(XIII) Informality…

Perhaps the most telling feature of the decline of the capitalist economic system has been the outgrowth of the informal sector, which has implications for all parts of the system –its legal framework, its State, its economy, and its institutions. Informality basically means non-payment of certain State taxes, non-observance of laws, the growth of parallel economies, the super-exploitation of workers (it ignores labor laws, health laws, etc.), the opening-up of society to the ills of the past (slavery, tyranny, etc.), the degradation of human rights and the displacement of the public sector by the private sector, while its directly criminal part engages in such pursuits as prostitution, drug-trafficking, illegal arms dealing and trading in stolen cars, machinery, etc. Unemployment, the child of increased productivity under Capital (the displacement of workers by machines, etc.) is the basis for the growth of the informal sector, which provides a great nest for crime and its organizations.

The informal sector by its nature defies measurement. Attempts therefore vary greatly. A report by the Inter-American Development Bank in 1995 (March 16) stated that of the economically active population in Latin America, 30% worked in the informal sector. Meanwhile, the same year a report by the International Labor Office (El Economista, Mexico, July 13, 1995) stated that of every 10 jobs generated in Latin America, 8 were in the informal sector, and in Mexico 57% of new jobs were in the informal sector. In March, 1997, Mexico’s statistical office INEGI (with a reputation for playing down what it sees as bad and exaggerating what it sees as good) was reporting that 8% of Mexican GDP was accounted for by the informal sector, although it stated that in the commercial sector it contributed about 20%.

36 “What is alarming is that the already large informal sectors in many emerging democracies and economies continue to grow. A recent IMF study reveals that about nine trillion dollars –roughly a third of the GDP of emerging markets –was produced informally…Similarly, 1999 International Labor Organization figures indicate that 17% to 84% of the urban labor force in developing countries work informally.” (Catherine Kuchta-Helbling, Ph.D., Center for International Private Enterprise, “Tapping Hidden Fortunes”)

“The vast majority of the world’s workers, including the poorest – who most need self-defense through organization – are in the informal sector. In India, for example, the proportion of the active population in the informal sector (including agriculture) increased from 89 percent in 1978 to 92 percent in 1998. In Africa, Asia and Latin America the informal sector accounts for a share of employment ranging from significant to prevalent…For Central and Eastern Europe data are generally not available, but anecdotal evidence indicates that the informal sector is rapidly growing as State enterprises close down or are privatized and unemployment increases (the same applies to China). Such statistical data as are available for OECD countries (the industrialized world) indicate that also there the informal sector represents a significant part of the labour force: about 11% in Ireland and New Zealand, 19% in Germany, 20% in Italy (excluding agriculture)...It is no longer accurate today to describe the informal sector as “atypical”. In most so-called developing countries it is the formal sector (regular direct employment with a formal sector company) that is “atypical” in the literal sense and in many of the older industrialized countries the informal sector, although it does not occupy a majority of the labour force, is becoming increasingly significant, particularly for women. (The Global Labor Institute: Notes on Trade Unions and the Informal Sector)

The fact that the economy now defies measurement also poses problems for the corporate sector and the State. However, it also means that measurement is even more arbitrary and designed to fit the interests of the powerful. The whole phenomenon means that human beings face even greater exploitation than before. Who can deny that poverty is the deliberate design of Power, rather than a by-product of neglect?

(XIV) ...and Drug Trafficking

It is clear from William Chambliss’ (and others’) studies that to treat organized crime (and informality) as something separate from the formal economy would be merely to erect a mental barrier across reality. The work of Edwin Sutherland’s demonstrates this point:

37. “The activities of Insull, Hopson and others who committed gross violations of the law were not so much offensive to the sentiments of businessmen as threats to the generalized and simplified stereotypes in terms of which the public evaluates businessmen as a group. The policy of condemning the gross violators of the law, whose offenses become generally known, enables corporations to carry out a general attitude of public adherence to the law while in fact they are engaged privately in defections from the law.” (From Edwin Sutherland’s White Collar Crime, 1949)

During the 1960s, William Chambliss began gathering information in Seattle, which showed the unity between the “respectable” business world and organized crime. He concluded that “organized crime really consists of a coalition of politicians, law-enforcement people, businessmen, union leaders, and (in some ways least important of all) racketeers.” In the preface, he states: “The parts and the script are always the same. Where politics, illegal business, and corruption are concerned, every city in the United States is ‘America in miniature’.” See his book, “On the Take” (1978) .

