Cantillon and the Class War | Evelyn Grant
Whilst watching Tho Bishop’s recent talk at Mises U “The Case for Economic Populism”, which I would highly recommend to those who have not seen it, there was a fantastic quote used by Tho from William M Gouge a prominent figure in hard money advocacy during the early 1800’s. Who stated that the system of banking is the “…foundation of artificial inequality of wealth, and thereby of artificial inequality of power.”. At a time when lucrative land grabs were being passed out to friends of the state at discounted rate under the proviso of railway infrastructure projects this dynamic was more obvious and easier to wrap one’s head round. One could much more simply identify the “them” to our “us”. However in the era of “Woke Capital” and fully unchained fractional reserve banking, the dynamic is much more confusing and given the injection of power into the equation one might suggest that it is deliberately so.
First we must identify and begin to understand the very economic phenomena that allows for this inequality to exist, for those unaware it goes by the Cantillon effect. Richard Cantillon was born into Irish landed gentry around the 1680’s and soon became involved, much like many other affluent Catholics at the time, in European banking. During this Cantillon witnessed the implementation of paper money within the French economy to fund debts for projects within the colonies and more specifically the events that lead to the Mississippi bubble. As the crash of 1720 reared its head and laid waste to a number of Cantillon’s associates, the man himself had plenty reason to be happy. Not only had he sold off many of the inflated assets that he had acquired at the time he furthermore loaned his money out so that it may be repaid to him during a period of deflation. It is speculated that this series of events may have led to Cantillon becoming the richest man in the world, and subsequently lead him to having many enemies that may or may have not led to his demise, see Rothbard’s “Economic Thought before Adam Smith”, for more on this.
So how did he do it? How did one man manage to outwit his peers who we ought to expect to be highly educated? The best part is that before his death in 1734 he told us, Cantillon wrote a treatise “Essai sur la Nature du Commerce en Général” (Essay on the Nature of Trade in General). His work was not only grounded within the work of the catholic scholastics before him, he put forward many proto-Austrian points in his work. The most important of which, takes his namesake, the Cantillon effect, or as it is more technically understood, the non-neutrality of money. The general idea of this non-neutrality is that when new money enters an existing economy those who receive the new money first can garner more utility from its use than those who receive the money second, so on and so forth until all hands within the economy have come across this new money. This means that the first users of this new money can purchase goods at their current price, ceteris paribus, this will cause the price of any good purchased with this new money to increase at the same time those still buying said goods must purchase at an inflated price, with a non-inflated supply of money.
This effect carries on, sometimes right through an economy until those who have no access to this new money are in theory left materially worse off than they would have otherwise been. This is the non-neutral aspect of money in regards to economic theory, however this isn’t where the lack of neutrality ends. It should be obvious now that there is the clear issue of who gets this new money and possibly even under what conditions are they allowed access to it? Given the modern state’s propensity to monopolise the money supply and engage in financial malpractice normally excused under the auspices of “central banking”, it is evident that money is politically non-neutral and that through it’s distribution or lack of distribution the state and its banking system creates an “…artificial inequality of power.”
“..the state is an organ of class rule, an organ for the oppression of one class by another: it is the creation of ‘order’, which legalises and perpetuates this oppression by moderating the conflict…” – Lenin: State and Revolution.
Why wouldn’t it? As identified by a number of thinkers across the political spectrum the state is an entity which seeks to both agitate and moderate, it lifts those whose support it see’s as convenient up, and leaves those it see’s as troublesome by the wayside. Better yet it allows some of its populace to make simple riches with “free” money whilst they slowly but surely plunder those beneath them. Ultimately subjugating sections of society to financial tyranny. When laid out so simply it becomes somewhat marvelling that such a dynamic can be so sorely misunderstood. Neither the capitalists in question have clean hands nor do the agitated underclass truly get a look into who and what facilitates this relationship, this only becomes more complex as we throw ideology into the situation, or begin to inject the manufactured social movements indicative of a dying modern state, yet it can still be unravelled.
The most modern and up to date arrangement for this process is referred to as “Woke Capital”, which on the face of it seems true but is an entirely misleading statement. Neither are the financiers genuine in their beliefs nor are they holding anything we may consider as capital proper. No saving, no long term planning and most importantly no deferred gratification is involved in the majority of financial markets, each and every one is a wash with government backed fiat substitutes for what would have at one point been redeemable in precious metals. So they may be better referred to as “Fiat Machiavellians”, not only are their money and beliefs false but their position is still way below what one might suggest as sovereign. Investment banks the world over have allowed for their marketing and HR departments to become clogged with woke-oids, with almost no progressive cause going unspoken of. Some firms even go to the lengths of being “…ahead of the curve…” in terms of segmenting resources to care for any of the next progressive fads.
“Goldman presents itself as being ahead of the curve on lesbian, gay, bisexual and transgender issues. It has offered health and relocation benefits to same-sex couples since 2000. It expanded its employee medical plan to cover gender reassignment surgery and hormone therapy in 2007… This year, Goldman’s former chief executive, Lloyd Blankfein, received the Ally Award from the Lesbian, Gay, Bisexual & Transgender Community Center, a 35-year-old institution that supports the L.G.B.T. community in New York City.” – New York Times.
