Goebbels Rides Again

In 1947, the transnational public-private partnership scheme known as Bretton Woods, which had been negotiated as Allied victory approached in World War II, was beginning to assemble a new Western empire from the mangled body parts of several old ones. There was dissention among the surgeons about what features to include. While official delegates in Geneva failed to sew on a charter for world trade, a breakaway gathering at the other end of the lake was more consequential. Its attendees came to be known as ‘the Mont Pelerin Society’.

You can imagine some optimism in Geneva. The hot war was apparently over and the question of how to run a modern capitalist economy seemed to have been resolved. FDR’s New Deal had soothed some of the deprivation and revolutionary fervour left by collapsing markets and failing banks before the war. And central planning had subsequently galvanised the American war effort. It must have been hard to see a compelling argument for governments to give capitalism free rein again. But that would have been to underestimate its advocates.

Totalitarianism of both the communist and fascist kinds had harmed many people, and frightened many more, and some were refugees from conflict living in the West. For European economists like Joseph Schumpeter, Ludwig von Mises and Friedrich Hayek (who would later turn up in Margaret Thatcher’s handbag), market economies were indispensable constraints on the agglomeration of state powers. And these men had found welcome in American universities, especially the University of Chicago, home to a cadre of native-born libertarians like Milton Friedman.

The argument of the free marketeers was that central planning invites abuse of power and is doomed to fail in any case from ignorance of factors on the ground; a more distributed, self-correcting method of decision-making is therefore preferable; and markets are the answer. Buyers effectively ‘vote’ with their money and sellers respond accordingly. Voila!

We ought to have learned by then to beware the rabbits which come out of hats. Many who had lived through a purer expression of the market economy in the preceding epoch didn’t remember a happy land of carefree people[1]. And some had watched inescapable adversity feed the rise of the very repugnant authoritarian regimes the free marketeers sought to preclude.

Nevertheless, there is something self-evidently factual about the Austrian School’s critique of centralised power. For anyone who has ever found life, liberty or happiness in abeyance thanks to bureaucracy it simply rings true. But the same could be said of Marx’s critique of capitalism. Any society where a small group of people controls productive capacity while the rest survive by working for them ought to be laughed at when it claims to be ‘free’. But some regimes have been much cleverer than others at hiding their terms and conditions in the fine print.

The Price of Liberty

It should be obvious that markets can answer human need only when the needy have money to access them. This is why no less a market fundamentalist than Milton Friedman expressed support for a universal basic income; but it’s essentially the same reason Southern plantation owners fed and housed their slaves: a dead slave was no more useful than a freed one. Moreover, when the seller is a corporation, he isn’t well governed by the whims of shoppers, having long since learned the art of selling us more than is good for us of what he likes to sell, often in place of what we really need.

Two centuries of polemicists, from an Irish judge to an American abolitionist[2], had set the price on liberty as “eternal vigilance”. For those bent on dominance and control, this was apparently the faculty to circumvent. Authoritarians liked to simply shoot it in the back of the head. But an order whose legitimacy depended on the impression of democratic consent needed subtler techniques of persuasion.

While it was Hayek who organised the meeting at Mont Pelerin, it was British battery chicken magnate Antony Fisher who used the opportunity to rouse the ruling class to action. In the institutions of Western governance, where inflamed oligarchic displeasure was soon keenly felt, the freedoms at issue belonged to neither buyers nor sellers, whether rich or poor, but to financiers. And the trick was to make their peculiar freedoms appear universally important.

The plutocrats who chipped in to fund Mont Pelerin programs were ideological heirs to the robber barons of the Gilded Age. For them, ‘free’ meant a free-for-all; a kind of liberty which accepts neither restraint nor obligation. And this time the resource they sought to gather was neither material, like oil or coffee, nor psychological, like greed and envy; rather it was social – the yield from centuries of expanding productivity which centuries of popular struggle had obtained.

This was the era of union power and public infrastructure programs. A substantial share of industrial surplus was being returned as time, money, utilities and services to the people who had produced it; and this induced much slavering among rent-seekers. The fastest route to added riches, without any of the tiresome burdens of productive endeavour, would surely be to simply undo such proletarian favouritism. But persuading millions of its beneficiaries to relinquish it again would take more than just time and patience; it would also need craft and guile; and therein worse damage would be done.