“Its first and most important characteristic is that all the heads of the local Mafias were (and are) men of wealth, some ex-feudalists in the inland areas, but overwhelmingly men of the middle class, capitalist farmers and contractors, lawyers and the like. The evidence on this point seems conclusive.” (E.J. Hobsbawm, “Primitive Rebels”, page 37, 1971 edition.)

Several studies have shown that it is the most privileged businessmen who are responsible for the bulk of tax fraud and robbery. Gabriel Kolko (Wealth and Power in America, 1962) for instance notes that U.S. tax declarations in 1957 contained omissions totaling US$ 27.7 billion, mostly from the 10% highest taxed, while US$ 11 billion were retained by America’s richest 1%, who owned 80% of U.S. corporations. That compares with an estimated US$ 284 million in U.S. robberies in 1965. Frank Pearce, meanwhile, (Crimes of the Powerful, 1976), referred to the British defense contractor Ferranti, which in 1963 agreed to build rockets for the Ministry of Aviation at a fixed “fair and reasonable” price. The cost was calculated at £ 12,013,720 sterling, with profits at £ 810,353 (a profit margin of 6 3/4% on cost). It was later revealed that the cost had really been £ 7,051,109, to give a profit margin of 82% on cost and total profits of £ 5,772,964. The company gave back £ 4,250,000, still retaining an excess of £ 650,000.

Clearly, all of this has serious implications for the State. The informal sector, one of the nestling places of the modern Mafia cannot be ignored simply because it breaks the law. The State has to embrace it as far as possible, and new hypocrisies are added to old ones, as the informal sector’s alienation of the State and Law is repeated a billion times over within the State (one might, for instance, think that taxes are deducted from the payrolls of people employed by the State, as laid down by the law, but experience in developing countries, at least, does not bear this out). The State, which sanctifies Law, breaks the Law, too. The representatives of the State are therefore those who are best able to carry out the great balancing act of having one foot firmly rooted in respectability and law, while the other is firmly rooted in lumpen criminality (but this is reminiscent of the English naval officer, played by Marlon Brando, who organizes a revolution among the slaves on a remote island in the Caribbean, returning years later to crush its leaders, in Pontecorvo’s memorable film, Quemada!).. They are the schizophrenic products of a schizophrenic system, in which Law is the plaything of Power.

A scene from Burn! (Quemada!)
(Director, Gillo Pontecorvo, 1970)

In the 1970s, it was possible to believe that organized crime was under attack by the State and the corporate sector (in the United States) because it was taking business away from it.

38. Regarding the failure of the U.S. Congress to pass laws placing stricter controls on amphetamine manufacture in the 1970s, James Graham notes that 90% of the amphetamines on the illicit market was legally manufactured by the large drug companies. He therefore came to the conclusion that: “The end result is a national policy which declares all-out war on drugs which are not a source of corporate income,” (From J.M. Graham, “Amphetamine Politics on Capitol Hill”, in W.J. Chambliss and M. Mankoff, “Whose Law? What Order?”, 1976.)

The situation can no longer be explained so clearly. It seems more than likely that even if the above were true in the 1970s (and this is open to doubt), it is no longer the case. In assessing these matters, one should always look at all sides of the question –in this case, what was in the interests of organized crime, what contribution could it make towards the profitability and maintenance of Capital, and where were the biggest profits being generated. The weight of organized crime would appear to have increased, although the subject is fairly obscure. As early as the 1950s, people were talking about the Mafia controlling America.

The role of drug-trafficking in the accumulation of capital has been stressed by several writers. Here also, we cannot ignore the vast amount of research on secret societies and clandestine power referred to in section V, notes 24 and 27. This has sprouted especially since the 1980s, although its roots obviously go back much further. But conspiracy studies do not come “value-free”. It has attracted the entire political spectrum, especially those who want radical change. However, since this includes those of an ultra-right (i.e. fascist-nazi or Christian fundamentalist) persuasion, extreme care is needed in this area –what often seems fascinating and true (and may well be true) is slanted in such a way that the reader is seduced by the over-arching myths of the ultra-right (history as one big conspiracy, for instance). The existence of these underground groups probably correlates with the fact that as the powerful become more predatory and as their projects become more outrageous, secrecy becomes increasingly necessary. On the other hand, one group would say that its secrecy is justified by the existence of “enemies”. This leads to the question of to what extent these groups are rivals and to what extent they collaborate; studies on on-going and substantiated rivalry between powerful clandestine groups is hard to find. While conspiratorial groups with links to the State, big business and the Vatican (including the Vatican-connected Opus Dei, Legionnaires of Christ, etc.) not only exist but also exercise great influence in world power, a massive scapegoat literature has grown up within conspiracy research, whose targets shift easily between organized crime, the power elite, freemasonry (with special emphasis on the “Illuminati”), the Vatican (often centering on the Jesuits) and the Jews. The next writer provides some valuable insights into the possible history of the U.S. elite’s nexus with drugs (via Harvard’s Skull & Bones secret society, to which George Bush and George W. Bush belong), notwithstanding his adulation of certain voices within the far right in the United States:

