banks?” The king said, “Of course.” So the American banker did, and in the process he taught them international and transnational industrial-finance management.
There’s no question that the few who have title to Arabian oil find it essential to amalgamate their operations with the world’s great oil companies, which own the vast equipment of world-around distribution and interaccounting capabilities as well as the vast majority of refineries and petrochemical industries. The great oil companies control it all. In general they and noncommunist Arabia are one and the same. The Organization of Petroleum Exporting Countries’ (OPEC) officialdom, regardless of national political differences, is very probably run entirely by the oil corporations’ trillions of dollars of persuasiveness.
It is relevant at this point to note that the Arabs’ inadvertent isolation of both the physical-wealth items—(1) the underlying monetary gold and (2) the prime negotiable energy commodity, petroleum—and their concurrent discovery of their utter lack of know-how, clearly differentiated out the relative values of (A) the purely physical petroleum and gold, and (B) the exclusively metaphysical know-how wealth. It turned out that B was most in demand as well as scarcest. The physical wealth was thus proved to be of approximately zero value, while the metaphysical know-how wealth proved to be the prime economic “good-health” constituent of wealth.
Moreover, those who own oil also own the atomic energy and have long ago assumed that, if humanity exhausts or abandons oil, it will automatically switch over to atomic energy. Humanity has had nothing to say about all this because the know-how was so obscure and the lawyers’ stratagems so invisibly large. The lawyers’ omnilegal international stratagems were and as yet are so obscure, in fact, that no government authorities—let alone the public—knew that the world energy monopoly’s scientists had not taken into account earthquakes, for instance, in the construction of New England atomic energy plants, nor had the public or government anticipated that the intuitive wisdom of humanity would develop such an antipathy to atomic energy as eventually to force lawyer capitalism to fall back on its “ownable” coal mines and shale for conversion into pipable and meterable liquid fuels. It is as yet inscrutable to the public, government, and lawyer capitalism just how strong literate humanity’s intuitive wisdom will be in preventing the full-scale conversion of coal and shale into liquid energy fuel when it learns, as it has now been learned in a scientifically undeniable way, that this selfishly exploitable energy fuel strategy will inexorably destroy the atmosphere’s capability of supporting biological life on planet Earth. Like all fossil fuels coal gives off carbon dioxide when burned, but coal gives off 25 percent more of it per unit of energy than oil and 50 percent more than natural gas. Although carbon dioxide comprises less than 1 percent of the Earth’s atmospheric gases, this concentration has risen 17 percent since preindustrial times and is expected to rise an equivalent amount in the next twenty years. The “greenhouse” effect from the Sun’s heat and increasing amounts of this otherwise harmless gas could send average global temperatures soaring by as much as 6 degrees Fahrenheit within fifty years according to a U.S. government study. This unprecedented global environmental catastrophe would be virtually irreversible for centuries.
No one knows whether the cessation of the waste radiation of atomic energy exploitation or the cessation of coal and shale conversion into fluid fuel will occur in time to permit the physical continuance of humans on planet Earth. What we do know however, as we have previously stated, is (1) that, with the unselfish use of technology, it is now possible to take care of all humanity at a higher standard of living than any have ever experienced and do so on a sustaining basis by employing only our daily energy income from Sun and gravity and (2) that we can do so in time to permit the healthy continuance of humans on planet Earth.
Now things are beginning to go wrong with atomic-power generation . . . everywhere. To start off with, neither the scientists nor the atomic plant private-enterprise owners have any safe solution for what to do with radioactive atomic wastes. Humanity’s intuitions are logically aroused, and public antipathy to atomic energy is rapidly expanding—despite billions of dollars being spent by the world energy cartel in propaganda campaigns to make the vast majority of people “go for” atomic energy.
The second great gasoline-line “pinch” of June 1979 was put upon the public by the invisible energy-know-how cartel to painfully divert the public concern generated by the Three Mile Island radiation accident and threat of a reactor “meltdown.” Though the public had reacted strongly against atomic plants, the sudden energy supply squeeze administered by the oil companies made the general public so energy hungry again that it stopped, for the moment, listening to those who were attempting to curtail atomic energy plants. The “gas crisis” re-established “rational” public yielding to governmental support of atomic energy as the “answer” to the energy crisis.
Today’s (1980) world-power-structures struggle is one between the U.S.S.R. and big capitalism, which we now call lawyer capitalism, which deliberately took the world’s private-enterprise corporations out of the fundamental jurisdiction of America. They have kept their U.S.A. operations going in a seemingly normal way, so people in U.S. America haven’t realized that these companies are officially situated elsewhere despite the incredible amplification of those great corporations’ annual profits, whose annual totals payable to these corporations’ stockholders are of the same magnitude as the annual increase in the U.S.A.’s joint internal and external debt increases.
