The Key to Understanding Imperialism is Knowing Who Prints Money

Introduction

If you suggest to most people that almost all the political unrest, war and economic crisis in the world is the result of the manipulations of tiny elite groups of people they will probably call you a conspiracy theorist. But the reality is that all the information you would need to prove such a statement is freely available to the public.

The reason people are still largely unaware about the true nature of the Global System is that this information is usually dressed up in jargon that is deliberately designed to be incomprehensible to most people. In this essay I will try to explain some basic economic concepts using only normal English language. If any readers are still confused by anything I write here please let me know by leaving a comment and I will try to explain it in an even simpler way.

The essay begins by explaining who prints money in the Western world, and how these same people can be said to control the governments and economies of the West. Then we will look at how the system for printing money in many countries which oppose the West is organised differently, but still in a way which means that a small minority have all the power over the economy.

Lastly I will explain two completely different systems that I think are much fairer and democratic, and which I believe it is necessary for people to struggle in order to replace the current systems with. Both the systems I will propose can be said to be Anarchist systems, which means they are organised in a way which discourages inequalities of power from forming, and which do not require the existence of governments to function.

I should make it clear at this point that I am writing from an Anarchist perspective. This means I am biased against both governments and capitalists, so readers should bear this in mind. I am also not going to cite any sources, because hopefully once you read this you will already know what kinds of things to type into Google to find more detailed academic information which I am certain will confirm what I am going to tell you.

Central Banks Control the West

By the West I mean the United States and the European Union as well as all the countries around the world which are dominated by them. The most powerful military forces in the Western world apart from the US and the EU States are Israel, Australia and Japan, who should be considered Western countries even though they are not geographically in the Western world. Despite decades of struggles against Western Imperialism, the majority of other former European colonies in the world are still hopelessly weak in the face of Western military and economic power.

Most of these former colonies are in unimaginably huge amounts of debt to two financial institutions which work closely together, the World Bank and the International Monetary Fund (IMF), both of which are run by Western governments and investors. This debt gives the West power to dictate what the economic policies of other countries should be, through IMF “Structural Adjustment Programmes” (SAPs).

These SAPs do in fact sap the wealth from all these countries and convert it into money that ends up in the hands of Western Governments and businesses. This is because, as the name suggests, they adjust the structure of these country’s economies into whatever shape Western governments want them to be in. For example, if the West doesn’t want a rival government to develop its industry by educating it’s people and putting money into new industrial companies, the IMF will tell that government that it must take money away from schools and spend it’s money only on developing agriculture instead.

The IMF also always says that governments must not put taxes on foreign products or investment money being imported into the country. This makes it very easy for Western companies to buy all the best businesses in poorer countries and to make sure everyone in those countries has to buy Western products instead of their own. The poorer governments have no choice but to do what the IMF-World Bank system dictates because if they don’t it will punish them by not letting them borrow more money, or by raising the interest on the money they already owe.

The Treasury Department is the name given to the part of a government which looks after its money. But all of the money that most governments have is actually debt to banks. For poorer countries most of this debt is to the World Bank/IMF but even powerful Western governments are also in huge amounts of debt to their Central Banks.

Central Banks are a special type of bank that has the power to print a country’s money. The US Dollar is printed by a bank called the Federal Reserve, the British Pound Sterling is printed by the Bank of England and the Euro is printed by the European Central Bank.

All of these banks are actually private companies, not parts of the government, even though they have names which make them sound like they are. Western governments all used to print their own money themselves, but starting with Britain in the 1690’s they all gradually changed this to let private companies have this power.

This means that Government Treasuries in these countries don’t actually print money. Instead they print things called “Treasury Bonds”, which are just pieces of paper that basically say “please lend the government some money, and if you do this piece of paper will mean we promise to pay you it back, at interest”. They could just print money themselves, and not have to pay interest at all, because after all, they are the government and have lots of guns, so who is going to argue? But they don’t.

Instead they let these private businesses called Central Banks print lots of their own money and then buy these “Treasury Bonds” with it. This means that the government has money to buy more guns and do all the things governments do and the banks have lots of pieces of paper which say the government promises to pay them back. This gives the Central Banks a lot of power over Western governments to tell them how to run their economies and also what policies they should have in dealing with other countries.

For example, after the Bank of England was created and given the power to print money in the 1690s the country whose government it now controlled – Britain -became a huge empire all around the world which murdered millions of people, enslaved millions more and made lots of money for itself to pay back its debts to the Bank.

