Part 3: Wall Street, Banks, and American Foreign Policy


Richard Moore

Part 3 of 3

Wall Street, Banks, and American Foreign Policy

by Murray N. Rothbard
by Murray N. Rothba

This first appeared in World Market Perspective (1984) and later as a monograph published by the Center for libertarian Studies (1995). Afterword By Justin Raimondo.

Henry A. Kissinger

But of course the dominant foreign policy figure in both the Nixon and Ford Administrations was not William Rogers but Henry A. Kissinger, who was named national security adviser and soon became virtually the sole force in foreign policy, officially replacing Rogers as Secretary of State in 1973.

Kissinger was virtually “Mr. Rockefeller.” As a Harvard political scientist, Kissinger had been discovered by John J. McCloy, and made director of a CFR group to study the Soviet threat in the nuclear age. He was soon made director of a special foreign policy studies project of the Rockefeller Brothers Fund, and from there became for more than a decade Nelson Rockefeller’s chief personal foreign policy adviser.

Only three days before accepting the Nixon Administration post, Rockefeller gave Kissinger $50,000 to ease the fiscal burdens of his official post. Nixon and Kissinger re-escalated the Vietnam War by secretly bombing and then invading Cambodia in 1969 and 1970; they could be sure of compliance from Ellsworth Bunker, whom Nixon retained as Ambassador to South Vietnam until the end of the war.

Apart from the Vietnam War, the Nixon Administration’s major foreign policy venture was the CIA-led overthrow of the Marxist Allende regime in Chile. U.S. firms controlled about 80 percent of Chile’s copper production, and copper was by far Chile’s major export. In the 1970 election, the CIA funnelled $1 million into Chile in an unsuccessful attempt to defeat Allende. The new Allende regime then proceeded to nationalize large U.S.-owned firms, including Anaconda and Kennecott Copper and the Chile Telephone Co., a large utility which was a subsidiary of ITT (International Telephone and Telegraph Co.).

Under the advice of Henry Kissinger and of ITT, the CIA funneled $8 million into Chile over the next three years, in an ultimately successful effort to overthrow the Allende regime. Particularly helpful in this effort was John A. McCone, the West Coast industrialist whom Johnson had continued in charge of the CIA. Now a board member of ITT, McCone continued in constant contact by being named a consultant to the CIA on the Chilean question. President Nixon continued Johnson holdover Richard Helms as head of the CIA, and Helm’s outlook may have been influenced by the fact that his grandfather, Gates W. McGarrah, had been the head of the Mechanics and Metals National Bank of New York, director of Bankers Trust, and chairman of the board of the powerful Federal Reserve Bank of New York.

Of the $8 million poured into Chile by the CIA, over $1.5 million was allocated to Chile’s largest opposition newspaper, El Mercurio, published by wealthy businessman Augustin Edwards. Edwards was also, not coincidentally, vice president of Pepsico, a company headed by President Nixon’s close friend Donald M. Kendall. The transaction was arranged at a quiet breakfast meeting in Washington, set up by Kendall, and including Edwards and Henry Kissinger. After the successful overthrow of Allende by a military junta in September 1973, the man who became the first Minister of Economy, Development, and Reconstruction was Fernando Leniz, a high official of El Mercurio who also served on the board of the Chilean subsidiary of the Rockefeller-controlled International Basic Economy Corporation.

Richard Nixon also established, for the first time, diplomatic relations with Communist China. Nixon was urged to take this step by a committee of prominent businessmen and financiers interested in promoting trade with and investments in China. The group included Kendall; Gabriel Hauge, chairman of Manufacturers Hanover Trust Co.; Donald Burnham, head of Westinghouse; and David Rockefeller, chairman of the Chase Manhattan Bank.

