MAFIA CAPITALISM 101

THE U.S. EMPIRE IS AN EXTORTION RACKET BACKED UP BY THE THREAT OF VIOLENCE

Hey Folks,

It’s READER APPRECIATION DAY!

Yeah, yeah, I know, so soon. Well, it seems like you guys really liked the last edition, so I thought I’d follow up.

If you didn’t know, reader appreciation day is when I take some time to respond to comments left by readers.

If you regularly post insightful comments, you might be featured in a future edition!

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WAS THE BALTIMORE BRIDGE COLLAPSE AN ACCIDENT?

In today’s edition, I will respond to a reader who goes by the name of Ohio Barbarian, who took issue with a recent piece in which I confidently assert that the Baltimore bridge collapse was a Chinese-orchestrated attack that is part of a larger military strategy targeting U.S. ports.

WHO IS OHIO BARBARIAN?

Mr. Barbarian regularly comments on my articles, and his comments are often very insightful and on-point. He describes himself as a “Father, husband, stepdad, US Navy vet, Zen pagan agnostic, historical materialist, and grumpy old man who loves good satire and cats.”

Normally we mostly agree on most things, but in this particular case he felt that I was jumping the gun by pointing the finger at the CCP without real evidence.

I knew this was coming. Blaming the Chinese for the Baltimore bridge. No waiting for any kind of investigation, no application of Occam's Razor, just the instantaneous conclusion-jumping of an idealist; in this case straight to the same conclusion that has been screamed by one branch of the Republican Party, and of our MIC, for many years.

You need to study Chinese history, bud. It's a long one, and takes some real effort, but there are easily recognizable patterns which go back 4000 years. China expands to about the borders it has now, but any attempts to expand further are always resisted by the central government out of fear that such expansion will create dynamic new leaders who are a potential threat to its own stability.

The Chinese are increasing their influence by trade, and by building things for those with whom they wish to trade, not by destroying their infrastructure. Their current leadership is aware of the dangers of turning inward, so they are focused outwards, but always to increase stability at home, and always cautiously.

I'd be more worried about our own government trying to recreate the authoritarian Chinese censorship and social control system here than the Chinese themselves if I were you.

As for all of you going on about the CCP and Communist China, China hasn't been Communist for nearly 50 years now. They're a mix of state and private capitalism, with lots of state welfare programs and investment in infrastructure. You don't have to like it, but if you don't realize this, you don't know what you're talking about when it comes to China.

To which I replied:

I'll admit that I'm not an expert in Chinese history. Far from it. Could you point me towards any resources that you think are particularly valuable for understanding the present situation?

I have read Mao, though, which I think is more relevant than ancient history. I've also read Sun Tzu's The Art of War.

Even if I'm wrong about the Baltimore bridge collapse, my argument that the CCP is now the dominant military power on the planet seems beyond dispute. Do you agree or disagree with that statement?

I suppose the question of "Who Rules the World?" is a complicated question in a globalized world where all countries are enmeshed in a complex web of interdependent relations. I don't think that multipolarity is just a propaganda construct. I think it's an accurate term.

Nevertheless, some players are surely more powerful than others, and the CCP is the most powerful state actor on the world stage today. Next is Russia, probably followed by Turkey. Next would be India, Brazil, NATO, Mexico, and whoever got Gadhafi's gold.

(Am I missing anyone? I don't include Japan and Korea on this list because although they are economically powerful, their power is dwarfed by that of their neighbours.)

Personally, I believe that states are simply extortion rackets. That's all they are. And what would a Mafia loanshark be without debt collectors willing to use violence? Why would anyone pay their debts? The reality is that statecraft is institutionalized violence. That's why Mao said that "political power grows out of the barrel of a gun".

Ultimately, the U.S. Empire is an extortion racket backed up by the threat of violence. If they don't have military supremacy, their days are done.

Quoting David Graeber:

“China’s massive purchase of T-bonds since the 1990s seems to be part of a tacit agreement whereby China floods the United States with vast quantities of underpriced consumer goods, on a tab they’re aware the United States will never repay... [This] probably draws on a very ancient Chinese political tradition of flooding dangerously militaristic foreigners with wealth as a way of creating dependency."

As for China not being "real communists", you could also argue that the U.S. isn't "real capitalism. Pure ideologies exist only on paper. Reality is messy. But it is indisputable that the ideology of the CCP draws heavily on Marxism.

Quoting Graeber again:

"I suspect the simplest explanation of why China is willing to accept existing arrangements is just that its leadership were trained as Marxists, that is, as historical materialists who prioritize the realities of material infrastructure over superstructure. For them, the niceties of financial instruments are clearly superstructure. That is, they observe that, whatever else might be happening, they are acquiring more and more highways, high-speed train systems, and high-tech factories, and the United States is acquiring less and less of them, or even losing the ones they already have. It’s hard to deny that the Chinese may be onto something."

