The Staggers

The New Statesman’s rolling politics blog

Where next for Occupy Wall Street? Conspiracy theory and the financial crisis

There has clearly been a concerted effort by a wealthy elite to bring us to our current state of pla

By Deborah Doane Published 08 October 2011 8:26

Conspiracy theorists have long said that the financial crisis is not a failure of regulation, of taking the eye off the ball, but rather a Machiavellian exercise that has been implemented over many years by free market liberal capitalists, wanting to erase the state and let the market work its wonders.

I want so badly to believe that it wasn't planned, that it was simply stupidity, lack of leadership and a too-big system out of control. But two events last week have finally brought me closer to believing the conspiracy brigade. First was the shocking admission from a City trader on the BBC that "Goldman Sachs rules the world", which rapidly went viral on the internet for its sheer bold-faced honesty. Even the conspiracy theorists thought it was a yes-men stunt, and couldn't possibly be true.

But the exposure of a secret letter from the European Central Bank to Berlusconi -- in which they press for action to privatise public services and overhaul the unions in order to "restore the confidence of the markets", was the final bit of evidence that convinced me.

Of course, I wasn't naïve. I knew that free marketeers were trying to dismantle the state and take over everything -- I just didn't think that it could be so well-mastered and designed, by campaign strategists of the highest order.

As a campaigner, I know when we plot a campaign strategy, its important to take the long-view. We design the opening up of political space through mobilisation and other tactics, and we build in opportunities to take advantage of key political moments. We make sure we identify and inform allies on the inside. And hopefully, after a few years, we will have won our case. But whereas the campaigns I have worked on are about fighting for human rights and the environment, the free marketeers' campaign was to overturn a system that values public goods over private enterprise, replacing it with one that values the wealthy and sees the poor as entirely expendable. Whereas the former might be based on a three or five year horizon, theirs had a 50 + year timeline. And it's finally coming to fruition on a global scale.

You can imagine Milton Friedman and a few other men sitting around a smoke-filled room at the Chicago School of Economics, back in the late 1960s, mapping out a political future with a severe global crisis at just the right moment, so that their dream of a state-free-future would become a reality. "Let's pick a country to start out with and learn some lessons," they might have said. So they started with Chile in the 1970s, pitching themselves as economic experts, and advising then dictator Pinochet to cut public spending and let the corporate sector takeover. No matter that the result was inflation of 375 per cent and 30 per cent unemployment, while eradicating the middle classes.

"This is the pain they have to endure" Friedman and his cronies said at the time. "We'll need a few more countries to strengthen our power," they might have strategised in the review a few years later, in the same, presumably smoke-filled room.

Throughout the 1980s, they worked their way through a few more developing countries as an experiment (for these colonial outposts were easy to sacrifice), as their disciples spread into the Bretton Woods institutions and beyond. They implemented their "lessons learned" (prioritise debt repayment, strip assets, privatise public services, increase wealth for the few).

"We'll need to have more influence," they would have agreed, as they infiltrated the right and the left alike -- the US Republicans and Democrats, the Conservative and Labour parties over here -- ensuring that their economic and policy advisors went through a constant revolving door with big business. They would put forward their advocates in every aspect of political and monetary policy. Now we see "expert" groups comprised of ex-Goldman Sachs bankers in Europe informing regulations on the finance sector.

And when they thought about mobilising, they could do no better than the Tea Party and its various incarnations, not to mention the long-standing think-tanks that celebrate "free enterprise", like the Adam Smith Institute or its US-based cousin, the American Enterprise Institute.

So, decades later, many of the original campaigners now long gone, you can see their offspring enjoying a whisky, a round of golf, a ride on their yacht, toasting their success. The master plan is finally taking hold in the US and Europe, the global economic crisis almost certainly a design of their cadre's original making.

Is it all a conspiracy? Chaos theory, of course, is a counter-balance to this line of thinking, but the point is, in fact, moot. There has clearly been a fairly concerted effort by the hands of a wealthy elite to bring us to our current state of play.

The question is, do we simply accept their interim victory as a fait accompli? Or can we learn from their lessons? Like any real campaigner, I'm not prepared to accept defeat, even one of this magnitude. I'm inspired by the Occupy Wall Street movement taking off in the US, but simply showing dissent isn't enough. Let's learn from the right. We now need to take a long-term, strategic view, mapping out not just what we don't like and want to change, but also who we need to influence, and precisely how.

This is not a short-term project. But the sooner we do this, the more likely we will, in our old age, still be enjoying public services, watching our children have access to education, drinking clean water under green trees and a clean sky, and looking back on a campaign well fought and well won.

