Mexico’s Fight for National Banking Revives a Forgotten History

In Ellen Brown’s brilliant new article “Mexico’s AMLO Shows How It’s Done”, the researcher and national banking advocate made the powerful point that the only way to properly fight the neo-liberal order is for nations of the west to follow the lead of Mexico’s current President Lopez Obrador who recently announced the creation of a new network of national banks- of which over 3238 branches will be in operation by 2021. Obrador’s stated aim is to have 13 000 branches built across Mexico which would far outnumber the total number of all private banks and will also provide a vital tool for the economic liberation of Mexico.

This act is nothing short of heresy in the corridors of the neoliberal priesthood of our modern age. The “economic foundation” upon which today’s globalized world are premised assert that nation states may not participate in the marketplace. No price controls, no protective tariffs, no bank regulation and certainly no national banks. Following this gospel, nations are permitted to do war and promote various forms of population control… but nothing that pollutes the purity of the supposedly “free market”.

Of course, simply utilizing national banking practices by themselves is not a full solution. A fascist regime can of course, use national banks for destructive ends just as a democratic republic can use them for positive ends, and as we have seen over the years, the financial oligarchy has no problem supporting fascist regimes such as Hitler’s Germany or Mussolini’s Italy nor do they have any problem supporting “national Keynesian initiatives” so long as they are done under an anti-human Green New Deal frame work.

So what makes President Obrador’s current efforts different?

As Brown states in her paper:

“The new president has held to his campaign promises. In 2019, his first year in office, he did what Donald Trump pledged to do — “drain the swamp” — purging the government of technocrats and institutions he considered corrupt, profligate or impeding the transformation of Mexico after 36 years of failed market-focused neoliberal policies. Other accomplishments have included substantially increasing the minimum wage while cutting top government salaries and oversize pensions; making small loans and grants directly to farmers; guaranteeing crop prices for key agricultural crops; launching programs to benefit youth, the disabled and the elderly; and initiating a $44 billion infrastructure plan. López Obrador’s goal, he says, is to construct a “new paradigm” in economic policy that improves human welfare, not just increases gross domestic product.”

If you haven’t figured it out, the answer is MORALITY.

What gave the establishment of modern nation states their power and legitimacy in the wake of the Golden Renaissance, was the fact that they are premised upon the common good of the people against the interests of private oligarchs and elite families. Those feudal orders dominated by hereditary institutions during most of human history placed the “natural order” upside down, with the welfare of the talking cows (aka: peasants) granted to them by the fancy of the master class of land lords.

Under a true sovereign nation state, elected leaders derive their legitimacy and support of the people through their mandate to defend the inalienable rights of people though internal improvements which increase the socio-physical-spiritual well being of the people. This used to be recognised in past ages as an elementary idea of Natural Law (which saw the laws of morality as intertwined into the fabric of objective reality as the laws of gravity, and electricity).

Ben Franklin’s Electric Insight into Economics

It is here no coincidence that the leading proponent of national banking and productive credit in America was also the leading scientist who trumped all elite scientific minds of Europe when he discovered the principle of electricity in 1752. Benjamin Franklin and his vast network of leading collaborators across Europe and America never saw a distinction between “subjective moral sciences” and “objective a-moral physics”. The foundational documents and also the first national banking system of America (upon which other republics in South and Central America modelled themselves in the coming years) were based upon this idea of Natural Law. This insight was the basis for Franklin’s 1727 opus on the Necessity for a Paper Currency where Franklin argued that value was not located in gold, or silver, or land or even demand per se, but rather in the creative powers of a people!

The consolidation of America’s revolutionary war debt incurred by each of the 13 colonies into a unified federal credit transformed the unpayable debt “into a national blessing” as Ben Franklin’s protégé Alexander Hamilton (first Treasury Secretary) laid out in his famous Reports on a National Bank and On Manufactures in 1791. In opposition to the early free traders and monetarists who wished America would end its protective tariff, stay agrarian and allow Britain to maintain its global monopoly on industry, Hamilton and Franklin understood this would undo the entire revolutionary cause resulting in America’s eventual re-absorption back into the empire….

By 1865, Lincoln’s use of national banking practices (the Greenback) was instrumental in saving the union from British-orchestrated Civil War- although his assassination hampered this momentum to full industrial reconstruction of the south. During this time, Britain, French and Spanish Hapsburg empires had initiated parallel wars to destroy the newly emerging Mexican republic then led by Lincoln-admiring president Benito Juarez, first with the 1858-1860 War of Reform and then 1862-1867 French Invasion. In spite of this existential challenge, Juarez succeeded in driving out the imperialists with political and military support from Lincoln patriots in America, while also imposing tariffs which encouraged the build-up of industry- liberating Mexico from its status as cash cropping exporter. Social and educational reforms elevating the health and welfare of the people grew enormously under Juarez’s leadership….

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.