And of course the press pays lip service to this, outlets clamber at any opportunity to infantilise both the subject and the reader so that no one is left with an impression that isn’t, “Woe unto the gays for they are so strong and have tried so hard, yet we simpletons will still do not give them enough”. All the while the Goldman, Morgan, Barclays et al. line their pockets throwing the occasional tidbit at whatever cause needs supporting that month. In the process they create a smokescreen, instead of decrying the lack of quality work or the rejection of responsibility and meritocracy one instead becomes agitated by the rainbow clad martyrs. Which was of course the idea all along, no bank executive or trading floor manager gives two hoots about trans-kids, AIDS or racial justice. As long as they say what progressive zealots want there need be no further consideration. All the while these zealots presume that they are winning, they believe that their Cultural Marxism has somehow subjugated the so-called “capitalist class” into submission and that any moment now the trading floors will down tools and strike with the masses. If it was a movie you would have to suspend your belief for the clumsiness of the twist, as if these zealots somehow couldn’t see who they are being supported by and what fortunes these supporters are making.
It is for this reason that I invoked the term “Fiat Machiavellians”, the financial class makes use of the progressives like cannon fodder. Realigning aggravated populists towards social progressivism instead of the very mechanism that keeps it afloat. I’m afraid this isn’t even the end of the deception, whilst the socialists help their supposedly sworn foe run rings around the common man, the common man even if he is clever enough to see through the facade of progressive pleasantries, he is still tricked into believing that the source of his strife is indeed the bankers and investors, but the bankers and investors alone. The state apparatus designed to keep overleveraged and greedy firms alive never comes into consideration. The layered levels of deception create a number of limited hangouts behind which each offending member can attempt to hide behind, ridding the situation of accountability and non-violent solutions. At the same time a subset of new machiavellian actors, the outliers within social pressure groups who think for themselves, before the cause, can be brought into the fold if they can identify the pattern to it all. The cynical support of ascendant cultural causes by financiers is by no means a new phenomenon, if anything it is one of the key actions that cemented the importance of understanding the progressive era to those who consider themselves of The Right.
One might suggest that there is even a Cantillon-esque effect with the implementation of increasingly progressive social norms; those who introduce said norms may never truly see the ramifications of what sort of society develops under such norms, yet they still accrue the social capital from said implementation. They become supposed visionaries and forward thinkers without ever having to live with the consequences of their social engineering. Much like the original progressives who never had to raise a family in a nation burdened by welfare statism.
“If it wasn’t industrialism or mass movements of the working class that brought the welfare state to America, what was it? Where are we to look for the causal forces? In the first place, we must realize that the two most powerful motivations in human history have always been ideology (including religious doctrine), and economic interest, and that a joining of these two motivations can be downright irresistible. It was these two forces that joined powerfully together to bring about the welfare state.” – Rothbard: The Progressive Era.
The pattern is plain and has been repeated time and time again, as long as inane social causes can dominate conversation, whilst those trod upon remain in the dark. There is no reason I can see that it won’t continue for the foreseeable. With the ongoing implementation of ever more totalising, universalising and nebulous causes: Covid, Global inequality and Environmentalism. We should only expect the financial operators of the world to centralise and consolidate during a period where their cannon fodder becomes more bombastic and distracting. Financial institutes will become de facto state arms whilst remaining rhetorically and de jure all the more entrenched in “late stage capitalism”. Once again the synthesis of state and commerce brings about abject misery for all those not ideologically committed to the zealotry of the week, or cogs within the managerialist nightmare.
As we move past the fad of LGBTQ+ nonsense expect to be swamped in one word, and one word only for about the next decade, that being “sustainability”. As organisations like BlackRock, whose “risk averse” strategy could only exist in a situation awash with non-neutral money, move towards $10 trillion of managed assets. That’s roughly half of US GDP in 2019. It’ll be no surprise to me when we have not heard the last of Extinction Rebellion and that the privileged position of chief sacrificial lamb grants them immunity from acts the common man would never see the light of day again for. The improperly framed them/us dynamic will still rule common discourse meanwhile the state arbitrates merrily as if it is somehow a neutral actor in all of this, under the implicit threat that it will swap one set of stooges for another at the drop of a hat. Not only will the progressive zealots continue to parrot the corrupted words of the financiers so too will the financiers parrot the words of the monopoly they serve.
“At BlackRock, we define sustainable investing as the combination of traditional investment approaches with ESG insights to mitigate risk and enhance long-term return. With this in mind, many of our clients turn to Blackrock for sustainable investment solutions. We believe sustainability-related issues – ranging from board composition to human capital management to climate risks and opportunities – have real financial impacts. We are passionate about providing our clients with a clear picture of the relationship between sustainability issues, risk and long-term financial performance. With this picture in focus, we deliver investment solutions that empower our clients to better meet their financial objectives.” – BlackRock mission statement
“Rather than coming across as a plain fraud and parasite, in pursuing an easy-credit policy you can even pretend that you are engaged in the selfless task of ‘investing in the future’ (rather than spending on present frivolities) and ‘healing’ economic crises (rather than causing them). What a world we live in!” – Hoppe: The Great Fiction.