He [Goldsmith] would be used as a battering ram to break down the old system of power that had ruled America for fifty years. The conscious shaping of society by a corporate and political elite would be destroyed by people like him and replaced by the blind force of the markets. ibid.
Ronald Reagan had come to power at a moment of economic crisis. But he promised a dramatic regeneration of the country’s fortunes. But not by government which he blamed had led America into the chaos. His solution was to give power away to Wall Street and to the financial markets. He wanted them to find a way to regenerate America. ibid.
Investors were falling over themselves to invest in junk bonds. But to [Michael] Milken they were more than just a way of raising money. Junk bonds were a powerful weapon with which to challenge the established power of Wall Street. ibid.
The big corporation was at the heart of American life. It was far more than just a way of making money. The idea of the corporation had been born fifty years before out of pressure from politicians. They had wanted to find a way of protecting America from the growing chaos of the free market. ibid.
Goldsmith and Milken now set out to take over the technostructure. They would do it by borrowing billions of dollars with the promise that they would repay vast interest. They were confident they could do this because hidden away within the giant corporations was fantastic wealth which they could unlock and sell off. ibid.
It was the reconstruction of America by the power of the market. ibid.
A patrician elite who had run America for fifty years. ibid.
Downsizing became one of the most important factors fuelling a boom in the American stock market. Every time the raiders sacked managers and workers their share price soared, and in turn that pushed the bull market even higher. As the takeover boom grew, millions of workers were downsized. Whole towns were decimated. ibid.
But Goldsmith was beginning to suffer from delusions of grandeur: he forgot that he was no more than a creature of the banks. And having taken over control of industry from the state, he decided he now had the power and the money to take over foreign policy as well. And the first thing he decided he would do was undermine the Soviet Union. Goldsmith believed that the growing anti-nuclear movement in the West was completely controlled by the Soviet Union; so he and a number of right-wing tycoons set up a private organisation to undermine the peace movement. Goldsmith was going to privatise Western Intelligence. Goldsmith’s main target was the World Peace Council, an innocuous and ineffectual organisation. ibid.
Goldsmith’s belief that he was powerful was a fantasy. The men who really had the power were the bankers. They were using Goldsmith’s bullying nature as a weapon to break down the corporations. But the banks themselves were about to fall from grace. And Goldsmith would be left helpless and exposed. ibid.
The New York attorney [Giuliani] revealed that the takeover movement was riddled with corruption. ibid.
But the revelations of corruption started by Boesky kept growing. They now spread to Britain. As in America, the Guinness scandal exposed a network of illegal share-dealing, but unlike America, only four men were convicted. Evidence of a much wider system of corruption was quietly buried. ibid.
5,000 miles away in the Mexican jungle … He was Tiny Rowland and he too had been marginalised by the on-rush of the economy. Rowland believed that the Conservative Party had been corrupted by the boom. Both these men [Rowland and Goldsmith] wanted vengeance for their loss of power. And both now set out to destroy the Conservative Party. And they would be joined by a third vengeful tycoon who had been cast aside: Mohamed al-Fayed. Adam Curtis, The Mayfair Set IV: Twilight of the Dogs
Tiny Rowland was doing the same in Africa: he was taking over the old British-owned companies that had once dominated the empire. Rowland used ruthless methods to build a vast industrial empire; this included bribing the new rulers of independent Africa. They were methods that shocked the merchant banks in London. ibid.
The Conservatives’ boom had turned sour. It had led to inflation and industrial violence. And in November the Arab oil price rise pushed the market over the edge. It fell further than in the crash of 1929. The politicians now turned on the tycoons. When Rowland’s corrupt methods were revealed, Edward Heath publicly called him ‘the unacceptable face of capitalism’. And Goldsmith was now seen as a greedy spiv who had torn British industry apart to make himself a fortune. ibid.
The bankers not the politicians would change Britain. ibid.
Rowland knew that he had been stopped because of his corrupt past. He was furious because to him it was the height of hypocrisy. Rowland knew that underneath the new shiny enterprise culture there was a growing mass of corruption, corruption on a far grander scale than anything he had indulged in. ibid.