America is utterly bankrupt externally in terms of balance of trade due to its own oil companies now operating as Arabian business. The national debt at the time of the New Deal was $33 billion—which was the cost of World War I. Before World War I we frequently had no national debt whatever. We have today a national debt that exceeds $800 billion—30 percent of that indebtedness came from underwriting of ever-longer-term mortgages. In 1934 the U.S.A. underwrote a completely obsolete building industry while Eisenhower allowed the banking world to make an incredible amount of money in interest rates and services* in support of the building and real estate game, which building industry—if it were any good—would pay the U.S.A. back handsomely. The U.S.A. cannot even pay the annual interest on its $800 billion national debt. That is why the Nixon presidency and all those since have had to enter each year with a negative budget, acknowledging that at year’s end the U.S.A. will be a $100 billion-magnitude unrecoverably deeper in debt. Our foreign-trade-balance indebtedness is (as of September 1979) $104 billion ($86 billion if foreign branches of U.S. banks are taken into account). Sum-totally, what has been taken from the people of the U.S.A. runs into many trillions of dollars. In the quarter of a century since Eisenhower America has become completely bankrupt, with its world leadership, its financial credit, and its reputation for courage, vision, and human leadership gone.
|*In 1978 over $1 billion just for transferring home-ownership deeds.|
Everything we have reported here has been published at one time or another, but with the individual items often so far apart from the last relevant item that the public has tended not to remember and associate the items. As a consequence the total picture presented here is approximately unknown to any but the Wall Street lawyers’ grand strategists, most of whom are no longer alive.
One of my earliest books was Nine Chains to the Moon, written in 1935 and published by Lippincott in July 1938, and now being published by Doubleday. In it I referred so frequently to Finance Capitalism that I developed a contraction of those two words into FINCAP. FINCAP had died a lingering death between 1929 and 1934. In this book, Critical Path, I refer so often to the lawyer-resurrected “capitalism” that it is appropriate to refer henceforth to LAWCAP. LAWCAP’s “capitalism” is paradoxically the most highly socialized organization in all history—the citizens of LAWCAP’S welfare-state—the whole body of corporate stockholders—having an annual average dole of $100,000 per capita without their even having to make a pretense of getting a job.
If we take the billions of dollars given in the 1930s to the great U.S.A. defense-industries corporations by the New Deal’s Reconstruction Finance Corporation . . . if we take the hidden tax-deduction subsidies to do research, development, and advertising given to all these companies in pre-1942 dollars between 1933 and 1980 . . . if we take the $100 billion in foreign aid that paid for the overseas establishment of the great corporations . . . if we take the $155 billion of atomic know-how and development taken over by the oil companies . . . and if we take the number of fine ounces of gold bullion taken out of America exclusively by the capitalist world’s banking system . . . and if we take a reasonably low estimate of the unknown billions of dollars taken out of the U.S.A. by the CIA to operate exclusively on behalf of international capitalism without the knowledge or authority of the people of the U.S. of America’s quasi-democracy . . . and if we multiply the sum of the foregoing figures by twenty-five, which is the amount to which our present U.S.A. dollars have been depreciated between the time of the appropriations and January 1, 1980, we come to a figure in the magnitude of $6 trillion that has been legally transferred from the U.S.A. people’s national capital account over to the capital ownership account of the stockholders of the 1000 largest, transnational, exclusively American-flag-flying corporations.
The transnationally operating LAWCAP in the early ’50s resurrected the twenty-year-dead FINCAP and its “capitalist” world and left only its American-flag-flying storefronts in the U.S.A. to cover its comprehensive financial withdrawal from the U.S.A. LAWCAP silently and invisibly moved capitalism’s big-time operations into the any-legally-propitious-elsewhere. With its invisibly operating CIA (Capitalism’s Invisible Army) LAWCAP exploited the unwitting citizens of the U.S.A. in order—they hoped—to destroy socialism.
The 1947-50 LAWCAP decision to start a World War III had two objectives: (1) to keep capitalism in business, and (2) to prevent the Russians from employing their industrial productivity to produce a higher standard of living for their own people than that demonstrated in the U.S.A. LAWCAP’S decision to start World War III inaugurated history’s greatest game of poker, with the U.S.S.R. as a very reluctant player, worried about its “home-folks’ ” political agitation for a few “goodies.” It became a poker game that called for each side adding approximately $100 billion per year into the “killingry kitty.” They have now done so for thirty years. This amounts to $6 trillion. By complete coincidence $6 trillion happens to be approximately the same magnitude as that of the total mileage per year traveled by light operating at 186,000 miles each second of the year.
Throughout those thirty years, the U.S.A.-half of this $6 trillion (that is, $3 trillion) was redeposited at various turnover rates per year in the Western-world banks, and the latter continually reloaned those dollars, at historically unprecedentedly high rates, to armaments industry. The net of it all was to convert science and technology’s highest capability into accomplishing the killing of ever more people at ever greater distances in ever shorter time.
LAWCAP’s comprehensive grand strategy had its Achilles’ heel.
Having successfully lifted $6 trillion from the mid-twentieth-century world’s leading nation—the U.S.A. and its people—LAWCAP puppeted the U.S.A.’s people into expending another of their own $6 trillion in playing “the drop-dead killingry poker game” with the U.S.S.R. exclusively on behalf of invisible LAWCAP. The latter was sure that with its complete control of all the world’s money to back the U.S.A., the latter could not lose the killingry poker game with the U.S.S.R. Counting on winning the poker game, LAWCAP started planning its own post-World War III future.
LAWCAP once more deceived its so-easy-to-deceive U.S.A. puppet with the kibitzing of the U.S.A.’s playing of its killingry poker hand. LAWCAP did so through its enormous media control and its election-funding and lobbying power of the American political game. LAWCAP had its political leaders convince the U.S.A. people that they were playing the poker game so satisfactorily that the U.S.A. assumed that it was far ahead in atomic bombs, which gave it complete national security and assumedly maintained its world-around power and prestige.
