What Is Empire?

An Essay on the Financial Arrangement That Has Been Running Since Venice

Editor’s note: This essay defines Empire as a specific institutional arrangement, operating continuously since Venice, and traces its migration through five hosts to the present. If you have ever wondered why the fall of one empire never seems to end the pattern, this is the answer.

The Bank hath benefit of interest on all moneys which it creates out of nothing. — William Paterson, promoter of the Bank of England, 1694

The Wrong Question

Ask a hundred educated people what Empire is, and most will name a country. Britain. America. A few will name a period: the age of colonies, the Cold War, the decades of American dominance after 1991. The historically literate will name a structure of military bases, extractive trade relations, or cultural dominance. All of these answers share one feature. They locate Empire in a place or a time.

This is why the question keeps getting asked. When the place changes, the answer changes with it, and the underlying arrangement stays invisible. Britain gave way to America, so Empire must have moved. America is now visibly fraying, so Empire must be moving again, to Beijing, to Brussels, to a multipolar order. Each transition looks like a new problem because the last transition already fell out of view.

Empire is not a place. It is not a period. It is an arrangement.

The arrangement has seven components. A private institution creates money and lends it to the state at interest.¹ The state protects that monopoly by prohibiting competitors.² Chartered corporations operate under state protection, with their private interests treated as identical with the national interest.³ A tax system exists whose real function is servicing permanent debt to the money-creators.⁴ A population is made dependent on the arrangement by the destruction of prior forms of self-sufficiency.⁵ Offshore jurisdictions exist where the resulting capital escapes democratic accountability.⁶ Across sovereignties, coordination is maintained through a supranational institution with sovereign immunity and no meaningful public accountability.⁷

Every one of these components is documented in the primary sources. Each has been operating, in some form, for centuries. What follows is the demonstration.

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Venice: The Template Complete

By 1300 the arrangement was already assembled in a single city-state in the northern Adriatic. Venice ran on trade: silver east to the Levant, gold west back into the lagoon, twice a year, in fleets of up to thirty ships under naval escort.⁸ The profits on this trade exceeded the usurious interest rates the Venetian banks charged domestically, and they charged those too.⁹

The Venetian oligarchy governed through executive committees, above all the Council of Ten. Its ruling doctrine was expressed most clearly by Pope Pius II: something was just if it served the state’s interests; something was pious if it expanded the empire.¹⁰ The state was the oligarchy’s instrument, and the oligarchy’s interests were the state’s interests by definition.

Five of the seven components were already in place. Venetian banks concentrated the precious metals trade and ran the public mints, depriving monarchs across Europe of control over their own coinage. That is money creation captured by private hands. The state protected this monopoly through elaborate regulation, licensed trade routes, and lethal enforcement against competitors.¹¹ That is state protection of the arrangement. Venetian trading companies operated with public authority and private profit, indistinguishable from arms of the state. Those are chartered corporations. The wealth extracted from the Levant and Byzantium underwrote a permanent state debt that the population serviced through taxation. That is a tax system for debt service. A labor force existed in the lagoon and its holdings that depended on the arrangement for its survival, with no alternative to it. That is a dispossessed population.

The sixth component, offshore jurisdictions, was still latent. Venice would not need it until the arrangement itself had to relocate. The seventh, cross-sovereign coordination, would not appear until the arrangement had multiplied enough to require it.

What matters about Venice is not that the components were present but that they were present as one integrated machine. Roger Crowley, historian of the Venetian empire, notes that the city claimed the right to sell anything to anyone regardless of intended use. Slaves and war materiel were sold to the enemies of the Byzantine Empire on which Venice’s wealth depended.¹² The commercial logic was total. Nothing constrained it. Not religion, not political loyalty, not the survival of trading partners. Venice’s oligarchy had built a system in which commerce was sovereign and the state served commerce.

In April 1509 at Agnadello, Venetian mercenaries were destroyed by the French army in the service of the League of Cambrai. France, Spain, the Papacy, the Habsburgs, and the Italian states had assembled explicitly to dismember the republic.¹³ Venice survived through rapid diplomacy, but its oligarchs drew the lesson. The lagoon city was no longer militarily defensible. Plans were laid to move.

The Council of Ten selected the Netherlands and the British Isles. The Giovani party abandoned reconciliation with the Habsburgs and worked toward alliance with England and Holland. Wealthy Venetians participated in establishing the Dutch East India Company in 1602 and the Amsterdam Wisselbank in 1609.¹⁴ In 1603 the Venetians and Genoese took over the administration of James I’s finances and transferred their methods to the British East India Company.¹⁵

The Republic of Venice itself continued until 1797, when Napoleon’s armies dissolved it. The Republic was already empty. The oligarchs had left two centuries earlier, with their capital, their methods, and their doctrine. What Napoleon extinguished was a shell.