Similarly, after the Federal Reserve was created and given the power to print dollars in 1913, the United States government stepped up its own efforts to become an imperial power and eventually was powerful enough to force most of the world to use the dollar to trade in important goods like Oil.

Even now the United States will invade any country with a government that tries to trade its oil in a different currency, because this will mean among other things that the owners of the Federal Reserve will make less money. Since the War on Terror was announced in 2001 there have been Western military and secret service interventions in many Oil producing countries for this very reason: Invasion of Somalia by US 2002, Attempted Coup in Venezuela by US secret agents 2003, Invasion of Iraq by UK and US 2003, Lebanon by Israel 2006, Libya by UK, US and France in 2010 and the ongoing conflict in Syria in which US secret agents are also heavily involved.

All of these Wars were officially described as wars against “Terrorism” and for “Democracy”, both of which are never really defined by Western leaders when they use these words. It seems that their definition of Democracy is “selling Oil in money printed by the Federal Reserve Bank” and that they similarly define Terrorism as “selling Oil in any other currency”.

As well as explaining their Imperialist practices, the Western governments’ debt to their Central Bank also explains most of their policies in their home countries as well. If you have ever been to a Western country, or even seen a movie set in one, you will have noticed that Western culture is largely based on the idea that having lots of money is a good thing to aspire to and is in fact more important to focus on than pretty much anything else.

The result is that many people are really very depressed because they do not have as much money as they think they should, even if they actually have everything they need to survive as well as a community of loved ones, whilst those that have more money than they need seem to always be purchasing ridiculous items and living lives of shocking vanity and disregard for the less fortunate. But the prevalence of this psychologically damaging culture is only partly ordinary Westerners’ own fault.

The people who own the Western Central Banks are Capitalists, which mean that they earn their living from the fact that they have “Capital”, which is just money they choose to use to invest in profitable business rather than spend on something else.

All the money that these Bankers get from governments, and all the money that they print in the first place, will stop being “Capital” as soon as they let it just sit around somewhere without any profit being made from it. This means it is in their interest to force the governments they control to run a system that provides as many opportunities as possible to invest their money and make a profit.

This is why so many things in the West are run by private companies instead of by the government or by Non-governmental organisations. It is also why there are so many Western businesses around that don’t actually produce anything society needs, and often just cause lots of problems by their very existence.

Money in the West is not invested in places where it needs to be if everyone was to have a good job and be able to afford everything they need in life, because the Western governments don’t care about that.

They care about doing what’s good for the Central Bankers and the other capitalists that benefit from the system they set up. In fact, by their own laws they have to care more about that than anything else, because they are the ones who choose to be in debt by selling Treasury Bonds. So we should not be surprised at the class divide in Western countries or the divide between Western countries and the other countries they control.

Central Bankers ultimately profit from any other capitalist business going on in the country that they print money for because the government taxes these businesses and their workers in order to pay off it’s debts to the Bank. That’s right, the only reason the government takes so much of your wages if you work in the formal Western economy is to pay their debt to these banks, not to run public services, which are all paid for by the debt itself, as is the military.

Capitalists in general, and so the Central Banks in particular, need to have cheap workforce to exploit if they want to make a profit. There’s only so much money to be made from just buying something cheaply in one place and selling it for more in another. You make a lot more if in the middle you get someone to do some kind of work to change it into something more valuable, but only if you don’t pay that worker the same as the value that their work adds to the product. Instead, if you pay them a set wage per hour or per year, and make that wage pretty low, you can fool them into putting a lot of “value” into your products for free. (If you understand this paragraph you basically never need to bother reading Karl Marx, who made economics even harder for ordinary people to get their heads around, by making up a load of new jargon of his own).

This is why you see Western and Western controlled governments refusing to just give working class people free access to everything they need to live happy lives without working for someone else: Land, Education, Healthcare, Shelter, Clothing, Civil liberties etc, because they want to keep them in poverty. By keeping us in poverty they make us feel like the only way to survive is by either working for a capitalist business or living off hand outs from other people that do.

If you look at the average wages in Western societies (adjusted for inflation) over the past few decades you will see that they have just gone down and down while the shareholders of Central Banks and the biggest other Capitalist businesses have gone up and up. All of this can be traced back to government policies and the monetary policies of the Central Banks themselves.