By recruiting the agencies of research, education and communication through which the beam of science and technology was focussed, the engineers of this grand heist would effectively lead our hard-won knowledge infrastructure away from the pursuit of truth and the solving of problems to the appetites of their wealthy clients. The benchmarks for legitimacy in politics and economics would be recalibrated accordingly. As power, wealth and influence became concentrated once more, and institutions and politicians reverted to forms of private patronage, material living standards would gradually be withdrawn from a portion of the population even in rich countries, while our corrupted sense-making systems hid the extent of it and misrepresented the causes. Those populations would lose faith in their oracles; the cynicism, pessimism and frivolity forewarned by John Glubb would spread.

It would be an astonishing feat of manipulation, and a demonstration of the power of a compelling story when told often and loudly enough. It would reshape our understanding of history, even of what a human being is and what is ‘natural’. It would change our language, inflecting the meaning of many words in common usage, and introducing a raft of new or repurposed terms freighted with ideology. Almost all of it would be highly contentious, much of it blatantly dishonest, and nearly everyone, including many whose lives were harmed by its influence, would nonetheless absorb its precepts.

The Empire Strikes Back

The first obstacle to overcome for the strategists of Mont Pelerin was the fact that Bretton Woods had ushered in a period of general prosperity across the American-aligned West which was unconducive to radicalism. It was also riddled with inconsistencies, among them that women, coloured people, gays and the less able were still for the most part second class citizens, while its privileges were heavily subsidised by the rest of the world. But this wasn’t what preoccupied the Mont Pelerin Society.

When, in 1955, Antony Fisher established the Institute of Economic Affairs, its goal wasn’t to end discrimination in the West, nor to restrain plunder abroad, but rather to expand the reach of corporations and reduce legal and bureaucratic obstacles to plunder everywhere. Unsurprisingly, it wooed big players in commodities like fossil fuels and tobacco who foresaw questions looming about the damaging consequences of their enterprises. And it’s easy to see its appeal, behind the cloak of private donor anonymity, for the dynasties already enriched by centuries of colonial exploitation. But the real challenge was a new one: the kind of interests which had rewarded populations and their governments for endorsing Indigenous genocide and the North Atlantic slave trade with a share of the spoils now needed to convince them to give it up again.

In Vanessa Machado De Oliveira’s analysis[3], brute force had never been sufficient to capture the world’s resources; the colonial project had to capture minds as well, a process she calls “neurocolonization”; and before it travelled abroad it was practiced at home. Through millennia of warfare between rival Eurasian powers, bloody conflict under militarised rule had become a fact of life. A successful nation was a victorious one. A successful national was a loyal and obedient one. Peace and contentment for anyone were secondary.

So effective had this grooming been that when its drunken, disease-and-parasite-ridden emissaries had first encountered the strong, upright, clear-eyed human beings who still inhabited the ‘uncivilised’ world, it rarely occurred to them they weren’t in every way superior, a judgement perversely reinforced by the destructive power of European pathogens, weapons, and intoxicants[4]. And to this day, in the settler colonies those places became, even the most miserable and pathetic of their heirs find solace looking down on Indigenous survivors.

What remained to be done in the postwar era was to graft onto this diseased root an even more controversial understanding of ‘human nature’ which would put even the privileges enjoyed by the ‘superior’ races up for grabs. No longer would those advantages appear as victories, nor even as mere mistakes; instead, they would be reconstrued as disastrous abominations. But even as popular opinion rallied to the idea of leveling up so more people shared in the rewards, official arrangements would impose a new basis for discrimination which would distribute disadvantage more broadly. It would be a difficult message to sell, but happily for the propagandists taking Milton Friedman’s advice, useful ideas were already “lying around”.

An Inheritance

Neoclassical economics, like the robber barons, was a product of the tumultuous Nineteenth Century. It stripped human social relations down to simple questions of supply and demand. The ideal agent of economic activity was the human individual making a rational choice in a competitive market. The free marketeers sought to extend this transactional model of human behaviour into every corner of our lives. And like Thomas Jefferson, who had pondered the import of liberty in the design of the US Constitution, they wanted government confined to the protection of human life, private property and trade.

What were absent from the formula were the factors which had consumed the most candlewax for previous generations of economic theorists from Adam Smith[5] to Karl Marx[6]. The corrupting influence of gross disparities of wealth and power and the economic rents by which the already well-endowed extract value from an economy without contributing anything had been demoted from systemic risks to market functions.

Landlords, for example, were simply making property available to use for a fee. Banks, similarly, were providing access to money and charging for the ‘service’. It was no longer clear there was anything different about these activities from someone growing a vegetable or making an object to sell. But in fact, there had always been a fundamental difference. The grower and the maker produce something new which trade transfers to the ownership of the purchaser. The property owner and the bank do not. It would be more accurate to say the landlord had taken part of the physical world hostage and was now demanding a ransom for it. And the bank had done the same thing with the money supply.