This is the first of five migrations, and the model for all of them. Empire does not fall when its host falls. Empire relocates before its host falls, and the fall becomes a historical event that draws attention away from what has already happened.

1694: The Charter

The relocation from Venice took two hosts, not one. Amsterdam absorbed the arrangement first. The Dutch East India Company, founded in 1602, was a chartered company with authority to wage war, seize territory, hold slaves, and coin money. Its army and navy reported to a governor-general and an Indian Council, not to the States General.¹⁶ The Amsterdam Wisselbank, founded in 1609, held the bullion of the commercial city and issued deposit credit against it, with the credit circulating as a more reliable medium of exchange than the debased coinage of the time.¹⁷ By mid-century Amsterdam was the financial center of Europe.

England watched, and England learned. The Navigation Act of 1651 prohibited the import or export of goods between Asia, Africa, the Americas, and England except on English ships with captains and crews at least three-quarters English.¹⁸ Adam Smith, no friend of mercantilism, noted the Act’s effect: it did not increase England’s trade but redirected it, substituting long-distance trade for domestic trade, and it served its purpose by weakening the Dutch.¹⁹ Three Anglo-Dutch wars followed. By 1688, when William of Orange sailed to England with a large fleet and took the throne as William III, the arrangement had already been executing a merger. What looked like a Dutch conquest of England was the completion of a relocation.²⁰

Five years after William III took the English throne, the English Parliament passed a law with a title that stated its purpose before the politics buried it: *An Act for granting to their Majesties several Rates and Duties upon Tunnage of Ships and Vessels, and upon Beer, Ale and other Liquors: for securing certain Recompenses and Advantages, in the said Act mentioned, to such persons as shall voluntarily advance the Sum of Fifteen hundred thousand pounds towards carrying on the War against France.*²¹

A Scottish promoter named William Paterson had brought the scheme to a committee of the House of Commons the year before. The English Crown was broke, its credit poor, emerging from half a century of civil war. It could not raise taxes, since the civil wars had been fought partly over that question, and it could not borrow enough from private savers to fight France. Paterson’s group proposed a different arrangement. They would form a bank. The bank would issue new notes. The notes would be lent to the government. The government would pay interest on the loan from earmarked taxes on ships, beer, and spirits.²²

The arrangement had one feature that mattered more than any other. The money the bank lent did not exist before the loan was made. It was created by the act of lending.

When the subscription opened on 21 June 1694, King William III and the Whig parliamentarians crowded in. The Bank’s initial capital of £1,200,000 was fully subscribed within days.²³ On 27 July, with only forty-two members present and voting unanimously in favor, the Charter of Incorporation was granted.²⁴ The Bank of England was in business, with the immediate right to issue £1,200,000 in bank notes against gold reserves that were a fraction of that sum.²⁵ By 1697, Parliament had prohibited any competing corporate bank from being established in England. Counterfeiting Bank of England notes was made a capital offense.²⁶

The 1694 charter is the hinge. What Venice had operated through custom, and Amsterdam through convention, England now operated through statute. The private creation of money, its loan to the state at interest, the state’s protection of the monopoly, the earmarking of taxes to service the debt, the criminalization of competitors were all formalized in English law within three years.

The population, meanwhile, had been prepared for the arrangement. Seventy years of enclosure had already begun stripping the rural peasantry of common land. The 1688 settlement completed the work. Seats in Parliament were openly for sale within a few years of William’s accession. Property law was rewritten to favor the new holders. The traditional rights of the rural peasantry were dissolved. Laissez-faire replaced the older Stuart policy of regulating wages and protecting peasants from eviction.²⁷ This was the labor force the arrangement needed: dispossessed, dependent, available.

Continuity Without Conspiracy

Before continuing to the next instance, one objection deserves an answer.

A defender of mainstream historiography would concede much of the above and still resist the argument. Yes, they would say, the Bank of England influenced the Federal Reserve. Yes, the BIS coordinates central banks. Yes, offshore finance is a scandal. But calling this “one arrangement” running across eight centuries imposes a coherence the actors themselves did not experience. The men who chartered the Bank of England in 1694 were not the men who drafted the Federal Reserve Act in 1913. The Venetian oligarchs did not send instructions to Amsterdam. There is no council, no plan, no continuous conspiring class.

This objection is correct on its narrow point and misses the argument.

The argument is not that a single class of individuals has been meeting for eight hundred years. The argument is that a specific institutional pattern, once it emerged in Venice, produced results that made its replication attractive to the ruling classes of every subsequent commercial society. The Dutch copied Venice because it worked. The English copied the Dutch because it worked. The Americans copied the English because it worked. Each generation of financiers studied the previous one, hired the previous one’s personnel, and built institutions modeled on the previous one’s institutions. Hamilton studied the Bank of England. Warburg brought European central banking to Jekyll Island. Peabody built his firm on Rothschild credit and passed it to Morgan. Continuity operates through institutions, personnel, and demonstrated results, not through a single conspiring class.

