serendipity | The essential bond between capitalism and nationalism was broken in 1945, but it took some time for elite planners to recognize this new condition and to begin bringing the world system into alignment with it. The strong Western nation state had been the bulwark of capitalism for centuries, and initial postwar policies were based on the assumption that this would continue indefinitely. The Bretton Woods financial system (the IMF, World Bank, and a system of fixed exchange rates among major currencies) was set up to stabilize national economies, and popular prosperity was encouraged to provide political stability.
Neoliberalism in the US and Britain represented the first serious break with this policy framework — and brought the first visible signs of the fission of the nation-capital bond.
The neoliberal project was economically profitable in the US and Britain, and the public accepted the matrix economic mythology. Meanwhile, the integrated global economy gave rise to a new generation of transnational corporations, and corporate leaders began to realize that corporate growth was not dependent on strong core nation-states. Indeed, Western nations — with their environmental laws, consumer-protection measures, and other forms of regulatory "interference" — were a burden on corporate growth. Having been successfully field tested in the two oldest "democracies," the neoliberal project moved onto the global stage. The Bretton Woods system of fixed rates of currency exchange was weakened, and the international financial system became destabilizing, instead of stabilizing, for national economies. The radical free-trade project was launched, leading eventually to the World Trade Organization. The fission that had begun in 1945 was finally manifesting as an explosive change in the world system.
The objective of neoliberal free-trade treaties is to remove all political controls over domestic and international trade and commerce. Corporations have free rein to maximize profits, heedless of environmental consequences and safety risks. Instead of governments regulating corporations, the WTO now sets rules for governments, telling them what kind of beef they must import, whether or not they can ban asbestos, and what additives they must permit in petroleum products. So far, in every case where the WTO has been asked to review a health, safety, or environmental regulation, the regulation has been overturned.
Most of the world has been turned into a periphery; the imperial core has been boiled down to the capitalist elite themselves, represented by their bureaucratic, unrepresentative, WTO world government. The burden of accelerated imperialism falls hardest outside the West, where loans are used as a lever by the IMF to compel debtor nations such as Rwanda and South Korea to accept suicidal "reform" packages. In the 1800s, genocide was employed to clear North America and Australia of their native populations, creating room for growth. Today, a similar program of genocide has apparently been unleashed against sub-Saharan Africa. The IMF destroys the economies, the CIA trains militias and stirs up tribal conflicts, and the West sells weapons to all sides. Famine and genocidal civil wars are the predictable and inevitable result. Meanwhile, AIDS runs rampant while the WTO and the US government use trade laws to prevent medicines from reaching the victims.
As in the past, Western military force will be required to control the non-Western periphery and make adjustments to local political arrangements when considered necessary by elite planners. The Pentagon continues to provide the primary policing power, with NATO playing an ever-increasing role. Resentment against the West and against neoliberalism is growing in the Third World, and the frequency of military interventions is bound to increase. All of this needs to be made acceptable to Western minds, adding a new dimension to the matrix.
In the latest matrix reality, the West is called the "international community," whose goal is to serve "humanitarian" causes. Bill Clinton made it explicit with his "Clinton Doctrine," in which (as quoted in the Washington Post) he solemnly promised, "If somebody comes after innocent civilians and tries to kill them en masse because of their race, their ethnic background or their religion and it is within our power stop it, we will stop it." This matrix fabrication is very effective indeed; who opposes prevention of genocide? Only outside the matrix does one see that genocide is caused by the West in the first place, that the worst cases of genocide are continuing, that "assistance" usually makes things worse (as in the Balkans), and that the Clinton doctrine handily enables the US president to intervene when and where he chooses. Since dictators and the stirring of ethnic rivalries are standard tools used in managing the periphery, a US president can always find "innocent civilians" wherever elite plans call for an intervention.
In matrix reality, globalization is not a project but rather the inevitable result of beneficial market forces. Genocide in Africa is no fault of the West, but is due to ancient tribal rivalries. Every measure demanded by globalization is referred to as "reform," (the word is never used with irony). "Democracy" and "reform" are frequently used together, always leaving the subtle impression that one has something to do with the other. The illusion is presented that all economic boats are rising, and if yours isn't, it must be your own fault: you aren't "competitive" enough. Economic failures are explained away as "temporary adjustments," or else the victim (as in South Korea or Russia in the 1990s) is blamed for not being sufficiently neoliberal. "Investor confidence" is referred to with the same awe and reverence that earlier societies might have expressed toward the "will of the gods."
