What the Fuck is Going On? - Expanded

An overview of all that matters - Everything else is theater.

There is a certain kind of British conversation that takes place in a quiet room with two cups of tea going cold on the table, the kind where one man tells another that the country he was born in has been gutted from the inside, that the elections he votes in are theatre, that the pension he has been paying into is collateral for a debt nobody intends to repay, and the other man, who already half-believed it, sits there and feels the last of his civic optimism leave the room like steam off the tea. That conversation has been happening more often lately. It is happening in pubs in Bedford, in coffee shops in Manchester, in the spare bedrooms of men in their fifties who have stopped sleeping properly and have begun reading books their fathers would have called crank literature, and it is happening because the official explanations no longer fit the visible facts.

The visible facts are these. The British state cannot build a hospital on time or on budget. It cannot guard its own borders. It cannot keep the lights on without buying gas from people who hate it. It cannot prosecute the obvious crimes committed in the open against children in its northern towns. It cannot house its own citizens, who now hand over more than half their take-home pay for a flat they will never own, and it cannot stop importing several hundred thousand new claimants on those flats every year.

Yet at the same time the FTSE prints record highs, the people running these failures retire to estates and consultancies, and the national broadcaster spends its breath worrying about pronouns. Two stories cannot both be true. Either the people in charge are the most consistently incompetent ruling class in modern European history, or the failure is the point. Once you accept the second possibility, a great many things start to make sense at once, and the quality of your sleep suffers accordingly.

What follows is the case for the second possibility. It is a case made by people who have spent twenty-five years inside the engine room and emerged convinced that the engine was built to do exactly what it is doing. It is not a comfortable case. The popular framing, encouraged by whichever feed your algorithm has been training, would have it that the villains are the Jews, or the Muslims, or the lizards, or whichever team your particular grievance has been schooled to hate. The case here is something different. It is a case about money, and about the small number of institutions that get to create it from nothing, and about what those institutions do with three centuries of compounding advantage.

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The Original Sin

The pound sterling, the most respectable currency in the European imagination, was born of a private loan. In 1694 a Scottish projector called William Paterson lent the King of England one point two million pounds at a perpetual rate of interest, and in exchange the King granted Paterson and his syndicate a monopoly on issuing the new national currency. From that day to this, every pound in circulation has begun its life as somebody’s debt.

The mathematics of this arrangement contain a problem the inventors understood and the public still does not. If the principal is created when the loan is made, the interest is not. The interest must come from a future loan, made by someone else, and that loan in turn carries its own interest, which must come from a third loan, and so on into the ungraspable distance. This is the engineering specification of a Ponzi scheme, written into the foundation document of British finance and exported, by gunboat and by treaty, to every country that now uses a central bank. Yes, the British are guilty of the original sin. It has always been them. Every single central bank in existence has been founded on British dung. Thank you.

The consequences are not subtle. A monetary system that requires perpetual new debt to service old debt requires, at every level, a population willing to keep borrowing. The consumer is treated as a yield-bearing asset, drained at thirty per cent on his credit card and at four hundred per cent on his payday loan. The small business is cut off from cheap credit because cheap credit is reserved for the entities closest to the central bank, and the small business is left to pay the same rate as the consumer or to die. The corporation that sits at the top of the pyramid borrows at near zero, buys the assets the consumer is too indebted to buy, and rents them back to him. The government takes the rest of the debt onto its own books and presents the bill to the next generation, which has not been born yet and cannot vote.

This is not capitalism. The word has been used so loosely for so long that it has lost the power to describe anything at all, but if capitalism means anything coherent it means a system in which capital is privately owned, freely priced, and earned through providing something other people want. Under that definition Britain has not had capitalism in any of our lifetimes. What Britain has, and what America has, and what every member of the post-war Western order has, is socialism for the institutions that can borrow at the central bank rate, and a brutal Hobbesian struggle for everything below them. The bank that mismanages a trillion pounds gets bailed out at midnight on a Sunday by a treasury minister who used to work for it. The plumber whose van breaks down in February goes bankrupt in March. Both outcomes are described by the same Chancellor, in the same speech, as the natural workings of the free market.