THE U.S. DOLLAR WAS BACKED UP BY U.S. MILITARY SUPREMACY.

In the truth movement, the dominant narrative is that it is “the globalists” who control the world. This explanation leaves a lot to be desired, if you ask me. Which globalists?

The Rothschilds? George Soros? Warren Buffett? Bill Gates?

Maybe, but I think it’s worth noting that Soros and Buffett are both 94 years old. As for Jacob Rothschild, he dead.

Furthermore, Charles III apparently has cancer and none of the Royals seem like they’ve got two braincells to rub together. They’re clearly not ACTUALLY running the world. Maybe a policy of inbreeding isn’t the best long-term strategy.

Side note - here’s a fun fact from Paul Cudenec’s excellent 2022 book Enemies of the People:

For many generations [the Rothschilds] followed a policy of deliberate in-breeding, marrying not just within their own faith but within their own immediate kinship group.

Of 21 marriages involving descendants of Mayer Amschel Rothschild between 1824 and 1877, no fewer than fifteen were between his direct descendants.

This meant, for instance, that when Natty Rothschild married Emma Rothschild, he was marrying the daughter of both his father’s sister and his mother’s brother.

That leaves Bill Gates. My theory about him is that he’s a traitor to America and that he’s working with the CCP.

I think he decided to get revenge on the U.S. government for the whole anti-trust thing.

What Army do they rule it with?

Really, the question shouldn’t be “Who rules the World?” It should be “What Army do they rule it with?”

Seen in this way, my position that the CCP’s has attained global supremacy seems inescapable. Why would they do everything that you would need to do to take over the world and then not do it?

Seems like a lot of trouble to go to. I think people are in denial.

Anyway, if we zoom out a bit, I think we would end up agreeing with David Graeber:

If one looks at the matter in historical perspective, one finds that for centuries the world trade currency has always been the money of the dominant military power, and that such military powers always have more wealth flowing into them from abroad than they send out again.

“FINANCIAL SERVICES” IS CODE FOR FRAUD AND EXTORTION

In The Democracy Project, Graeber explains:

The conventional story is that we have moved from a manufacturing-based economy to one whose center of gravity is the provision of financial services. As I’ve already observed, most of these are hardly “services.”

Former Fed chairman Paul Volcker put the reality of the matter succinctly when he noted that the only “financial innovation” that actually benefited the public in the last twenty-five years was the ATM machine.

We are talking little more than an elaborate system of extraction, ultimately backed up by the power of courts, prisons, and police and the government’s willingness to grant to corporations the power to create money.

But if these “services” are not really “services” at all, but government-sponsored credit arrangements enforced by the power of courts and police—then why would anyone not under the jurisdiction of U.S. law agree to go along with it?

The answer is that in many ways, they are under the jurisdiction of U.S. law. This is where we enter into territory that is, effectively, taboo for public discussion. The easiest way to illustrate might be to make note of the following facts:

    • The United States spends more on its military than all other countries on earth combined. It maintains at least two and a half million troops in 737 overseas military bases, from Paraguay to Tajikistan, and, unlike any other military power in history, retains the power to direct deadly force anywhere on earth.

    • The U.S. dollar is the currency of global trade, and since the 1970s has replaced gold as the reserve currency of the global banking system.

    • Also since the 1970s, the United States has come to run an ever-increasing trade deficit whereby the value of products flowing into America from abroad far outweighs the value of those America sends out again.

The current world financial architecture, in which U.S. Treasury bonds serve as the principal reserve currency, did not somehow emerge spontaneously from the workings of the market but was designed during negotiations between the Allied powers at the Bretton Woods conference of 1944.

Like the “Bretton Woods institutions” (the IMF, World Bank) that were created at that same conference to back up the system, these were political decisions, established by military powers, which created the institutional framework in which what we call the “global market” has taken shape.

HOW DOES THE GLOBAL FINANCIAL SYSTEM ACTUALLY WORK?

The system is endlessly complicated. It has also changed over time. For most of the Cold War, for instance, the effect (aside from getting U.S. allies to largely underwrite the Pentagon) was to keep cheap raw materials flowing into the United States to maintain America’s manufacturing base.

[T]hat’s how empires have tended to work for the last five hundred years or so: they start as industrial powers, but gradually shift to “financial” powers, with the economic vitality in the banking sector.

What this means in practice is that the empires come to be based more and more on sheer extortion—that is, unless one really wishes to believe (as so many mainstream economists seem to want us to) that the nations of the world are sending the United States their wealth, as they did to Great Britain in the 1890s, because they are dazzled by its ingenious financial instruments. Really, the United States manages to keep cheap consumer goods flowing into the country, despite the decline of its export sector, by dint of what economists like to call “seigniorage”—which is economic jargon for “the economic advantage that accrues from being the one who gets to decide what money is.