What the mainstream frame calls a series of separate national mercantilisms was, mechanically, the same arrangement operating in successive hosts. The men are different. The mechanism is the same. Naming the mechanism as one thing is not conspiracy theory. It is refusing to be misled by the frame that treats each host as its own separate case study.

1913: The Replication

The men who had fought England over taxation and trade restriction proceeded to replicate England’s financial architecture. The Bank of North America, chartered in 1781 under the Articles of Confederation, was explicitly modeled on the Bank of England. It received the monopoly privilege of having its notes accepted at par with specie in all federal and state tax payments. No other bank was permitted to operate. In return, it created money and lent most of the new money to the federal government, on whose debt the taxpayer would pay principal and interest.²⁸

The Bank of North America collapsed as a central bank within two years. Alexander Hamilton pushed through the First Bank of the United States in 1791. Its design was Bank of England in miniature. Nathan Rothschild became one of its largest shareholders.²⁹ Hamilton’s reasoning was explicit: a central bank on the English model would give the state “durable and extensive credit” for war finance.³⁰ Between 1791 and 1796, inflation ran at 72 percent as the Bank pyramided notes on a small specie base and lent the resulting money to the government.³¹

The Jeffersonians let the charter expire in 1811 by one vote. A Second Bank was chartered in 1816 and destroyed by Andrew Jackson in the 1830s. The United States spent the next seventy-seven years without a central bank.

The Rothschilds, meanwhile, had built the institutional structure that would carry the arrangement across the century between Napoleon’s defeat and Jekyll Island. Meyer Amschel Rothschild established five sons in five European capitals: Nathan in London, James in Paris, Salomon in Vienna, Carl in Naples, Amschel in Frankfurt. Carroll Quigley calls the family the greatest of the nineteenth-century banking dynasties.³² The family’s innovation was structural. Five branches in five sovereignties, each legally independent, each coordinating through private family correspondence, each able to move capital across borders that sovereigns could not cross. A state could default. A Rothschild branch in that state would survive, because the capital had already moved elsewhere.

The Napoleonic Wars were the demonstration. The Bank of England credit system was England’s chief weapon in the victory over Napoleon in 1815. Napoleon, in Quigley’s account, “as the last great mercantilist, could not see money in any but concrete terms, and was convinced that his efforts to fight wars on the basis of ‘sound money,’ by avoiding the creation of credit, would ultimately win him a victory by bankrupting England. He was wrong.”³³ The credit system of 1694 defeated the last mercantilist emperor. The Rothschilds moved the funds that paid English forces and their allies in ways no state could match.³⁴

The interval in America ended on Jekyll Island, Georgia, in November 1910. The meeting was secret. Nelson Aldrich, whose daughter had married John D. Rockefeller Jr., hosted it. The participants included Frank Vanderlip of Rockefeller’s National City Bank, Paul Warburg of Kuhn, Loeb & Co., and Henry Davison of J.P. Morgan & Co.³⁵ They drafted what became, with modifications and after a political re-labeling exercise, the Federal Reserve Act of 1913. Warburg’s proposal at Jekyll Island had been to disguise the central bank by calling it a “Federal Reserve Association” and structuring it as twelve regional banks, so that “the dominant influence of New York, the nation’s largest banking and money center, would be concealed.”³⁶

The men in the room were not outsiders seizing the machinery. They were the machinery’s new custodians. George Peabody had founded a banking house in London in 1835 with loans from the Brown Brothers and Nathan Mayer Rothschild.³⁷ Junius Morgan joined as partner. After Peabody’s death the firm passed to the Morgans. J.P. Morgan moved the bank to America and renamed it. Quigley’s summary is a single line: the Rothschilds “were being replaced by J.P. Morgan whose central office was in New York, although it was always operated as if it were in London (where it had, indeed, originated as George Peabody and Company in 1838).”³⁸

The 1913 replication of the 1694 arrangement was executed by men whose firms had been part of the arrangement since the mid-nineteenth century. Benjamin Strong, the first Governor of the Federal Reserve Bank of New York and the man who ran American monetary policy from 1914 until 1928, came from Bankers Trust, a bank created by the Morgans. He was persuaded to take the Fed job by Henry Davison, a Morgan partner, and Dwight Morrow, another Morgan partner.³⁹

Quigley, writing from inside the establishment he was describing, noted the underlying pattern:

The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks.⁴⁰

The average reserve requirement for all American banks before the Fed was 21.1 percent. Under the 1913 Act it was cut to 11.6 percent, then to 9.8 percent in June 1917.⁴¹ Between December 1913 and January 1920, total bank demand deposits nearly doubled. Member bank deposits grew by 250 percent. The impetus was unambiguously from the center.⁴²

The 1694 arrangement had now been installed at continental scale, in the state that emerged from the First World War as the world’s largest economic power. Component seven, cross-sovereign coordination through a supranational institution, was still missing. That would take another seventeen years.