The Family Bush

39 “William H. Russell (Skull & Bones’ co-founder-1833) cousin Samuel Russell formally established Russell & Co. on January 1, 1824 for the purpose of acquiring opium and smuggling it to China. Russell & Co. merged with the number one US trader, the J. & T.H. Perkins “Boston Concern” in 1829. By the mid-1830s the opium trade had become ‘the largest commerce of its time in any single commodity, anywhere in the world.’ Russell & Co. and the Scotch firm Jardine-Matheson, then the world’s largest opium dealer working together were known as the “Combination.” George HW Bush (S&B 1948) was born in Milton, Massachusetts not far from the historic home of Robert Bennett Forbes, a Russell partner. Many great American, European and Chinese family fortunes were built on the ‘China’ (opium) trade. Yes, they sold porcelain, tea, silks and other items at home in the US, but they ‘needed’ the trade in opium for silver to pay for the desired goods and-opium smuggling returned ‘handsome’ profits.

Members of Skull and Bones class of 1900 seated (left to right):
Frederick Baldwin Adams, Hulbert Taft. Standing
(left to right): John Morgan Hopkins, Ashley Day Leavitt, Frank Dexter Cheney, Stuart Brown Camp, James Cowan Greenway, Malcolm Douglas, Corliss Esmonde Sullivan, John Walter Cross, Percy Avery Rockefeller, Brace Whitman Paddock, Frederic Winthrop Allen, George Armstrong Lyon.

“The trade in such drugs usually results in some form of monopoly which not only centralizes the drug traffic, but also restructures much of the affiliated social and economic terrain in the process. In particular two major effects are the creation of mass markets and the generation of enormous, in fact unprecedented, cash flows. The existence of monopoly results in the concentrated accumulation of vast pools of wealth. The accumulations of wealth created by a succession of historic drug trades have been among the primary foundations of global capitalism and the modern nation-state itself. Indeed, it may be argued that the entire rise of the west, from 1500 to 1900, depended on a series of drug trades.
”...Drug trades destabilized existing societies not merely because they destroyed individual human beings but also, and perhaps more importantly, because they have the power to undercut the existing political economy of any state. They have created new forms of capital; and they have redistributed wealth in radically new ways.

Chinese opium-smokers by Thomas Allom

“Opium thus created a succession of new political and economic orders in Asia during the past two centuries. These included the state of the East India Company itself, the new Malay polities of island Southeast Asia, the colonial states of nineteenth-century Southeast Asia and the warlord regimes of post-Qing China as well as the Guomindang and communist states that arose out of that milieu. At the same time, the economies of the entire region were radically reoriented, or perhaps ‘re-occidented’ would be a more appropriate word. India’s opium production was brought under western control while China’s domestic economy was opened to the west. Southeast Asia was first opened to western traders and then to western control. With the migration of Chinese labor, Southeast Asian economies were transformed into commodity-producing regimes focused on exporting to the industrializing western Powers. Underlying all of this, opium rearranged the domestic economies and pushed them down the path of mass consumption, which together with mass production, typified the ‘modern’ economic order.” (From: Kris Millegan, “The Boodle Boys, 1999)

The degree to which organized crime has infiltrated business and the State is brought out by other studies made since Chambliss. But the problem is no longer a purely American or European one (if it ever really was).

40 “Commencing with a scam that would’ve made Ian Fleming’s ‘Goldfinger’ blanch in admiration, the Russian Mafia, along with outgoing Communist Party officials, ‘heisted’ thousands of tonnes of gold bullion from Russia’s reserves. Valued at $35 billion, Russia’s gold reserves were estimated to be 100 million troy ounces –just under 3000 tonnes. Then in September 1991, a palpitating Grigory Yavlinski, the economic supremo, revealed to delegates at the Group-of-Seven industrial countries meeting in Bangkok, that a mere 240 tons were all that was left. Two months later, in November, even that had disappeared. ‘Not a gram of gold remains; the vaults are empty,’ said Victor Geraschenko, chief of Gosbank, the Russian Central Bank.
“In one operation valued at $4 billion, over 300 tons were secretly shipped to Switzerland, some of it subsequently arriving in London. Unlike Britain, the Swiss authorities do not keep records of gold imports which makes it a favourite centre for disguising the point of origin –a very effective method of laundering suspicious transactions. The bullion, some sources now believe, was used as collateral in a secondary scam that set-out to vacuum-up all the available Rouble bank-notes in existence at the time and sell them at knock down prices to organised crime syndicates from around the world.” From: “Gangsters’ Paradise”, David Guyatt, 1997.

