Money, Money, Money

The rich have made it their world.

These posts explore the themes developed in my monograph, Narcisso-Fascism, which is itself a real-world test of the central concepts of the Biocognitive Model of Mind for psychiatry.

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Politically, there’s something unexpected happening around the world. In one country after another, the traditional two-party duopoly of right wing vs. left wing is crumbling. We saw it in last week’s local government elections in the UK where the Conservatives, the oldest political party in the world, were hammered into about fourth position. Labour, the governing party, lost thousands of council seats around the country and the Labour prime minister’s political career hangs by a thread. In a by-election here in Australia on the weekend, one of the most rock-solid rural seats fell to a far-right insurgent party. In France, prime ministers come and go; India’s recent elections show a lunge to the right; Israel’s government is willing hostage to religious fanatics who are fascist in all but name; Argentina’s doctrinaire right wing is dismantling decades of social safeguards; Japan has recently lurched to the right and is busy rearming; and then there’s the US. Something strange is happening.

In fact, it’s been happening for quite a while but now it’s really starting to show. Chaos, destruction, social breakdown, and rage. Everywhere people are so angry yet what are they angry about? Except where there are actual wars going on, the overwhelming bulk of the population are far, far bettter off than they were 70, 50 or even 30 years ago. Literacy rates and standards of education are rising, especially for girls, health standards are rising, the average life span is rising, women are no longer trapped by a pregnancy every year, housing is better, roads are better, cars are cheaper, mobile phones and the internet are ubiquitous yet people are still not happy. In the US, what are called “deaths of despair,” meaning suicide and overdoses, are now so common that the mean life span is actually dropping, first time in modern history that has happened in a developed country not at war. Even popular music is suffering: the yearning lyricism of “Love me do” has been drowned by the angry gabble of gangsta rap.

It wasn’t always so. The decades after World War II were seen as a “golden age” for ordinary people. In the UK, rationing during the war had given the working classes their first balanced diet in history. Even in the late 1930s, Orwell reported that people doing heavy work and pregnant women lived mainly on oatmeal made with water, white bread and potatoes. In the 1950s, Britain built its NHS, extended schooling and had a huge housing program to replace bombed areas and the vast Victorian slums crammed together with no building codes [1,2]. In the US, the GI Bill extended education to the masses, the huge highway system provided brought markets to the hinterland, and industry hummed to replace the destruction of the war. The salary of the average CEO was about 20 times that of the median worker. Australia welcomed immigrants to work on massive projects such as the Snowy River Hydro Scheme and the rapidly expanding public housing and infrastructure (schools and hospitals) to cope with the baby boom. Education was essentially free. Take-home pay for workers had never been so high. An ordinary worker could raise a family in their own home with their own car, as British PM Harold McMillan snorted: “You’ve never had it so good.”

That’s all gone. Industrial jobs have vanished overseas, housing is impossibly expensive, especially for young people weighed down with student debt, public health services groan as people are forced out of high cost private practice or simply go without, drugs, alcohol, overbearing police who can never seem to catch the big fish, red tape, loss of privacy to private and government domestic spying agencies, and the average CEO in the US takes home nearly 400 times the median worker’s salary. Things were supposed to get better but they’re not, they’re getting worse by the day. Our brain dead governments can’t seem to stop fighting with everybody, universities have turned into repressive factories that simply mine students for their money, gambling flourishes and the Epstein business shows our leaders are corrupt to the core. Our leaders. What a joke. How did such a ghastly shower of no-hopers, conmen, parasites and paedophiles get their slimy hands on the controls? Did we take a wrong turn somewhere? Yes, we did. It’s called neoliberal economics and it has a lot to answer for.