The first envoy to China was the veteran elite figure and diplomat, David K.E. Bruce, who had married a Mellon, and who had served in high diplomatic posts in every Administration since that of Harry Truman. After Bruce became Ambassador to NATO, he was replaced by George H.W. Bush, a Texas oil man who had served briefly as Ambassador to the United Nations. More important than Bush’s Texas oil connections was the fact that his father, Connecticut Senator Prescott Bush, was a partner at Brown Brothers, Harriman.

The Trilateral Commission

In July 1973 a development occurred which was to have a critical impact on U.S. foreign – and domestic – policy. David Rockefeller formed the Trilateral Commission, as a more elite and exclusive organization than the CFR, and containing statesmen, businessmen, and intellectuals from Western Europe and Japan.

The Trilateral Commission not only studied and formulated policy, but began to place its people in top governmental posts. North American secretary and coordinator for the Trilaterals was George S. Franklin, Jr., who had been for many years executive director of the CFR. Franklin had been David Rockefeller’s roommate in college and had married Helena Edgell, a cousin of Rockefeller. Henry Kissinger was of course a key member of the Trilaterals, and its staff director was Columbia University political scientist Zbigniew Brzezinski, who was also a recently selected director of the CFR.

President Ford continued Kissinger as his Secretary of State and top foreign policy director. Kissinger’s leading aide during the Ford years was Robert S. Ingersoll, Trilateralist from Borg-Warner Corp. and the First National Bank of Chicago. In 1974, Ingersoll was replaced as Deputy Secretary of State by Charles W. Robinson, a businessman and Trilateralist.

Ambassador to Great Britain – and then moved to several other posts – was Elliot Richardson, now a Trilateralist and a director of the CFR. George Bush, Trilateralist, was retained as Ambassador to China, and then became director of the CIA. He was replaced as Ambassador by Thomas S. Gates, Jr., head of the Morgans’ flagship bank, Morgan Guaranty Trust Co. Meanwhile, Robert McNamara continued to head the World Bank. Becoming head of the Export-Import Bank in 1975 was Stephen M. DuBrul, Jr., who had had the distinction of being a partner of both Lehman Brothers and Lazard Freres.

James Earl Carter and his administration were virtually complete creatures of the Trilateral Commission. In the early 1970s, the financial elite was looking for a likely liberal Southern governor who might be installed in the White House. They were considering Reubin Askew and Terry Sanford, but they settled on the obscure Georgia governor, Jimmy Carter. They were aided in their decision by the fact that Jimmy came highly recommended.

In the first place, it must be realized that “Atlanta” has for decades meant Coca-Cola, the great multi-billion dollar corporation which has long stood at the center of Atlanta’s politico-economic power elite. Jimmy Carter’s long-time attorney, close personal friend, and political mentor was Charles Kirbo, senior partner at Atlanta’s top corporate law firm of King & Spalding.

King & Spalding had long been the general counsel to Coca-Cola, and also to the mighty financial firm, the Trust Co. of Georgia, long known in Atlanta as “the Coca-Cola bank.” The long-time head and major owner of Coca-Cola was the octogenarian Robert W. Woodruff, who had long been highly influential in Georgia politics. With Kirbo at his elbow, Jimmy Carter soon gained the whole-hearted political backing of the Coca-Cola interests.

Financial contributors to Carter’s race in the 1971 Democratic primary for governor were: John Paul Austin, powerful chairman of the board of Coca-Cola; and three vice-presidents of Coke, including Joseph W. Jones, the personal assistant to Robert Woodruff. If Pepsi was a Republican firm, Coke had long been prominent in the Democratic Party; thus, James A. Farley, long-time head of the Democratic National Committee, was for thirty-five years head of the Coca-Cola Export Company.

In 1971, Carter was introduced to David Rockefeller by the latter’s friend J. Paul Austin, who was to become a founding member of the Trilateral Commission. Austin was long connected with the Morgan interests, and served as a director of the Morgan Guaranty Trust Co., and of Morgan’s General Electric Co. Other early political backers of Jimmy Carter were the Gambrell brothers, David and E. Smyth, of a family which was a major stockholder in Rockefeller-controlled Eastern Air Lines. The Gambrell law firm, indeed, served as the general counsel for Eastern. They, too, aided in forming the Carter-Rockefeller connection.