The IMF/World Bank and Western Central Banks have deliberately created economic crises in countries all over the world many times in order to further the consolidation of their power, and the power of large capitalist businesses generally, over society as a whole. One simple way they can do this is to print so much money that it starts to lose value. This is the law of supply and demand, which says that in any kind of marketplace something has more value if its supply is low and the demand for it is high and has less when the opposite is true. When this happens with money, which if something that is traded in markets just like anything else, it is called inflation. Inflation has been the root cause of most economic crises in Western Imperialist history, and it is caused by deliberate Central Bank policies.

They cause these crises because in these situations many small capitalists and even poor people are forced to sell their assets, which is a fancy word for “valuable stuff” like their houses or their businesses or their land or their jewels or Treasury Bonds, to the bigger capitalists, including the people who own the Central Banks. This is what is called “Class War”, when one class of people attacks another in order to steal their property, but the suffering inflicted on the poorer classes in order to make them surrender their assets is caused by denying them what they need to survive – in this case money – rather than direct physical violence. But it is War just the same.

This is why you might sometimes hear about people talking about Capitalism or the Capitalist System as the name for the political-economic system in the West, and saying that Capitalism is imperialistic and oppresses the working classes. I prefer to be more precise and call it the Western Imperialist system, rather than “The” Capitalist system, because, as we will see, Non Western societies and theoretically even non-oppressive systems can also be called “capitalist”.

State-Capitalism in the Anti-Western World

State-Capitalism is when a government (State is just another word for government) acts like a capitalist business itself, rather than just being controlled by separate capitalist businesses. This means of course that the government in a State-Capitalist country has to print its own money rather than just get into debt to capitalist banks.

Many Anti-Western governments have understood the power of the Central Banks over the Western Imperialist system and sought to make sure that they have not been able to take over their own countries as well. I have already explained about how many Oil producing States have tried to free themselves from domination by the US Federal Reserve system and been invaded or had their leaders killed by the CIA. There have been two Anti-Western countries, however, which have managed to resist such a fate for many decades due to their size and military capability: Russia and China.

Russia was called the Russian Empire until 1917 and was ruled by emperors called “Tsars”, so this period of history is often called “Tsarist”. In Tsarist Russia the Central Bank was not an independent private business but was actually owned and controlled by the government. After the Russian Revolution in 1917 the new government run by the Communist Party kept this system going. Even today, when Russia is now called the Russian Federation and Communist Party rule is finished, the Russian Central Bank is still heavily controlled by the government, which takes half it’s profits.

Russia’s independence from the Western Imperialist Banking system means it has always been able to run it’s economy in a different way and have a foreign policy that actually challenges the West’s dominance. During the time the Communist Party was in power many revolutionary-minded people in other parts of the world naively thought that the Russian system was actually run for the benefit of the working class and for anti-imperialist struggles in other parts of the world.

In fact Russia’s foreign policy was still as Imperialistic as it was when they called themselves the Russian Empire, and workers in Russia were still deliberately kept in poverty by the government so that they could be exploited, just like in the West. State-Capitalism (which they called Communism to piss off real Communists, who mostly changed their name to Anarchists) just meant they were exploited by State-run businesses instead of private ones.

Nonetheless there was much more social equality (except within the Communist Party, whose leaders lived in luxury) in Communist Russia than in the West, and except for times of severe shortages the living conditions of the working classes were actually better than in the West in many ways. Even though they had less political rights – like the right to free speech or assembly- Russian workers had economic and social rights which Western workers did not have, like the right to have a job and healthcare. The Russian government did not make sure this was the case out of love for the people though, it did it to secure their loyalty and make the West look bad.

The Russian Communist Party did also actually give lots of money to revolutionary groups around the world who were fighting Western Imperialism, and many of the civil wars in what was then called the Third World (Africa, Latin America and Asia) were actually wars between the US and Russia in disguise, with Russian secret agents supporting one side and American ones the other. The Russians were not fighting for the liberation or self-government of these countries though, they just wanted to be the ones exploiting their workers and resources instead of the Westerners.

Russia was able to do all this, and still is able to control the economies of most of its neighbouring countries, because when it wants to start a new industry it can just print money itself with which to do so, rather than having to borrow money from other people, because the government runs the Central Bank. Because Russia has always been a dictatorship as well it has also been able to just force people to work to build up its empire, especially during the time they were led by Josef Stalin. Stalin ordered several “5 year plans” which were successful in revolutionising Russian industry and were only possible because of the State-Capitalist combination of a dictating government with its own State-run central bank.