LAWCAP was confident that with ownership of all money and control of all the Western world’s arms-producing facilities, they could outlast the U.S.S.R.’s ability to cope with its internal pressure for shifting its productivity toward its people’s life-style—as surreptitiously agitated for by the ClA’s psycho-guerilla operations.
Because it was a “poker game” the Russians, realizing that intercontinentally delivered warheads with a twenty-minute lag between rocket blast-off and landing bang-off inadvertently provided a twenty-minute radar lead, that meant for the first time in the history of war that both sides would be able to see the other side shooting at them twenty minutes before the bullets would reach them, which gave both sides twenty minutes within which to get away all of both sides’ atomic bombs, gases, germs, and death rays before the Big Bang, thus producing the first war in history in which both sides and all their allies would lose. To be a survivor of such a war would be worse than being killed by it. Planet Earth would be humanly untenable.
Because the Russians knew all this was so, and the American people did not seem to know it was so, the Russians assumed after the Khrushchev-Eisenhower Geneva Meeting of 1955 that atomic bomb warfare would never occur—that is the way the U.S.S.R. played their poker hand. They assumed only enough atomic bomb-making to camouflage their strategy, while they counted on conventional arms, vast divisions of armed and trained men, and the greatest ever of world history’s line-of-world-supply-controlling navies. The latter featured all of their now-perfected Vertol planes, being above-the-sea-surface-emitted, vertically ascending into the sky from enormous-bellied atomic submarines, moving far more swiftly submerged—seventy knots—than could the surface-battling, forty- to fifty-knot aircraft carriers. This the U.S.S.R. assessed to be the world-winning strategy.
The reason that LAWCAP’s strategy kibitzed its U.S.A. players into holding four atomic bomb “aces” and an aircraft carrier “king” was because LAWCAP wanted to be sure that the atomic energy technology was so advanced and proliferated by World War III’s end that they could employ its U.S.A.-peoples-paid-for basic equipment and widely developed uranium mines and production sources and its scientific personnel to produce the energy to run through their money-making meters after their fossil fuels were exhausted.
LAWCAP’s cupidity outwitted its wisdom. LAWCAP’s sense of evolutionary-event acceleration was faulty. They bluffed only the people of the U.S.A.—not the Russians.
The Russians have now attained so commanding a lead in the killingry poker game that even the U.S.A. president concedes that it would take the U.S.A. a minimum of ten years to restrategy itself so that it could in any way cope with the Russians’ “conventional” naval supremacy and its vastly greater numbers of modernly armed divisions of world-around warfaring capabilities.
In the meantime as already mentioned the United States has gone completely bankrupt internally, its national indebtedness coming very close to a trillion dollars and its balance of trade debt to $109 billion—worsening at a horrendous rate due to LAWCAP’s arranging to force the U.S.A. to obtain almost half its petroleum energy from the Near East. The U.S.A. has for eight years past been unable to meet even the interest on its internal debt as demonstrated by a negative balance of trade. Its future credit has been hypothecated thirty years beyond Armageddon. Nothing to stop the U.S. Treasury from issuing 2050 notes, but for how far into the future can LAWCAP keep selling U.S.A. promissory notes?
Unless God has something else in mind, it looks as though it will not be long before LAWCAP’s kibitzing of the U.S.A. will have lost the $6-trillion killingry poker game. Russia will not hesitate to “call” the U.S.A. hand and rake in the winnings of omniworld, line-of-supply control—maritime, aeronautical, and astronautical.
In one way the U.S.A. and U.S.S.R. citizens are in much the same socioeconomic position. The Communist party which runs the U.S.S.R. consists of about 1 percent of their total population, while the U.S.A. is controlled by about the same 1 percent, who are the LAWCAP strategists of the great U.S.A. corporations.
The U.S.A. is not run by its would-be “democratic” government. All the latter can do is try to adjust to the initiatives already taken by LAWCAP’s great corporations. Nothing could be more pathetic than the role that has to be played by the President of the United States, whose power is approximately zero. Nevertheless, the news media and most over-thirty-years-of-age U.S.A. citizens carry on as if the president had supreme power. All that he and the Congress can do is adjust to what the “free-enterprise system” has already done. They are riding on the snapping end of the power-structure dragon’s tail.
If I had not been studying and working for a half-century on the assumption that this present state of affairs would come about at about this moment in history, I would have to be very pessimistic now about the human affairs of the 7 percent of the world’s population situated within the national boundaries of the U.S.A. let alone critically threatened omnihumanity.
But, in fact, I have been studying and working anticipatorily throughout all those intervening fifty-three years, and I know what I am talking about. The world now has an option to become comprehensively and sustainingly successful—for all—and that is what this book is about: How to do so . . . and do so expeditiously enough to succeed within the time limit. “How to do so” is implicit in the chapters that follow starting with the manner in which I came to discover the critical options and the individual self-disciplines that came naturally to disclose the grand strategy of human survival and successful functioning.