1930-1971: The Planetary Hinge

The Bank for International Settlements opened in Basel on 27 February 1930. Its original purpose was to facilitate German reparations payments under the Treaty of Versailles. That purpose lasted three years. When reparations collapsed in 1933, the BIS found a new direction: fostering monetary cooperation among central banks.⁴³

The BIS is unaccountable in a specific technical sense. Under the Hague Convention of 1930, updated by an agreement with the Swiss Federal Council in 1987, the bank’s property, assets, deposits, archives, documents, and electronic data are immune “in time of peace and in time of war from any measure such as expropriation, requisition, seizure, confiscation, prohibition or restriction of gold or currency export or import, and any other similar measures.”⁴⁴ It maintains its own private police force. It has complete immunity from national laws and taxation. Its bi-monthly Global Economy Meetings, where the world’s central bankers coordinate policy, proceed without a written agenda and without minutes.⁴⁵

Sixty central banks are affiliated to it. Its board of directors has included, at various points, the chairs of the U.S. Federal Reserve, the Bank of England, the European Central Bank, the Bundesbank, and the People’s Bank of China.⁴⁶ Carroll Quigley, who had access to the papers of the network that produced it, described the design plainly:

The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.⁴⁷

The seventh component was now in place. The arrangement had, for the first time, an operational apex outside any national sovereignty. It had an institution with legal inviolability, secret proceedings, and coordination authority over the central banks that had themselves become the operational agents of the arrangement in each country.

What happened next was the extension of the arrangement to the world’s population.

Roosevelt broke the domestic gold standard in 1933, devaluing the dollar from $20.67 to $35 per ounce, confiscating private gold holdings, and burying the metal at Fort Knox.⁴⁸ The international gold standard survived, formalized at Bretton Woods in 1944 as the dollar-gold link. Foreign governments and central banks could still convert dollars to gold at $35 per ounce.

The Vietnam War killed it. Between 1964 and 1968, U.S. balance-of-payments deficits produced dollar accumulations abroad that far exceeded the American gold stock. France and Germany began cashing in dollars for gold on approaching a monthly basis. By March 1968 the American gold stock had fallen to the $10 billion floor beyond which the Treasury had privately signaled it would suspend further sales. The London Gold Pool was disbanded. Central banks informally agreed to stop converting their dollar inflows into gold.⁴⁹

On 15 August 1971, Nixon made the embargo official. Michael Hudson’s analysis of what happened that day is one of the most important passages in post-war economic history:

Three years later, in August 1971, President Nixon made the gold embargo official. The key-currency standard based on the dollar’s convertibility into gold was dead. The U.S. Treasury bill standard, that is, the dollar-debt standard based on dollar inconvertibility, was inaugurated. Instead of being able to use their dollars to buy American gold, foreign governments found themselves able to purchase only U.S. Treasury obligations. As foreign central banks received dollars from their exporters and commercial banks that preferred domestic currency, they had little choice but to lend these dollars to the U.S. Government. Running a dollar surplus in their balance of payments became synonymous with lending this surplus to the U.S. Treasury. The world’s richest nation was enabled to borrow automatically from foreign central banks simply by running a payments deficit.⁵⁰

Read that carefully. Before 1971, the 1694 arrangement extracted from the population of the state that housed it, first the English population, then the American population, because those were the populations whose taxes serviced the debt to the money-creators. After 1971, every foreign central bank holding dollars was structurally compelled to recycle those dollars into U.S. Treasury securities. The bigger the American deficits grew, the more dollars accumulated abroad. The more dollars accumulated abroad, the more foreign central banks were forced to finance the American deficit. The American state could run any deficit it chose. The rest of the world would fund it.

This is the 1694 arrangement at planetary scale. A central institution creates money. It lends the money to the state. The state pledges revenue to service the debt. But the revenue is no longer taxes on English beer and English ships. The revenue is the structural obligation of every population on earth that uses dollars, which, since 1971, has meant every population that trades internationally, buys oil, holds foreign reserves, or participates in the global financial system.

The population being taxed through this arrangement is no longer the population of any single host state. It is the world.

Denis Rancourt names the mechanism: U.S. dollar hegemony is “the mechanistic backbone of the global empire, ever since the 1971 end of the Bretton Woods system.”⁵¹ The dollar retains its status because the United States controls the main commodities that have the greatest global demand and the highest prices in U.S. dollars: oil, gas, opium, national debts serviced in dollars, U.S. military hardware, U.S. dollar currency choice for savings and investment. The military and financial dimensions are one thing, not two.

