In the 18th century, the great powers of England, France, Holland, Portugal, and Spain ruled over much of the world, competing over who could seize the most land and assets, something that very much included people. The slaughter had, in fact, begun earlier; between 1492 and 1600, violence combined with the diseases Europeans brought with them led to the population of the Americas being reduced from 50 to 8 million, and between 1525 and 1867, about 12 million slaves, many of whom died during the journey, were transported across the Atlantic.
The so-called feudal system meant that society was structured like a pyramid where the ruler controlled a large piece of land and lent out parts of the area to vassals whose soldiers assisted the king in times of unrest or war, and in return, they received income from the serfs who farmed the land and paid taxes to the vassal. This system was not unique to the medieval period; it had existed earlier and is still in use today, albeit in a modified form.
The ones who supported the system were the serfs who produced the food that sustained everyone. They were in a dependent relationship with the landowners and had to pay rent to farm the land, either through labor, products, or money. The law forced them to stay on the estates for life unless they received permission to move. Various loyalty conflicts and intrigues, combined with rebellions, new revolutionary ideas, and the advent of industrialism, eventually led to this type of feudalism beginning to falter.
During the so-called Enlightenment in the 18th century, new ideas flourished. Science thrived, and philosophers like Voltaire, Rousseau, and Montesquieu had a strong influence. For example, Voltaire questioned the power of the nobility and clergy, and together with the others, he represented much of the spirit of the time. The emergence of revolutionary movements, which became increasingly common towards the end of the 18th and the beginning of the 19th century, was connected to the rise of this type of intellectuals on the continent.
Ideology can be defined as integrated statements, theories, and goals that form a socio-political program. It was often men from this new class of intellectuals who formulated the ideas that later developed into ideologies. United by a reluctance towards the prevailing systems and the early downsides of industrialism, it was not uncommon for people from different social and ethnic groups to join forces with these new types of leaders, sometimes with imprisonment or death as a consequence.
Since the creation of a privately-owned central bank, the British had fought four wars in Europe. Instead of creating their own debt-free money, they had borrowed gigantic sums from the bank, and by the mid-18th century, the British government’s debt had reached an unimaginable 140 million pounds. At the same time, the American colonies had begun printing their own money in proportion to the needs of trade and industry so that products could move from producers to consumers as easily as possible.
Through the creation of their own paper money, its purchasing power was also controlled, and no interest was paid to anyone. The famous scientist, diplomat, and politician Benjamin Franklin wrote:
’There was abundance in the colonies and peace at every border. It was difficult, even impossible, to find a happier and more prosperous nation on the face of the earth. Security reigned in every home, the general public had high morals, and education was widespread.’
This could not be tolerated; a system that gave people freedom and independence from the bankers while the British state needed to extract taxes from the colonies was a mischief that had to be stopped. The British introduced a law that forbade the colonies from printing their own money and forced them to pay taxes in gold and silver. Franklin later wrote that this was the original and real cause of the American Revolution.
Unemployment soared, poverty increased, and misery spread, but the Americans resisted and managed through boycotts of British goods to have all taxes and duties abolished except on tea, resulting in the so-called ’Boston Tea Party’ in 1773 when 60 colonists sneaked aboard three cargo ships and dumped 342 chests of tea into the water.
Edmund Burke, often called the father of Conservatism, belonged to the Whig party in England and was critical of the policies King George III pursued in both America and India, which may seem surprising since Burke’s ideology is characterized by the idea that society needs hierarchies and classes and that individuals are irrational and can make mistakes and therefore should trust the ruling class.
According to Burke, there are mainly two driving forces within humans: On the one hand, the will to compete, which in its worst forms leads to envy, destruction, and violence, and on the other hand, the ability to adapt, change, and a capacity for respect that balances the downsides of the first.
Burke saw society as an organism where each organ has its special function for the whole, and that classes and estates are naturally evolved, and that there exists a natural law that is universal, objective, ethical, and primarily visible through culture, tradition, and customs, and that when changing a society, one must consider a country’s past and its traditions. Changes should be made cautiously, he believed.
However, several of Burke’s theories have proven incorrect, such as how politics should be organized. He argued, among other things, that an aristocratic system was necessary for society to be stable and that redistribution in society always leads to chaos. In other words, Burke believed that properties can really only be secured if they are concentrated in the hands of an elite who manage them.
The British continued to press on, and finally, a revolution broke out. In 1776, the country declared its independence, Washington was elected president, and they drafted their own constitution. However, after all the conflicts with the British, the country was in dire need of capital, and in 1781 they allowed Robert Morris, the country’s financial advisor, along with politicians like Alexander Hamilton, to open a privately-owned central bank. Researchers such as Professor Sydney White and Patrick S.J Carmack suggest that these gentlemen acted as agents for the British.
The Bank of North America was born, but its license to operate required private funds of 400,000 dollars to be invested. Morris couldn’t raise the amount, so instead, he used gold the country had borrowed from France as collateral. He then loaned money to himself and his friends to invest in the bank’s shares, and so the circus began. The value of the American currency continued to fall, and the bank’s license was not renewed when it expired in 1785.
One of those who put a stop to the greedy bankers then was the politician William Findley, who said: ’Once established, the moneyed aristocracy will corrupt the legislature so that its laws are made in their favor and the legislators will only benefit the rich.’ This is something we have seen many examples of since then.
Americans were well acquainted with various types of governance, both feudal and monarchies appointed by God. For more self-regulating societies, there were the old examples of ’democracy’ in Athens and the Republican period in Rome. The antagonism between the two ideologies was evident in the constitution.
Hamilton’s fight for a British monarchical model contrasted with the constitution aimed at strengthening the national government but with a wise distribution of power. The constitution gave the Federalists a stronger government, and the Anti-Federalists were appeased by the fact that the power distribution had been done well.
Unfortunately, the constitution had left a loophole that Jefferson and his allies had overlooked. The constitution had failed to sufficiently clearly define the monetary power in the new nation. Politically and religiously, they had regulated the possibility of authoritarian rule of the country but not monetarily. This would have major consequences.
With the assistance of bankers in Europe, Morris and Hamilton greased enough members of Congress to push through a new privately-owned central bank, ’The First Bank of the United States,’ according to the English model. The question was now whether it would be the bank or the government that would issue the notes. Would the profit from issuing currency benefit the whole nation or the private bank?
The bank directors were counting on the legislation. They knew that all that was needed to give the paper slips value was for the government to accept them as payment for taxes. Of the bank’s 10 million, only a tenth was paid in gold, the rest was accepted in the form of government bonds that Hamilton had turned from pennies on the dollar to full value. The money for the private bank effectively came from the American people.
Thomas Jefferson, one of the fathers of the American Constitution and future president, was at that time the Secretary of State. In a letter to his fellow politician John Taylor, he wrote:
’If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.’
After the financial collapse in the fall of 2008, many could observe that Jefferson had been right.
Hamilton persuaded Washington to approve the bank in April 1791, and a 20-year contract was established. In the first 5 years, the government borrowed 8.2 million dollars, and prices in the country rose by 72%. When the bank’s charter expired 20 years later in April 1811, Congress, largely thanks to Jefferson’s efforts, voted against renewal, and the bank was liquidated.
It was then revealed that three-quarters of the bank was actually owned by English and Dutch interests.
Also read part 1, How the oligarchs fool the masses – Part 2
