Part 2
The Art of Killing Quietly

Chapter 7
THE ECONOMY

7.1 The Function of Poverty
7.2 Monetary and Fiscal Policy
7.3 Free Trade Agreements
7.4 Open Borders
7.5 The Environmental Movement
7.6 War as a Means of Planned Waste
7.7 Criminalizing Society
7.8 Disease

7.1 THE FUNCTION OF POVERTY

The standard of living of the average American has to decline...
- Paul Volcker,

Chairman of The Federal Reserve, New York Times, 18 October 1979, p.1, Volcker Asserts U.S Must Trim Living Standard.

'Money is power'. Well, to be precise, it's the gap between the rich and poor that counts. The objective of the elite is to maintain the capitalist structure as it is with one vital difference. There will be no middle class in the New World Order. Under public-private partnership, the middle class, free markets, and consumer choice will be replaced with a neo-feudal society in which the Money Trust dictates to an impoverished populace through a supranational technocracy.

This is international socialism, run for the benefit of the financial elite who own the economy and control the emerging continental Politburos. The polite name for it is 'The Third Way', but less deferential commentators call it 'corporate fascism'. The corporations need government to restrict consumer choice in the market place, allowing the cartel to determine what we can buy, sell, or even do in our own homes.

The 'Third Way' is the path to utopia for our self-appointed philosopher kings, advocated by the likes of Bill Clinton, Tony Blair, and Gerhard Schroder - their senior political puppets. There is no difference between ostensibly right and left wing political parties about the eventual destination, even if they appear to be travelling at different speeds towards it.

Real power, then, is achieved when the ruling class controls the material essentials of life, granting and withholding them as if they were privileges, as George Orwell reflected:

From the moment when the machine first made its appearance it was clear to all thinking people that the need for human drudgery, and therefore to a great extent for human inequality, had disappeared. If the machine were used deliberately for that end, hunger, overwork, dirt, illiteracy, and disease could be eliminated within a few generations

 

But it was also clear that an all-around increase in wealth threatened the destruction... of a hierarchical society. In a world in which everyone worked short hours, had enough to eat, lived in a house with a bathroom and a refrigerator, and possessed a motorcar or even an airplane, the most obvious and perhaps the most important form of inequality would already have disappeared. If it once became general, wealth would confer no distinction. Such a society could not long remain stable.

 

For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realize that the privileged minority had no function, and they would sweep it away. In the long run, a hierarchical society was only possible on a basis of poverty and ignorance...

 

It is deliberate policy to keep even the favored groups somewhere near the brink of hardship because a general state of scarcity increases the importance of small privileges and thus magnifies the distinction between one group and another... The social atmosphere is that of a besieged city, where the possession of a lump of horseflesh makes the difference between wealth and poverty.

The difference between riches and poverty is often the difference between pleasure and pain. Orwell concluded this idea in the torture episode at the end of 1984.

How does one man assert his power over another, Winston?' By making him suffer. Obedience is not enough. Unless he is suffering, how can you be sure that he is obeying your will and not his own? Power is in inflicting pain and humiliation... Progress in our world will be progress towards more pain.(1)

In The Creature from Jekyll Island, G. Edward Griffin discusses the relationship between 1984 and The Report From Iron Mountain: On the Possibility and Desirability of Peace by Leonard Lewin. It has never been established whether or not this report published in 1966 was written by a U.S. government think tank or if it was an elaborate political satire. On 26 November,1967, the report was reviewed in the book section of the Washington Post by Herschel McLandress, which was the pen name for Harvard professor John Kenneth Galbraith.

Galbraith, who also had been a member of the Council on Foreign Relations, said that he knew firsthand of the report's authenticity because he had been invited to participate in it. Although he was unable to be part of the official group, he was consulted from time to time and had been asked to keep the project a secret. Furthermore, while he doubted the wisdom of letting the public know about the report, he agreed totally with its conclusions. For the purposes of Griffin's comparison, it makes no difference whether it is a satire. The report credits Orwell for many of its ideas and it is a blueprint for what has occurred since.

Importantly, it agreed with Orwell's view that poverty is a prerequisite for a hierarchical society:

The continuance of the war system must be assured, if for no other reason, among others, than to preserve whatever quality and degree of poverty a society requires as an incentive, as well as to maintain the stability of its internal organization of power.

The economic destruction of the world's middle class is well advanced. Personal debt, bankruptcies, and unemployment are soaring while investments are destroyed in the stock-market and incomes decline. Like Manchurian Candidates, the Western middle class have played their essential part in creating the techno-bureaucracy of the new feudalism which will enslave them. This chapter describes seven significant methods being used to reduce living standards around the world.

These are: 1. money supply and taxation; 2. free trade; 3.free movement of labour; 4. environmentalism; 5. wars; 6. the criminal justice system; and 7. disease.
 

7.2 MONETARY AND FISCAL POLICY

Stock cultivates land; stock employs labour. A tax which tended to drive away stock from any particular country, would so far tend to dry up every source of revenue, both to the sovereign and to the society.
-Adam Smith,

The Wealth of Nations
 

THE BURDEN OF TAXATION

In 1900 the combined national and local tax burden in the U.S. was a mere 5.7% of income. By year 2000 it reached an all time high of 33%. (2) The U.K.'s tax burden has grown from 8.5 % of GDP in 1900 to 31% in 1963 and to a peak of 39% in 1982. It is now around 38%.(3)(4) The E.U.'s tax burden now averages 40.5%.(5)

The burden of taxation on middle income bracket families has grown in line with the overall increase. In 1958 the median two-earner American family ($68,605) paid 17.9% of its income in taxes. In 1998 that percentage was 37.6 % in 1998. In year 2000, taxes claimed a greater share of the median two-income family's income (39.0 percent) than food (8.9 percent), clothing (3.9 percent), housing (15.9 percent), and transportation (6.9 percent), combined.(6) The U.S now has the same household taxation levels as Britain reached at the end of the 1970s and where they remain today: between 35 and 40% of household income.(7)
 

HIGH LABOUR TAXES

One of the most confounding economic trends in the United States during the past 20 years has been the relative stagnation of workers' real wages. One of the primary reasons for flat wages is that taxes and other government mandates on employers have been expanding steadily, crowding out worker take-home pay. Combined Federal Income taxes and payroll taxes increase the average cost of employing a manufacturing worker by 28%.(8)

In Europe the situation is even worse, but due to the rigidity of the labour market it has caused high unemployment rather than driving wages down. In 1970, the tax-to-GDP ratio of the E.U. was similar to America but then it grew by 8 percentage points largely due to an expansion of the welfare state. The tax hike was largely imposed upon labour.

 

The average effective tax rate on labour is about 10 percentage points higher in Europe than in the U.S. with the exception of the U.K, Ireland and Portugal whose rates are similar. The average effective tax rate imposed on labour in 1997 reached 38% compared to 24% in the U.S. This largely accounts for the high unemployment rate.(9)
 

THE HIDDEN TAX: INFLATION

Inflation is another form of taxation. It is an indirect tax therefore it falls as heavily on the poor as it does on the rich. In the early stages of inflation, the business class actually benefits from the easy credit. The government causes inflation by going into debt therefore is one of the major collectors of this tax. As described at the beginning of this book, the central bank prints money for the government to borrow.

 

As John Maynard Keynes explained:

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
-John Maynard Keynes,

The Economic Consequences of the Peace, 1919, Ch. 6

Alan Greenspan elaborates:

Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale...

 

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.... As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods.

 

When the economy's books are finally balanced, one finds that loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.
- Alan Greenspan,

Gold and Economic Freedom, The Objectivist, July 1966 (10)

This new money can be expanded up to ten times when it passes through commercial banks therefore their private borrowers are also tax collectors as Congressman Ron Paul suggests:

An astute stock investor or home builder can make millions in the boom phase of the business cycle, while the poor and those dependent on fixed incomes can't keep up with the rising cost of living.(11)

The inflationary effect of lending is exacerbated when borrowers get into trouble and the debts are "rolled over", "re-scheduled" and eventually "bailed out". A non-performing loan causes inflation because the freshly printed money injected into the economy via the borrowing corporations and individuals has not been accompanied by a sufficient increase in production to keep up repayments.