The philosopher John Locke had proposed that land becomes property when labour is exerted upon it, as is the case with farming, grazing and mining; thus, the Enclosure Acts had been legitimised at home, and colonialism abroad. Whether the property in question lay at the core of empire or in one of its outposts, the origin of any chain of ownership was a sequestering of land from other people who may have lived and depended on it but had failed by Locke’s peculiar definition to establish ownership. But what did it become when the labour exerted on it wasn’t the owner’s? What if the labour came from the very people he had dispossessed, as in the English counties, or, as with Jefferson, his slaves? Pierre-Joseph Proudhon had seen through the ruse and coined the phrase “Property is theft”[7]. But once the world had been parcelled up among landgrabbers, ownership had become an a priori condition and disappeared from the concerns of the neoclassical economist.

The state’s function, via its central bank, of producing its own currency had become similarly invisible. The neoclassical model held that banking was a mere service function, making ‘savings’ available to borrowers. But under the fractional reserve system, banks were lending mostly new money they created out of thin air, by arrogating the power of the central bank, and reaping profits from the interest they charged. In effect, private property owners and private banks had been given license to set up toll gates and charge the rest of us for access to the shared foundations of our productive enterprises[8].

The business of the Mont Pelerin Society wasn’t specifically to expand markets, but rather to magnify the extraction of these and other economic rents. Markets would simply provide a smokescreen. Markets grant access to resources through purchasing power; when wealth becomes concentrated, markets naturally adapt to the preferences of the rich. And just as democratic governments can be diverted by donors and lobbyists, competitive markets can be dominated or even monopolised by big players, so fewer people capture bigger returns. But if we can be persuaded that markets are foolproof, we may relax our ‘eternal vigilance’, allowing the transfer of public property into private hands and the replacement of institutional oversight with consumer psychology. The rich may then use their disproportionate influence to create a river of unearned income, all the while professing to support our democratic ‘freedom’. And despite – or perhaps it’s more accurate to say because of – his track record in distributing a bigger share of productive surplus to the people who produced it, economists like John Maynard Keynes can be kicked out of the economics club altogether.

But how was this to be achieved? The brutal contest we had come to accept between ‘nations’ and ‘races’ was about to be scaled all the way down to the individual human being. The ordinary people who had lived cohesively for generations in neighbourhoods, guilds and congregations would be given encouragement to reimagine themselves in the likeness of their rulers, no longer joining forces to prize a share of productive surplus from them, but competing with one another to join them. And this required firstly a foothold in our knowledge systems. Aligned institutions needed to develop a ‘scientific’ account of ‘human nature’ which pitted everyone against everyone else. And once it had been installed at the fountainhead of Western thought, where the scions of the ruling class would adopt it as holy writ, a loyal following cultivated among academics, journalists and commentators would spread it far and wide.

Plutocratic ‘philanthropy’ poured into the project through an expanding gallery of purpose-built ‘think tanks’, with the goal of reorienting economics, business administration and public policy.

The Turning Point

Most historians place the high-water mark for the postwar boom in America as the 1970s. This was a time, and really the only time, when an ordinary American could become prosperous through work alone. Even a mundane job could support a single income family. A relatively unskilled worker could buy a house and car, put some kids through college, and retire in modest comfort. Similar conditions prevailed across much of the West. But thanks to decades of preparations by the friends and associates of the Mont Pelerin Society, things were about to change.

By then the American war-baby economies of Germany and Japan had grown up and entered global markets. America’s wartime surplus, which had furnished the reconstruction, had expired and the US had become a net importer. But with the value of other Western currencies pegged to it, and loans to ‘developing’ nations denominated in it, the US Dollar had become the emperor’s coin.

At this time, when asked what America stood for, many people in many places would probably have said “freedom”. But few would have recognised how much this view was the product of marketing expertise rather than the visionary politics or divine providence its proponents liked to claim.

America was where ambition and hard work found reward, so the story went, and to the rest of the world there did seem to be a lot of wealthy Americans; if it was American ‘freedom’ which made this possible, it was powerful stuff. Even on the other side of the Pacific, school history classes, political speeches, songs on the radio and sitcoms on TV, including the critical or satirical variety, rarely conveyed any uncertainty about American-led Western global dominance; and this fused with another enduring idea that the process by which Indigenous lands across half the world had been appropriated was somehow providential.