During the same period, Carter was also introduced to the powerful Hedley Donovan, editor-in-chief of Time magazine, who was also to be a founding Trilateral. Rockefeller and Donovan liked what they saw, and Carter was also recommended to the Trilaterals by the Atlanta Committee of the Council on Foreign Relations.

Jimmy Carter was invited to become a member of the Trilateral Commission shortly after it was formed, and he agreed enthusiastically. Why did the Trilaterals appoint an obscure Georgia governor with admittedly no knowledge of foreign affairs? Ostensibly because they wanted to hear the views of a Southern governor. Far more likely, they were grooming him for the Presidency and wanted to instruct him in trilateralism. Carter took instruction well, and he wrote later of the many happy hours he spent sitting at the feet of Trilateral executive director and international relations expert Zbigniew Brzezinski.

What the unknown Carter needed more than even money for his 1975–1976 campaign for President was extensive and favorable media exposure. He received it from the Trilateral-influenced Establishment media, led by Time’s Hedley Donovan and Trilateral syndicated columnists Joseph Kraft and Carl Rowan.

Major New York Carter backers, who served on the Wall Street Committee for Carter or hosted gatherings on his behalf, included Roger C. Altman, partner of Lehman Brothers, the chairman of which, Peter G. Peterson, was a Trilateral member; banker John Bowles; C. Douglas Dillon, of Dillon, Read, who also served as a member of the international advisory board of the Chase Manhattan Bank; and Cyrus Vance, a Trilateral founder and vice-chairman of the CFR.

Furthermore, of the six national finance directors of Jimmy Carter’s costly pre-convention race for the Presidential nomination, three were high officials at Lehman Brothers, one was a vice-president of Paine, Webber, another was a vice-president of Kidder, Peabody, and a sixth was the venerable John L. Loeb, senior partner of Loeb, Rhodes, & Co., and a Lehman by marriage. Other prominent business fund-raisers for Carter’s election campaign included Walter Rothschild, who had married a member of the Warburg family of Kuhn, Loeb & Co., and Felix Rohatyn, a partner of Lazard Freres.

The Carter Administration proved to be Trilateral through and through, especially in foreign affairs. Trilateral members holding high posts in the Carter Administration included:

  • President, James Earl Carter;
  • Vice-President Walter, (“Fritz”) Mondale;
  • National Security Adviser, Zbigniew Brzezinski;
  • Secretary of State Cyrus Vance, who was now chairman of the board of the Rockefeller Foundation. Vance’s law firm of Simpson, Thacher & Bartlett had long served as general counsel for Lehman Brothers and Manufacturers Hanover Trust Co. Vance himself served up to 1977 as a director of IBM, the New York Times Co., and Lehman’s One William Street Fund. It perhaps also helped Vance’s cause that Simpson, Thacher & Bartlett was the New York general counsel for Coca-Cola Co.
  • Deputy Secretary of State, Warren Christopher. This Los Angeles corporate lawyer had no diplomatic experience whatever for this high post, but his law firm of O’Melveny and Myers was a prominent one, and he acted as the Los Angeles attorney for IBM. More important was the fact that Christopher was the only Trilateral Commission member from the Western half of the United States.
  • Under-Secretary of State for Economic Affairs, Richard Cooper. This Yale professor was also on the board of the Rockefeller-controlled J. Henry Schroder Banking Corporation.
  • Under-Secretary of State for Security Assistance, Science, and Technology, Lucy Wilson Benson. Mrs. Benson had been a longtime president of the League of Women Votes and highly active in Common Cause; she was also a board member of the Lehman-oriented Federated Department Stores.
  • Assistant Secretary of State for East Asian and Pacific Affairs, Richard Holbrooke.
  • Ambassador at Large, Henry D. Owen, of the Brookings institution and the CFR.
  • Ambassador at Large for the Law of the Sea Treaty, Elliot Richardson.
  • Ambassador at Large for Non-Proliferation Matters (nuclear weapons negotiations), Gerald C. Smith, head of the U.S. delegation at the SALT talks under Nixon, Washington attorney at Wilmer, Cutler & Pickering, and North American Chairman of the Trilateral Commission.
  • Ambassador to the United Nations Andrew Young.
  • Chief Disarmament Negotiator, Paul C. Warnke, senior partner of Clark Clifford’s influential Washington law firm.
  • Assistant Secretary of the Treasury for International Affairs, C. Fred Bergsten, of the Brookings Institution, consultant to the Rockefeller Foundation, and a member of the editorial board of the CFR’s prestigious quarterly journal, Foreign Affairs.
  • Ambassador to Communist China, Leonard Woodcock, formerly head of the United Automobile Workers. It is interesting to note that it was under the Carter-Woodcock aegis that, one week after the first establishment of formal ambassadorial relations with Communist China, China signed an agreement with Coca-Cola giving it exclusive cola sales in that country.
  • Secretary of Defense, Harold Brown. This physicist was president of the California Institute of Technology – the only Trilateral college president – and also served on the board of IBM and of Schroders, Ltd., the Rockefeller-controlled British parent company of J. Henry Schroder Bank of New York.
  • Deputy to the Director of the CIA, Harvard Professor Robert R. Bowie.
  • Secretary of the Treasury, W. Michael Blumenthal, head of Bendix Corp., a director of the CFR, and a trustee of the Rockefeller Foundation.
  • Chairman of the Federal Reserve Board, Paul A. Volcker. Volcker was named chairman by President Carter at the suggestion of David Rockefeller. Small wonder, since Volcker had been an executive at the Chase Manhattan Bank, and was a director of the CFR and a trustee of the Rockefeller Foundation.
  • And finally, White House Advisor on Domestic and Foreign Policy, Hedley Donovan, formerly editor-in-chief of Time magazine.

One of the first important Carter foreign policy actions was the negotiation of the Panama Canal treaty, giving the Canal to Panama, and settling the controversy in such a way that U.S. taxpayers paid millions of dollars to the Panama government so they could repay their very heavy loans to a number of Wall Street banks.

One co-negotiator of the treaty was Ellsworth Bunker, who bad been engaged in fruitless negotiations since 1974. The treaty was not concluded until Carter added as co-negotiator the Trilateralist Sol Linowitz, a senior Washington partner of the Wall Street corporate law firm of Coudert Brothers, and a board member of Pan-Am Airways, the Marine Midland Bank of New York, and Time, Inc.

The Marine Midland Bank itself held part of two bank consortium loans to Panama. Furthermore, no fewer than 32 Trilaterals were on the boards of the 31 banks participating in a $115 million 10-year Eurodollar Panama loan issued in 1972; and 15 Trilaterals were on the boards of fourteen banks participating in the $20 million Panama promissory note issued in the same year.

Another crucial foreign policy action of the Carter regime was the President’s reluctant decision to admit the Shah of Iran into the U.S., a decision that led directly to the Iran hostage crisis and the freezing of Iranian assets in the U.S. Carter was pressured into this move by the persistent lobbying of David Rockefeller and Henry Kissinger, who might well have realized that a hostage crisis would ensue. As a result, Iran was prevented from pursuing its threat of taking its massive deposits out of Chase Manhattan Bank, which would have caused Chase a great deal of financial difficulty. In politics, one hand washes the other.

Kissinger, by the way, was scarcely put back in the shadows when he left government office in 1977. He quickly became a director of the CFR, a member of the executive committee of the Trilateral Commission, and chairman of the International Advisory Board of the Chase Manhattan Bank.