Western quality of life continues to decline, while the WTO establishes legal precedents ensuring that its authority will not be challenged when its decisions become more draconian. Things will get much worse in the West; this was anticipated in elite circles when the neoliberal project was still on the drawing board, as is illustrated in Samuel Huntington's "The Crisis of Democracy" report discussed earlier.
The management of discontented societies
The postwar years, especially in the United States, were characterized by consensus politics. Most people shared a common understanding of how society worked, and generally approved of how things were going. Prosperity was real and the matrix version of reality was reassuring. Most people believed in it. Those beliefs became a shared consensus, and the government could then carry out its plans as it intended, "responding" to the programmed public will.
The "excess democracy" of the 1960s and 1970s attacked this shared consensus from below, and neoliberal planners decided from above that ongoing consensus wasn't worth paying for. They accepted that segments of society would persist in disbelieving various parts of the matrix. Activism and protest were to be expected. New means of social control would be needed to deal with activist movements and with growing discontent, as neoliberalism gradually tightened the economic screws. Such means of control were identified and have since been largely implemented, particularly in the United States. In many ways America sets the pace of globalization; innovations can often be observed there before they occur elsewhere. This is particularly true in the case of social-control techniques.
The most obvious means of social control, in a discontented society, is a strong, semi-militarized police force. Most of the periphery has been managed by such means for centuries. This was obvious to elite planners in the West, was adopted as policy, and has now been largely implemented. Urban and suburban ghettos — where the adverse consequences of neoliberalism are currently most concentrated — have literally become occupied territories, where police beatings and unjustified shootings are commonplace.
So that the beefed-up police force could maintain control in conditions of mass unrest, elite planners also realized that much of the Bill of Rights would need to be neutralized. (This is not surprising, given that the Bill's authors had just lived through a revolution and were seeking to ensure that future generations would have the means to organize and overthrow any oppressive future government.) The rights-neutralization project has been largely implemented, as exemplified by armed midnight raids, outrageous search-and-seizure practices, overly broad conspiracy laws, wholesale invasion of privacy, massive incarceration, and the rise of prison slave labor (see "KGB-ing America.", Tony Serra, Whole Earth, Winter, 1998). The Rubicon has been crossed — the techniques of oppression long common in the empire's periphery are being imported to the core.
In the matrix, the genre of the TV or movie police drama has served to create a reality in which "rights" are a joke, the accused are despicable sociopaths, and no criminal is ever brought to justice until some noble cop or prosecutor bends the rules a bit. Government officials bolster the construct by declaring "wars" on crime and drugs; the noble cops are fighting a war out there in the streets — and you can't win a war without using your enemy's dirty tricks. The CIA plays its role by managing the international drug trade and making sure that ghetto drug dealers are well supplied. In this way, the American public has been led to accept the means of its own suppression.
The mechanisms of the police state are in place. They will be used when necessary — as we see in ghettos and skyrocketing prison populations, as we saw on the streets of Seattle and Washington D.C. during the anti-WTO demonstrations there, and as is suggested by executive orders that enable the president to suspend the Constitution and declare martial law whenever he deems it necessary. But raw force is only the last line of defense for the elite regime. Neoliberal planners introduced more subtle defenses into the matrix; looking at these will bring us back to our discussion of the left and right.
Divide and rule is one of the oldest means of mass control — standard practice since at least the Roman Empire. This is applied at the level of modern imperialism, where each small nation competes with others for capital investments. Within societies it works this way: If each social group can be convinced that some other group is the source of its discontent, then the population's energy will be spent in inter-group struggles. The regime can sit on the sidelines, intervening covertly to stir things up or to guide them in desired directions. In this way most discontent can be neutralized, and force can be reserved for exceptional cases. In the prosperous postwar years, consensus politics served to manage the population. Under neoliberalism, programmed factionalism has become the front-line defense — the matrix version of divide and rule.