Fayed paid MPs to defend him in Parliament … The lobbyists found it easy to buy MPs, not just because politicians were greedy but because increasingly they were disillusioned. They knew that power had shifted from parliament to the City of London. ibid.
Currency markets decided to take on the British government. They deliberately set out to force John Major to devalue and to leave the Exchange Rate Mechanism. It was to be a defining battle over who now really controlled Britain’s economy – the markets or the government. ibid.
‘There’s a divorce between the interests of major corporations and of society.’ ibid. James Goldsmith, television interview
1997: The Labour government gave away its power and the markets rewarded them. Money did not flee from London as it had done when previous Labour governments had been elected, and the boom continued. ibid.
[Friedrich] Von Hayek had fled the Nazis and now taught at the University of Chicago: Hayek was convinced that the use of politics to plan society was far more dangerous than any problems produced by companies. Because it inevitably led to tyranny and the end of freedom. Adam Curtis, The Trap: What Happened to Our Dream of Freedom: Fuck You Buddy, BBC 2007
They [strategists] turned to a new idea called Game Theory. Game Theory had been developed as a way of mathematically analysing poker games. ibid.
A military think-tank called the Rand Corporation: and the strategists at Rand used Game Theory to create mathematical models that predicted how the Soviets would behave in response to what they saw the Americans doing. ibid.
Underlying Game Theory was a dark vision of human beings who were driven only by self-interest constantly distrusting of those around them. ibid.
The mathematical genius John Nash … In reality Nash was difficult and spiky; he was notorious at Rand for inventing a series of cruel games. The most famous he called Fuck You, Buddy. ibid.
A system driven by selfishness did not have to lead have to chaos. He proved that there could always be a point of equilibrium in which everyone’s self-interest was perfectly balanced against each other … Selfishness always led to a safer outcome: it was called the Prisoners’ dilemma. ibid.
In the early ’60s R D Laing set up a psychiatric practice in Harley Street in London. He offered radical new treatments for schizophrenia and quickly became a media celebrity. But his research into the causes of schizophrenia convinced him that a much wider range of human problems were caused by the pressure-cooker of family life. Laing decided to investigate how power and control were exercised within the world of normal families. And to do this he would use the techniques of Game Theory. ibid.
Laing produced matrices which showed how just as in the Cold War couples use their everyday actions as strategies to control and manipulate each other. His conclusion was stark. That what was normally seen as acts of kindness and love were in reality weapons used selfishly to exert power and control. From this research, Laing argued that the modern family, far from being a nurturing caring institution, was in reality a dark arena where people played continuous selfish games with each other. ibid.
Laing was radicalised by his findings. He believed that the struggle for power and control that he had uncovered in the family was inextricably linked to the struggle for power and control in the world. In a violent and corrupt society the family had become a machine for controlling people. Laing believed that this was an objective reality revealed by his scientific methods, above all by Game Theory. But these very methods contained within them bleak, paranoid assumptions about what human beings were really like, assumptions borne out of the hostilities of the Cold War. ibid.
The system that was trying to control your mind and destroy your freedom … What Laing and the counter-culture were doing was tearing down Britain’s institutions in the name of freedom. ibid.
A group of right-wing economists in America now put forward a theory why this was happening. At the heart of their idea was Game Theory. They said that the fundamental reality of life in society was one of millions of people continually watching and strategising against each other, all seeking only their own advantage. An assumption had become a truth. The self-interested model of human behaviour that had been developed in the Cold War to make the mathematical equations work had now been adopted by these economists as a fundamental truth about the reality of all human social interaction. ibid.
Public Choice theory … James Buchanan: ‘no meaningful concept that could be called the public interest.’ ibid.
Psychiatry, said Laing, was a fake science used as a system of political control to shore up a violent collapsing society. Its categories of madness and sanity had no reality. Madness was simply a convenient label used to lock away those who wanted to break free. ibid.
All human judgment would be removed and replaced instead by a system based on the power of numbers; they gave up on the idea they could understand the human mind and cure it; instead, American psychiatry created a new set of measurable categories that were only based on the surface behaviour of human beings. ibid.