While Ronald Reagan’s early campaigning included attacks on the Trilateral Commission, the Trilateralists have by now been assured that the Reagan Administration is in safe hands.

The signal was Reagan’s choice of Trilateralist George Bush, who had also become a director of the First International Bank of London and Houston, as Vice-President of the United States, and of Reagan’s post-convention reconciliation visit to Washington and to the home of David Rockefeller.

Reagan’s most influential White House aides, like James A. Baker, had been top campaigners for Bush for President in 1980. The most influential corporate firm in the Reagan Administration is the California-based Bechtel Corporation. Bechtel vice-president and general counsel Caspar Weinberger, a Trilateralist, is Secretary of Defense, and fellow top Bechtel executive George Shultz, former board member of Borg-Warner Corp, General American Transportation Corp., and Stein, Roe & Farnham Balanced Fund, is Secretary of State.

Trilateralist Arthur F. Burns, former Chairman of the Fed, is ambassador to West Germany, Paul Volcker has been reappointed as head of the Fed, and Henry Kissinger is at least partially back as head of a Presidential Commission to study the question of Central America.

It is hard to see how the Trilateralists can lose in the 1984 elections. On the Republican ticket they have George Bush, the heir apparent to Ronald Reagan; and in the Democratic race the two front-runners, Walter Mondale and John Glenn, are both Trilateralists, as is Alan Cranston of California. And, as a long shot, John Anderson of the “National Unity Party” is also a Trilateral member. To paraphrase a famous statement by White House aide Jack Valenti about Lyndon Johnson, the Trilateralists and the financial power elite can sleep well at night regardless of who wins in 1984.

Murray N. Rothbard (1926–1995) was the author of Man, Economy, and State, Conceived in Liberty, What Has Government Done to Our Money, For a New Liberty, The Case Against the Fed, and many other books and articles/>. He was also the editor – with Lew Rockwell – of The Rothbard-Rockwell Report.

Afterword By Justin Raimondo

Murray Rothbard’s 1984 analysis of modern American history as a great power struggle between economic elites, between the House of Morgan and the Rockefeller interests, culminates in the following conclusion: “the financial power elite can sleep well at night regardless of who wins in 1984.” By the time you get there, the conclusion seems understated indeed, for what we have here is a sweeping and compressed history of 20th century politics from a power elite point of view. It represents a small and highly specialized sample of Rothbard’s vast historical knowledge coming together with a lifetime devoted to methodological individualism in the social sciences. It appeared first in 1984, in the thick of the Reagan years, in a small financial publication called World Market Perspective. It was printed for a larger audience by the Center for Libertarian Studies in 1995, and appears in 2005 online for the first time.

Theoreticians Left and Right are constantly referring to abstract “forces” when they examine and attempt to explain historical patterns. Applying the principle of methodological individualism – which attributes all human action to individual actors – and the economic principles of the Austrian School, Rothbard formulated a trenchant overview of the American elite and the history of the modern era.

Rothbard’s analysis flows, first, from the basic principles of Austrian economics, particularly the Misesian analysis of banking and the origin of the business cycle. This issue is also discussed and elaborated on in one of his last books, The Case Against the Fed(Mises Institute, 1995). Here, the author relates the history of how the Federal Reserve System came to be foisted on the unsuspecting American people by a high-powered alliance of banking interests. Rothbard’s economic analysis is clear, concise, and wide-ranging, covering the nature of money, the genesis of government paper money, the inherent instability (and essential fraudulence) of fractional reserve banking, and the true causes of the business cycle.

As Rothbard explains in his economic writings, the key is in understanding that money is a commodity, like any other, and thus subject to the laws of the market. A government-granted monopoly in this, the very lifeblood of the economic system, is a recipe for inflation, a debased currency – and the creation of a permanent plutocracy whose power is virtually unlimited.