The Present: Basel, the Spiderweb, and BRICS

While the dollar-Treasury standard was being consolidated above the waterline, a parallel relocation was happening below it. The agent was the City of London. The instrument was the Eurodollar market.

In June 1955, Bank of England staff noticed odd trades at Midland Bank. Midland was taking U.S. dollar deposits unrelated to any commercial transaction, and offering interest rates higher than U.S. regulations permitted. A Bank of England official called in Midland’s chief foreign manager. The Bank’s internal conclusion, in Nicholas Shaxson’s account: “We would be wise, I believe, not to press the Midland any further.”⁵²

In 1957 the British government, trying to shore up the pound after the Suez humiliation, raised interest rates and imposed controls on overseas lending in sterling. London banks shifted their international lending from sterling into dollars, using the unregulated market Midland had opened. The Bank of England ruled that the transactions had not taken place in the United Kingdom for regulatory purposes. Since they had not taken place in the United Kingdom, no other authority could reach them either. London banks began keeping two sets of books, one for onshore, one for offshore. A new market had been born.⁵³

The Eurodollar market held $200 million by late 1959. One billion by end of 1960. Three billion by end of 1961.⁵⁴ Kennedy’s 1963 Interest Equalization Tax, designed to discourage dollar outflows, succeeded only in driving Wall Street lending offshore to London. Henry Alexander of Morgan Guaranty understood: “This is a day you will remember. It will change the face of American banking and force all the business to London.”⁵⁵

A Bank of England memo from 1963 captured the operating principle: “However much we dislike hot money, we cannot be international bankers and refuse to accept money.”⁵⁶ When American regulators pressed for action, the response was: “It doesn’t matter to me whether Citibank is evading American regulations in London. I wouldn’t particularly want to know.”⁵⁷

The infrastructure that emerged between 1957 and 1986 is what Shaxson calls the British spiderweb. The inner ring: the three Crown Dependencies of Jersey, Guernsey, and the Isle of Man. Jersey’s offshore deposits stood at $800 billion in mid-2009.⁵⁸

The intermediate ring: the fourteen British Overseas Territories. Cayman, Bermuda, British Virgin Islands, Turks and Caicos, Gibraltar. Between them, a quarter of a million inhabitants and a significant fraction of global finance. The Cayman Islands is the world’s fifth-largest financial center, with over eighty thousand registered companies, over three-quarters of the world’s hedge funds, and $1.9 trillion on deposit, four times as much as in all the banks in New York City. It has one cinema.⁵⁹

The Caymans are nominally independent. The British monarch appoints the Governor, who retains control of defense, internal security, foreign relations, the police commissioner, the auditor general, the attorney general, and the judiciary. The final court of appeal is the Privy Council in London. The local legislators have no meaningful power over the money.⁶⁰

The outer ring includes independent states with deep historical links to British finance: Hong Kong, Singapore, the Bahamas, Dubai, Ireland. Newer entrants continue to be added. Ghana announced an offshore center in 2006 with assistance from Barclays.⁶¹

A 2008 U.S. Government Accountability Office report found Citigroup with 427 tax haven subsidiaries, of which 290 were in the British spiderweb. Morgan Stanley had 273, with 220 in the British zone. News Corporation had 152, with 140 in the British zone. Enron, before its bankruptcy, had 881 offshore subsidiaries: 692 in the Caymans, 119 in Turks and Caicos, 43 in Mauritius, 8 in Bermuda. All in the British spiderweb.⁶²

The Tax Justice Network estimates that somewhere between $21 and $32 trillion sits in offshore jurisdictions.⁶³ This is not the domain of celebrity tax-dodgers. The major users are the largest banks and multinational corporations. The offshore system exists to allow the beneficiaries of the arrangement to hold their capital outside the reach of the taxation and regulation that applies to everyone else.

Component six of the arrangement, offshore jurisdictions where capital escapes democratic accountability, is now operational at planetary scale. It is coordinated from London and its dependencies, with the United States (Delaware, Nevada, South Dakota) as a substantial secondary node. The Tax Justice Network’s own Financial Secrecy Index has ranked the United States as the world’s most important secrecy jurisdiction in recent years.⁶⁴

Above this extraction layer sits the coordination layer. The BIS in Basel continues to operate as Quigley described. Its board of directors reads like a directory of the world’s most powerful central bankers.⁶⁵ Global Economy Meetings continue without agenda or minutes. The bank’s legal inviolability continues to protect its operations from any national jurisdiction.

Above the coordination layer sits the current integration project. The BRICS grouping (Brazil, Russia, India, China, South Africa, and recent additions) is presented in Western media as an emerging rival to the Western-dominated financial order. The evidence for this framing does not survive contact with the personnel.