 

There have been some major corporate bailouts in the U.S. amounting to billions of dollars:

• Penn Central railroad and Lockheed in 1970

• Commonwealth Bank of Detroit 1972

• New York City 1975

• Chrysler 1978

• First Pennsylvania Bank of Philadelphia 1979

• Chicago's Continental Illinois in 1982

All of these were saved from bankruptcy by Congress acting as lender of last with the guarantee of freshly printed money from the Fed. This is inflationary not just in the final stage where money is sourced from the Fed but in the first, second and all the other intermediary stages on the way to default. (12)

The main event in the bail-out Super Bowl has not been played at home. It's the game between Third World governments and the IMF/World Bank. All of these non-performing loans to foreign governments cause domestic inflation when the new money eventually returns to our shores in exchange for our products and services. Loans to most Third World governments started to fail by 1982. By 1983 third world governments owed $300 billion to banks and $400 billion to western governments.(13)

In preparation for the bail-out phase of the international lending Super Bowl, the U.S. central bank was brought onto the field in 1980, when Congress passed the Monetary Control Act authorizing the Fed to print money for foreign governments.(14) Since then, the size of bailout packages has become mind-boggling.

Mexico is just one example of the IMF/World Bank Third World bailout system. In 1982 it owed $85 billion to the banks, an inflationary loss to the American taxpayer which is being sustained to this day by central banks who initially made new loans and eventually underwrote almost the entire debt. In 1982 the IMF organized a $4.5 billion loan from Western central banks, and in 1989, a further $7.5 billion.

 

This is the roll-over and reschedule play, whose purpose is to enable interest payments to continue on the original non-performing commercial loans and prevent them going into default and bankrupting the commercial banks. However the day of reckoning inevitably arrives: Mexico could no longer afford even the interest payments.

 

On 31 January 1995, President Clinton, acting independently of Congress, authorized a $50 billion package of loan guarantees: $20 billion from the U.S Exchange Stabilization Fund, $17.8 billion from the IMF, $10 billion from the Bank of International Settlements and $3 billion from commercial banks.(15)

Joseph Stiglitz declared one of the functions of the central bank/IMF/WorldBank to be a banker's welfare system. In relation to the $95 billion bailout package during the 1997 Asian crisis:

The money served another function: it enabled the countries to provide dollars to the firms that had borrowed from western bankers to repay the loans. It was thus, in part, a bailout to the international banks as much as it was to the country.(16)

Whilst the commercial banks profit from the interest rates, which are often vastly inflated for debtor governments, the Western taxpayer pays off the loans through inflation at home. This system is designed to go on forever, draining the West of its wealth in order to build socialist dictatorships abroad and enrich the banking elite. The total foreign debt of low and middle income countries rose from $1.4 trillion in 1990 to $2.3 trillion in 2001.(17)

To summarize inflation: There are three bands of thieves who work as a cartel. The central banks acting as lender of last resort have enabled the commercial banks and the government to expand the money supply at our cost by increasing government deficit spending, sustaining non-performing loans and bailing out major corporate failures.

 

Since 1971 when Nixon destroyed the last remnants of the Gold Standard, the U.S. national debt has increased from $408 billion to $6.8 trillion, a 1600% increase. In 1971, M3 money supply was $776 billion; today it stands at $8.9 trillion, a 1100% increase. During that time the dollar has lost almost 80% of its purchasing power.(18) In addition to all the other state and federal taxes, the hapless taxpayer has paid another 5% per year in inflation.(19)

A 1999 UK Parliamentary report shows that inflation in Britain accelerated after WWII. The pre-war annual inflation rate was about 2.5% and the post -war rate averaged 6%. Over the whole century, the Pound lost 98.5% of its purchasing power.(20) It is no coincidence that during this period the gap between rich and poor and the size of government has grown significantly.
 

DEPRESSIONS: MONETARY AND FISCAL TIGHTENING
 

In Globalization and its Discontents, Joseph Stiglitz describes how the contractionary policies of the IMF exacerbated the 1997 east Asia crisis. In any economic downturn, there is a standard government response: stimulate demand by either cutting taxes, increase expenditures, or loosen monetary policy. The IMF pushed exactly the opposite course. By continuing to advocate contractionary policies the IMF caused the contagion to spread from one country to the next as exports decreased.

 

The IMF monetary remedy was to impose interest rate hikes of more than 25%, throwing fuel onto the fire.(21) This had the effect of driving even more capital out of the country as it pushed companies towards bankruptcy. Furthermore it imposed restructuring in the banking sector which closed down any banks with significant non-performing loans. In Indonesia, sixteen private banks were closed which caused a run on the remaining private banks and a retreat of capital to the state run banks.

 

The effect on the Indonesian banking system and the economy was disastrous.(22) Riots followed when welfare, especially food and fuel subsidies for the poor, were cut back. Businessmen and their families were targeted. This exacerbated the retreat of capital out of the country since riots do not restore business confidence.

According to Greg palast's interviews with Stiglitz, "IMF riots" were virtually written into the 111 conditionalities formulated at the end of the 1980s. One of the IMF condionalities on Ecuador was to raise the price of cooking gas by 80% at the same time as they were cutting back pensions and laying off government workers. Poor Andean Indians came down from the hills and set fire to cars in the capital bringing troops onto the streets.(23) In Argentina, when the banks put their interest rates up to 21-70%, the government had to change the law against loan-sharking because the banks would have been in breach of it.

Stiglitz laments that deepening a recession not only causes more pain today but also more pain tomorrow. An economy which has a deep recession may grow faster as it recovers, but it never makes up for lost time. The deeper today's recession, the lower income is likely to be twenty years from now.(24)

The IMF was not the first to use fiscal tightening as a weapon of economic warfare. In 1920-21, America went through an agricultural depression. This was caused solely by the monetary policy of the Government and Federal Reserve. The farmers had borrowed large amounts of money to buy land at the instance of the government. They had become very prosperous.

 

However, with an eye on closing down the smaller banks in the South West, the Wall St. controlled Fed decided to drastically cut credit in May 1920. Unable to keep up repayments, thousands of farmers were bankrupted and brought down their local banks with them. G. Edward Griffin describes this episode as "Country-Duck Dinner in New York."(25) However, this was just the starter before the main course.

 

At the behest of the Wall St. Money Trust, the Open Market Committee was formed in 1922, to coordinate the purchase of Treasury bonds by the twelve regional Reserve banks. From 1923 onwards low interest rates caused new money to flood into the economy causing a massive speculative boom on the stock market. By 1929, half of retail transactions were on credit.(26) On 9 August 1929, the Fed started selling Treasury bonds in the open market and reversed its easy credit policy.

 

It raised interest rates on loans to commercial banks to 6% and the money supply rapidly contracted; speculators who had borrowed money to purchase shares could no longer keep up repayments to their brokers. The pin had been inserted. On 29 October 1929, an avalanche of selling on Wall Street wiped out millions of investors. The bankers and their preferred clients had exited the market long before only to re-enter at rock bottom and devour stock like sharks in a feeding frenzy. Some of the greatest fortunes in America were made in this fashion.

Today, consumers in the U.K. and U.S. hold record levels of debt. These extreme debt ratios make us very vulnerable to the maneuvers used in the past. Figures from the U.K. Office for National Statistics showed that consumers now owed an average of £5,330 ( about $8500) in unsecured debt, which excludes mortgages.(27)
 

CONCLUSION

Fiscal and monetary policy has been used by the bankers to redistribute wealth to themselves and the corporations they control as well as to national governments. Whilst taxation policy is overt, a hidden transfer of wealth is achieved by monetary policy- the public endure inflation whilst the debtor governments grow in size and the bankers grow rich collecting interest on the loans that cause it.

 

The fleecing of the Western taxpayer accelerated during the post-War period, with the creation of the IMF/World bank.
 

7.3 FREE TRADE AGREEMENTS

GATT/WTO

On 1 January 1995, The World Trade Organization replaced The Global Agreement on Tariffs and Trade (GATT) which had regulated global trade tariffs since 1947.(28) Three months before, Sir James Goldsmith, a British billionaire, gave a speech to the U.S. senate in which he warned about the effect global free trade would have on Western employment and wage levels.(29)

 

Goldsmith argued that GATT and the theories on which it is based were flawed. If implemented, it would impoverish and destabilize the industrialized world while at the same time cruelly ravaging the third world. The principle of global free trade is that anything can be manufactured anywhere in the world to be sold anywhere else.