In the present essay, as in The Case Against the Fed, it is in the section on the history of the movement to establish the Federal Reserve System that the Rothbardian power elite analysis comes into full and fascinating play. What is striking about this piece is the plethora of details. Rothbard’s argument is so jam-packed with facts detailing the social, economic, and familial connections of the burgeoning Money Power, that we need to step back and look at it in the light of Rothbardian theory, specifically Rothbard’s theory of class analysis.

Rothbard eagerly reclaimed the concept of class analysis from the Marxists, who expropriated it from the French theorists of laissez-faire. Marx authored a plagiarized, distorted, and vulgarized version of the theory based on the Ricardian labor theory of value. Given this premise, he came up with a class analysis pitting workers against owners.

One of Rothbard’s many great contributions to the cause of liberty was to restore the original theory, which pitted the people against the State. In the Rothbardian theory of class struggle, the government, including its clients and enforcers, exploits and enslaves the productive classes through taxation, regulation, and perpetual war. Government is an incubus, a parasite, incapable of producing anything in its own right, and instead feeds off the vital energies and productive ability of the producers.

This is the first step of a fully-developed libertarian class analysis. Unfortunately, this is where the thought processes of all too many alleged libertarians come to a grinding halt. It is enough, for them, to know the State is the Enemy, as if it were an irreducible primary.

As William Pitt put it in 1770, “There is something behind the throne greater than the king himself.” Blind to the real forces at work on account of their methodological error, Left-libertarians are content to live in a world of science fiction and utopian schemes, in which they are no threat to the powers that be, and are thus tolerated and at times even encouraged.

The Left-libertarian failure to take the analytical process one step further is, in many cases, a failure of nerve. For it is clear, given libertarian theory and the economic insights of the Austrian School, where the next step leads. No empirical evidence is necessary, at this point (although that will come later, and in spades); the truth can be deduced from pure theory, specifically the Austrian theory of the nature of money and banking, and the Misesian analysis of the origin of the business cycle.

This deduction was brilliantly and colorfully made in the first issue of The Journal of Libertarian Studies (Winter 1977), by two students of Rothbard, Walter E. Grinder and John Hagel III, in “Toward a Theory of State Capitalism: Ultimate Decision-Making and Class Structure.”

While a pure free market would necessarily prevent the development of a banking monopoly, “however, the market system does concentrate entrepreneurial activity and decision-making within the capital market because of the considerable benefits which are rendered by a certain degree of specialization.”

This “specialized capital market, by the very nature of its integrative role within the market system, will emerge as a strategic locus of ultimate decision-making.” Given that some individuals will choose the political means over the economic, some of these great fortunes will utilize their tremendous resources to cartelize the market and insulate themselves against risk. The temptation for bankers in particular to wield the power of the State to their benefit is very great because it permits banks to inflate their asset base systematically. The creation of assets made possible by these measures to a great extent frees the banking institutions from the constraints imposed by the passive form of ultimate decision-making exercised by their depositors. It thereby considerably strengthens the ultimate decision-making authority held by banks vis-à-vis their depositors. The inflationary trends resulting from the creation of assets tend to increase the ratio of external financing to internal financing in large corporations and, as a consequence, the ultimate decision-making power of banking institutions increase over the activities of industrial corporations.

The Austrian insight focuses on the key role played by the central banks in generating the distortion of market signals that leads to periodic booms and busts, the dreaded business cycle which is always blamed on the inherent contradictions of unfettered capitalism.

But in fact this capitalism is anything but unfettered. (Try starting your own private bank.) The last thing American bankers want is an unfettered banking system. Rothbard not only traces the original market distortion that gives rise to the business cycle, but also identifies the source (and chief beneficiaries) of this distortion. It was Mises who pointed out that government intervention in the economy invariably leads to yet more intervention in order to “fix” the havoc wreaked – and there is a certain logic in the fact that it was the original culprits who decided to “fix” the distortions and disruptions caused by their policies with further assaults on the market mechanism. As Grinder and Hagel put it:

In the U.S., this intervention initially involved sporadic measures, both at the federal and state level, which generated inflationary distortion in the monetary supply and cyclical disruptions of economic activity. The disruptions which accompanied the business cycle were a major factor in the transformation of the dominant ideology in the U.S. from a general adherence to laissez-faire doctrines to an ideology of political capitalism which viewed the state as a necessary instrument for the rationalization and stabilization of an inherently unstable economic order.