* * *
Fortunately, the Sun does not demand payment for all the energy that it delivers by radiation to Earth in the overall cosmic scheme, which is trying to make humanity a success despite our overwhelming ignorance and fear. The stars are trying to tell humanity to awake and prosper and to consciously assume the important cosmic responsibilities for which it was designed. Since realization and fulfillment of that responsibility involve evolutionary discovery by humanity of the cosmic stature of its mind and the inconsequentiality of its muscle, the planting of humans on Earth may not bear fruit.
When Universe is developing important functional interdependencies, she does not put all her embryos in the same proverbial “basket,” (or fiscus). So poor is the probability of self-discovery by humans of the infinite potential of the mind and the relative triviality of human musclepower (which is not even as capable as a grasshopper’s) great nature must have planted a myriad of human-function-equivalent seedlings on a myriad of planets. In order to succeed as local-in-Universe critical information-gatherers and local-in-Universe problem-solvers in support of the integrity of eternally regenerative scenario Universe, the human-function equipment for local-in-Universe information-gathering will be as variable as the varied environments in Universe. Rarely will they have the appearance of human organisms—such would be employed only under environmental conditions similar to those of planet Earth.
The first manifestation that humanity may make good on this planet will be the serious introduction of cosmic costing into the mainstream deliberations of Earthians.
Cosmic accounting completely eliminates the economic validity of bankruptcy accounting, except when humans make the mistake of trying to hoard or withdraw critical “capital” assets from production functioning. Withdrawal of capital assets is akin to attempting to withdraw one of the stars from the celestial system. Into what Universe, other than the cosmic totality, may the star be transferred? Every atom and electron is an essential part of the eternally regenerative—ergo, totally inexhaustible (but always locally ebbing and flooding)—pulsative Universe.
from pages 188 – 197
For several years I was a member of the “Dartmouth Conference.” This was an arrangement made by Norman Cousins and two other Americans with the Russian Academy of Sciences to produce teams of U.S.S.R. and U.S.A. leaders in various fields—teams of approximately twenty-five on each side—to meet in such years as seemed expedient, first in the U.S.A. at Dartmouth College and next at Moscow-and-Leningrad, next at the Westchester Country Club in New York, etc. I was a member of the Moscow-Leningrad and Westchester, New York, conferences.
The conferees discussed every known point of contention existing between the two countries. The U.S.A. team on which I served consisted of John Kenneth Galbraith, Harvard economist; Paul Dudley White, Eisenhower’s cardiologist; Norton Simon, financier; Leslie Paffrath, the director of the Johnson Foundation; two Harvard U.S.S.R.-specializing professors; a U.S. Navy admiral and a U.S. Army general. The latter four had been on many U.S.S.R./U.S.A. arms-problem negotiating teams. The balance of the U.S.A. team consisted of Norman Cousins (team leader); Dr. Franklin Murphy, the chancellor of UCLA, now chairman of the board of the Los Angeles Times-Mirror Corporation; David Rockefeller; and myself.
The Russian team included the president of their Academy of Sciences, their leading astronomer (who was in charge of their space-vehicle guidance), their leading climatologist, others of their leading scientists, their most eminent writers, philosophers, economists, an admiral, a general—thirty in all. Present also were a dozen “simultaneous interpreters” loaned by the UN.
We all lived at the same hotel. The dining room had only four-place tables. As you entered, you chose quickly with which of the Russians you wished to sit. They were the first to reach the dining room. You tried to sit successively with each of the U.S.S.R. team members. The moment you sat down with a Russian, an interpreter moved in with you. To our U.S.A. surprise it turned out at the end of the conference that all the Russians could speak English, while amongst the U.S.A. representatives only the two Harvard professors could speak Russian.
Our meetings consisted of: (A) those lasting all day, every day, at which all the officially-to-be-considered points were discussed; and (B) the very small individual dining room and other casual meetings at dinner parties and receptions. At the latter it seemed as though all points of contention could be coped with in a manner satisfactory to both sides. At the formal all-day meetings, however, everyone seemed so intractable that nothing could be resolved.
For the last day of the first week-long conferences, some in Moscow, some in Leningrad, it was decided by the leaders of the two teams that instead of having summaries prepared of what had occurred, each side would select one of its members to give a speculative half-day-long prognostication regarding all prominent features of human life on planet Earth for the next half-century. Each prognosticator would have half a day in which to make his or her presentation. It was assumed that the prognosticators would indicate how much each side was accommodating the other side’s conference issues. These presentations were expected to provide a clue as to what extent the respective sides would be yielding in the future to the opposing arguments presented during the previous formal sessions.
The Russians chose their leading meteorologist to give the U.S.S.R prognostication. He would have all of Saturday morning to present it.
I was chosen to present the U.S.A. prognostication. I had all Saturday afternoon to do so. In preparation I made a tensegrity sphere to demonstrate new human-use potentials of nature’s fundamental structuring principles of discontinuous-compression-and-continuous as employed in all geodesics and synergetics. I also calculated the weight of a great cathedral we passed each day on the walk to the grand palace in which we held our conferences. Employing tensegrity principles, I was able to show a 99-percent weight reduction for enclosing an equal amount of clear-span to that of the cathedral, including adequately engineered snow-loading, wind-loading, and earthquake-proofing.