It didn’t matter whether you explicitly believed these propositions or not, they were inhaled with the air you breathed, and in large immigrant settler societies like Australia and Canada they helped to quiet the disturbing undercurrents of occupation; for the ghost at this mythological banquet was several preceding centuries of butchery, robbery and slavery. If Richard Slotkin is right[9], the victories on America’s fiercely contested frontier imbued its settler culture with a taste for bloodshed as a purifying and ennobling sacrament, a trap Walter Wink called “the myth of redemptive violence”[10]; and this trait followed the rise of the US to global pre-eminence like an Olympian curse, with increasingly worrisome geopolitical consequences.

When the gas-guzzling behemoth of US ‘foreign policy’ roared out of its parking lot in the postwar era it wasn’t for the President and it wasn’t for ‘the people’ of the Gettysburg Address; just as President Eisenhower had forewarned, it was primarily for a coalition of business interests, rivals in the big game hunt for economic rents, but comrades in arms when it came to keeping the jungle open for hunting. This empire was more like the original East India Companies than its cultivated image as a sovereign state and ‘leader of the free world’, since its considerable resources were almost wholly committed both at home and abroad to the harnessing of hope and toil to the profit machine of extractive capitalism.

We in the postwar West grew up in its neon aura, smiled at from screens and magazines, charmed and seduced in movies and on TV until eventually, like a global electronic hydra, ravenous for our devotion, it would lay siege to our attention through a billion handheld devices. The garish spectacle of its ‘democratic’ politics was, in Frank Zappa’s words, its “entertainment branch”[11], a gigantic medicine show which swept the host nation periodically at great expense to its Olympian sponsors, whose plots, intrigues and contesting claims on American greatness continually generated fresh champions, but whose closed order of mutual advantage none was able to challenge. ‘Freedom’ remained essential to ‘brand value’, but in practice it was another commodity, something which accreted to the oligarchy as others were deprived of it.

Occasionally the demos threatened this setup by taking democracy seriously. Presidents, especially popular ones, had a habit of getting shot when they encouraged this kind of thinking, including one recent incumbent, whose Vice President had precipitously stepped into his shoes, which is why Lyndon Johnson was in the Oval Office when a false flag event in the Gulf of Tonkin ushered the US into the Vietnam War.

Soon American bombs and American kids were falling on Asian soil again while the profits of American armaments manufacturers rose commensurately. The resulting expansion of public debt also had to absorb President Johnson’s conscience in the form of his Big Society programs along with America’s negative balance of payments. Before long the currency was way overvalued; convertible US gold reserves were draining; something had to give; and since it wasn’t going to be the war effort, it would have to be Bretton Woods. The West abandoned fixed exchange rates with gold backing in 1971.

This marks the beginning of the end of the golden age of American industry, but not of what some economists took to calling the “exorbitant privilege” of the American currency. When OPEC imposed an oil embargo against the countries which had supported Israel in the Yom Kippur war, President Nixon’s Treasury Secretary William Simon cut a consequential deal with the Saudis. In exchange for military protection, they would price their oil in US dollars and secretly invest their dollar surplus in US goods and services and U.S. Treasury bonds. Not only did this undermine solidarity among the Arab nations, with increasingly genocidal repercussions in Southwest Asia, it effectively made the Saudis financiers of American deficits[12].

The empire would soon discover it could afford a military big enough to oversee the disposal of the world’s resources and still give massive tax cuts to the elites who profited from it. And although the expanding deficit was handy for scare campaigns to justify withholding benefits from ordinary Americans, the global appetite for bonds ensured the public debt which funded the racket need never be repaid.

And what of those ordinary Americans? For the empire to satisfy their appetites was less important now; but worsening circumstances couldn’t be allowed to weaken their faith in American exceptionalism; it was that which invested the empire with legitimacy; which allowed crimes to be hidden and others costumed as heroism; and which its media stable of tent evangelists and snake oil salesmen could whip into a righteous fervour when military adventurism demanded the sacrifice of more young lives and sovereign wealth. Increasing hardship could even be advantageous if anger and frustration were redirected toward strategic targets, both abroad and at home. And this is where the legacy of the great propagandists of the past came into its own.

The techniques established by pioneers in the art of deception like Edward Bernays had been developed into an applied science in Nazi Germany by Hitler’s chief propagandist Joseph Goebbels. This in turn had proven useful to the practitioners of the postwar era, who were sometimes the same people working for a different boss.

The Method

The full story of how the West expanded its global dominance in the postwar era takes more telling than a single essay permits. And it would be shocking to most people to discover how much Nazi methodologies contributed. But for our present purposes, what’s relevant is the way a set of radical precepts came to be broadly accepted among ordinary Westerners.