Gert Frobe as “Goldfinger”

We live today in a world where, as noted by several writers, the words “crisis” and “corruption” are in danger of losing their meanings, or they already have. “Crisis” is no longer a periodic affair but an everyday occurrence. It is difficult to see where corruption begins and ends, as whenever the State stands up to fight corruption we see corrupt individuals settling scores with equally corrupt individuals. A campaign run with dirty money to ruin a corrupt president merely puts another in his place. A State fights organized crime, but merely opens the old infrastructure for equally (if not more) ruthless criminals, from a different stable, with a marginally different strategy –i.e. the State fights to preserve its monopoly over who can engage in crime. People are killed in all of these episodes, but their results always seem more virtual than real.

41. ”...But the older generation of the Mafiosi have the lucrative rackets under their control and are reluctant to make way for the new men, who therefore organise rival gangs, generally on the same lines as the old Mafia, often with the help of the police, which hopes thereby to weaken, and which the young Mafiosi wish to use for the same purpose. Sooner or later, if neither side has been able to suppress the other…old and young combine, after a redistribution of the spoils.” Regarding the Sicilian Mafia in the United States, “it has been plausibly suggested that a purge of the ‘old’ Mafia by the ‘young’ took place about 1930, the old organization being replaced by a more up-to-date version which was, unlike the old blood-brotherhood, prepared to co-operate with Neapolitan, or for that matter Jewish gangsters.” (Hobsbawm, ibid., page 46-7)

(XV) The Lie

This does, however, lead to the question of the lie. Why is it necessary for crime to hide behind the assumed respectability of the State and its institutions? The order of lying is clear from the fact that it is generally accepted that poverty is something that has to be and is being fought by governments and world agencies, such as the United Nations and the World Bank, as well as by various charities. Society, generally, seems to take their sincerity as axiomatic. Thus, what is not perceived is the deliberate perpetuation and generation of poverty as the political project of those who set themselves above society and nature. (This does not of course mean that there are not sincere and courageous people working in all these institutions –of course, there are, even at the highest levels.) Despite the illusion that is fed year in year out, we cannot but note the importance of the lie in general (and of this lie in particular) and how it reflects the weakness of the system, the poverty of power.

Insignia of the Imperial and Royal
Dragon Court and Order

Of the multiple kinds of lie, two polar forms stand out: denial and exaggeration. The first may be used directly: the company does NOT engage in criminal activities; or indirectly, by omission or by interpreting things in such a way that the truth escapes. The second involves stories which appear to come close to the truth, but which, like the last type, divert the listener away from it, and turn his/her head in a totally wrong, time-wasting, self-defeating or absurd direction. The latter has become very important since World War II. Within this category, we find stories that point away from historically proven causes of oppression and towards extra-terrestrial beings (“America is run by aliens”), Masonic plots (such as the Illuminati and the Rosicrucians) and even directly at the Jews (and many other scapegoat groups).

“UFO attacked by US military in Los Angeles, 1942”

The UFO story is particularly characteristic of the post-War period (independent of whether life exists beyond our planet, which few doubt, including highly civilized life, and even if we maintain an open mind on whether we have been “visited”). This literature originally dates back to the United States and Europe in the period immediately following the Second World War (more recently it has been dated back to events said to have taken place in German airspace during the last few years of the War). The original UFO story has been dramatically expanded on and the kinds of phenomena reported have multiplied in shape, size, color, and behavior (originally saucer-shaped, they have gone through a variety of forms to include cigar-shaped craft, box-shaped objects and even “amoeba-shaped” phenomena, the latest -since about the mid-1980s -being large triangular craft; in addition, we now have abductions by extra-terrestrials, crop-circles and attacks on cattle). The stories have become increasingly mysterious and bizarre. Moreover, with the flourishing of this sub-culture, the Power Elite has seen its opportunity. Fully in line with the thesis of Guy Debord (“The Society of the Spectacle”, 1967), it has added the extra-terrestrial to its ideological spectacle. For years, in fact, the military elite has seen the usefulness of this lie: statements affirming the existence of UFOs by top military leaders go back to at least the 1950s. Endorsing the extra-terrestrial thesis, a group of French generals and other high-flying members of French security published a report in 1999 (“Les Ovnis et la Défense: A quoi doit-on se préparer?”, Institut des hautes étude de défense nationale, July 16, 1999). However, this was pre-dated by a similar report (“Briefing Document”, 1995) sponsored by Laurance Rockefeller, one of the five Rockefeller brothers, who was praised in 1991 by President Bush for his work as a conservationist. Given that family’s notorious influence during the 20th century, nothing they do can be taken at face value.