I based my presentation on the twentieth century’s unprecedented invisible revolution in chemistry, electronics, and metallurgy, by means of which we could now do so much more with so much less weight, volume, energy, and time per each accomplished function as to suggest that we humans would soon prove invalid Malthus’s seemingly infallible scientific conclusion that economically on our planet Earth it had to be “only you or me—not enough for both.” I then outlined the changes in patterning of life on Earth if there were ample high standard of living, life support for all. My discourse, its predictions, and the raisons d’etres for those predictions were approximately the same as those of this book—Critical Path.
What I said pleased both the U.S.A. and U.S.S.R. delegates. On the walk home to our hotel each individual delegate from both sides hustled up beside me and told me how excitedly pleased he or she was over my statements. The Russians were unanimously enthusiastic about what I said. Fortunately, all the U.S.A. delegates seemed equally pleased. At the farewell banquet that night the president of the U.S.S.R. Academy of Sciences said in his closing speech, “From now on Buckminster Fuller will be ranked in the U.S.S.R. side-by-side with Franklin and Edison.” I assumed that the Russians had so classified me because I was not only an inventor but dwelt in the lands of capitalism—despite the fact that I am apolitical and an ardent advocate of an omnihumanity-advantaging freedom of individual initiative, and not of private enterprise’s only selfishly benefited freedoms.
In our second meeting, two years later at the Westchester Country Club, many of the American participants lived nearby and so went home each night. Together with the Johnson Foundation director I lived at the club with the Russians. I found that the young editor of Pravda was the only Russian amongst them who seemed free to explore and discuss spontaneously the world’s future prospects. Though obviously a faithful communist, his speculative thoughts seemed not to be bound within popularly established party-line dogma.
What I learned from the Russians—regarding which I am certain they were seriously convinced—was that “the U.S.S.R. would never be willing to negotiate with the U.S.A. regarding any world-around, supreme-power matters when the U.S.S.R. was in a weaker military position than the U.S.A.”
They said to me, “Every time we struggle to attain parity with the U.S.A. so that we can negotiate, the U.S.A. institutes an arms advancement before the meeting, wherefore we are deprived of tolerable negotiating conditions.
“Worse than that,” they said, “this continually defeats turning our massive high-technology productivity toward realizing a life-style for our socialist economy equal to or better than that already enjoyed by capitalism—whose world-publicized high standard of living is a thorn in our side as we remain unable to do so—not because of technical or social inability but because of the preoccupation of technological resources with the cold warring.”
Assuming that an atomic war would mean that both sides would lose*—ergo, it would not occur—the U.S.S.R. determined to outnumber and thus overpower the U.S.A. in the design and the production of conventional air and sea armaments and in the training and maintenance of a vastly greater standing army, whereafter they felt they could negotiate constructively for the establishment and maintenance of peaceful world-around conditions.
It must be remembered that, in their 1920s-formulated, successive-multistaged five-year industrial planning, the Russians had assumed a World War II to occur in the early 1940s, at which time it would be evident to the private-enterprise world that socialism could be successful—which private enterprise had always said would be impossible—ergo, the private-enterprise-dominated countries would start a war to destroy socialism but would do it in a highly deceptive manner by having a Nazi propaganda offensive launched against the German industrial cartels, which would suddenly be turned against the U.S.S.R. This is exactly what happened. The Germans first made the U.S.S.R. their ally. When well into Poland and at the Russian border, the Nazis turned treacherously against the U.S.S.R. The anti-U.S.S.R. strategy of the “Cliveden set” miscarried when, soon thereafter, the U.S.S.R. and the U.S.A. became allies.
No one in the U.S.A. can understand the bitterness as yet existent in the U.S.S.R. over the millions of U.S.S.R. troops and civilians killed by the Nazis. The U.S.S.R. could not understand the U.S.A. rearming of the Germans, with whom the U.S.S.R. was much more concerned as a World War IV enemy than with the U.S.A. as such an enemy.
The Russians had assumed in their five-year planning that when World War II terminated, they would be able to divert all their high industrial productivity toward advantaging all their people to prove that socialism could produce an economically desirable life-style equal to or better than that provided by capitalism. Again, the Russian planning became thwarted when Western capitalism, which had been socialized by FDR’s New Deal, realized at the cessation of World War II that it could not carry on without the vast government procurement program which is occasioned only by war. To cope with this situation the capitalists invented World War III (which they called the cold war).
The Russians queried of the U.S., their supposed ally, “Who are you going to fight?” and the U.S.A. answered, “You.”
This meant that the U.S.S.R. would have to focus all its high-science-and-technology productivity on producing armaments for decades of around-the-world cold warring, in the conduct of which both the Russians and the U.S.A. would have to avoid direct, all-out interconfrontation. With the joining of supreme-powers war by direct military confrontation, neither side could withdraw without all-out surrender. However, all-out intercontinental atomic war would mean the end of human life on Earth. Therefore, the U.S.A. and U.S.S.R., in testing their respective strengths, would have to operate indirectly against one another through their respective puppet nations, hopefully intent on drawing forth the “secret weapons” in the other’s arsenals. Thus we have the North versus the South Koreans, the “Vietnamese” versus the Vietcong, the Israelis versus the Arabs, etc.