Among the lingering questions of WWII is why the German people would allow themselves to be swept up in a colossal and brutal campaign of war and genocide which would destroy so many of them and their nation. Prewar indicators show most Germans didn’t want war[13]. And yet, it happened. The Treaty of Versailles, the Great Depression and Adolf Hitler have all attracted blame. But perhaps we need only consult the man whose job it was.

Joseph Goebbels understood that when the task is to get others to do what you want, the truth is subordinate to purpose. He saw the rise of the Nazi Party to power as an expression of the nascent collective will of the German nation[14]. Dissent, whatever its motivation, was therefore a kind of impurity to be expunged. His role as propagandist was “to lead the people to an understanding that will allow it to willingly and without internal resistance devote itself to the tasks and goals of a superior leadership”. Propaganda was like “background music” which “miraculously makes the unpopular popular, enabling even a government’s most difficult decisions to secure the resolute support of the people”[15].

Goebbels knew that trying to convince the populace with reason was redundant. “The most brilliant propagandist technique”, he said, “will yield no success unless one fundamental principle is borne in mind constantly—it must confine itself to a few points and repeat them over and over.”[16] It was the same principle which had been articulated by Hitler from his prison cell a few years before[17]. By the Twenty-first Century it would be standard practice in public politics.

Nazi propaganda points weren't confined to speeches; they were encoded in an elaborate theatre of visual, architectural, technological and military spectacle, a brazen celebration of power which was seductive to those who had endured poverty, insecurity and ignominy. The best propaganda, Goebbels observed, “works invisibly”, so those who are being manipulated believe they are acting on their own free will[18].

And here is where the Western empire enjoyed a particular advantage. To deploy these techniques rapidly, the Nazis had to usurp control of German institutions, replacing sticklers and dissidents with loyal party members. But for those playing a long game, propaganda is more effective when it emanates from sources which appear to be entirely independent.

The Targets

By the time Bretton Woods collapsed, the schemers of the Mont Pelerin Society had successfully substituted the source code of postwar prosperity with a new paradigm of competitive individualism. Nourished by a flood tide of big money, it had germinated first in America’s higher education faculties, flourished in the policy labs and consultancy firms which they supplied with ‘talent’, spread through these agencies to political parties, public offices and business circles, and enmeshed a coalition of special interests who found it consonant with the one objective they all shared – the discouragement of organised opposition – from bankers and industrialists to the Pentagon, the CIA, the churches and media owners. And this general intoxication among the ruling class had also captured popular opinion, using a new technocratic jargon built for the task.

For many centuries, improvements in living conditions for ordinary Westerners had depended on an expansion of political representation. Aristocrats and magnates had proven equally incapable of delivering much more than conflict, oppression and hardship without it. But for the propagandists, this correlation needed to be concealed. The new language of economics did so, by replacing questions of power and consent with supposedly impartial ‘market’ functions. Instead of citizens, from now on we would be ‘consumers’. And in our jobs, we would no longer be workers, but ‘human capital’[19], a term gifted by neoclassical economists Gary Becker and Theodore Schultz.

These expressions belong to the same family of terms as ‘ethnic cleansing’. The purpose they serve is the erasure of personhood, reducing flesh-and-blood human beings to the stature of machine components, or in adverse cases, technical malfunctions, their status determined by their usefulness to power and profit. From now on, corporations would direct human affairs with just enough concern for their employees and customers to preserve their utility, and the new economics would make it all sound sensible and ‘scientific’. Just as actors appeared in lab coats to sell supplements and cosmetics, others would put on business suits to sell compatible public policies. The core message was that human wellbeing was now a responsibility belonging entirely to individuals^[20]. And they were ‘free’ to pursue it, but only insofar as it didn’t interfere with the profit machine.

The Powell Memorandum of 1971[21], submitted in confidence to the US Chamber of Commerce by a tobacco industry lawyer who would later be appointed to the Supreme Court, identified the principal threats to America’s cherished ‘free’ enterprise system as youth counterculture and the movements championing civil and women’s rights. The 1960s had shown what a flourishing economy, greater social mobility and a liberal education could accomplish, and the establishment didn’t like it. These factors make the aggregation of power and profit more difficult, even in the unlikely event they’re justly deserved.

Austrian economist Roger A. Freeman, who served Eisenhower, Nixon, and later Ronald Reagan warned that America was “in danger of producing an educated proletariat”[22]. He wanted education funding cut. He wasn’t a fan of desegregation or welfare either and this was martial music to the ‘conservative’ American factions who shared the plutocracy’s fervour for protecting special privileges.