Deborah Doane is the Director of the World Development Movement

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Tags: Occupy Wall Street

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21 comments

Sun, 2011-10-09 13:38 — Daniele1

Finally an article which is attempting to give us a glimpse of the truth.
It lifts the veil of all the bullshit thrown at us over the past few years and like a Pilger article, goes deeper to find out what is really going on.
Yes more of the same NS.
What scares me is that this attempt by the financial markets to control the world is not going to provoke a reaction from the left but a reaction from the right.
In times of difficulties like now (remember Germany in the 30's), people tend to turn against the poor and vulnerable in society, not the ones who caused the problem in the first place.They start blaming people on benefit, immigrants,the unemployed.This is happening now. All you have to do is look at the "Daily Mail" headlines.(the same paper who blamed the Jewish refugees coming to this country in the late 30's and called them scroungers).
So the biggest danger is that fascism will rise, not left-wing movements which tend to flourish during good times like the 70's. It is an awful paradox, but history has shown this to happen many times.
I hope I am wrong.

Sun, 2011-10-09 16:47 — Fergus Pickering (not verified)

Fascism will rise. History shows this has happened many times. Can you tell me, Daniele, say three of these times?
Other than the 930s.

Sat, 2011-10-08 08:37 — Fergus Pickering (not verified)

You want so badly to believe... No you don't. You hope it's wicked capitalists plotting. Of course you do.

Sat, 2011-10-08 09:48 — swatantra

I'm prepared to believe it because its happened before. Remember George Soros?
We have another generaion of speculators intent on bringing the systems to collapse, because its a challenge and because they are not beholden to any country and because they can make a few quick bucks out of the chaos. Its a network of international speculators using social media. I call that a conspiracy. Nobody knows who they are or what they are planning next; its finacial terrorism, straight out of a John Buhan novel.

Sat, 2011-10-08 10:18 — Anon (not verified)

BRilliant - well done NS keep 'em coming.

A great article. Just because we're paranoid doesn't mean they're not out to enslave us.

And even if 'they' weren't it's kind of happened, 99%.

However I believe that given the numbers involved, 'long term' planning is not what's needed, merely wider understanding. So I'm absurdly glad to see this, and hope it'll spread eventually to the Mail.

I'll just tell the writer before an 'anti' does, but wasn't Rastani (although from the mouths of babes) a penny-share attention seeker living with his mum in Bexleyheath?

Sat, 2011-10-08 10:19 — Dave C (not verified)

Wasn't Alessio Rastani exposed as more a self-publicist than a "city trader"?

BBC financial expert Alessio Rastani: 'I'm an attention seeker not a trader': http://www.telegraph.co.uk/finance/economics/8792829/BBC-financial-exper...

Sat, 2011-10-08 11:50 — Luddite (not verified)

You don't need to be a weatherman to see where the prevailing wind is blowing. Times are taught and are going to get an awfully lot tougher. We are entering a period of economic lunacy, we are all being led by probably the worse-set of politicians we've ever had to suffer, (that includes the left-wing ones) So comrades batten down the hatches were in for one hell of a ride, and if you already haven't done so, empty your bank accounts.

Sat, 2011-10-08 12:39 — Sam (not verified)

Is this a serious article? Just because one part-time trader says something doesn't make it true. Especially if there's no evidence given.
Everyone knows that Italy's economy needs modernising, it should hardly be considered a conspiracy that privatisation and union reform are considered good ways of doing it.

Why can't the NS get any serious people to write articles? Maybe someone like David Harvey or something. I don't agree with everything he says but at least he makes an effort with his arguments, unlike this woman. God help global development if she's leading the way.

Sat, 2011-10-08 13:36 — Ceeks (not verified)

Yes, not sure about the conspiracy angle at all. But a sentiment is there... if there is major discontent with the economy as it is currently constructed then a specific, workable alternative needs to be agreed by the discontented and pushed forward in a structured way. Alike the Chicago Boys and their neoliberal 'campaign'.

OccupyTogether is an admirable rally of voices but, perhaps, isn't enough for deep change where those campaigners wish to see it.

Sat, 2011-10-08 14:14 — Anon (not verified)

"Broken Markets seeks to counter the arguments put forward by those sceptical of the influence of financial speculation on rising food prices. It shows how financial speculation has boomed, turning commodity derivatives into just another asset class for investors, distorting and undermining the effective functioning of agricultural markets.

It shows how these changes in the financial markets translate into changes in the price of food, and the devastating impact this has had on the world’s poorest people. It concludes by recommending urgent action to introduce new rules to limit the influence of financial speculators and bring transparency and stability to these out of control markets." http://www.wdm.org.uk/stop-bankers-betting-food/broken-markets-how-finan...

Sam- glad the world is treating you so well that you can sit in your armchair making aanonymous pops at people's arguments. What are you doing? It's fucked up.

More of same please NS. David Harvey, anyone.

Sat, 2011-10-08 14:40 — matthew fox (not verified)

According to Luddite, it is something to do with wind.

Why are people blaming weather systems for Osborne's poor judgement?

Sat, 2011-10-08 14:57 — oh dear (not verified)

Oh Sam, the evidence is all around you. Open your eyes.

I don't think when you really look at the situation we're in that you could ever conclude we got here by accident. No, we're here partly because of incompetence, but mainly by design. It's perfectly reasonable to believe that the people who run the world (financial institutions- of course they run it, money is THE global organising principle)can influence it.