Capitalists as Enemies of Capitalism

This explains the strange historical fact, recounted at length and in detail by Rothbard, that the biggest capitalists have been the deadliest enemies of true capitalism. For virtually all of the alleged social “reforms” of the past fifty years were pushed not only by “idealistic” Leftists, but by the very corporate combines caricatured as the top-hatted, pot-bellied “economic royalists” of Wall Street.

The neoconservative Right depicts the battle against Big Government as a two-sided Manichean struggle between the forces of light (that is, of capitalism) and the remnants of largely discredited Leftist elites. But Rothbard’s historical analysis reveals a much richer, more complex pattern: instead of being two-sided, the struggle for liberty pits at least three sides, each against the other. For the capitalists, as John T. Flynn, Albert Jay Nock, and Frank Chodorov all pointed out, were never for capitalism. As Nock put it:

It is one of the few amusing things in our rather stodgy world that those who today are behaving most tremendously about collectivism and the Red menace are the very ones who have cajoled, bribed, flattered and bedeviled the State into taking each and every one of the successive steps that lead straight to collectivism. [“Impostor Terms,” Atlantic Monthly, February 1936.]

The New Deal economic policy was, as Rothbard demonstrated, prefigured by Herbert Hoover, champion of big business, and foreshadowed in the reforms of the Progressive era. As the revisionist economic historians, such as Gabriel Kolko, have shown, those who regulated the great industries in the name of progressive “reform” were recruited from the very cartels and trusts they were created to tame.

And of course the monopolists didn’t mind being tamed, so long as their competitors were tamed (if not eliminated). Every giant leap forward of economic planning and centralization – central banking, the welfare state, “civil rights,” and affirmative action – was supported if not initiated by the biggest and most politically powerful business interests in the country. The House of Morgan, the Rockefellers, and the Kuhn-Loebs must take their place alongside the First, Second, and Third Internationals as the historic enemies of liberty.

Giant multinational corporations, and their economic satellites, in alliance with governments and the big banks, are in the process of extending their influence on a global scale: they dream of a world central bank, global planning, and an international welfare state, with American troops policing the world to guarantee their profit margins.

After the long battle to create a central bank in the U.S., the high priests of high finance finally seized and consolidated control of domestic economic policy. It only remained for them to extend their dominance internationally, and for this purpose they created the Council on Foreign Relations, and, later, the Trilateral Commission.

These two groups have been seized upon by the new populist Right as the virtual embodiments of the Power Elite, and rightly so. It is only by reading Rothbard, however, that this insight is placed in its proper historical perspective. For the fact of the matter is that, as Rothbard shows, the CFR/ Trilateralist network is merely the latest incarnation of a trend deeply rooted in modern American history. Long before the founding of the CFR or the Trilateral Commission, there was a power elite in this country; that elite will likely endure long after those organizations are gone or transmuted into something else. Rothbard’s unmasking of the historical and economic roots of this trend is vital in understanding that this is not a “conspiracy” centered in the CFR and the Trilateralist groups, as such, but an ideological trend traditionally centered in the Northeast, among the upper classes, and deeply rooted in American history.

I put the word “conspiracy” in quotes because it has become the favorite swearword of the Respectable Right and the “extremist”-baiting Left. If it is conspiracy-mongering to believe that human beings engage in purposeful activity to achieve their economic, political, and personal goals, then rational men and women must necessarily plead guilty. The alternative is to assert that human action is purposeless, random, and inexplicable. History, in this view, is a series of discontinuous accidents.