 

That means that these new entrants into the world economy are in direct competition with the workforces of developed countries. In most developed countries, the cost to an average manufacturing company of paying its workforce is an amount equal to between 25 percent and 30 per cent of sales. If such a company decides to maintain in its home country only its head office and sales force, while transferring its production to a low-cost area, it will save about 20 percent of sales volume.

 

For every French employee, a company could have recruited 47 Vietnamese. Many economists believe that the growth in service industries will compensate for lost jobs in manufacturing. However even service industries will be subjected to substantial transfers of employment to low-cost areas.

On the other hand, the real cost to consumers of cheaper goods will be that they will lose their jobs, get paid less for their work and have to face higher taxes to cover the social cost of increased unemployment. According to figures published by the U.S. Department of Labor, since 1973 real hourly and weekly earnings, in inflation-adjusted dollars, have already dropped respectively by 13.4 per cent and 19.2 per cent, and that was before the 1995 GATT negotiations known as the Uruguay Round. If 4 billion people enter the same world market for labour and offer their work at a fraction of the price paid to people in the developed world, it is obvious that such a massive increase in supply will reduce the value of labour. Organized labour will lose practically all its negotiating power.

Regional free trade zones should only be established between countries with similar levels of economic development. The 1957 Treaty of Rome between France, Germany, Italy, Belgium, the Netherlands and Luxembourg created the European Economic Community, the largest free market in the world. Within the EEC, there would be no tariffs, no barriers, and a free and competitive market. Trade with nations outside the EEC would be subject to a single tariff.

 

This concept was known as community preference. In other words, priority would be given to European jobs and industry. About twenty years ago, quietly, the technocrats who run Europe started to alter this fundamental principle and move progressively towards international free trade. Ever since, unemployment in Europe has swollen despite growth in GNP. The 1992 Treaty of Maastricht enshrines this change and makes global free trade one of the fundamental principles on which the new Europe is to be built.

Regarding the economic success of Hong Kong, South Korea and Taiwan, special economic concessions granted by the West combined with their cheap and skilled labour made them successful. Over the past thirty years the balance of trade between these countries and the West has resulted in a transfer of tens of billions of dollars to them. However, a balance of trade in monetary terms can disguise huge job losses because, as Mr Goldsmith noted, he could employ 47 Vietnamese for the price of one Frenchman.
 

JOB LOSSES DUE TO NAFTA

The U.S. has lost millions of manufacturing jobs due to a growing trade deficit over the past three decades. This trend accelerated when The North Atlantic Free Trade Agreement (NAFTA) was signed by the U.S., Canada and Mexico, designed to remove tariff barriers over a fifteen year period. NAFTA eliminated 766,030 actual and potential U.S. jobs between 1994 and 2000 because of the rapid growth in the net U.S. export deficit with Mexico and Canada.

 

The majority of the job losses were in the manufacturing sector so workers who found jobs in the service sector are paid on average 23% less. Almost all new American jobs being created are in this sector and wages in the manufacturing sector are kept down due to the threat of job relocation overseas. The growth in U.S. trade and trade deficits has put downward pressure on the wages of "unskilled" (i.e., non-college-educated) workers in the U.S., especially those with no more than a high school degree.

 

This group represents 72.7% of the total U.S. workforce and includes most middle and low wage workers. A large body of economic research has concluded that trade is responsible for at least 15-25% of the growth in wage inequality in the U.S. (U.S. Trade Deficit Review Commission 2000, 110-18).(30)(31) In some areas of the U.S. the loss of manufacturing jobs to Mexico has caused disturbing levels of poverty. Since George Bush won Ohio in the 2000 presidential elections, the state has lost one in six of its manufacturing jobs. A string of local factories have relocated to Mexico in the last two years.

 

Two million of the state's 11 million population resorted to food charities in 2002, an increase of more than 18% from 2001.(32)


WHITE COLLAR JOB LOSSES

A study by Forrester Research predicts that U.S. companies will transfer 3.3 million service jobs overseas by 2015, compared with just 102,000 jobs shifted in 2000. The job exports are predominantly in the areas of information technology (including software and product development), customer service, back-office accounting and sales.(33) On 10 August 2003, USA Today warned that white collar workers are going to experience the devastating job losses that occurred in manufacturing in the previous thirty years. Almost any professional job that can be done long distance is suddenly up for grabs.

 

Jobs done by financial analysts, architectural drafters, telemarketers, accountants, claims adjusters, home loan processors and others at higher levels of the labour food chain are being farmed out to workers in other countries.

"We're not just talking about call-center jobs, but all kinds of jobs," says Deloitte Consulting analyst Christopher Gentle. "It doesn't leave any part of the corporation untouched."

Major U.S. companies, including such giants as IBM, Microsoft and Procter & Gamble, are leading the pack.

 

Tens of thousands of jobs already have been shipped out, and analysts project that millions more will go -- just as the fragile economy attempts a rebound.

"We see it as a threat to America's middle-class work force, in terms of wages and benefits," says Marcus Courtney, president of Washington Alliance of Technology Workers in Seattle.

 

"The service sector is not immune to the forces of globalization. We're talking about highly skilled, best-paying jobs. It's raising the concern of workers."(34)

In the U.K., HSBC Bank just announced that it is shipping 4000 back office jobs from the U.K. to Asia. By 2006, that will have increased to 7000, 13% of its current U.K. workforce.(35)
 

7.4 OPEN BORDERS

Whilst free-trade allows capital to travel to developing countries in search of cheap labour, lax immigration controls have allowed cheap labour to travel to the West in search of capital.

The immigrant population in the United States has increased to 33 million, a five percent increase in the last two years. The new Census Bureau data show that immigrants account for 11.8 percent of the U.S. population. In California 27% of the population are foreign born. The immigrant population in the U.S. is now larger than the entire population of Canada.(36) 9 million Mexicans make up 30% of these foreign born residents. Over a third of them are illegals.(37)

 

BLUE COLLAR WORKERS

Throughout the economic boom of the 90s, when the unemployment rate got as low as 3.9 percent, economists marveled at the U.S. economy's ability to grow jobs without sparking wage-led inflation. Many speculated that the waves of low-paid immigrants had created a "safety valve," keeping average wages low enough for the economy to grow without an increase in prices. An article in the Labor Department's "Monthly Labor Review" has laid out just how important those foreign-born workers were for the U.S economy: foreign-born workers earned about 75.6 cents for every dollar earned by the native born in 2000.(38)

Economic theory suggests that immigration that is complementary to the native workforce can boost wages all round. The most extreme example is Middle East countries that have oil but no oil expertise, so importing oil industry workers from the West makes the locals rich. In contrast, substitute workers are likely to reduce the wages of those they compete with in the labour market while boosting the profits of the owners of capital.

 

However, the lower cost of production associated with cheaper labour makes goods cheaper and keeps wage inflation down. George Borjas, professor of political economy at Harvard University, an authority on the economics of migration, is sceptical of claims that immigration boosts wages when it goes beyond meeting skills shortages. "I find very sizeable negative effects of immigration on wages," he says. "The numerical effect is strong and the statistical significance is strong. It will turn the economics of migration on its head."(39)

The National Academy of Sciences estimates that approximately 44 percent of wage depression among low-skilled Americans ( 70% of workforce) during 1980-1994 was due to immigration. Also an estimated 1,880,000 American workers are displaced from their jobs every year by immigration.(40)(41)

The American food and agriculture system has become dependent on foreign-born workers, a substantial number of whom are illegals. Until 15 or 20 years ago, meatpacking plants in the United States were staffed by highly paid, unionized employees who earned about $18 an hour, adjusted for inflation. Today, the processing and packing plants are largely staffed by low-paid non-union workers from Mexico and Guatemala. Many of them start at $6 an hour. A few years ago, the Immigration and Naturalization Service estimated that about 25 percent of meatpacking workers in the Midwest were probably illegals.(42) A government study estimated that nearly 40 percent of farm labourers are illegals.
 

WHITE COLLAR WORKERS

Immigration has also suppressed wages of white collar workers because U.S immigration has granted huge numbers of working visas. More than 100,000 American computer programmers are unemployed but when those who are underemployed or working in other jobs because they cannot find programming jobs, the total grows to about half a million. At the same time, more than 450,000 H-1B visa workers are employed as programmers in the United States.

