Why Banking, Corporate America And The Government Need Each Other
November 14th, 2013
by Gold Silver Worlds
It should not come as a surprise that banking, industry and government are closely connected. The recent draconian decisions of the US Fed or the US foreign policy towards the Middle East are obvious examples. In order to understand who is behind most of those decisions and who the beneficiaries are, one should go back in history to the end of the 19th century.
Murray N. Rothbard revealed in his book “Wall Street, Banks and American Foreign Policy” in great detail that the financial and political stakeholders are one and the same. Rothbard, being an author and great thinker, highlights the role of political capitalism and crony capitalism in the US by tracing the historical references and connections in US financial and political decision making. This was also the context in which the US Fed was created.
Claudio Grass, managing director of Global Gold Switzerland, created a short and comprehensive overview of Rothbard’s book as part of his latest Global Gold Outlook Report. In this article, we provide some highlights. We strongly recommend to read the document at the bottom of this article. For readers with more time, Rothbard’s book is a must-read; it is available as an electronic download (hyperlink at the bottom of this article).
Join us on this journey behind the scenes where the banking elite, the corporate elite and politicians in the United Stated laid the foundations of their empire.
“Bankers are inherently inclined toward statism”
Rothbard was a traditionally strong advocate of a laissez-faire economy, which calls for free and voluntary exchange, and where the role of the individual and his choices are central to its existence. In his book, Rothbard illustrates the convergence of the US economy from a free market of free and voluntary exchanges, particularly up to the 19th Century, to state capitalism. According to Rothbard in his article Capitalism versus Statism (published in 1972), statism is “one or more groups making use of the coercive apparatus of the government – the state – to accumulate capital for themselves by expropriating production of others by force and violence”.
We find this gradual convergence occurring over two phases in the 20th Century, with the turning point being WWI as the US advocated a militarist approach to the war (as opposed to the previous ‘peaceful’ and non-interventionist approach) – up to the final stage where this becomes institutionalized with the creation of the Federal Reserve. Rothbard traces this convergence back to the strong influence of Wall Street players and family corporates, particularly the Morgan family.