Yet it would be inaccurate to call the Rothbardian world view a “conspiracy theory.” To say that the House of Morgan was engaged in a “conspiracy” to drag the U.S. into World War I, when indeed it openly used every stratagem, every lever both economic and political, to push us into “the war to end all wars,” seems woefully inadequate. This was not some secret cabal meeting in a soundproof corporate boardroom, but a “conspiracy” of ideas openly and vociferously expressed. (On this point, please note and underscore Rothbard’s analysis of the founding of The New Republic as the literary flagship of “the growing alliance for war and statism” between the Morgan interests and liberal intellectuals – and isn’t it funny how some things never change?)

A conspiracy theory attributes virtually all social problems to a single monolithic agency. Radical feminism, which attributes all the evil in the world to the existence of men, is a classic conspiracy theory; the paranoid views of the ex-Communists in the conservative movement, who were obsessed with destroying their ex-comrades, was another.

But the complexity and subtlety of the Rothbardian analysis, backed up by the sheer mass of rich historical detail, sets Rothbard on an altogether different and higher plane. Here there is no single agency, no omnipotent central committee that issues directives, but a multiplicity of interest groups and factions whose goals are generally congruent.

In this milieu, there are familial, social, and economic connections, as well as ideological complicity, and none is better than Rothbard at ferreting out and unraveling these biographical details. Taken together, the author’s small and studied brushstrokes paint a portrait of a ruling class whose ruthlessness is surpassed only by its brazen disloyalty to the nation.

It is a portrait that remains unchanged, in its essentials, to this day. Wall Street, Banks, and American Foreign Policywas written and published in 1984, during the Reagan years.

Reagan started out by denouncing the power elite and specifically the CFR and the Trilateralists, but wound up with that epitome of the Establishment, Skull-&-Bonesman George Bush as his vice president and successor.

Bush is a longtime CFR director, and Trilateralist; most of his major cabinet officers, including his chairman of the joint chiefs, Colin Powell, were CFR members. The Clinton administration is similarly afflicted, from the President (CFR/Trilateral) on down through Donna Shalala (CFRJ Trilateral) and George Stephanopoulos (CFR), with the CFR honeycombed (as usual) throughout the State Department. In addition to Secretary of State Warren Christopher, other CFR members in the Clinton cabinet include Laura Tyson, chairman of the Council of Economic advisors, Treasury Secretary Robert Rubin; Interior Secretary Bruce Babbitt, HUD honcho Henry Cisneros; and Alice Rivlin, 0MB director.

The other side of the aisle is equally co-opted at the leadership level, as vividly dramatized by Gingrich’s retreat before the power and majesty of Henry Kissinger. One naturally expects cowardice from politicians, but the indictment also includes what passes for the intellectual leaders of the Republican free-market “revolution.”

There is a certain mentality that, no matter how convincing the evidence, would never even consider the argument put forward in Wall Street, Banks, and American Foreign Policy. This attitude stems from a particular kind of cowardice. It is a fear, first of all, of not being listened to, a dread of consigning oneself to the role of Cassandra, the ancient Greek prophetess who was granted the power of foresight by the gods, with but a single limitation: that none would ever heed her warnings. It is far easier, and so much more lucrative, to play the role of court historian.

This is a role the author of this scintillating pamphlet never could have played, even if he had tried. For the truth (or, at least, the search for it) is so much more interesting than the official histories and the conventional wisdom of the moment. The sheer pleasure Rothbard took in unearthing the truth, in carrying out his vocation as a true scholar, is evident not only on every page of the present work but throughout his 28 books and thousands of articles and speeches.

Rothbard was not afraid of sharing Cassandra’s fate because, in the first place, truth is a value in its own right, and ought to be upheld for its own sake. Second, the truth has a way of eventually getting out, in spite of the most strenuous efforts to suppress it.

Justin Raimondo, author of An Enemy of the State: the Life of Murray N. Rothbard and other books, is editor of

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