I.T. companies are subcontracting thousands of jobs to outsourcing companies such as Tata, Infosys Technologies, and Wipro Technologies, the three largest Indian software servicing companies, who can provide Indian employees who will work for a third of the wages.(44) Furthermore a 2001 National Research Council report found that H-1Bs have an adverse impact on overall wage levels. The Independent Computer Consultants Association reports that the use of cheaper foreign labour has forced down the hourly rates of U.S. consultants by as much as 10 to 40 percent.(45)
 

BY DESIGN NOT BY ACCIDENT

None of this has come about by chance: Since 1986, Congress has passed 7 amnesties for illegal aliens. The 1986 Immigration Reform and Control Act (IRCA) gave amnesty - legal forgiveness - to all illegal aliens who had successfully evaded justice for four years or more or were illegally working in agriculture. As a result, 2.8 million illegal aliens were admitted as legal immigrants to the United States. Amnesties to date total 3,356,021.(46)

 

Cheered on by editorials in the The Wall St Journal,(47) President of Mexico Vincente Fox, is currently negotiating a blanket amnesty of millions of Mexican workers.(48) Republicans and Democrats are proposing different pieces of legislation which, if all passed, would give amnesty to all 8-11 million illegals. This is one of many steps being taken to merge Mexico and the U.S. as a prelude to a Pan-American Union from Alaska to Chile.(49)
 

UK

Research indicates that, on current trends, we can now expect a net inflow of at least 2 million non E.U. citizens per decade.(50) Total net Immigration from outside the E.U. has more than trebled in the past five years and is still rising. Each year nearly a quarter of a million people come to live in Britain.(51)

However this is nothing compared to the problem looming from the newly enlarged E.U. The floodgates for cheap labour opened on 1st May 2004 when 10 former Eastern Bloc countries join the E.U. making their 73 million citizens eligible to work anywhere within the EEA. Created in 1992 The European Economic Area (EEA) consists of the 15 member states of the European Union (EU) plus Norway, Iceland and Liechtenstein.

 

There is free movement of people, goods and services within the area. So long as nationals of the countries are exercising their freedoms under these the various treaties, they are not strictly subject to immigration control, and may work or set up in business without restriction. These rights extend also to members of the households of EEA nationals accompanying them to the U.K..

 

13 countries have applied to become new members: 10 of these countries -Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia joined on 1st May 2004. They are currently known by the term "acceding countries". Bulgaria and Romania hope to do so by 2007, and Turkey is currently negotiating its membership.(52)

The E.U. estimates that around 335,000 people will migrate each year from Eastern Europe after the barriers to free movement come down, including 100,000 workers. This may be a deliberate understatement of the tidal wave of cheap labour which is about to demolish wage levels in Western Europe.(53)

Another revolution is quietly taking place in another aspect of immigration aimed directly at the middle class. The Government has been clamping down on illegal immigration but massively expanding legal migration for skilled workers, most noticeably through expanding the work permit scheme to about 200,000 people this year. David Blunkett, the Home Secretary, has said he is proud to have produced the largest work permit programme of any country.

 

These workers will be able to bring their families and, on past form, most will be accepted for settlement after 4-5 years if they so wish. This massive expansion of the work permit scheme therefore represents a major new avenue of immigration. The Government has also set up the Highly Skilled Migrant Programme, which has so far brought in 3,000 of the of the world's brightest and best. The scheme makes it easier for foreign students to carry on working in the

U.K. after their course finishes. No doubt many will come from poor countries and will accept significantly lower salaries than native workers.(54)(55) The effect of immigration policy on the labour market is the same as in the U.S.. While the highly skilled in London enjoy wages up to 80 per cent higher than the national average, a recent report by Incomes Data Services showed that shelf-fillers in London suffer wages 10 per cent below the national average. Immigration has pushed unemployment 2 per cent higher than it would otherwise be.

 

National unemployment has been at just over 5 per cent for two years now, and in London, where most immigrants live, unemployment is the second highest in the UK at 6.6 per cent.(56) Britain's top labour economist, Professor Richard Layard of London School of Economics, who helped to design Labour's welfare to work programme, stated in a letter to the Financial Times:

There is a huge amount of evidence that any increase in the number of unskilled workers lowers unskilled wages and increases the unskilled unemployment rate. If we are concerned about fairness, we ought not to ignore these facts. Employers gain from unskilled immigration. But the unskilled do not.
 

CONCLUSION

The elite have promoted free trade and open borders with full knowledge of their destructive consequences. Poor workers are glad to work for higher wages either by migrating to the West or by working in the new steel factory at home. This analysis has not addressed their plight, which is already well documented, but has shown the serious damage to employment and wage levels in the West.
 

7.5 THE ENVIRONMENTAL MOVEMENT

 

THE REPORT FROM IRON MOUNTAIN, 1966

The purpose of the study was to analyze methods by which a government can perpetuate itself in power. The authors concluded that, in the past, war has been the only reliable means to achieve that goal. Under world government, however, war would be impossible so the challenge was to find other methods for controlling populations and keeping them loyal to their leaders. It concluded that a suitable substitute for war would require a new enemy which posed a frightful threat to survival. Neither the threat nor the enemy had to be real, they merely had to be believable.

 

Several surrogates for war were considered, including a staged space-alien invasion, but the only one holding real promise was the environmental pollution model. This was viewed as the most likely to succeed because firstly, it could be related to observable conditions such as smog and water pollution - in other words, it would be based partly on fact and, therefore, believable. Secondly, predictions could be made showing end-of-earth scenarios just as horrible as atomic warfare.

 

Accuracy in these predictions would not be important. Their purpose would be to frighten, not to inform. Not only does the environmental pollution model justify expansive and authoritarian government, it also requires citizens to impoverish themselves thereby widening the gap between leaders and followers.

Matching the Iron Mountain brief, part of the environmental movement aims to reduce living standards in the West, especially in the U.S.. The questionable intellectual credibility for this plan was provided in the benchmark publication from Massachusetts Institute of Technology, The Limits To Growth, commissioned by The Club of Rome in 1972. The book introduced the concept that the environment would be irrevocably damaged if its "carrying capacity" was breached.

 

On current trends it predicted total collapse of industrial civilization in the second half of the twenty-first century unless capital and population growth were severely limited. Whilst polices designed to reduce consumption under the rubric of 'sustainable development' are high on the political agenda, real environmental health and pollution issues are either being swept under the carpet or being created by the petrochemical- pharmaceutical cartel.

 

The last chapter of this book proves that, actually, the elite regard human beings as Earth's primary contaminant.
 

FINANCING ENVIRONMENTALISM

A few years after the Report from Iron Mountain was published in 1966, the environmental movement was hijacked by the banking cartel. Instead of staying focused on scientific study of conservation, it became a catch-all for a radical political agenda, now spearheaded by ex-KGB chief Mikhail Gorbachev and his Western banker colleague Stephen Rockefeller.(58)

Dr Michael Coffman's fascinating article Why Property Rights Matter, details the high-level funding of environmentalism:

In a dazzling display of raw power, foundations with interlocking directorates funded the Nature Conservancy in 1996 to the tune of $203,886,056, or 60 percent of its annual revenue. Initially the foundations banded together under the name Environmental Grantmakers Affinity Group of the Council on Foundations. Under the umbrella of Rockefeller Family Fund 136 foundations formed the Environmental Grantmakers Association (EGA) in 1987 which has grown to over 200 by the end of the twentieth century.

 

Congressman Richard Pombo (R-CA) claimed in 1999 that there are,

"3,400 full time employees, including leaders who often make $150,000 or more, as well as a small army of outside contractors such as scientists, lobbyists, lawyers, and public affairs specialists" in Washington DC.

Citing a 1999 Boston Globe article, Congressman Pombo said:

…"foundations invest at least $400 million a year in environmental advocacy and research. The largest environmental grant-maker, Pew Charitable Trusts, gives more than $35 million annually to environmental groups.

 

".....When the additional 2,300 foundations that donate to environmental activism are considered, plus the billion dollars or so contracted to environmental organizations by various agencies of the federal government, the Boston Globe [newspaper] estimates the total funding for environmental activism to be around four billion dollars annually!".(59)

Substantial financing and leadership of the United Nations came directly from the corporate elite as well as from national governments. In 1946 John D. Rockefeller Jr. brought the U.N. to America by gifting $8 million for the purchase of the land for the U.N. building in New York. Canadian multi-billionaire and Rockefeller associate, Maurice Strong, was the first Director of the U.N. Environmental Program (UNEP) created after The Stockholm Conference, ('Earth Summit 1') in 1972.