The Russians decided early on that atomic warheads would not be used because the rocket delivery times traveling at 14,000 miles per hour were such that with radar traveling at 700,000,000 miles per hour, both sides would know ten minutes before being struck that the enemy had fired their atomic warheads—ergo, both sides would have plenty of time to send off all their atomic warheads, and both sides would lose. So while deceptively continuing the atomic-warhead race with the U.S.A., the U.S.S.R. committed itself realistically to producing the strongest navy in history.
The U.S.A. politicans kept the U.S.A. populace feeling militarily secure because they could point out that the U.S.A. was developing far more atomic warheads than was the U.S.S.R. The U.S.A. was doing so because big oil money, which successfully lobbied Washington’s Capitol Hill energy policies-knowing that petroleum would ultimately be exhausted–fostered atomic-warhead production in order to build up the atomic technology industry (in the development of which the U.S. people’s government had spent over $200 billion) and its nuclear scientist personnel whom they, the world-power-structure organizations, would need to employ in operating the atomic-energy plants and the electrical-distribution network as world petroleum supplies dwindled. They would need the energy meters in order to continue exploiting the capitalist world’s energy needs.
When Jane’s Annual World Inventory of Ships showed that the U.S.S.R. Navy had reached parity with the U.S.A., the U.S. politicians laughed it off by saying the Russians did not even have aircraft carriers. This was true because the U.S.S.R. had seen that aircraft carriers are “highly vulnerable,” so they built huge airplane-carrying submarines from which a plane would take off by “Vertol”—vertical flight to height, followed by horizontal flight—ergo, needing no runways. This Vertol-from-submarine launching was strongly advocated by some of the U.S. Navy’s most astute officers, whose word was not heeded because the aircraft carriers were much more profitable business for private enterprise. The weapons industry’s Washington lobbyists were more persuasive than the U.S. Navy’s experts.
With its naval fleet supremacy established but lacking en route support bases, the U.S.S.R. then set about to develop disarmament talks with the U.S.A. from a superior conventional-warpower position—that of controlling the high-seas lines of supply.
Realizing that the U.S.A. senators had jurisdiction over all peace negotiating and that the U.S.A. Senate’s Republican membership was intent to deprive the Democratic President of peace-making success, and that apparently the U.S.A. was not going to go along with ratification of the SALT treaty, the Russians decided to put the heat on the U.S.A. so that a global naval-line-of-supply confrontation incident such as the occupation of Afghanistan would demonstrate—as it has in Iran—that the U.S.A. can no longer control the Indian Ocean and Arabian Sea and therefore cannot take yesteryears’ sure-to-win military steps against Iran.
The U.S.A.’s half-century dominance of world affairs is now terminating, just as did Great Britain’s century and a third of dominance come to an end with the 1929 economic crash.
The Orient Express ran only from Paris to Constantinople in Asia Minor. The czar-backing Russian-power-structure interests, hoping to compete with the British, represented the inheritors of the before-the-water-route, overland-caravaning powers of the Old World. Mackinder showed the British that the only economically successful trans-Europe and Asia railroad route would have to be from France to Constantinople and thence via Turkey and Iran to Kabul, Afghanistan, and thence through the Khyber Pass, through Sinkiang and Inner Mongolia to Shanghai, China, cutting shipping times down very much as compared with the sea routes around Africa to the Orient. Mackinder’s counsel was heeded by the British.
Mackinder showed the British that Russia could, by taking Afghanistan and Pakistan, reach the Persian Gulf and then come through the Indian Ocean to intercept British cargo ships en route to the Orient. Mackinder identified on the map what he called “the Heartland.” The heart of Mackinder’s Heartland was Afghanistan, with its Khyber Pass leading to the east and its ability to break through to the Arabian Sea and the Persian Gulf. Mackinder said, “Whoever controls the Heartland, rules the world.” Afghanistan was (and as yet is) the heart of the world’s heartland.
After World War I the British were so “tired” that they did not listen to Mackinder as they had before. In the 1920s he tried to make the British realize that the airplane altogether eliminated the world’s shorelines as the limit of travel. The British did not see the airplane as a cargo carrier and believed that their world trading exclusively by ships of the sea would not be threatened by air traffic. No one had ever flown across an ocean, let alone set up air-cargo fleets capable of competing with their seagoing fleets. One of the factors that they failed to envision was that of the technology becoming ever lighter per unit of functional performance until it became feasibly and economically air-deliverable.
Mackinder developed a doctorate-level school in London in the 1920s. One of his students was a talented German named Haushofer, who listened to Mackinder pointing out that the armored tanks were, in effect, the navy destroyers coming out of the sea and running up on the land. Mackinder said to his students, “The French Maginot Line and all great fortresses around the world are obsolete.” He continued, “The airplane raiders above and the armored tanks on the land could circumvent, overrun, and overfly the fortresses and overwhelm any troops or other defense.” Haushofer graduated from Mackinder’s school, returned to Germany, and went to work for Goering, Hitler’s air minister. Haushofer described Mackinder’s science in German as Geopolitik. From his description of Mackinder’s concept, which the British were not heeding, Goering developed his blitzkrieg—lightning war—with the Luftwaffe commanding the sky and tanks and other armored vehicles commanding the land. Goering flew over and rolled over the Maginot Line and took all Europe.
Until the end of World War II the British had kept the Afghanistan heartland well under control. Then, after World War II, they let its militarily guaranteed isolation greatly deteriorate. Meanwhile the Russians were busy giving Afghanistan such “presents” as a first-class highway from Russia to Kabul. The U.S.A. gave them naught.