Nixon, ever alert for shortcuts to re-election, began the process of defunding science and education to win them over. When he launched the ‘war on drugs’, it wasn’t intended to defeat the drug trade, nor to address its underlying causes[23], at both of which it would prove to be a colossal failure, but as Nixon advisor John Ehrlichman later confessed[24], to swing white voters further right by diverting blame from agencies like the CIA, who were running drugs for geopolitical leverage, and attaching it to Powell’s imagined infiltrators, who happened to be their children and black neighbours.

People who are excited by power want to play with it. The School of Economics won’t provide many of the skills their machinations require but it can help to legitimise them. And it also doesn’t hurt, it turns out, for opposition to develop in adjacent faculties. This can prove useful in a different way.

Unlikely Collaborators

There’s a widespread misunderstanding that Jews were singular victims of the Nazi death machine[25]. In fact, Jews were massacred with large numbers of Poles[26], Roma and unwanted minorities[27], as well as Christians and atheists who happened to be communists, trade unionists, journalists or members of some other group in opposition or offensive to the cult of Aryan purity. Long before that, Goebbels had gained traction by inflaming rivalries between groups, offering Nazism as a solution to the ills perceived by one group in another. Sadly, Jews made a popular target. But Goebbels also knew that scapegoating is most effective in tandem with favouritism.

Decades later, many were shocked to discover that feminist icon Gloria Steinem had accepted funding from the CIA at the start of her career of activism. Steinem defended her decision to the end, insisting the goal was worthy regardless of where the money came from[28]. German women like Thea von Harbou and Leni Riefenstahl had similarly accepted Nazi collaboration as the price for realizing their creative potential. And neither Nazi Germany, nor Gloria Steinem, nor the CIA wanted the Soviet Union to claim the mantle of female emancipation.

The kind of feminism which gained prominence in Western institutions and public life from the 1950s onwards, like the influences which secured a better deal for blacks, gays and the less able, wasn’t the kind which challenged the Western establishment or its economic system. On the contrary. Granting outgroups better access to the hierarchy of power helped to fortify it.

There would still be ‘losers’, but they would no longer be segregated from the ‘winners’ along neat lines of gender, colour, sexuality, and ability. As colonialism and oppression of women and minorities gathered attention in academia, the entitlements which centuries of struggle had attained for those who were white, able-bodied, heterosexual, or male began to seem less like signs of democratic progress than artefacts of historical injustice. Rather than becoming rights for all, security and prosperity would be reconstrued as rewards for effort, as everyone competed under the supposedly ‘fair’ rules of ‘meritocracy’.

Of course, in practice, those at the very top retained ample means to protect their advantages, such as the elite schools where their offspring gained favoured access to influential networks, lucrative careers and startup capital. Reforms which left these pathways secure were of little concern to them. Rather, as ‘diversity, equity and inclusion’ policies entered workplaces, they helped to promote paid work in elite-owned enterprises from a begrudged necessity to a domain of personal fulfilment, while life outside of employment lost some of its importance. And if so-called ‘woke’ curricula in education provoked fierce debate, its emphasis was on participation in the economic system rather than its transformation.

‘Conservatives’ and ‘progressives’ would spend decades arguing vociferously about rights and obligations while ignoring the architecture of power and reinforcing personal freedom as the context which mattered. As the internet turned hostility into clickbait, the craft of the propagandist would be exposed by one of its chief opponents with a clarity which might have impressed even Goebbels himself. “The smart way to keep people passive and obedient” said Noam Chomsky, “is to strictly limit the spectrum of acceptable opinion but allow very lively debate within that spectrum.” Chomsky saw how the domestication of “free thinking” reinforces the structures which enclose it[29].

The last thing the shrewd strategists of Mont Pelerin wanted was a united population. Resentments were useful – white Americans against civil rights, native-born Americans against immigrants, ‘conservatives’ against gays and feminists, ‘progressives’ against traditionalists – provided they distracted from the fact that nearly everyone was losing economic opportunity and political representation to a tiny minority of plutocrats.

While some constituencies listened to Billy Graham, and others to Martin Luther King, the plutocrats themselves took the ancient advice of Phillip II of Macedon: divide and rule. And to marvellous effect.

The Payoff

A couple of graphs succinctly tell the story. The first one tracks the yield from increasing postwar productivity as a percentage of US GDP to its destinations, one line for wages, the other for profits[30]. Until the mid-1970s, the lines rose in unison, but after that, the wage line flatlined, while the profit line kept climbing, exactly as the strategists of Mont Pelerin had intended. In 2025, the Rand Corporation calculated the cumulative benefit to the richest 1% through 2023 was 79 trillion dollars[31].