 

Mr Strong was secretary general of all three Earth Summits 1972, 1992, and 1997. He initiated The Earth Charter Project in 1994, the 'Ten Commandments' of sustainable development. Gorbachev was co-chair of The Earth Charter Commission and Stephen Rockefeller was Chair of the drafting committee. The ceremony to launch the Earth Charter initiative in May 2000, involved the presentation of the document to regular Bilderberg attendee, Her Majesty Queen Beatrix of The Netherlands. This illustrates how top-down the environmental movement is, despite its significant grass-roots support.(60)

The Earth Charter developed an earlier Rockefeller initiative, the 1972 Rockefeller Brothers Fund report entitled Use of Land: A Citizen's Policy Guide to Urban Growth. This was a bench-mark publication on subjecting property rights to government censure.(61) Ted Turner is another multi-billionaire environmentalist. In September 1997 he set up The United Nations Foundation to distribute funds to U.N programmes with a gift of (U.S.) $1 billion.(62)

 

Former Nazi SS officer and I.G. Farben employee, Prince Bernhard of The Netherlands was one of the founders of The World Wildlife Fund in 1961.(63) Britain's Prince Philip was the first President of the World Wildlife Fund UK (WWF) from its formation in 1961 to 1982, and International President of WWF (later the World Wide Fund for Nature) from 1981 to 1996. Since 1985, World Wildlife Fund has invested over 1.5 billion dollars in 11,000 projects in 130 countries.(64)

 

Prince Philip also founded the Alliance of Religions and Conservation in 1995.(65) Prince Charles set up The Prince of Wales Business Leaders Forum in 1990 to promote environmental issues in the business world and it now has support from 65 major multinational corporations.(66)
 

RURAL CLEANSING

Less than 5 percent of the U.S. is urban, but urban areas comprise 77.2 percent of the population. The population density in the U.S. is only 77.7 people per square mile, compared to the U.K. which is 629.4. The reason the environmental lobby has been so successful in the U.S. since the 1970's is that the courts have generally ruled in favour of the primacy of public use when judging property rights.

 

In the spirit of Rousseau, the thrust of the 1972 Use of Land report supported the premise that development rights of private property owners should be censured by the government. Environmental protection areas would be protected "not by purchase but through the police power of the federal government." The Endangered Species Act was passed the following year, a key weapon for restricting property rights.

The plundering of rural America has gotten so bad that a Wall Street Journal editorial on 26 July 2001, called it "rural cleansing". The WSJ cites the case in which the federal court forced the Bureau of Reclamation to cut off irrigation water in April 2001 that undeniably belonged to 1400 farmers in the Klamath Basin Irrigation Project, a watershed straddling the California and Oregon border. The action turned their once lush green farmland to swirling dust reminiscent of the Oklahoma dust bowl days of the 1930s Great Depression.

 

The suit began in 1988 when two sucker fish were listed as "endangered" under the Endangered Species Act of 1973. The coho salmon was later added as a threatened species. Citing the U.S. Endangered Species Act, Oregon District Judge Ann Aiken ruled in Federal Court on April 6, 2001, to give all the water to the endangered species. The decision was the result of a lawsuit brought by the Oregon Natural Resources Council (ONRC).(67)

The WSJ claimed ,

"The goal of many environmental groups - from the Sierra Club to the… ONRC - is no longer to protect nature. It is to expunge humans from the countryside."

Just as in the Klamath basin example, the WSJ determined that,

The strategy of these environmental groups is almost always the same: to sue or lobby the government into declaring rural areas off-limits to people who live and work there. The tools for doing this are the Endangered Species Act and local preservation laws, most of which are so loosely crafted as to allow a wide leeway in their implementation. In some cases the owners loose their property outright. More often the environmentalists' goal is to have restrictions placed on the land that either render it unusable or persuade owners to leave of their own accord.

Congressman Richard Pombo laments this attack on America's natural resource-based industries:

Federal policies implemented as a result of environmental advocacy financed by private foundations are trampling on property rights. They are shutting down the timber industry, the mining industry and the oil and gas industry. These policies are creating misery in rural areas dependent on resource production. Small communities and families in rural areas are reeling, while environmental groups are collecting rewards of six figure grants from rich, private foundations. Why is this sort of activity subsidized by the taxpayer?

The land grab is also being directed by the federal government. President Clinton used the 1906 Antiquities Act to set aside tens of millions of acres of federal land as national monuments preventing any commercial use. In 1998 he initiated the Clean Water Action Plan which withdraws thousands of miles of federal roads and also imposes buffer zones of natural habitat on private land along millions of miles of streams and rivers.(68)

 

Following the 1968 U.N. Conference on Man and the Biosphere, the U.S. government instituted their own program called The United States Man and the Biosphere Program-U.S. MAB. There are currently 47 biosphere reserves and 20 World Heritage Sites in America, as designated by the U.N.. The counties surrounding the biosphere reserves/World Heritage Sites are "buffer zones." At some point there will be no human activity in the biospheres and the buffer zones are to protect the biospheres where there will be limited human activity.(69)

 

This plan first appeared as part of The Wildlands Project, a grandiose design to transform 50% of the U.S. into a biosphere cleansed of modern industry and private property and the rest into buffer zones. The U.S. Senate came close to endorsing this plan in 1994 when considering ratifying the U.N. Biodiversity Treaty. At the eleventh hour it was pointed out that the study on which the Treaty was based, the 1994 Global Biodiversity Assessment, endorsed the Wildlands Project strategy.(70)

 

The Biodiversity Treaty also proposes an unaccountable U.N. Trusteeship Council to regulate any human activity that presents potential harm to biological diversity.

With 1.8 million acres Ted Turner, billionaire and radical environmentalist, is now the largest land owner in America. According to Forbes Magazine,

Despite his reputation as a die-hard conservationist, the cable pioneer makes plenty of money off his land. He sells bison meat to restaurants (including his own). He opened some of his New Mexico holdings to gas and coal exploration. Timber is harvested and sold. Hunting and fishing fees generate $5 million a year. "I'm doing things as natural as I can and trying to make some money at the same time" (71)
 

URBAN SPRAWL?

The key principles of The Use of Land were adopted at the 1976 U.N. Conference on Human Settlements (Habitat I) held in Vancouver:

Land... cannot be treated as an ordinary asset, controlled by individuals and subject to the pressures and inefficiencies of the market. Private land ownership is also a principal instrument of accumulation and concentration of wealth and therefore contributes to social injustice... Public control of land use is therefore indispensable.

"Smart growth" advocates seek to preserve land in a natural or agricultural state by encouraging individuals to live in denser communities that take up smaller tracts of land per housing unit. Such communities also encourage residents to rely more on walking or public transit than on cars for mobility, and they more closely mix retail and other commercial facilities with residential units to foster easy access to jobs and shopping.

 

The density of the average U.S. suburban area is 1-3 housing units per acre. The Sierra Club's definition of urban efficiency is 100 units per acre. Reaching that goal, however, would require living arrangements that are 2.4 times as dense as all Manhattan, twice as dense as central Paris, and ten times that of San Francisco.

 

At least nineteen states have state growth-management laws or task forces to protect farmland and open space. Dozens of cities and counties have adopted urban growth boundaries to contain development and prevent the spread of urbanization to outlying and rural areas. Portland Oregon is a model for smart growth and since the 1970s it has had the most stringent planning laws in the U.S..(72)

 

The Federal Department of Housing and Urban Development (HUD) partially funded a 2002 report called Growing Smart Legislative Guidebook: Model Statutes for Planning and the Management of Change by the American Planning Association (APA). This report not only applies the smart growth principle to future land use, but also to current land use by introducing the idea of "amortization of non-conforming uses."

 

This will require the local government to seize property without just compensation where property owners fail to adjust the use of their property to fit revised zoning ordinances or new plans for a particular geographical area in the community.(73)
 

REGULATING CONSUMPTION

One of the key concepts of the sustainable development agenda is "Factor 10". This theory proposes exponential decrease in resource use especially in OECD countries which are required to reduce material consumption by 90%. (74) The 1994 statement of the Factor Ten Club demands and end to private property:

The process of dematerialization must involve a shift in thinking toward the 'life-cycle' approach, meaning that improvements are in no way limited to products, but can and will have to incorporate changes in the way products are produced, packaged, transported, sold, used, reused, cascaded, recycled and disposed of... Use-sharing, renting, leasing and borrowing are just a few examples of concepts which result in reduced material flows.