In 1954 the British Foreign Office advised the U.S. State Department that they had just learned from their ambassador in Kabul, Afghanistan, that Russia, East Germany, Czechoslovakia, and China had all installed impressive exhibition buildings in Kabul to take part in Afghanistan’s most sacredly important holiday—the Geshin Fair. Neither the United Kingdom nor the U.S.A. nor any of their allies had an exhibit in Kabul.
I received an emergency call from Jack Masey of the U.S. State Department’s U.S. Information Agency. He asked me how long it would take me to produce a 10,000-square-foot-floor area geodesic dome so light and compactly shippable that it could be sent by one DC-4 airplane to Kabul. My Raleigh, North Carolina, shop had it produced in twenty-five days, complete with a high-tension, all-weather skin outwardly tensed to its geodesic, tubular aluminum frame. All the struts and hubs of the dome were color-coded. The 114-feet-in-diameter dome was test-assembled at the Raleigh airport and accepted by the U.S.A.
It was flown to Kabul with my one engineering representative to supervise its erection by the Afghans. It was assembled in one day just in time for the Geshin Fair opening. The U.S.A. show inside consisted of the Borden’s “laughing cow,” bouncing ball bearings, and Lionel trains. No one showed interest in the show inside, but all the Afghans, the Russians and East Germans, the Chinese and Czechs, were fascinated with the geodesic dome itself. The Russians asked permission to bring in their moving picture equipment to make a documentary of the dome construction. The then king of Afghanistan fell in love with the dome—it was a great modern-materials Afghan yurt—the Afghans’ own architecture. The king asked the U.S.A. to give him the dome, but the U.S.A. refused and sent the dome off as an around-the-world traveling show.
The Russians, finding the Afghans making themselves working automobiles out of the most battered second-hand cars shipped into Kabul and then driving them around on very rough dirt roads, made the Afghans a present of macadam-surfaced, first-class roads, which delighted the Afghans because they provided some real distance driving—the Russians extended the highways all the way into the U.S.S.R. These roads recently (1979) provided the means for the U.S.S.R. to roll their armed forces into Afghanistan.
Having been a long-time student of Sir Halford Mackinder’s work, I was fascinated through my dome experience to discover that the U.S. diplomacy apparently knew nothing of Mackinder’s “Heartland” concept—or considered it to be no longer relevant.
When early in 1979 the U.S.S.R. took over Kabul, Afghanistan, it was because the balance of world power had shifted from U.S.A. to U.S.S.R. mastery.
As we have related, Mackinder had identified “The Heartland” on the maps. The heart of his Heartland was Kabul, Afghanistan. Also, the Russians with their now-great navy had access to the Atlantic Ocean only at Archangel and the Baltic ports and Vladivostok in the North Pacific. With Afghanistan under their control the Russians were able to control all the northern and eastern borders of Iran and the western borders of Pakistan.
Russia always uses the power structure’s number-one strategy—”divide to conquer!”—and does so with psychological expertise. She often finds religious divisibility the most propitious. It was feasible in Iran, which could be divided religiously against the incumbent political power—ergo, the Muslims versus the Shahdom of Iran—with knowledge that after driving out the U.S.A.-supported Shahdom, it (the U.S.S.R.) could divide the Muslims into their subsects and militarily overwhelm Iran. The U.S.A.’s secretly supported Kurdish opposition to Russia in Afghanistan and to the Muslims in Iran would become the final obstacles to the Russians’ century-held objective of gaining direct access to the Indian Ocean and therewith complete control of U.S.A. access to Arabian oil. The Russians’ move into Afghanistan was not just a power-structure play. They were exercising their evolutionary ascendancy into the world’s top power position. The Heartland—Afghanistan and its ultimate access to the Indian Ocean—is the historic prizes of the world’s top power position.
Fortunately for the cross-breeding world citizens of North America and for the rest of the world, the U.S.S.R. is most probably intent on getting the world power structure under irreversible control as quickly as possible so that it can institute controlled demilitarization and thereby turn its immense productivity toward improving the standard of living for the socialist world and thus prove socialism’s life-style to be equal to or better than the best of the life-styles produced by capitalism. I am confident that Russia does truly intend world disarmament. She will keep a powerful upper hand at each stage of disarmament but will seek to have the world’s militarily scrapped metals reinvested in peacefully productive livingry advantage for all the world’s peoples.
I have only one objection to the concept of comprehensive socialism: So far it has made no provision for effective development of the individual initiative of humans. Too long has such freedom of initiative been usurped either by the Communist party, representing only 1 percent of the U.S.S.R. population, or by the Western world’s private enterprise’s utterly selfish exploitation for money-making rather than for common sense-making. I have discussed this point with the Russians. They admit that a party dictatorship is not “democracy” and, at the same time, also admit that it is for true democracy to which the Russians, the Chinese, and most people of the world aspire. Possibly the electronically operative democracy and its ability to cope with complex problem-solving will also make safe the realization of individual initiative to be exercised on behalf of all humanity by any humans anywhere.