The result is what economists who still wish to be invited to dinner parties call the K-shaped economy. The top arm of the K rises because its inhabitants own the assets that monetary inflation pumps up. The bottom arm of the K descends because its inhabitants pay for those assets in rent, in higher prices, and in the steadily declining purchasing power of a wage that is denominated in the very currency being debased. There is no middle. The shape of the letter forbids it.

Britain Invented This and Britain Was Eaten By It

The mercantile system that grew out of Paterson’s loan needed somewhere to deploy its borrowed money. England in the late seventeenth century was small, agricultural, and short of useful things to seize. The solution, worked out over the next two centuries by men whose statues still stand in London squares, was to wed the new monetary plumbing to two complementary projects.

The first was the Royal Navy, the most expensive military instrument the world had yet seen, paid for by issuing more government debt to the Bank of England, which printed the money to buy it. The second was the British East India Company, a private corporation chartered to convert the Navy’s geopolitical reach into private commercial dominion.

The Company addicted China to opium and built HSBC on the proceeds. It looted India of its accumulated gold, broke its textile industry, and engineered famines that killed numbers most British schoolchildren are still not taught. It planted a banking system in every port it touched, and through that banking system it ensured that the surplus production of half the world flowed back to London and serviced the original debt.

The arrangement worked beautifully for the people who owned shares in it. It worked rather less well for the British nation, which acquired in the process a vast and lethal habit. By the end of the First World War the empire had borrowed more than it could ever repay, the gold had moved across the Atlantic, the navy was obsolete, and the colonies were beginning to read their own newspapers. The corporate class that had ridden Britain’s century of dominance did not go down with the ship. It packed up its skills, its families, and its capital and emigrated to the next host. The next host was America, a country with abundant resources, an inferiority complex about European finance, and a constitution that, by 1913, had been amended to permit both an income tax and a privately owned central bank in the same calendar year. Anyone who imagines this was a coincidence has not yet started reading.

The American century followed the British template with the precision of a franchise rollout. Two world wars, with the United States entering each one late enough to bankrupt the European belligerents and rich enough to lend them the money to keep fighting. A great depression in the middle, during which the American government confiscated the gold of its own citizens at twenty dollars an ounce and revalued it within months at thirty-five.

A Bretton Woods conference in 1944 at which the dollar, by then sitting on perhaps three quarters of the world’s monetary gold, was installed as the global reserve currency and every other currency was tied to it. An IMF and a World Bank, both headquartered in Washington, both staffed by the same handful of universities, and both empowered to lend to any developing country that agreed to certain conditions. The conditions, then as now, were two: install a Western-style central bank, and privatise your natural resources. Sign the paperwork and the loan disburses. Refuse and the country discovers that its president has unfortunate tastes, that its army has restive colonels, and that its capital city is full of NGOs distributing leaflets.

The arithmetic of the gold-dollar promise broke down well before the politicians admitted it. From 1963 onwards Charles de Gaulle’s France ran a quiet operation, code-named Vide-Gousset, that converted French dollar reserves into bullion and shipped the metal home from the New York Federal Reserve and the Bank of England in a steady flow of warships and chartered aircraft. Over three years the French repatriated more than three thousand tonnes.

De Gaulle made the policy explicit in his Élysée Palace press conference of February 1965, in which he denounced the privilege of a country that could pay its foreign bills in paper its own central bank had just printed and called for a return to the discipline of gold. By 1971 the drain had become a panic. West Germany left Bretton Woods in May. In August, with the dollar haemorrhaging against the deutschmark, Britain requested three billion dollars in gold from Fort Knox, and Georges Pompidou’s French government dispatched a warship to New York to collect what was left of the French claim.

President Nixon went on television on 15 August in a tone of practised regret and announced that the United States would be temporarily suspending convertibility. The temporary measure remains in force five and a half decades later. Every currency on earth is now what economists call a fiat currency, which is a Latinate way of saying that it is worth what its issuer says it is worth and not a penny more.

