Global governance and the three factors of production

The supra-national institutions that rule the world

If citizens really controlled and ran their governments on a democratic basis, we could control and negate the power of international capitalism on a country by country basis. We could create economies that work and model it for others to follow. The fact that we don’t has nothing to do with capitalism being the best possible system with no viable alternative, but with the fact that our politicians and legislatures are controlled by concentrated economic forces which have supra-national origins. ‘Supra’ means that they stand above nation-states. Understandably, none of these supra-national institutions are democratically elected, and global citizens (and national governments) have no input into their decision making. While these institutions, which will be listed below, each deserve a study on their own, the aim here is only to give an overview into the world picture; to show how each of these supra-national institutions fit into one of the three categories of factors of production. The reader will have to ‘fill in’ the picture with his/her general knowledge.

Of the three factors of production, Capital in the supra-national scene is controlled primarily by these three institutions: the World Bank, the International Monetary Fund, and the Bank for International Settlement. The WB and IMF essentially serve to get countries into debt in foreign currencies, bankrupt them by various means, and thereby gain leverage over those countries’ governments and natural resources. (John Perkins in Confessions of an Economic Hitman describes his former role as an economic development advisor whose job was to get undeveloped countries to borrow as much money as possible with the intention and knowledge that they would not be able to repay the loan and hence get into debt with international banks.) The BIS on the other hand creates the illusion that there is a sound structural set of international regulations governing and justifying the practices of private banking. The BIS has no official branches outside of its headquarters in Basel, Switzerland, but it has unofficial branches in almost all the central banks of the world (even though these central banks are supposed to be public institutions).

In our webpage Why banks, corporation, land and natural resources should not be privately owned, we show how and why, share owned companies and the practice of freehold land ownership (and private natural resource ownership), would not arise if we had a sound and healthy banking system – a system which did not allow private banks to create money with every loan. Given therefore that the whole of Capitalism derives from, and is dependent on, the banking system (and more specifically, the question of the right to credit creation), one could argue plausibly that the Bank for International Settlement is the most powerful, by far, of all the supra-national institutions under discussion here. The BIS exists to ensure as much as possible that people and governments do not realise the perfidy involved in private banks enjoying the right to credit creation. Without an understanding of this perfidy; and without an understanding of how radically better the economy would be without it; we thrash and flay at creating a New Economy. The BIS does not officially have a lot of money. Its budget would be dwarfed by say the CIA budget. The BIS does not in the main use financial power, or legal power, or military power to achieve its aims. Its power lies in ideas.

The World Trade Organisation is a forum for the multinational share owned corporations set up to further their interests and their profits against whatever government legislation might stand in their way. Their mantra is about ‘free trade’. When they failed to secure a global ‘free trade agreement’ in the late 90s called the Multilateral Agreement on Investment (because their plans were leaked out to the global justice movement), they resorted to a number of regional ‘free trade agreements’ - such as the Trans-Pacific Partnership - to effect an overlapping patchwork of FTAs to give them global control. Corporations in principle get their corporate charter from the (democratic) governments of nation-states. In the legal sense, they are sub-categories, or subsets of the nation-states. In theory the corporations are overseen by the governments of nation-states. Through the WTO and FTAs they are dictating terms to nation-states with no citizens’ participation on these ‘agreements’.

Because of the obvious connection of the WTO and FTAs with the share owned corporations, we can say that these institutions belong in the factor of production of Labour.

Global access to natural resources is an imperative for global capitalism. Governments, to the degree that they are democratically controlled, stand in the way of such an agenda. Since the end of the Second World War, to ensure that only a certain kind of ‘business friendly’ government is elected or installed all over the world has been the main raison d'être of the Central Intelligence Agency and the US military as whole. Control of one single natural resource – oil – has been the pivotal issue in the U.S. Department of State interference in Middle East affairs since the Second World War. The US military maintains today nearly 800 military bases in more than 70 countries and territories abroad. (It is questionable if ANY of these host countries would tolerate these bases if they practised direct democracy.) Because the CIA has no legal authority to spy on US citizens, and because the latter are also a threat to the capitalist order, the National Security Agency has stepped up to fulfil this function.

With the understanding of how the factor of production of production of Land is tied up with natural resources, we can thus associate these last-mentioned institutions – the US military (plus offshoots like NATO), the CIA and NSA – with Land.

We can thus sum up these supra-national institutions and their associated factors of production thus:

In the Fractal Economy, we are working from the ground up, in the most democratic way possible, to ‘take back’ and claim the three factors of production as property of the commons, and to stop the insidious and devastating impact of unearned income on our society. As a fractal, we start at the grassroots level; then move to the national level; then the global level where the above-mentioned supra-national organisations function. One can anticipate that we do not need to be in operation for very long before our project is replicated all over the world. The most powerful tools in our social structures are ideas – not financial, nor legal, nor military might. If people can grasp in a straightforward way how easily they can transform local and global society for the better, they would not tolerate the crap we have today.