The BRICS New Development Bank was launched with a Vice President who was also an Executive Board member of the IMF, and who publicly pledged cooperation between the two institutions.⁶⁶ The NDB’s first chief was a former staffer of the Asia Development Bank. The head of the Asian Infrastructure Investment Bank was a former Vice President of the Asia Development Bank and alternate Executive Director of the World Bank.⁶⁷ Zhou Xiaochuan, who ran the People’s Bank of China through the launch of these institutions, sat on the BIS board through the same period. In 2009 he proposed the IMF’s Special Drawing Rights currency basket as the new world reserve currency, which is not the position of a challenger to the Bretton Woods system but of an insider proposing its next phase.⁶⁸

The term “multipolarity” appears in the Council on Foreign Relations’ journal Foreign Affairs from the early 1970s onward, decades before the Primakov doctrine that is now credited with originating it.⁶⁹ BRIC was coined in 2001 by Jim O’Neill of Goldman Sachs. His 2003 co-author on the BRICs report, Roopa Purushothaman, is a World Economic Forum Young Global Leader.⁷⁰

What is being described as a rival to the Western financial order is being run by personnel drawn from that order, coordinated through the same institutions, and financed through the same channels. James Corbett’s summary is direct: “The BRICS are a phoney opposition literally created by Goldman Sachs whose pseudo-alternative institutions are run by the very same bankers and bureaucrats they pretend to oppose.”⁷¹

The current phase is the integration of the Global South into the arrangement that already operates in the Global North. It is not the arrangement being challenged. It is the arrangement completing itself.

The 1694 charter is still in effect. The addresses are 1 King William Street, Grand Cayman, Wall Street, Geneva, and Singapore. The coordination is at Basel. The extraction is through the spiderweb. The population is now planetary.

What This Costs You

A reader is entitled to ask what any of this has to do with them.

The answer is specific.

The inflation you have lived with your entire life is not weather. It is a transfer. Every dollar the Federal Reserve creates and lends to the U.S. Treasury reduces the purchasing power of every dollar you already hold. The purchasing power lost from your wages, savings, and pension is not destroyed. It moves. It moves to the state, whose deficits are financed by it, and to the financial sector, which handles the newly created money before it reaches you. Keynes noted a century ago that debasing a currency is the most subtle and certain way to overturn the existing social order, and that perhaps one person in a million could diagnose what is happening.⁷² The proportion has not improved.

The national debt your state carries is not a national obligation in any meaningful sense. It is a permanent income stream for the arrangement. It cannot be repaid because repaying it would dissolve the mechanism that creates the money. The interest on it, which your taxes service, is a rent paid in perpetuity for the privilege of using a currency whose value is set by an institution you cannot vote against.

The wages you earn are priced against a currency whose value is determined by decisions made in Global Economy Meetings held in Basel without published minutes. The house you cannot afford is priced by credit conditions set in the same rooms. The pension you are told to save for is denominated in a unit of account that will lose most of its purchasing power over the course of your working life, by the arrangement’s own admitted trajectory.

The Cayman Islands has one cinema and three-quarters of the world’s hedge funds. Your workplace does not. The offshore system was not built for you. It was built for the beneficiaries of the arrangement, so that their capital could escape the taxes and regulations you are subject to. The reason the tax code is complicated for you and simple for them is not administrative accident. It is the arrangement operating as designed.

Empire is what has been running since Venice. It is running now. Its coordinators meet in Basel. Its beneficiaries hold their capital in Cayman. Its currency finances its wars from your labor. Its next phase, presented as the emergence of a multipolar world, is the extension of its reach to the populations it has not yet fully absorbed.

The republic that John Perkins mourned, the one founded on the idea of equality and justice for all, which could open its arms to shelter the downtrodden, is what Empire has been eating for as long as it has existed.⁷³ You are what it is eating now.

How To Explain It To A 6 Year Old

Imagine a game with a group of children.

The rules are simple. One child, call her Ada, has an empty jar. Everyone else in the group has to give Ada a real cookie every week. In exchange, Ada gives them paper tickets she has drawn herself. The tickets say “one cookie” on them. There is no real cookie behind the ticket. Ada just draws more tickets whenever she needs to.

At first the children accept the tickets because they trust Ada, and because Ada has told them the tickets are as good as cookies. Some of the children even lend Ada their tickets back, and Ada promises to give them extra tickets later. Ada calls this “interest.” She is very generous with her interest because she can always draw more tickets.

After a while, three things happen.

First, cookies become more expensive in tickets. It used to take one ticket to buy one cookie. Now it takes two, then five, then ten. The children who saved their tickets to buy cookies later find that their tickets buy fewer cookies than they expected.

Second, Ada’s friends notice she is doing well and want to help. They are given permission to draw tickets too, as long as they follow Ada’s rules. Now several children are drawing tickets and lending them to everyone.