The doctrine of neoliberalism emerged in the early 1920s in a small group of economists in Vienna, so it’s often called the Austrian school of economics. The first and most influential was Ludwig von Mises (1881-1973) who built his system of economics on the notion that only individuals are effective; essentially, if everybody cares for themselves, we don’t need bossy governments. Only individuals know enough about what they want and their local business to make the essential decisions to bring it about. Governments can never know what individuals know and their decisions are inherently inefficient; therefore, the only good government is the smallest possible that can do the jobs that nobody else wants or is able to do. Anything that impedes an individual’s self-directed actions or encourages individuals to rely on others, especially government services, is anathema. It’s said that 80% of economists in the world today follow the Austrian school or one of its variants. Governments everywhere are in a race to the bottom to see who can be first to sell off assets and reduce services to “improve efficiency.”

Von Mises and his many disciples such as Friedrich Hayek (1899-1992; Nobel Prize 1974) developed the notion of “trickle-down economics,” that accumulation of capital by individuals was entirely laudable as they would then invest the money, providing jobs for workers and generally lifting the wider economy. Government doesn’t have any significant role in this process, which is natural and flows from self-interested human activity. People don’t need to be told what is good for them. All governments have to do is guarantee a “level playing field” for all actors in the market economy built on essentially common sense laws that will facilitate economic activity and provide safety for all citizens.

As economists, the Austrians had very little effect in the early post-war period when governments in most countries were building welfare states with “safety nets” to provide for their citizens. By the early 1970s, everything was humming along as the “baby boomers” were getting into their stride. Apart from the usual wars, life was generally a lot better so people who weren’t doing so well or who had been elbowed aside began to press for their rights. This alarmed the elite who didn’t like the idea of an uppity working class threatening what they saw as their natural right to an ever-larger share of the expanding national wealth. This was especially true in the US where the wealthy lived in fear of two potential events: a workers’ revolution aimed at restricting or even abolishing capitalism, and an uprising by the long-repressed black people. The real nightmare was that these two movements would fuse into a single, irresistible force, ending their privilege. So, in 1970, they decided they needed to get in first. Just as Marxists have their Communist Manifesto, or fascists their Mein Kampf, so the power elite had a guiding doctrine known as the Powell Memorandum (1971). Its author, the lawyer and future Supreme Court judge, Lewis Powell, was a former counsel for the tobacco industry and a major influence on the “tobacco playbook,” the general recipe for industrial skullduggery.

We will never know the full history of the neoconservative, neoliberal movement. They’re called neoliberals because they wanted to return to the liberal principles of the 19^th Century, based on universal laws and rights, freedom and the supremacy of the individual over institutions, rationality, reasonableness, sobriety and restraint, and so on. That’s a gigantic topic in its own right; suffice it to say that Powell urged “responsible citizens” to take control of the community before it was too late, meaning before the long-haired, rebellious youth of the day got power and began to – shudder – dismantle privilege. He set out a program by which the hotbeds of rebellion, such as universities, the press and broader media, etc., could be captured and neutered, turning them into faithful servants of capital rather than breeding grounds of wannabe bolsheviks trying to steal the wealth of the hard-working and self-denying elite. Central to his plan was the establishment of a network of what are now called “think tanks,” very well-financed institutions with credentialed researchers on the payroll working on programs to hand to governments for immediate implementation.

A major part of their plan involved developing and publicising the Austrian or neoliberal school of economics. They had their work cut out for them as practically all of the economists were prolific and generally terrible writers. The bad news was that they were prolix, vague and generally woolly thinkers; the good news was that as prolix, vague and generally woolly thinkers, their work could, with a little massage, support exactly what the reactionaries wanted: minimal government restraint and maximal freedom to get as rich and powerful as they wanted. In essence, it was a lunge for power. They wanted to take control of the entire government, society and economy and redirect it to satisfy their wishes in such a way that it could never again be taken off them.