43. Laurance Rockefeller (born 1910) became interested in high tech firms in 1938 with the foundation of the Rockefeller Brothers Fund, and apparently owned 20% of the McDonnell aircraft company during the war. With family friends C. Douglas Dillon and Felix DuPont he made a fortune out of helicopter production during the Korean War. This consortium also owned Nuclear Development Associates, the original power behind civilian nuclear reactors, and a little company called ITEK, which would make the spy cameras for the U-2 and America’s spy satellites. (Val Germann, Columbia, Missouri, 1996)
For two years (1993-95) Laurance Rockefeller supported Dr. John Mack’s Center for Psychology and Social Change in Cambridge, Mass., to the tune of $250,000 a year. Dr. Mack is the controversial psychiatrist who investigates alleged UFO abductions. He paid for at least two meeting sessions of the Starlight Coalition, a group said to be made up of former intelligence officers and military men interested in UFOs. At one time Rockefeller funded a plan to establish contact with aliens. Laurance Rockefeller once held a UFO conference at his ranch in Wyoming. In 1995, he gave an estimated $30,000 for a special UFO project created by Marie “Bootsie” Galbraith, wife of investment banker Evan Galbraith and one-time U.S. ambassador to France. (From: “The Rockefeller UFO Report or How a Millionaire and a Socialite New Ager are Trying to Influence World Leaders about UFOs” by Paul B. Thompson, 1996) Laurance Rockefeller has made few public statements on UFOs, but is said to want governments to publish what they know about them.

Richard Cheney with Laurance Rockefeller

The UFO thesis is a brilliant cover for war, a mask for covert operations, and a hook for general mystification, a sustained attempt to build a modern mythology in the name of science (as pointed out by French scientist Jacques Vallée: Passport to Magonia, 1969). It has become one of the great repositories of secrecy, the secrecy essential to the survival of parasitism –of the thieves, assassins and perverse who rule the Earth. The UFO story has been used to argue that post-War scientific developments are not the result of centuries of work by human beings, but taken from a UFO that crashed on earth (i.e. the so-called “Roswell Incident”). The Power Elite wants us to end with history, lose our connection with the past, and accept a new supreme being as our savior, about which they know more than anyone else. If we accepted this, history (like education -see below, Section XVII) would pass further into the hands of the elite, as was hoped for and worked for by Zbigniew Brzezinski (see below, Section XVI)

Surely, one of the biggest sources of hypocrisy in the 20th century centered on the conflict between the Allied and Axis Powers known as the Second World War. Much evidence was exposed before World War II and even more continues to surface exposing the political and business sympathies that existed between the two groups.

44. America’s most powerful oil company, Standard Oil of New Jersey, controlled by the Rockefeller family, entered into a secret cartel agreement with the German chemicals combine I.G. Farben (which supplied the gas used to murder Jews in Hitler’s concentration camps). The Truman Committee came into possession of “Standard’s 1939 letter renewing its agreement, which made it clear that Rockefeller’s company was prepared to work with the Nazis whether their own government was at war with the Third Reich or not.” An official investigation into the cartel ended, because Standard Oil (through a third party) threatened to end U.S. oil supply during the War. From: Marc Aarons and John Loftus, “The Secret War Against the Jews,” 1994.
While the ultra-right has long blamed the “Allies” for starting World War II, we should look at the true relationships between the British and American governments and the nazis during World War II, to understand what was really going on then. It is known, for instance, that meetings took place between Third Reich, British and U.S. financial authorities under the auspices of the Bank for International Settlements in “neutral” Switzerland throughout World War II.

It is impossible here to identify all the areas that seem to have come in for particularly heavy lying campaigns (which would require a book in itself). However, apart from the obvious areas relating to affairs of State, and espionage, secret societies and the Mafia in particular, free energy seems to have attracted some very heavy treatment, including the “new era” treatment by those said to be engaged in it (see note 51 below). Undoubtedly, lying is a quintessentially “differential” art.

In a world that is essentially false, truthfulness would be an anti-natural tendency; such a tendency could have meaning only as a means to a higher power of falsehood. (Friederich Nietzsche, The Will to Power, 1888)

In a world that has really been turned on its head, truth is a moment of falsehood. (Guy Debord, The Society of the Spectacle, 1967)

Friederich Nietzsche