The second graph shows how this transition coincided with a decade of runaway inflation. Many factors contributed, including two oil shocks and a tardy response from the Fed [32]. But since wages were already comatose, it was corporate coffers which captured most of the yield in higher prices and interest on enabling debt. If you’ve been listening to public commentators since then, however, you would have heard that the main causes of inflation are greedy workers and big spending governments. And there’s a reason for that.

By the 1980s, hundreds of plutocrat ‘think tanks’ had spread around the world. In 1981, Antony Fisher set up the Atlas Network to coordinate their activities. Marshalling the resources of billionaires such as the oil magnate Koch Brothers, organisations like the Heritage Foundation were now able to target policymakers and thought leaders systematically through lobbying, political donations, academic bequests and mass media soapboxes.

Waves of university graduates imbued with the new economic orthodoxy which came to be known as ‘neoliberalism’[33] intersected with the rise of a new kind of charismatic, libertarian politician. The resulting shift in Western politics exemplified by Margaret Thatcher and Ronald Reagan decimated the trade unions and started a landslide of privatisations of public utilities and a spate of senior institutional appointments which favoured big business and the rich.

While the Berlin Wall stayed up, there was at least some incentive for even the most rampant capitalist enterprises to gild their image in the West with fair wages and taxes. When the Soviet Union collapsed in 1991, neoliberal capitalism’s triumph seemed to be complete. And once “there is no alternative”[34], there is less pressure on a system to prove itself by looking after its participants.

Instead, sermons emanating from financial pundits and an expanding ‘self-help’ industry urged us to summon our competitive zeal. Fierce competition was now a fact of life for individuals and even whole nations if they wished to claim a share of the future. Greed, the ‘experts’ asserted, was natural and useful, whereas public services and regulation only robbed people of ‘incentives’. There was no society[35], only ‘free’ individuals. Corporations had only one responsibility and that was to enrich their shareholders by any means possible^[36].

The working class, the traditional adversary of unfettered exploitation, had effectively been erased, leaving only ‘winners’ and ‘losers’. If our lives didn’t improve under these arrangements, we probably had ourselves to blame. After all, the system itself was perfectly aligned to ‘human nature’. But we were also at risk from an unfortunate tendency toward excessive benevolence. Refugees, the unemployed, the disabled and young people with limited means naturally aroused our sympathies. We were inclined to offer them support. But what they needed was ‘tough love’. We had to stop mollycoddling people and reward independent effort. ‘Leaners’ needed to become ‘lifters’ and ‘wealth creators’.

Few people would have known why they believed that life for our ancestors had been “solitary, poor, nasty, brutish, and short”, that nature demands “the survival of the fittest”, that “what doesn’t kill me makes me stronger”, or that prosperity derives not from mutuality but from an “invisible hand” of the market. Nor would they have imagined how thinkers like Hobbes, Darwin, Nietzsche, and Smith, whose names had rightly or wrongly become attached to these simplistic adages, might have felt about them being used to justify lives of novel precarity built around work, debt, and palliative compensations. Their proliferation, out of context, owed not to the authors but to demand among neoliberal propagandists for messages that were, as Goebbels had recommended, simple and repetitious.

By the Twenty-first Century, ‘socialism’ and ‘welfare’, which had improved many measures of wellbeing when judiciously applied across the West, had become dirty words. ‘Trickledown economics’, which had begun as a joke[37], had become an acceptable theory. Climate disruption, which had been confirmed by Exxon-Mobil’s own internal investigations in the 1970s, was now derided as a conspiracy of venal scientists[38].

Conversely, an aura of timeless wisdom had accreted to US President Ronald Reagan’s provocative pronouncement that “…government is the problem”[39]; not the plutocrats who had redirected America’s productive surplus into their tax havens; nor the donors and lobbyists pulling the strings of legislators to make them dance to that tune; rather it was those legislators, like Reagan himself, on whom ordinary people depended for a just and stable social order, and the public servants charged with delivering it, who were now an insufferable imposition on our natural condition of ‘freedom’. Worst of all, this was rapidly becoming a self-fulfilling prophecy, as ‘terrorism’ and ‘tough on crime’ rhetoric justified the expansion of surveillance, policing and prisons while corruption, political appointments and withdrawal of funding undermined the efficacy of even the most noble public programs.

Reagan’s assertion had been disingenuous. He may have cut taxes for the wealthy, but public spending and government debt had grown during his presidency[40], in service to Wall Street and the military-industrial complex. Moreover, this combination of plutocrat tax relief and public debt burden had been exported around the world in the luggage of organisations like the International Monetary Fund, the World Bank and the World Trade Organisation, the big difference for other countries being they had to pay their borrowed US Dollars back.