It also demands increasing the cost of capital (natural resources) in relation to labour using taxation.(75)

Whereas the first U.N. Habitat Conference in 1974 dealt with land use issues, Habitat II in June 1996 dealt with consumption issues. The underlying theme was that people of the world would have to pay a tax for the usage or depletion of a resource in addition to the service provided. Therefore, if you pay $1.00 per thousand cubic feet for water consumed, they are then saying that they want you to pay another $1.00 for the depletion of the water used.

 

What the World Bank and IMF are working on is to find a formula to measure how much a person produces at their job and at home. From that amount they would then subtract out how much of the Earth's resources they use such as water, energy, food, material, heat, etc.. If the net figure is a plus, the person is adding back to the Earth's resources. If it is a negative, he is taking away from the earth's resources and is therefore a bad global citizen.(76)

The conference identified Public-Private Partnership as instrumental to this task. The Public-Private Partnerships for the Urban Environment initiated by the United Nations Development Programme (UNDP) became operational in 1996, the year of the Habitat II conference. (77) This is the key socio-economic component of the global feudal state. Whilst property is transferred into the hands of a private ruling elite, the use of that property by the masses will be regulated by a large body of laws restricting consumption and consumer choice.

As described in chapter 6, Prince Charles' Prince of Wales Business Leaders Forum (PWBLF) was set up in 1990 to promote Public-Private Partnership. The official website of PWBLF makes specific reference to key role of PPP market regulation in the New World Order:

The International Business Leaders Forum is an international educational charity set up in 1990 to promote responsible business practices internationally that benefit business and society, and which help to achieve social, economic and environmentally sustainable development, particularly in new and emerging market economies.

 

From the outset, the Forum has pursued three pathways:

• in making the case that in the new world order, [emphasis added] well-led and competitive businesses have a positive role to play in development challenges, through responsible core business practices and engagement with society

• in showing that -while partnership and collective action is difficult - in the networked society it is essential to combine business skills and resources with community support and public accountability

• in demonstrating that scale can only be achieved and economic exclusion addressed through `enabling environments' in which governments, international institutions and the media play a part.(78)

This is preparation for the strait jacket of U.N. environmental and social legislation being fastened onto to the global economy. its main purpose is to reducing living standards, restrict consumer choice, and limit property rights in order to empower the ruling elite.
 

THE GLOBAL WARMING SCAM

Whilst there are many real and serious environmental problems, man-made global warming is a contrived political issue. The end of earth scenarios linked to global warming have been successful in mobilizing public opinion in favor of reducing industrial activity in order to cut CO² emissions. However, an independent petition organized by the Oregon Institute for Science and Medicine signed by 17,000 independent scientists states that increased CO² levels do not cause deleterious changes in climate or weather; indeed they lead to increased plant growth.(79)

Iron Mountain style propaganda has resulted in a raft of anti-car measures being introduced across the developed world. Private motoring has to rank as one of the highest achievements in personal freedom of the twentieth century. Now the elite are doing everything possible to curtail that freedom. A tax on carbon is now one of the major proposals of advocates of global taxation (80) and the U.K. government has already announced plans to impose satellite vehicle tracking and road tolls (see chapter 12).
 

7.6 WAR AS A MEANS OF PLANNED WASTE

The blueprint for the economic destruction of the U.S through war is the policy paper entitled Rebuilding America's Defenses written by the neo-conservative think-tank Project for the New American Century in year 2000. (81) It recognizes the need to pursue an indeterminate series of wars in order to protect American interests. The U.S. Government has also stated that the War on Terror may never end.

In 1984 George Orwell outlined the real Machiavellian purpose of war:

The primary aim of modem warfare... is to use up the products of the machine without raising the general standard of living... The essential act of war is destruction, not necessarily of human lives, but of the products of human labour. War is a way of shattering to pieces, or pouring into the stratosphere, or sinking into the depths of the sea, materials which might otherwise be used to make the masses too comfortable...

The Report From Iron Mountain repeats Orwell's conclusion:

The production of weapons of mass destruction has always been associated with economic "waste." The term is pejorative, since it implies a failure of function. But no human activity can properly be considered wasteful if it achieves its contextual objective... In the case of military "waste," there is indeed a larger social utility. In advanced modern democratic societies, the war system... has served as the last great safeguard against the elimination of necessary social classes... The continuance of the war system must be assured, if for no other reason, among others, than to preserve whatever quality and degree of poverty a society requires as an incentive, as well as to maintain the stability of its internal organization of power.

7.7 CRIMINALIZING SOCIETY
 

OVERALL ECONOMIC COSTS OF CRIME

U.S. expenditure on prisons is currently $ 46 billion a year. The overall cost of crime in terms of lost productivity is in excess of $1 trillion per year.(82) Put another way, total loss of productivity due to crime is 10% of GDP (10.4 trillion in 2002).

 

Including stolen assets the figure is $1.7 trillion. This has not come about by chance. Increasing the crime rate has been deliberate policy of the U.S. government over the last two decades and drug crime has been central to it.
 

THE WAR ON DRUGS

The total economic cost of drug abuse and drug crime in the U.S between 1992 and 2000 is calculated at $1.1 trillion, increasing each year from $102 billion in 1992 to $160 billion in 2000.(83) Lost productivity accounted for 69% and health costs 9%. Imprisonment is the single largest cause of lost productivity, accounting for 30% of the total.
 

THE COCAINE IMPORT AGENCY (CIA)

In March 1998, the CIA Inspector General testified that there had existed a secret agreement between the CIA and the Justice Department, wherein,

"during the years 1982 to 1995, the CIA did not have to report the drug trafficking by its assets to the Justice Department."(84)(85)

As Michael Levine commented,

"..[to] a trained DEA agent this literally means that the CIA had been granted a license to obstruct justice in our so-called war on drugs; a license that lasted, so the CIA claims, from 1982 to 1995."

That understanding remained in effect until August of 1995, when Attorney General Janet Reno rescinded the agreement. The CIA collusion with allied drug traffickers led to the formation of a protected narcotics pipeline, resulting an increase in supply and drop in price. Former DEA agents have repeatedly pointed out that 50%-70% of the cocaine entering the U.S. went via drug cartels that enjoyed CIA protection.(86)

Despite the exponential growth in spending on the alleged "drug war", illicit drugs are cheaper and purer than they were two decades ago, and continue to be readily available. Between 1981 and 1998, the price of heroin and cocaine dropped sharply while their levels of purity rose.
 

DRUG OFFENDERS ACCOUNT FOR THE EXPLODING PRISON POPULATION

In 2001 the Federal Bureau of Investigation's Uniform Crime Reports (UCR) estimated that there were 1,586,900 State and local arrests for drug abuse violations in the U.S. an increase of 200% from the half million in arrests 1982 when the War on Drugs began. This accounted for 11.5% of all arrests.(87) The War on Drugs has resulted in the arrest, prosecution and incarceration of tens of thousands of persons each year for crimes associated with the sale, possession and use of illegal drugs. 500,000 drug offenders are in prison, 25% of a two million prison population.(88)

In 1986 and 1988 Congress enacted mandatory minimum sentencing laws, which forced judges to deliver fixed sentences to individuals convicted of a crime, regardless of culpability or other mitigating factors. The most common mandatory sentences are for 5 and 10 years, and are based on the weight of the drug or the presence of a firearm.

 

Simple possession of any quantity of powder cocaine by first-time offenders is considered a misdemeanor, punishable by no more than one year in prison but simple possession of crack cocaine results in a five-year mandatory sentence.(89) The average sentence for a first time, non-violent drug offender is longer than the average sentence for rape, child molestation, bank robbery or manslaughter.(90)

 

While the intent was to punish high-level drug offenders, the laws have had the opposite effect-jailing low-level drug offenders for unusually long sentences. Enforcement agencies focus their efforts on those minor actors in the trade who are the most easily arrested, prosecuted, and penalized, rather than on the middle and high-level criminals who are drug dealing's true masterminds and profiteers who are able to trade information in return for significantly reduced prison sentences.