Who Actually Runs This

Here the story tends to lose people, because the popular imagination, fed on cinema, demands a villain with a face. There is no face. There is, instead, a structure, and the structure has a logic that operates regardless of who occupies its chairs. To understand the logic you have to understand who owns what.

The largest banks in the world are publicly traded companies. Their shares have to be held by somebody. For most of the twentieth century those shares were held by a diffuse population of pension funds, insurance companies, and individual investors, and no single entity held enough of any major bank to dictate its behaviour. That changed in the early 2000s, with the rise of the passive index fund. An index fund does not pick stocks. It buys all of them in the proportions that match a published index, and it charges its customers almost nothing for the privilege. The mathematics of fees alone guaranteed that index funds would eat the active management industry alive, and they did. By 2025 three firms, BlackRock, Vanguard, and State Street, between them held roughly thirty trillion dollars of assets under management. BlackRock alone held twelve trillion. To put that number in scale, it is larger than the gross domestic product of every country on earth except the United States and China, and it is roughly ten times the GDP of the United Kingdom.

When BlackRock buys a share on behalf of an index fund customer, it holds the share in custody and votes it. That last word is where the real story sits. Every share is a vote at the annual meeting. Every vote elects a board. Every board appoints the executives, sets the strategy, approves the mergers, and decides what the company will refuse to do. BlackRock holds roughly twenty thousand board seats across the publicly listed corporate world. It is the largest single shareholder in most of the companies whose products you used today, including the company that made your phone, the company that runs the platform you read this on, the company that processed your most recent card transaction, the company that brewed your coffee, and the company that will sell you the funeral plot when the time comes. Vanguard and State Street hold most of the rest.

This is not a conspiracy in the sense the word has acquired through decades of bad television. There is no chamber of robed elders. There is, however, a structural pre-eminence so total that the elders are no longer required. If a company wants access to capital, it needs a relationship with the investment bank that will underwrite its bonds. The investment bank’s largest shareholder is one of the three asset managers. The pension fund that holds the company’s bonds is also a customer of one of the three asset managers. The index that decides whether the company belongs in the S&P 500, and therefore whether the trillions of passive flows must buy its shares, is run by a firm whose largest customer is one of the three asset managers. The board of the company contains directors who serve on three other boards, all of which have one of the three asset managers as a top-five shareholder. Nothing has been said. Nothing has been agreed in a smoky room. The incentives align themselves, and the executives, who would like to keep their jobs and their share options, behave accordingly.

The most visible expression of this alignment in the last decade was the ESG movement, which appeared from nowhere around 2018, dictated for half a decade what every multinational was permitted to say about diet, family, sex, and energy, and then, when the political wind changed, vanished as suddenly as it had arrived. The companies that complied prospered. The companies that resisted found their financing costs mysteriously elevated and their insurance premiums revised. No law had been passed. The asset managers had communicated, through the soft channels available to them, what would be required of the firms whose shares they held in such enormous quantities. The same mechanism is now being repurposed for whatever the next priority happens to be, and it will be repurposed again after that, because the mechanism is permanent and the content is incidental.

The Politicians Are Not in Charge

The popular conception of politics, taught in schools and reinforced by every Sunday morning programme, is that the people elect representatives, the representatives debate the laws, and the laws are then administered by a neutral civil service. Anyone who has spent ten minutes inside a government department knows this is a children’s story. The civil service is not neutral; it has its own institutional preferences, which it pursues across the lifespan of any number of ministers. The representatives do not write the laws; the laws are written by lobbyists, sometimes copied verbatim from documents prepared by the very industries they are meant to regulate. And the elections, which are the part the public is invited to participate in, select between candidates who have already been vetted, financed, and in some cases compromised by the same network that will tell them, once elected, what they may and may not do.

The financing is the obvious filter. Any candidate who wishes to rise above the level of constituency MP requires money, and the money comes from people who expect a return on it. The return is rarely as crude as a brown envelope. It takes the form of a directorship after office, a speaking fee at the right conference, a publishing contract, a foundation grant, a quiet word with the regulator. The candidate who refuses the money does not rise. The candidate who takes the money and then refuses to deliver discovers that there is always a story, somewhere in his past, that a sympathetic journalist might run.