The other State-Capitalist country is of course China, which was also taken over by a group calling itself the Communist Party, who are still in power today. The Chinese Communist Party was always separate from the Russian one, even though they were obviously inspired by them in many ways. The Chinese dictator Chairman Mao, who brought the Communist Party to power and created the State called the People’s Republic of China, followed similar policies to the Russians when it came to industrialising the country.

China also supported many anti-imperialist and revolutionary movements around the world, and still does, but just like Russia it has always been simply another Imperialist power in itself, supporting these struggles for its own interests rather than out of genuine solidarity.  Just a few years ago a Maoist Communist Party took power in Nepal after a civil war that had gone on for ten years. The Chinese government were supplying them with weapons all throughout the civil war and now that they are in power they are adopting policies that benefit China. This is exactly what the Western Imperialists are trying to do in Syria.

The People’s Bank of China is the Chinese Central Bank which prints the Chinese currency, the Yuan, and is controlled by the State. This Bank’s policies have helped China to become the world’s biggest industrial economy, producing more industrial goods than any country in history.

Here we see an important difference between the Western and State-Capitalist systems. Because the Peoples Bank of China is not simply concerned with making the most profit for itself as possible, but can also have more long term goals in mind they have strategically supported the development of China’s industry in such a way as to provide jobs for most of the working class and to be able to export more products than they import. In China the State doesn’t employ all workers anymore, but let’s private capitalist businesses exist as long as they don’t challenge the Communist Party’s power, and this has helped industry to grow, as private capitalists are greedier than Communist bureaucrats so run their businesses more efficiently.

In the West almost the exact opposite has happened. Western governments, controlled by their need to make money for private capitalist bankers, have allowed the industries of their countries to all but collapse, with terrible consequences for working class people. This has not been a well thought-out strategic long term government policy, and Western governments are probably regretting now that they have allowed this to happen.

Because the bankers always had a short term interest in letting Western factories shut down and be replaced by factories in other countries where wages were lower instead, that’s what Western governments allowed to happen. The bankers had an interest in this because they were always investing in the other companies that ran the factories (as they invest in pretty much everything) so they shared in the increased profits from the cheaper labour in other countries.

This is where the Western Imperialists have fucked up, perhaps so much so that they will soon lose their empires and never get them back. They now have to import goods from China, their Imperial rival, because they cannot produce them by themselves. This means that American Dollars and other Western currencies are flowing into China, as Westerners use them to buy Chinese goods, but not many Chinese Yuan are flowing into the West.

That means that Chinese businesses have more Western currency that they need to convert into Yuan so they can spend them in China than there is Yuan that Western businesses want to change into Western currencies.  In other words: the supply of Yuan is less than the demand for it and the supply of Western currencies is higher than the demand for them. This means that the Yuan should in theory start to be worth more in relation to Western currencies (stop and think about this for a few minutes if you need).

If the Yuan started to be worth more compared with Western currencies then people in the West would have to pay more for Chinese products and so they would stop buying them. For example, if you earn 6 British Pounds an hour, then if that gets you 100 Yuan, you can buy two shirts that cost 50 Yuan in China. But if 6 pounds starts to be worth only 50 Yuan then you can only buy one of those shirts and maybe you will not bother because you can find them cheaper somewhere else.

The People’s Bank of China does not want this to happen so they print more and more Yuan as they earn more and more dollars so that the supply of Yuan will stay the same relative to Western currencies, so that its value will stay the same. They call this “pegging” the Yuan, and just like with the Western inflation crises they do it by simply printing money,

They then use this extra Yuan to change Western currencies that Chinese businesses have earned by exporting products into Yuan, which those businesses need to pay their workers. The Peoples Bank of China therefore keeps earning more and more Western currencies for itself.

Because the Chinese government is like one big capitalist enterprise, they do not want this money to just sit around doing nothing, they want to invest it in something than will earn them even more money. The best things you can buy with Western money are Treasury Bonds from Western governments. If you remember, these  are just pieces of paper the government gives in exchange for loans at interest – a pretty sure way of making a profit as they are backed up by the whole authority of the government. So now the Peoples Bank of China owns huge amounts of Western Treasury Bonds, which means that the Western governments are now increasingly in debt to the Peoples Bank of China, and therefore to the Chinese Communist Party itself.

So although the United States is still the biggest military power and still uses that fact to try and force Oil producing countries to sell in Dollars, as just one example among many forms of imperialist military operations, China may one day own more of the US government’s debt in the form of treasury bonds that the Federal Reserve actually does, making the global Oil markets use of the dollar seem less likely for the future, all because China has used State planning to successfully out-manoeuvre the West’s system of private capitalism.