A central element was what they called “trickle-down economics,” which said that capital must be given to individuals to invest because only they know enough about the community’s needs to satisfy them. Therefore, taxation and other economic policies have to be reshaped to funnel capital from the factory floor and the farmer’s paddocks, to the “captains of industry and finance” in their eyries in Wall St so that, armed only with their dispassionate self-interest, they could work out where best to invest it. That would provide jobs for all and the “rising tide” of GDP would “lift all boats.” All this made perfect sense to busy politicians and lawmakers, whose understanding was aided in no small part by the generosity of the caring people who had taken so much time to write the legislation for them and were keen to help with troublesome side issues such as campaign funds. In the first step, moving money from the poor to the rich, they have been outstandingly successful, as US Sen. Bernie Sanders reports:

As Republicans prepare legislation to provide more tax breaks to billionaires with massive cuts to programs working families need, Senator Bernie Sanders (I-Vt.) today highlighted a new report from the nonpartisan RAND Corporation, which found that nearly $80 trillion in wealth in the United States has been redistributed from the bottom 90 percent of Americans to the top 1% over the past 50 years (my emphasis).

That’s only the US, there are plenty of other places following the same policies. Trouble is, there was a small hole in the Austrian theory of economics, a hole just big enough to allow $80trillion to slide through, largely unnoticed. I don’t think it was the intention of von Mises and his disciples to leave a hole in their theories, and I doubt if Mr Powell noticed it in 1971. I don’t think many people have found the exact hole since then but a lot of rich and powerful people have noticed its effect and were delighted to stand and watch as the geysers of money jetted aloft, perchance to fall upon their heads. The name of the hole is “human psychology,” and we could possibly forgive economists, lawyers and certainly politicians and bankers and so on for not seeing it. The effect of the hole in their theory has been to negate the second part of their theory of trickle-down economics, to invest their new wealth for the benefit of society.

In the original works, wealthy people are seen as rational actors, calmly going about their business of making sure their little bit of the world runs efficiently and satisfies their needs. They follow rules, check the information, weigh up what’s needed and what people will pay for, and then invest. Workers, the people for whom the investments are made, are even more robotic. They go to work, provide for their families, pay their bills, live and quietly die. Nowhere in the theory is there any recognition of what utter pricks humans are. The seminal works by von Mises, Hayek and others do not talk about corruption, or greed, or of putting your foot on your opponent’s throat and pressing just for the sheer joy of crushing another person and taking his property. That is, while they are strong on humans as rational creatures, they don’t give any account of the irrational human drives, the most irrational of which is the drive to dominate. They have a lot to say about humans as rational actors, and plenty of humans are indeed rational actors, but not the rich. Above all, there’s nothing in neoliberalism on scoundrels like Donald J Trump, who don’t have a rational bone in their bodies. As it exists, neoliberal economics doesn’t just fail to keep psychopaths out, to stop them taking over, it invites them in and makes them comfortable by relieving them of any residual guilt. So that’s just what they do. Instead of investing the money in their home markets where they made it, they ship it offshore to secretive banks in tax havens, then lend it back to themselves at brutal interest rates that consume all the profits so they don’t pay tax at home, either. So simple, why didn’t Hayek think of that?

Look at a couple of examples. Kevin Walmsley is an American businessman in Kunming, China, who writes brief and informative Substack posts and YouTube videos on how the US is shooting itself in both feet with its antagonistic and generally corrupt attitude toward China. In this video, he describes how a fire truck made in the US takes 4 years and $2million to deliver, whereas the same thing in China (and generally better) takes six weeks and $400,000, but nobody is allowed to import Chinese trucks because Trump and the firetruck manufacturers. The extra cost is entirely artificial. I have the same problem here in Brisbane with my solar power system. We have full solar PV and batteries. When we installed it in 2017, the power company (commonly known as AGL and the Forty Thieves) paid us 22c per kwh for power we exported to the grid, which they then sold for 35c per unit. We paid off our installation in 6 years and could look forward to 20 years of free, totally clean power and about $2,400 a year as a small profit. Then they reduced it to 20c/kwh, and again a while later to 17c per unit. We could still make about $1700 a year, but they have just changed it to 3c/kwh, which they sell for 35c, giving them nearly 1,100% profit and wiping out our little payments. Oh, and they now charge us a “pole fee” for the pleasure of exporting our electricity back to their grid. The person who buys the power at the other end also pays the pole fee, which is like me buying a stamp to post a letter, and the postman charging the addressees another fee to put the letter in their box.