Third, when some children ask hard questions about the tickets, Ada explains that only she and her friends are allowed to draw them. Anyone else who tries to draw tickets will be sent to the corner. Anyone who refuses to accept the tickets will also be sent to the corner. The children learn to stop asking.

The game has been going on for a long time. Ada is not the first child to run it. There was a child called Venezia who ran it a long time ago. Then a child called Amsterdam. Then a child called England. Then a child called America. Each time the game moves to a new child, the old child pretends nothing has changed and the new child pretends they invented it. They all use the same tickets. They all follow the same rules. The rules are always written by whichever child is holding the jar.

Now there is a new part of the game. Ada and her friends have a very secret meeting room in a country called Switzerland, where they decide together how many tickets to draw. They meet every two months. They write nothing down.

The children who make the cookies do not know about the room. They just know that every year, the cookies they make disappear into Ada’s jar, and the tickets they get for them buy less.

You are one of the children who make the cookies.

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This essay is a companion piece to “The Tower in Basel: Central Banking and the Machinery of Empire,” which develops the coordination architecture at Basel in greater detail. Where this essay traces the arrangement across its five hosts, that essay describes the specific institution through which the arrangement now coordinates.

The Tower in Basel: Central Banking and the Machinery of Empire

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References

1. Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan, 1966), on the founding of the Bank of England and the credit-creation mechanism.

2. Murray N. Rothbard, The Mystery of Banking, 2nd ed. (Auburn: Ludwig von Mises Institute, 2008), chapter XII on the Bank of England charter and the prohibition of competing corporate banks by 1697.

3. Nicholas Shaxson, Treasure Islands: Dirty Money, Tax Havens and the Men Who Stole Your Cash (London: Vintage, 2012), on the East India Companies as chartered corporations with state authority.

4. Michael Hudson, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy (2015), on the tax system as underwriter of interest on permanent state debt.

5. Stephen Mitford Goodson, A History of Central Banking and the Enslavement of Mankind (2014), on the tax structure introduced after 1694, and on the dispossession following the 1688 settlement.

6. Shaxson, Treasure Islands, on the offshore system as the mechanism for beneficiary escape from taxation and regulation.

7. Adam LeBor, Tower of Basel: The Shadowy History of the Secret Bank that Runs the World (New York: PublicAffairs, 2013), and Goodson, A History of Central Banking, on the BIS as coordination architecture with sovereign immunity.

8. Frederic C. Lane and Reinhold C. Mueller, Money and Banking in Medieval and Renaissance Venice (Baltimore: Johns Hopkins University Press, 1985), on Venetian trade fleets and precious metals concentration.

9. Ibid., on the differential between trade profits and domestic interest rates.

10. Pope Pius II, as quoted in Martin Erdmann interview material.

11. Lane and Mueller, on Venetian control of the precious metals trade and public mints by 1310.

12. Roger Crowley, City of Fortune: How Venice Won and Lost a Naval Empire (London: Faber, 2012), on Venetian sales of slaves and war materiel to enemies of Byzantium.

13. W.H. McNeill, Venice: The Hinge of Europe, 1081-1797 (Chicago, 2009), on the League of Cambrai and the battle of Agnadello.

14. Martin Erdmann, The Greed for Gold and Glory, on Venetian relocation to Amsterdam and London and participation in founding the VOC and the Wisselbank.

15. Ibid., on the 1603 Venetian-Genoese takeover of James I’s finances.

16. Ibid., on VOC governance and its independence from the States General.

17. Ibid., on the Amsterdam Wisselbank.

18. English Navigation Act, 1651, primary text.

19. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book IV, ch. 2.

20. Erdmann, on the 1688 Dutch arrival in England as completion of a commercial merger.

21. An Act for granting to their Majesties several Rates and Duties..., 5 & 6 W. & M. c. 20 (1694), primary text quoted in Goodson, A History of Central Banking.

22. Goodson, A History of Central Banking, and G. Edward Griffin, The Creature from Jekyll Island: A Second Look at the Federal Reserve (Westlake Village: American Media, 2010), on the Paterson scheme.

23. Goodson, A History of Central Banking, on the June 1694 Bank of England subscription.

24. Ibid., on the 27 July 1694 charter vote.

25. Ibid., on the Bank’s right to issue £1,200,000 in bank notes without gold cover.

26. Rothbard, Mystery of Banking, on the 1697 prohibition of competing corporate banks and the capital offense for note counterfeiting.

27. Goodson, A History of Central Banking, on the tax structure and property law changes following 1694, and Erdmann on the specific dispossessions.

28. Rothbard, Mystery of Banking, ch. XV, on the Bank of North America.

29. F. William Engdahl, Gods of Money: Wall Street and the Death of the American Century (Wiesbaden: edition.engdahl, 2009), on Nathan Rothschild’s investment in the First Bank of the United States.