There is a reason, I think, why most economists like to ensure such matters are shrouded in jargon that most people don’t understand. The real workings of the system are almost the exact opposite of the way they are normally presented to the public. Most public discourse on the deficit treats money as if it were some kind of preexisting, finite substance: like, say, petroleum. It’s assumed there’s only so much of it, and that government must acquire it either through taxes or by borrowing it from someone else. In reality the government—through the medium of the Federal Reserve—creates money by borrowing it. Far from being a drag on the U.S. economy, the U.S. deficit—which largely consists of U.S. war debt—is actually what drives the system.

The American dollar is essentially circulating government debt. Or to be even more specific, war debt. This again has always been true of central banking systems at least back to the foundation of the Bank of England in 1694. The original U.S. national debt was the Revolutionary War debt, and there were great debates at first over whether to monetize it, that is, to eliminate the debt by increasing the money supply.

The Bretton Woods decision was, essentially, to internationalize this system: to make U.S. Treasury bonds (again, basically U.S. war debt) the basis of the international financial system.

THE U.S. EMPIRE IS VERY LITERALLY A PROTECTION RACKET

During the Cold War, U.S. military protectorates like West Germany would buy up enormous numbers of such T-bonds and hold them at a loss so as to effectively fund the U.S. bases that sat on German soil (the economist Michael Hudson notes that, for instance, in the late 1960s, the United States actually threatened to pull its forces out of West Germany if its central bank tried to cash in its Treasury bonds for gold); similar arrangements seem to exist with Japan, South Korea, and the Gulf States today.

In such cases we are talking about something very much like an imperial tribute system—it’s just that, since the United States prefers not to be referred to as an “empire,” its tribute arrangements are dressed up as “debt.”

THE WEALTH OF THE U.S. EMPIRE IS BASED ON EXTORTION, WHICH IS BASED IN MILITARY SUPREMACY IT NO LONGER HAS

I should emphasize it’s not as if the United States no longer has a manufacturing base: it remains preeminent in agricultural machinery, medical and information technology, and above all, the production of high-tech weapons. What I am pointing out, rather, is that this manufacturing sector is no longer generating much in the way of profits; rather, the wealth and power of the 1 percent has come to rely increasingly on a financial system that is ultimately dependent on U.S. military might abroad, just as at home it’s ultimately dependent on the power of the courts (and hence, by extension, of repossession agencies, sheriffs, and the police).

Within Occupy, we have begun to refer to it simply as “mafia capitalism”: with its emphasis on casino gambling (in which the games are fixed), loan-sharking, extortion, and systematic corruption of the political class.

THE MARKETS ARE RIGGED

Graeber makes an important point here. The markets really are rigged. This is too big of a topic to get into here, but it’s important. I refer you to the excellent work of James Corbett on this subject if you’d like to learn more.

You could also watch this documentary about Haim Bodek, the guy that blew the whistle on how certain players get preferential treatment in high-frequency trading”.

Anyway, Graeber concludes with a simple truism.

Is this system viable over the long term? Surely not. No empire lasts forever.

So, thank you for commenting, Mr. Barbarian, and maybe you’re right that I shouldn’t jump the gun by assuming that the Baltimore bridge collapse was Chinese-orchestrated without proof.

In any way, I’m sticking with my main point: China now has global military supremacy, which means that whoever controls the CCP controls the global financial system, which implies the right to decide what money is. If Chinese people control the CCP, the Chinese are the world’s new master race. This doesn’t mean that I think the rulers of China will rule in the interests of the Chinese people. If everything goes according to plan, the transition from the Anglo-American Empire to the Chinese Empire will be seamless. I’ve got my doubts about that, though. I think that there’s a good chance that the global supply chain will not survive the end of U.S. Dollar hegemony, and that the world will break into more regional blocs. I also think that it’s entirely possible that capitalism itself is replaced by a new form of feudalism. Time will tell.

Does the CCP have deals with European globalists? Yes, definitely. Do European bankers control the CCP? I doubt it. I’m a big believer in the parsimony principle, and the most parsimonious theory is that the Chinese Communist Party is controlled by Chinese people.

Are those people communists? That’s debatable. They deliberately understand Marx’s economics though.

Seriously, I think that we can now stop wondering about whether Marx was right about capitalism’s inevitable collapse. History has proven him right - it happened in 2008.

Since then, the global financial system has been on life support, kept afloat by the Chinese Communist Party.

So I guess we can look forward to the state withering away now that the Dictatorship of the Proletariat has served its purpose. It’s not like the CCP would hang on to power now that they rule the world, would they?

Nah, of course not. Get ready for a golden era of everything for everyone forever guys! The worker’s paradise is nigh!

HAIL TO THE RED DAWN!!!