Before the sentencing guideline concept took root, however, state lawmakers began enacting mandatory minimum penalties for drugs. This began in 1973 with the passage of the notorious "Rockefeller drug laws" in New York (named after then Gov. Nelson Rockefeller) requiring mandatory 15-year prison sentences for sales of small amounts of narcotics.(91)
 

THE PRISON ECONOMY

By increasing rates of crime and incarceration, the U.S. Government has not only reduced living standards but has laid the foundations for the new coercion economy. The warning from past and present events is that private corporations can meet a substantial portion of their labour requirements through slave labour. There's nothing wrong with putting prisoners to work providing they are genuine criminals and basic human rights are upheld.

 

However, in both Nazi Germany and modern day China, slave labourers were not criminals, they were enemies of the state or targets of genocide; they were ruthlessly abused, tortured and murdered. Private corporations were glad to use labour under these conditions. For this reason, the exponential growth of the U.S. prison population accompanied by a deterioration of civil liberties is cause for serious concern. Also, when prison labour starts to become significant, as it now is in China, that has a negative effect on wage and employment levels.

The number of inmates in state and federal prisons has increased more than six-fold from less than 200,000 in 1970 to 1,440,655 by the end 2002. An additional 665,475 are held in local jails. As of 30 June 2002, the nation's prison and jail population exceeded 2 million for the first time in history.

 

At the end of 2002, 1 of every 143 Americans was incarcerated, the highest incarceration rate in the world. The number of persons on probation and parole has been growing dramatically along with institutional populations. There are now 6.7 million Americans incarcerated or on probation or parole, an increase of more than 265 percent since 1980.(92)

In the U.K. the prison population was about 45,000 in 1990. By 2009 it could be as high as 107,000 according to home office predictions.(93)

The 1979 U.S. Federal Prison Industries Enhancement Certification Program gave private industry the green light to put state and federal prison inmates to work. Major companies such as Texas Instruments, Honeywell, Hewlett-Packard, Siemens, Microsoft and Boeing sub-contract some low-end assembly work to prisons. They can pay the same or lower wages as they would in Mexico but can use the 'made in USA' label.(94) (95) In July 2003 Dell Computer Corp. was admonished by an environmental group for running a primitive recycling operation that exposed prisoners to toxic chemicals.(96)
 

NAZI SLAVE LABOUR

The use of slave labour by two major German industrial giants was scrutinized at the Nuremberg Trials. I.G. Farben had an estimated 83,000 slaves at its Auschwitz factory and Krupp industries use around 75,000 slaves. However the full scale of slave labour was brought to light in 1999 when The American Jewish Committee presented the results of their investigations.(97) Aware of this investigation, major companies employed their own historians to look for skeletons in their closets. Deutsche Bank's company historian discovered that it helped finance the construction of Auschwitz from which tens of thousands of slaves were taken.(98)

In February 1999 thirteen major corporations who used slave labour came clean and agreed to set up a compensation fund for the victims to head off law suits:

1. Allianz AG

2. BASF AG

3. Bayer AG

4. BMW AG

5. DaimlerChrysler AG

6. Deutsche Bank AG

7. Degussa-Hüls AG

8. Dresdner Bank AG

9. Friedr. Krupp AG

10. Hoesch-Krupp

11. Hoechst AG

12. Siemens AG

13. Volkswagen AG

In December 1999, The American Jewish Committee produced a list of 257 companies that used slave labour. More than 50 companies on AJC's initial list of 257 firms, including multi-nationals Shell & DEA Oil GmbH, and Ford Motor Co, joined the general compensation fund. Ten days after the list was issued, negotiators agreed on a fund totaling $5.2 billion dollars.

 

Professor Ulrich Herbert of, University of Freiburg, an expert on Nazi slave labour points out that the firms identified on the AJC list account for just a fraction of all German companies that used slave or forced labour. Indeed, virtually every industrial company of any size in Germany used slave or forced labour. The total number of slaves is estimated at 12 million. German historians estimate that of the thousands of companies that used forced and slave labour, more than 500 are still in operation.(99)(100)

The compensation fund is now called The German Economy Foundation Initiative, whose stated purpose is,

...guaranteeing that all German companies, including foreign affiliates and parent companies, will be protected against lawsuits relating to the Nazi era and that they will be able to work on international markets under conditions of comprehensive and lasting legal security.(101)
 

CHINA

The Laogai Research Foundation is a non-profit organization dedicated to collecting information about China's vast system of forced-labour camps. The foundation was started by Hongda Harry Wu, who has written three books on his experiences as a Chinese prisoner for over 19 years. Currently, there are estimated eight million prisoners in China's slave labour camp system known as 'Laogai'.

 

As a tool of political repression, the Laogai serves to silence all voices of political dissent throughout China. Once in the Laogai, inmates are forced to confess their "crimes," denounce any anti-Party beliefs and submit to a regime of reeducation and labour. Although Chinese law forbids torture and the use of torture to extract confessions, the practice remains widespread in the Laogai.

 

Anyone in China can be held for up to three years in with no trial or sentencing procedure of any kind. All that is necessary is the directive of any official in China's Public Security Bureau. All prisoners in the Laogai are forced to labour. Labour conditions vary from region to region and camp to camp. There are many reports of prisoners working up to 16 to 18 hours a day to meet labour quotas that are enforced through withholding of food rations.

 

Prisoners also often labour in highly unsafe conditions including work in mines and with toxic chemicals. Sometimes conditions are less arduous with more reasonable working hours and more humane treatment. Prisoners do not receive payment for their labour or any profit generated from the products they produce. According to documented evidence gathered by the Laogai Research Foundation and other human rights and media organizations, the practice of harvesting the organs of executed prisoners in China began sometime in the late 1970s.

 

Organs harvested from prisoners are used in transplant operations for privileged Chinese and for foreigners. According to the statistics of Amnesty International, China executes more prisoners every year than the rest of the world combined.

The deliberate application of forced labour by the Chinese government has spawned an entirely new field in China's economy: the economics of slavery. One theorist clearly defined this policy in the following statement:

The fundamental task of our Laogai facilities is punishing and reforming criminals. To define their function concretely, they fulfill tasks in the following three ways:

(1) Punishing criminals and putting them under surveillance

(2) Reforming criminals

(3) Organizing criminals in labour and production, thus creating wealth for society

Our Laogai units are both facilities of dictatorship and special enterprises.
- Criminal Reform Handbook,

PRC Ministry of Justice, Laogai Bureau,Shaanxi People's Publishers, 1988 (102)

Western companies are still using slave labour today on a huge scale by trading with China. The U.S. imports approximately $70 billion worth of Chinese goods.(103) The import of Chinese forced labour-made goods into the U.S. is illegal, according to section 1307 of the Tariff Act of 1930, which makes it is illegal to import any product that is produced in whole or in part by prison labour of any kind. In 1992, the need to directly confront the Chinese regarding this issue became apparent, leading to the signing of a document known as the "Memorandum of Understanding Between the United States of America and the People's Republic of China on Prohibiting Import and Export Trade in Prison Labor Products".

 

In the most recent State Department Report on Human Rights from 1999, U.S. authorities admit that the MOU has been "nearly impossible" to enforce and that Chinese authorities have been "uncooperative. When a product is labeled "Made in China," it may hide the fact that it was made in the Laogai by Chinese prisoners. Until China reveals the extent of their Laogai production, and

U.S. companies are willing to release the location of all of their manufacturing facilities in China, there is no way for the Western consumer to be certain that s/he is not financially contributing to the Laogai system.

Examples include Chrysler's joint venture in China to make Cherokees called Beijing Jeep Company and Volkswagen's joint venture in China to make the Santana model called Shanghai Volkswagen Automobile Company. The Laogai foundation investigation showed they were sourcing parts from prison labour.(104)

 

The success of China's prison economy is evidenced by all the "made in China" toys in our shops. The China National Toy Association (CNTA) is actually a front for People's Armed Police (PAP) and the Chinese Army (PLA) Laogai system.(105)
 

7.8 DISEASE

Spending on health care in the U.S. is projected to rise from 14% of GDP (2000) ($1.42 trillion ), to 17% in 2011.(106) Total health care expenditure in the

E.U. averages 8% of GDP. (107) The pharmaceutical companies are the major beneficiaries of disease as indicated by their market value. At the time of writing, Britain's GlaxoSmithKline was Britain's fourth largest company. Pfizer was America's fourth largest company and the fourth largest in the world. Novartis was Switzerland's largest company, 35% larger than second place Nestle. The world's top ten drug/healthcare companies had a total market value of $ 1.1 trillion (see chapter 2).