It’s a small example but, multiplied over the million or so home solar installations in the state, it gives the company about $3billion extra profit each year for no further investment, and they don’t pay tax as they are largely foreign-owned (i.e. owned by shell companies in tax havens). To cap it off, they are classic rentiers, i.e. they have inserted themselves in the production and distribution process without contributing anything to it, but charging the end user a fee they can’t avoid. They don’t generate power, they buy it from the power generators and they even rent the poles. It’s a fantastic little racket if you can persuade the politicians to let you get away with it but we’ll fix them. We’ll get an electric car and put our excess power in the car, saving petrol and depriving the pricks of the eye-watering profits they make at our expense. But this is what a free market is, this is what a free market does. It gives insiders the power to tilt the playing field in their favour and there’s nothing the dumb consumers can do about it.

The neocons who set this up, who persuaded Thatcher and Reagan of the virtues of “small government,” probably didn’t realise all this at the time but they woke up to it very quickly, quick enough to push the legislation through before any troublemakers sat up and said: “Hey, your model of human behaviour is crap, like, you haven’t got a model. This is fantasy, it opens the door to a ghastly shower of no-hopers, conmen, parasites and paedophiles.” Because that’s what it’s done, and that’s why everybody is so angry, and that’s why it’s all going to fall apart. What we’re seeing today in terms of the widespread dispossession of the working and middle classes (who actually carry the country on their backs); of the concentration and, above all, the encryption of wealth by and for the 1%; their criminality and their utter cynicism; coupled with the ever-growing threat of global warming and of nuclear war; these are the direct and predictable results of allowing a class of people to believe that they could plunder the commonweal for their personal benefit with impunity while broadcasting to the world that they are doing us all a great favour by getting richer.

As a social experiment, neoliberalism has absolutely failed in every respect. It did not lift billions out of poverty, China did that without any help from von Mises, Hayek and Co. It has not spread the benefits of industry, science or education evenly, has not helped the disabled or neglected, has not stopped war and is driving us toward the precipice of environmental catastrophe, just because the project deliberately weakened the ability of the great mass of people to influence their governments. As we see in the illegal, immoral and abhorrent wars of aggression in West Asia. It’s time to call a halt to the gathering disaster before it’s too late. We’re only seconds from midnight.

Don’t think for one instant that people of the character of Trump or Netanyahu give a shit about ordinary people and will come to their senses. They’re only interested in domination for domination sake. They won’t stop as they don’t have a better self. If you want your grandchildren to have a future, then speak up.

References:
1, 2: See George Orwell’s classic reportage, Down and Out in Paris and London (1933) and The Road to Wigan Pier (1937). Timeless.

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My critical works are best approached in this order:

The case against mainstream psychiatry:

McLaren N (2024). Theories in Psychiatry: building a post-positivist psychiatry. Ann Arbor, MI: Future Psychiatry Press. Amazon (this also covers a range of modern philosophers, showing that their work cannot be extended to account for mental disorder).

Development and justification of the biocognitive model:

McLaren N (2021): Natural Dualism and Mental Disorder: The biocognitive model for psychiatry. London, Routledge. At Amazon.

Clinical application of the biocognitive model:

McLaren N (2018). Anxiety: The Inside Story. Ann Arbor, MI: Future Psychiatry Press. At Amazon.

Testing the biocognitive model in an unrelated field:

McLaren N (2023): Narcisso-Fascism: The psychopathology of right wing extremism. Ann Arbor, MI: Future Psychiatry Press. At Amazon.

The whole of this work is copyright but may be copied or retransmitted provided the author is acknowledged.