The compromise is the less discussed filter, and it is the more important one. Every senior politician in the modern Western system has, somewhere in his history, an episode he would prefer not to discuss in public. The selection process favours those who are already entangled, and the entanglement is the qualification. A man with nothing to hide cannot be relied upon to keep the network’s secrets, because he has no reason to fear the network. A man with something to hide will do as he is told, because the alternative is the front page of a tabloid he has spent his career courting.

This is the function of the apparatus that the late Jeffrey Epstein operated for several decades on a private island in the Caribbean. The popular framing of the Epstein affair, which holds that a single financier of mysterious wealth ran a sex trafficking operation for his own amusement, is laughable to anyone who has examined the documentary record. No one private individual, however charming, accumulates a flight log containing presidents, prime ministers, royal princes, billionaires, scientists, and senior figures from every major intelligence service over thirty years by accident.

The apparatus existed before Epstein and existed after him; he was the operator of one iteration of a much older mechanism. There was a Charles Kushner before there was an Epstein, and there was a Roy Cohn before there was a Kushner, and there was a Meyer Lansky before there was a Cohn, and the moment one operator is exposed the network builds another. The function is unchanged. To rise to the top, a man must be compromised, because mutual compromise is the only currency in which a network of competing predators can transact.

When Sir Keir Starmer was Director of Public Prosecutions, his office made certain decisions about certain investigations that have not aged well. When Sir Tony Blair was Prime Minister, he made certain decisions about certain wars, and the lobbying empire he built afterwards has been paid for by the regimes those wars benefited. When the current Prime Minister meets Mr Larry Fink of BlackRock at Number Ten, neither man is in any doubt about which of them is the senior partner in the conversation. Mr Fink is not a head of state. He has not been elected to anything. He commands twelve trillion dollars of other people’s money and the proxy votes of half the British stock market, and the Prime Minister will adjust his policy paper accordingly, because not to adjust it would be unprofessional.

What This Looks Like in a War

The clearest expression of the system in operation is what it does in war. The popular understanding of recent Western foreign policy is that a series of well-meaning interventions, undertaken in good faith for reasons of human rights or collective security, have unfortunately produced disappointing results. The actual record is different. Every major Western military adventure since 1990 has produced predictable, repeatable, and richly profitable outcomes for a small number of identifiable corporations, and the disappointment expressed by the political class at the lack of broader strategic gains is itself a piece of theater.

Consider Afghanistan. The Western press has spent four years asking how it was possible that twenty years and two trillion dollars of expenditure ended with the same Taliban government in Kabul that had been displaced in 2001. The framing assumes that the goal was to defeat the Taliban. It was not. The goal was to spend two trillion dollars, and the goal was achieved in full. The money flowed to Lockheed Martin, to Raytheon, to General Dynamics, to Halliburton, to the contractor companies that flew the food in and the contractor companies that flew the soldiers out and the contractor companies that wrote the reports that justified the next year’s appropriation.

The poppy fields, which the original Taliban had succeeded in eliminating to a degree that startled Western drug agencies, were carefully restored under coalition occupation, and Afghan opium production rose to historic highs during the years the United States Marines were notionally guarding them. When the time came to leave, the new Taliban that took over was not the old Taliban; it was a negotiated successor that had agreed to permit certain commercial arrangements to continue. The poppies remain. The contracts have moved elsewhere. Two trillion dollars was added to the American national debt, which means two trillion dollars of inflation, which means two trillion dollars transferred from the holders of cash and wages to the holders of assets. The asset holders did not lose this war. The asset holders never lose this war.

Consider Iraq. The same template, with different sand. Consider Libya, where a functioning North African state with a non-Western central bank and ambitions to back a pan-African gold-denominated currency was reduced, in the space of one summer, to a slave market. Consider Syria, where what began as a civil uprising was steered, by means now amply documented, into a multi-year proxy conflict that produced no political settlement until the moment a former al-Qaeda affiliate, refurbished and presentable, was installed in Damascus, met with the President of the United States in the White House, and immediately presided over a series of forty-year land deals divvying up the country’s coast and oil fields between Western and Gulf-aligned banks.