The colonial era had not expired; it had been upgraded. The corporate golem had at last broken free of national restraints and could roam the world under the aegis of respectably anodyne institutions. The ruthless, self-serving opportunist, once exemplified by men like Robert Clive[41], had transmogrified into the hero entrepreneur. CEOs like Jack Welch, whose hardness and severity signalled uncompromising effectiveness, became celebrities of a kind. But the business model was essentially the colonial one, converting the world’s labour and resources into products for the consumption of an emerging global comprador class and the enrichment of investors.

Neoliberalism is more than an economic theory, or even an ideology. Like Nazism, it has many of the qualities of organised religion, principally a ‘faith’ in its efficacy and infallibility which can withstand enormous evidence to the contrary. In fact, the tougher times become, the more innate appeal it has, since its operating principle is the human individual fighting for survival. And thanks to the lessons Goebbels had left for his acolytes, a global corporately sponsored profusion of movies, including a few starring Ronald Reagan, plus TV and radio shows and other vehicles for the ‘triumph over adversity’ narrative had ennobled personal struggle in popular culture and infused it with a nostalgic reverence for the rugged man of the frontier.

As Goebbels knew, once a paradigm has become entrenched in this way, dispute tends to be treated as heresy. It doesn’t matter that its chief proponents are exempted from its difficult demands. As careers, wealth, status and opportunities for offspring become dependent on obedience to a hierarchy of power, dissent appears as threat, regardless of what the evidence tells us.

The truth, unfortunately, was that the real heroes of American business, who had been integral to the stability and prosperity of America’s golden age, had mostly ridden into the sunset. Like salmon returning to spawn, many US Dollars sloshing through the world’s trade found their way back to Wall Street. But, again like the salmon, few made it onward to ‘Main Street’ where they could replenish America’s productive economy, much of which had already migrated to emerging low-cost labour markets. Instead, they fed the rapacious ingenuity of the financial sector, symbolised if not actualised in 1999 by the repeal of the Glass-Steagall Act, which had been expressly devised to curb such excesses after the Great Crash of 1929. Then, as at the turn of the new millennium, the ultimate destination for these greenback salmon was to be the dinner plates of the rich, served to them from their tax havens.

Thus progressed the parasitising of the US and many other advanced economies of the Western empire, including Australia’s. Flimsy hypotheses built around abstract ideas and encouraged by cynical opportunists had developed into an extremist ideology which would gradually redirect public spending into private coffers, eviscerate the established middle class, justify the toppling of foreign governments, neutralise criticism and demonise public protest. The boomer generation, on whose complicity it depended, while largely oblivious of consequences decades in the making, enjoyed an Indian summer of steady jobs, affordable housing and functioning infrastructure. And their complacency would subsequently be reinforced by the neoliberal Trojan Horse of gratuitous gains in real estate and pension fund valuations. But for the next generation of populist demagogues, Goebbels’ legacy would prove invaluable for goading the growing numbers of downcast, disenfranchised people – who were neoliberalism’s true invention – to harm themselves and one another[42]. George Santayana, who said, “Those who cannot remember the past are condemned to repeat it”[43], was vindicated by another century of forgetting; we forgot our bonds with one another, our responsibilities to those who follow us, and the horrors which once made us say “never again”.

The Phantom of Liberty

The sociologist C. Wright Mills observed that the biggest challenge for libertarian purists is that the arrangements which might make their ideology sustainable are anathema to it. Any version of ‘freedom’ which creates ‘winners’ and ‘losers’ is doomed to fail. People won’t welcome poverty and insecurity from a ‘market’ any better than from a despot. Unfortunately, however, when hardship spreads, authoritarianism isn’t far behind, because that’s how the ‘winners’ protect their gains, using popular anger and frustration to justify illiberal measures.

The alternative to a voluntary imposition of moderating constraints is an involuntary one; the real difference is whether constraints are applied to benefit everyone or an elite. The ruling class has never believed in ‘freedom’ as a universal principle; for oligarchic rulers, it’s a euphemism for privilege; for the ruled, it’s marketing.

Vanessa Machado De Oliveira sees four capabilities we need to reinvigorate if we are to survive this time – sobriety, maturity, discernment, and responsibility. These are less the special needs of the modern era than the normal qualities of human adulthood. The fanatics of neoliberalism simply found them inconvenient. They had to be excised for the new ideology to take root. But this wouldn’t have been possible if the peculiar history of the West from ancient times had not created a fertile soil. That topic requires another essay.

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