So What Are We Supposed To Do About All This?

Though Western Imperialism is unquestionably a bad thing, that doesn’t mean that it’s decline is necessarily good if it is just going to be replaced with Eastern Imperialism. The BRIC (Brazil, Russia, India and China) is a political alliance of extremely big Anti-Western countries that already exists and is growing stronger, symbolising the very real threat of a new Eastern Imperialist world system.

So if we don’t want to maintain the old Western System, but are also frightened of the new Eastern one, which after all is led by a totalitarian dictatorship which already has a history of supporting armed groups in other countries, what are we supposed to fight for instead?

The truth is that we don’t need either of these systems, neither Central banks run by governments in the East or visa versa in the West. In fact we don’t need anyone to print money at all, if we just got rid of all these governments and collectively decided that everyone was entitled to all they needed to survive and live a good life, free of charge. There are more than enough resources in the world for that to be possible if no capitalists or “Communists” were around making a profit.

So for me personally, that’s what I am fighting for, a system called Anarchist Communism in which there are neither governments or central banks, neither laws nor money but instead merely a culture, everywhere in the world, in which no-one lets anyone else get oppressed or go without access to food, shelter, clothing, education, healthcare or the wilderness. As I said before, there are enough resources for this to be possible and I genuinely believe that this global cultural revolution is all that would be necessary to achieve it, plus of course the destruction of all the worlds governments and capitalist businesses, which admittedly is a tricky thing to achieve.

But even in such a utopian world some people may still decide that they want to start using money for some reason and there would be no government around to stop them.  The global anarchist communist culture would not be able to stop them either so long as they did not start oppressing people or denying people of access to what they needed.

If everyone’s basic needs were already met for free and people wanted to set up some kind of money based market place for purely unnecessary items, then this would not be a threat to the overall Anarchist Communist system.  Even if they started acting out roles as capitalists and workers the exploitation of the workers would still be truly voluntary if they could just walk away from the job at any moment and still have all they need to survive happily, which is not the case for most workers today.

But I hope I have already convinced you that whenever some kind of system based on money is created it becomes necessary to ask “Who controls the printing of this money?” If we do not want the power to print money to be in the hands of elite minorities, whether they be private capitalists or Communist Party Bureaucrats, then we must ensure that this power is held collectively by ordinary people.

Many small communities around the world have successfully experimented with local currencies that they can only use in that area, but which the decisions about monetary policy (which is policy about money) for are made democratically by everyone who uses the currency. These experiments are a reminder to the world that Central Banks are not necessary even in a capitalist economy. The only thing they are necessary for is an Imperialist economy.

No political party, lobbying group or social movement will ever be powerful enough to get Western Governments to change their banking systems or turn the People’s Republic of China into a genuinely democratic communist system, and small-scale local currency projects, as promising as they are, will never be allowed by governments to grow big enough to really challenge the Central Banks. The only way we can liberate ourselves from the tyranny of bankers and bureaucrats is through Revolutionary Direct Action against the power of all governments.

We cannot fight against the West without fighting the East at the same time, or else we will just find that we have been helping the East to take over our lives. We must work on building the global cultural shift towards a world where no one accepts poverty of oppression any longer, and at the same time work on building a united global insurrectionary movement against all the power of all States.

Even if you do not agree with me about the need for Global Anarchist Communist Revolution against all States and Empires, I hope I have at least convinced you that we do indeed live in a world of empires, and of the importance of the role of Central Banks in explaining global inequalities of wealth and power.

I hope I have also convinced you never to become either a capitalist or a member of a Communist Party, but rather to try and live your life in as free a way as possible from their systems.

You don’t have to try to get rich, and if you can find ways to get what you need to survive for free then you don’t even have to use money at all. Money and the laws of governments are not real things and you don’t have to treat them like they are. The more you do, the more you make them real. Sure, you can pretend to believe in them when it suits you but you don’t have to lose your sense of self because of them like so many people have. Revolution begins in the mind.

Even if you do not want to join in with any revolutionary activity to do with actually bringing down or sabotaging governments, I hope you will at least be as free from them in your own life as you can and that you will encourage others to do the same.

I hope you will put your trust in love for all people, in your own self-reliance and in strengthening that of your community, whatever that might mean for you, rather than in money, governments or the murderous ruling class fuckers that they are controlled by.

Good luck, and Power to You.

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