What we are witnessing is on the one hand is a form of indenture through illness, a pharmaceutical feudalism. As disease increases so does the tariff that society pays to the petrochemical sorcerers who provide symptomatic treatments and abuse their power over medical research to block any curative or preventative treatments. However the other Orwellian economic goal of public health policy is to make us poorer.

Nothing illustrates this second point better than the emergence of extremely disabling new diseases during the 1980s which are described in the final chapter of this book. The economic consequences of Western public health policy are clear from the statistics of disability, unemployment and healthcare spending. The percentage of the population who are disabled is similar in Europe and the U.S.. In the E.U., disability is estimated to affect 10-20% of each country's population and the U.K. and U.S. both have 15% disabled.(108)(109)

So much for the medical 'breakthroughs' of the twentieth century. In the U.K. 3.8 million disabled people of working age are out of work, 11% of the total 34 million of working age. In the U.S., 13 million disabled people of working age are out of work 8.5% of the total 159 million of working age. Incomes of households with at least one disabled person are 20-30% lower than the incomes of all households.

For Federal Reserve Bank Chairman Paul Volcker and Co. who require a substantial decline in living standards in the West, these statistics represent success not failure of the healthcare system.
 

CONCLUSION

The dream of prosperity for all is dying out around the world. Developing countries which had an expanding middle class in the early 1980s have been ransacked. Almost 5 billion people on the planet do not have basic property rights enjoyed in the West. At the same time, Westerners are getting poorer year by year. In the U.K., the enormous increase in house prices has made home ownership an impossibility for most young people.
 

Chapter 7 End Notes

1. George Orwell, 1984, part 3 chapter 2. Full text available on-line at http://www.mondopolitico.com/library/1984/1984_c21.htm

2. Special Report: America Celebrates Tax Freedom Day, The Tax Foundation, April 2003. http://www.taxfoundation.org/SR122.pdf

3. Jane Hough, The Burden of Taxation, economic policy and statistics section, House of Commons library,10 May 2001, ref. 01/51, appendix. See http://www.parliament.uk/commons/lib/research/rp2001/rp01-051.pdf

4. Technical Appendix, Tax Freedom Day website. See http://www.taxfreedomday.co.uk/technical-appendix.htm

5. How The UK Compares, Tax Freedom Day website. See http://www.taxfreedomday.co.uk/uk-compares.htm

6. New Study Profiles Total Tax Burden of Median American Family, The Tax Foundation, 9 March 2000 http://www.taxfoundation.org/prmedianfamily.html

7. Jane Hough op cit., p.21 Table 4

8. Dean Stansel, The Hidden Burden Of Taxation: How the Government Reduces Take-Home Pay, Cato Policy Analysis No 302, 15 April 1998. See http://www.cato.org/pubs/pas/pa-302.html

9. Isabelle Joumard, Tax systems in European Union Countries, OECD, economics department working papers No. 301, 29 June 2001, ref ECO/WKP(2001)27 pp.10-16. See http://www.oecd.org/dataoecd/4/7/1897173.pdf

10. Alan Greenspan, Gold and Economic Freedom, The Objectivist,1966. See http://www.gold-eagle.com/greenspan041998.html

11. Ron Paul, Congressman, speech in the House, Money as a Moral Issue, Paper Money and Tyranny, 5 September 2003. See http://www.house.gov/paul/congrec/congrec2003/cr090503.htm

12. G. Edward Griffin, The Creature from Jekyll Island, American Media, Fourth Edition, 2002, Ch. 3

13. Ibid., pp.116 and 120

14. Ibid., p.115

15. Ibid. pp116-119

16. Joseph Stiglitz, Globalization and its Discontents, Penguin Books, 2002, p.95

17. 2003 World Development Indicators, The World Bank, 4.16 External Debt, pp 246 -249. See http://www.worldbank.org/data/wdi2003/pdfs/table%204-16.pdf

18. Today's Conditions, Ron Paul op cit. http://www.house.gov/paul/congrec/congrec2003/cr090503.htm

19. U.S. Inflation Rates, Simple and User Friendly Calculator-Database Applications, Russell Software Inc. See. http://www.russellsoftware.com/inflarates.htm

20. Joe Hicks & Grahame Allen, A Century of Change:Trends in UK Statistics since 1900, social and general statistics section, House of Commons library, ref. 99/111, 21 Dec.1999. See http://www.parliament.uk/commons/lib/research/rp99/rp99-111.pdf

21. Sliglitz, op cit., p109

22. Ibid., pp.116-117

23. World Bank Secret Documents Consumes Argentina: Alex Jones Interviews Greg Palast, 4 March 2002. Transcript at Greg Palast's website. See http://www.gregpalast.com/detail.cfm?artid=125&row=1

24. Stiglitz, op cit., p.122

25. Griffin, op cit., Ch 23

26. Ibid., p.487

27. Rate rise forecast prompts debt warning, BBC, London, 6 November 2003. See http://news.bbc.co.uk/1/hi/business/3245969.stm

28. W.T.O. website. See http://www.wto.org/english/thewto_e/gattmem_e.htm

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35. Anger as HSBC cuts 4,000 UK jobs, BBC, London, 17 October 2003. See http://news.bbc.co.uk/2/hi/business/3199598.stm

36. Immigrant Population Climbs to 33 Million, Federation for American Immigration reform website, October 2003. See http://www.fairus.org/Research/Research.cfm?ID=2186&c=54

37. Immigration's Impact on the U.S, op cit.. See http://www.fairus.org/Research/Research.cfm?ID=2174&c=2

38. John McAuley, Immigrants Keep U.S. Economy Supple, Minnesota Star Tribune,4 Sept. 2002. See copy on Numbers USA website http://www.numbersusa.com/text?ID=1259

39. Anthony Browne, Cost of the migration revolution, The Times, London, 01 March 2003. See http://www.timesonline.co.uk/article/0,,630-595093,00.html

40. Lower Wages for American Workers, Federation for American Immigration Reform (F.A.I.R.),October 2002. See http://www.fairus.org/ ImmigrationIssueCenters/ImmigrationIssueCenters.cfm?ID=1211&c=15

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42. David Barboza, 'Meatpackers' Profile Hinges on Pool of Immigrant Labor'New York Times, 21 December 2001. See copy on Numbers USA website http://www.numbersusa.com/text?ID=885

43. High-tech worker visas, Numbers USA website, 2003 http://www.numbersusa.com/interests/hightech.html

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49. Dan Stein, Why Legalization Programs for Illegal Aliens Won't Solve the Problem, 17 October 2003, F.A.I.R. See http://www.fairus.org/Media/Media.cfm?ID=2253&c=35

50. Who Are We? Migration Watch UK website. See http://www.migrationwatchuk.org/default.asp?menu=whoweare&page=whoweare.asp 

51. Ibid., Key Points:Is there a problem? http://www.migrationwatchuk.org/default.asp?menu=isthereaprob&page=isthereaproblem.asp 

52. EU enlargement, E.U. website. See http://europa.eu.int/comm/enlargement/enlargement.htm

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54. An overview of UK migration, Migration Watch UK. See http://www.migrationwatchuk.org/ default.asp?menu=overview&page=overview.asp

55. Anthony Browne, op cit.,

56. Ibid.

57. Sir Andrew Green, Government grasping at straws to justify immigration policy, The Daily Telegraph, London, 22 September 2003. See copy on the website of Migration Watch UK http://www.migrationwatchuk.org/p_Telegraph_22Sept_2003.asp

58. Green Cross International, founded by Mikhail Gorbachev. See http://www.greencrossinternational.net/index1.html

59. Dr Michael Coffman, Why Property Rights Matter, pp.13-14 See also http://www.ega.org/

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61. Coffman, op cit.,

62. The Turner Foundation. See http://www.turnerfoundation.org/news/PRDetail10.asp

63. NationMaster.com encyclopedia. See http://www.nationmaster.com/encyclopedia/Prince-Bernhard-of-the-Netherlands

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67. Coffman op cit., p8

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70. Coffman op cit.,

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76. Joan Veon, op cit.

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