30. Alexander Hamilton, The Continentalist, No. IV, August 30, 1781, as cited in Engdahl.

31. Goodson, A History of Central Banking, on 72 percent inflation between 1791 and 1796.

32. Quigley, Tragedy and Hope, on the Rothschild family and its five European branches.

33. Ibid., on the Bank of England credit system and Napoleon as “the last great mercantilist.”

34. Erdmann, on Rothschild credit transfers across European states during the Napoleonic Wars.

35. Griffin, The Creature from Jekyll Island, on the November 1910 Jekyll Island meeting.

36. Engdahl, Gods of Money, on Warburg’s proposal at Jekyll Island for the “Federal Reserve Association” naming and structure.

37. Griffin, The Creature from Jekyll Island, on the 1835 Peabody founding loans from Brown Brothers and Nathan Mayer Rothschild.

38. Quigley, Tragedy and Hope, on the Peabody-to-Morgan succession.

39. Rothbard, Mystery of Banking, ch. XVI, on Benjamin Strong’s Morgan connections.

40. Quigley, Tragedy and Hope, on the investment bankers and their control of central banks.

41. Rothbard, Mystery of Banking, ch. XVI, on Federal Reserve reserve requirements.

42. Ibid., on the growth of deposits in the Fed’s first six years.

43. LeBor, Tower of Basel, on the 27 February 1930 founding of the BIS, and Goodson on its post-1933 turn to monetary cooperation.

44. LeBor, Tower of Basel, quoting Article 10 of the BIS Constituent Charter, and citing the 1987 Swiss Federal Council headquarters agreement.

45. Goodson, A History of Central Banking, on BIS immunities, its private police force, and the operating protocols of its meetings.

46. LeBor, Tower of Basel, on the composition of the BIS board.

47. Quigley, Tragedy and Hope, on the design of the BIS as the apex of a private world system of financial control. Reproduced in Goodson.

48. Rothbard, Mystery of Banking, ch. XVII, on Roosevelt’s 1933 gold confiscation and dollar devaluation.

49. Michael Hudson, Super Imperialism: The Origin and Fundamentals of U.S. World Dominance, 2nd ed. (London: Pluto Press, 2003), on the London Gold Pool and the pre-1971 gold drain.

50. Ibid., on the August 1971 gold embargo and the inauguration of the U.S. Treasury bill standard.

51. Denis G. Rancourt, “Geoeconomics and Geopolitics Drive Successive Eras of Predatory Globalization and Social Engineering,” OCLA Report 2019-1, on U.S. dollar hegemony as the mechanistic backbone of the global empire.

52. Shaxson, Treasure Islands, ch. 4, quoting Bank of England internal memo of 1955 on Midland Bank’s dollar deposits.

53. Ibid., on the 1957 emergence of the Eurodollar market and the Bank of England’s ruling on offshore transactions.

54. Ibid., on Eurodollar market growth 1959-1961.

55. Ibid., quoting Henry Alexander of Morgan Guaranty on Kennedy’s Interest Equalization Tax.

56. Ibid., quoting the 1963 Bank of England memo on “hot money.”

57. Ibid., quoting a senior Bank of England official on American regulators.

58. Ibid., ch. 5, on the Crown Dependencies and Jersey’s 2009 offshore deposits.

59. Ibid., on the Cayman Islands.

60. Ibid., on Cayman governance and the residual authority of the British Crown.

61. Ibid., on the outer ring of the spiderweb.

62. U.S. Government Accountability Office, “Large U.S. Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Jurisdictions,” December 2008, cited in Shaxson.

63. Tax Justice Network estimates cited in Shaxson, Treasure Islands.

64. Tax Justice Network Financial Secrecy Index, cited in Shaxson.

65. LeBor, Tower of Basel, on the current composition of the BIS board.

66. James Corbett, “Meet the World Bank’s Ultimate Insider: The Real Story of the BRICS Bank,” The Corbett Report, on the NDB Vice President’s IMF Board membership.

67. Ibid., on the personnel connections between BRICS institutions and the Bretton Woods institutions.

68. Zhou Xiaochuan, “Reform the International Monetary System,” People’s Bank of China, 23 March 2009, on the proposal to expand SDR use as reserve currency; on Zhou’s BIS board tenure, LeBor, Tower of Basel.

69. Geopolitics & Empire, “Multipolarity As World Government 3.0 & Its Pied Pipers” (March 2026), on the CFR archive of “multipolarity” usage since the early 1970s.

70. Ibid., on Goldman Sachs origins of BRIC and Purushothaman’s WEF status.

71. James Corbett, on BRICS as “phoney opposition literally created by Goldman Sachs.”

72. John Maynard Keynes, The Economic Consequences of the Peace (London: Macmillan, 1919), ch. VI.

73. John Perkins, Confessions of an Economic Hit Man (San Francisco: Berrett-Koehler, 2004), on the distinction between the American republic and the global empire.