*See p. 117, “Legally Piggily” chapter, and page 192 of this chapter.
from pages 278 – 280
We next observe the great twentieth-century influx of industry onto the California coast. Overnight settlements became towns and towns became cities, each with its own chamber of commerce doing its best to attract ever more industry. In order to pay for town governments taxes are necessary. In order to pay political obligations the elected town administrations need money to hire people to carry on all the legislatively conceived tasks—some of them necessary, many of them unnecessary, but all requiring large sums of money.
The Los Angeles Chamber of Commerce and the Los Angeles government did everything they could to invite industry to move into their domain because industries produce the greatest amount of taxable money-making. Industries also produce jobs and thereby in turn wages that can be taxed. Los Angeles did everything it could to attract industries and businesses. Having many locally occurring petroleum wells, one of the most logical of industries brought into Los Angeles was that of oil drilling, pumping, refining, storage, and shipping, such as those of the concentrated operations of the oil fields and harbor area of Los Angeles’s Long Beach. Los Angeles built a vast number of huge refineries in the southwest part of the city. On its southeastern side Los Angeles positioned its steel mills to satisfy the large demand for steel products in the building of the oil refineries, their storage tanks and pipelines.
The fumes from these industries then loaded the mist and the warm airs, and the Sun-exposed upper cloud surfaces and their shaded lower surfaces produced temperature differentials, which in turn produced layer inversion, with the fumes locked in on the underside, which then acted as a widespread lower atmospheric lid, holding the industrial gases and fumes close to the ground throughout the whole Los Angeles basin. Thus smog became an industrially produced phenomenon.
Los Angeles’s citizens became politically articulate about this “air pollution” and went to their city government saying, “We mustn’t have this in our city.” The city government then went to the utilities, refineries, and steel manufacturers and said, “Stop putting your smog-producing fumes into our sky. We’ve looked into the situation and find there exists equipment that makes it possible to precipitate that fume. But you don’t have that equipment.” The companies responded, “If we put in that fume-precipitation equipment, it will cost us so much more to produce here in L.A. than it does companies producing in places that don’t have such controls that we won’t be able to compete in our industry. We’ll be forced out of business. So we’re either going to have to cut out this nonsense about fume precipitation or move out of your city.” The municipal government said, “For Heaven’s sake, don’t leave. Your tax base is essential to our political survival. We’re politicians, we’ll fix it up in some other way.”
Soon thereafter the L.A. city government made the following pronouncement: “People, the smog is your fault. It’s your backyard incinerators that are producing this smog.” The people said, “Sure enough, we are incinerating in Los Angeles. We are in the wrong. We must stop incinerating.” So a law was passed saying that nobody could incinerate within the city limits. The people did stop incinerating, and the smog abated–but only in minor degree. The real offender was the industrial fumes. Along came World War II, and the issue was buried under more immediately pressing matters.
When World War II was over, great numbers of additional citizens moved into California. Suddenly the smog problem was back, and the whole act of pre-World War II was repeated. The people complained to the municipal government, and the omnichanged government personnel had entirely forgotten about what had happened twenty years earlier. They went after the big corporations, which threatened to leave town, and the city once again pleaded, “Don’t leave town. We need you here.”
Once more the city blamed the people: “It’s the fumes from your automobiles that are producing the smog. We have taken samples, with scientific instruments, of the below-the-smog air, which samples when analyzed proved the obnoxious fumes to be those of your automobiles.” With their greatest election-fund support coming from the oil men, and with the most powerful regulation lobbying being carried on also by the oil men, the politicians of America took up the cry, “It’s the automobiles.” The people said, “Why, sure enough. We’ll have to do something about it. We’ll pass laws to limit the level of fumes coming out of each car and require the manufacturers to produce and install special smog-control equipment in each car.” The automobile companies loved that. It meant more accessories to be manufactured and sold and an obvious way to rationalize increasing the price of their cars.
Christmas and New Year’s Days are celebrated everywhere in America, but Los Angeles, being a relatively new and gigantic social body, is able to alter its celebration customs. The L.A. refineries and heavy industries have learned that the people of California want to take a Christmas vacation. So the holiday becomes a ten-or-more-day vacation starting the weekend before Christmas and continuing through the weekend after New Year’s Day. It pays all the refineries and other heavy industries to shut down their plants. As the holiday proceeds, the air gets clearer and clearer, until on New Year’s Day–the traditional Rose Bowl Day—you find throughout Los Angeles a dreamy-clear view of all the surrounding, often snow-capped mountains. If you went out with scientific devices to measure the fume-level from the cars, your instrument would read approximately zero. The only reason that auto fumes were previously measurable was that the industrial-fume-laden ceiling held the auto fumes down and locked them in at the level at which you and I are breathing. I have taken many New Year’s Day pictures from the hills of Los Angeles showing it to be absolutely clear. Then, on back-to-work industrial Monday, you see a vast, molasses-brown cloud rolling in from the southwest gradually to obscure the whole of Los Angeles.
There is no question about it. It is the refineries, the steel and other mills, and the public utility fumes that produce the smog. But no municipal government anywhere in America is going to let its industry go away. Therefore, cities are always going to find political ways of absolving the industries while blaming the people. Air does not stay in any one place. There is a preposterously stubborn myth about “this being my or someone else’s airspace…. This is my air.” Air keeps moving right through the geometry of our environment to continually recircle the Earth. The air belongs only to everybody on our planet.