Tue, 2011-10-11 15:24 — Maria111

Do we need banksters? - “We might be better-off without most of them:”

http://www.opendemocracy.net/openeconomy/jeremy-fox/pay-at-top-to-each-a...

Tue, 2011-10-18 20:41 — anne warren

What is worrying is that the "business speak" has invaded all areas. Parents now "invest" in their children's future. Schoolchildren "perform". Students are "consumers" and universities offer the right "product" - at a price. Workers on short-term contracts reduce the "cost" of social security. The poor are kept out of sight and out of mind like any other negative entry in a balance sheet. The elderly/old are similarly written off as a debt society has to target which it does its best to reduce by lowering pensions and making the elderly work longer. Like the poor (unless they are rioting) they are airbrushed from the media and society's attention. And we are all convinced every human activity needs to turn a profit.
When this corporatocracy coup d'etat has returned us to neo-feudalism worldwide, what then?

Mon, 2011-10-10 16:58 — Vic (not verified)

For heaven's sake. The current crisis was caused by politicians who concealed the true state of their affairs or pretended that they had eradicated boom and bust economics so that they could con banks in to lending them more money to keep their socialist spending schemes afloat. Politicians did this to us, not the banks who trusted that when they made loans they would be repaid. The absurd notion that all this is part of a plan by libertarians to destroy governments is the work of an insane mind. Yet we read this unbalanced nonsense day in day out fed to journos by politicos who have a very vested interest in us believing that "the bankers did it" so that they can get a mandate to punish tax them in to dust. Where will our public services be then? When the politcians have destroyed our means of accessing credit?

It is quite beyond me that a the Statesman could publish this kind of absurdity.

Sat, 2011-10-08 19:07 — Sam (not verified)

This is like talking to children. The finacial crash doesn't need a designer - a bit like evolution. It was essentially caused by the massive expansion in credit lending and bad risk management. Prevailing theories on risk management turned out to be wrong and because of low capital, light regulation and encouragement by government to lend lots to low and middle earners so the government didn't have to build even more houses and could mask the fall in living standards banks ended up with extreme complex lending between themselves which made it impossible for the bankers to know who had what toxic debt and where which lead to banks being unwilling to lend to eachother - hence the credit crunch.

I wonder if Anon knows what percentage of the rise in food is due to increased demand, rising wealth in developing world, and faltering supply due to climate change and what is due to speculation.

Sat, 2011-10-08 20:22 — michaelpetek

Jean-Claude Trichet is caught telling Italy what to do, interfering in its sovereign rights.

The Italian authorities should get him extradited for sedition and/or treason.

Sat, 2011-10-08 11:41 — Ceeks (not verified)

The Washington Consensus was the list of policies that helped spread neoliberal development policy. It's interesting that the writer of the Washington Consensus, John Williamson, claimed not to be neoliberal and deeply regretted omitting a proper redistribution policy rather than relying on theoretical 'trickle-down' predictions that never materialised.

I'm sure there will be many ideas written here on who and how to influence change. However, I have a modest wish, that I don't see mentioned much, to see Ethical Scores which rate the pos/neg social and environmental impact of profit driven organisations become accessible to and considered by every consumer. I would like to see consumer demand change business moral conduct and evolve capitalism into a more sustainable and positive version of itself. Could it work?

Sun, 2011-10-09 01:07 — Dickie1

Can I just put in that people are generally assholes and they like to trip on the idea that they are more important than they actually are.

I see only incompetent bungling: if the clever clogses who line their pockets have a long-term plan it doesn't seem to include the human race surviving beyond 50-100 years, that's a pretty piss-poor effort for a master criminal. It is really only the human race that is at risk, along with some interesting species. Life will continue in one shape or another until the sun has exhausted its energy. Let's not go trying to fart higher than our arses eh! The super fart businessman is a dinosaur for the future, perhaps his decaying remains will provide oil for a better race.

Mon, 2011-10-10 18:58 — Anon (not verified)

Um, no Vic, what we read (as opposed to what we hear when we talk to people who live in the real world) day in and day out, is that Labour did it to us. (Which you appear to agree with). Kind of avoiding the fact that it's not just one country. So as you are presumably counting the good ole US of A as a 'socialist' country I rather feel you have shown your hand. Too many other holes in your 'argument' to bother given that.

Speaking of bad arguments. It may or may not be a 'plan'. It's not that relevant really. That distinction may be of use in garnering support, and it certainly deserves idle consideration because something has to shake the people out of their torpor or we will all literally walk into slavery.

What it CERTAINLY is though, is a redistribution of wealth from the many to the few. Disagree if you will, but I can't really see how so please do.

Sam, likewise, amazing grasp of the Party line that you have and are so deprecating of others with. Did you make that up all on your own?

Second question to you, again, shooting fish - your last sentence work it out, what are you saying exactly. Or in simpler terms for you. How much? Is too much? Enjoy your armchair.

And no, I'm not really counting or blaming the bankers. They're just stooges. Overpaid they may be, and unloved they certainly are, but they're just like the expendable heavies in a bad film. Nobody and I mean nobody gives a sh*t when they're gone.