The so-called neo-liberal finance model which was espoused by the Thatcher government after 1979 had its origins in a decision by leading Anglo-American financial powers and their circle that it was time to begin a wholesale clawing back of the concessions which they had granted under, as they saw it, duress, during the great depression of the 1930's and in the case of Britain the postwar economic difficulties.
The origins of the effort in the United States go back to a seminal little known book by a scion of the vastly wealthy Rockefeller family, the late John D. Rockefeller III, titled The Second American Revolution. There, amid soporific rhetoric about creation of a ‘humanistic capitalism' he calls for drastic reduction in the role and size of government in the economy. That theme was then propagated through the efficient propaganda apparatus of the Rockefeller imperium, aided by the economist guru of the Rockefellers' University of Chicago, Milton Friedman.
Amid the misnamed ‘stagflation' sluggish growth high inflation era of the late 1970's into the 1980's, that propaganda machine, conveniently ignoring the pivotal role of the manipulated oil shocks, shocks incidentally manipulated and brought about by the same Rockefeller family, as I detail in A Century of War: Anglo-American Oil Politics, blamed all ills on ‘big government.' Rockefeller protégé, Paul Volcker of Chase Manhattan Bank was sent to Jimmy Carter on orders of David Rockefeller, to ‘wring inflation out of the system' in October 1979, the same general time Thatcher's Bank of England imposed its own form of economic ‘shock therapy.'
True economic causality was obscured and reams of press copy from the Friedmanite free market camp, during the Reagan and Thatcher era claimed that the ‘defeat of inflation' had been due to the ruthless discipline of Volcker and Thatcher. That was, we were told, again and again, the reason why the market should be unfettered from government regulation, freed to the devices of its own unbounded innovative genius. The results of that unfettered ‘humanistic capitalism' or what Alan Greenspan approvingly called the ‘revolution in finance' is now bringing both meccas of neo-liberalism, the United States and Great Britain to economic ruin. Somewhere between this and Stalin's Soviet central planning there lies a better way