The man who ran the regime that was overthrown was, on every reasonable metric, a brutal autocrat. The man who replaced him is also a brutal autocrat, with a longer history of beheadings. The difference is that the new autocrat will sign the contracts, and the old one would not.

Consider the war in Ukraine, which is the cleanest contemporary example of the pattern, because the players are still on the field and the money is still flowing in real time. Russia, since the early Putin years, has been one of the small handful of significant economies that operate outside the BlackRock-IMF-BIS grid. It has its own central bank, which is not a member of the Bank for International Settlements in any meaningful sense. It nationalized the oil industry that the 1990s oligarchs had attempted to sell to foreign majors, and it arrested the oligarchs who had been front men for that sale. It has a sovereign wealth fund, low public debt, and a trade surplus. None of this makes Russia a pleasant place to live or its government a sympathetic actor, and a Christian moral seriousness about the conduct of the war does not require pretending otherwise.

But Russia is, by the standards of the global financial order, a sovereign nation, and that sovereignty is the offence for which it is being punished. The war in Ukraine, at the level of capital flows, is a war between the financial-industrial complex of the West and any nation that still imagines it can sit outside the complex’s architecture. The Ukrainian and Russian dead are paying the tuition. The share prices of Lockheed Martin and Rheinmetall have approximately doubled since the war began. The reconstruction contracts have already been allocated. BlackRock signed an agreement with the Ukrainian government in 2022, before the first counteroffensive, to manage the post-war investment fund.

The European Project Was Always a Vassalage

The European Union, as an institution, has spent seventy years presenting itself as a peace project, a continental answer to the catastrophes of the twentieth century, and a bulwark of liberal civilisation against the rougher tendencies of the wider world. The institution does not lack for genuine believers, and a good number of its civil servants will go to their graves convinced of the project’s nobility. But the architecture, viewed from outside the cathedral, is a financial holding company with diplomatic privileges.

Its currency was designed in Frankfurt and runs on rails laid in Washington. Its energy policy was, until 2022, a managed dependence on Russian gas, and is now a managed dependence on American liquefied natural gas at four times the price. Its military procurement is steered through NATO, which is to say through the American defence majors. Its foreign policy is conducted by an unelected commission whose members rotate, with the smoothness of long practice, through the boards of the same global asset managers that hold the debt of every member state.

When Mrs Merkel ran Germany she ran it, in significant part, on the assumption that cheap Russian energy and an export-oriented industrial base could keep the German middle class affluent enough to underwrite the European project’s social-democratic pretensions. That bargain was deliberately broken.

The Nord Stream pipelines, the physical embodiment of the German-Russian energy compact, were destroyed at the bottom of the Baltic Sea in September 2022 by an actor that the American executive branch has spent three years not quite naming. Germany has since deindustrialized at a pace not seen in its peacetime history. BASF, the chemical giant whose Ludwigshafen complex was for decades a symbol of European productive capacity, has shifted production to Louisiana and to China. Volkswagen has closed German plants for the first time since the war. The Mittelstand, the network of family-owned medium-sized manufacturers that was the actual engine of German prosperity, is bleeding capital at a rate that no political party is prepared to discuss in public.

Britain has had a hundred years to perfect its own decline. The pound, which once measured a quarter of the world’s trade, now buys less than it did in 1900 even before the inflation adjustment. The country imports its food, its energy, its medicines, its industrial inputs, and an ever-larger share of its labour force. It exports financial services, military hardware that Whitehall pretends is not military hardware, and the children of its middle class, who now emigrate at rates last seen in the 1950s. The stock market, as if to mock the situation, sets new highs every quarter, because the FTSE 100 is denominated in a depreciating currency and its constituents derive most of their revenue overseas. A British pensioner reads in the morning paper that her index fund has had a record year and then walks to the supermarket to discover that her weekly shop has gone up by another six per cent. Both statements are true. They are descriptions of the same phenomenon from opposite ends of the K.

The political class that presides over this arrangement is uniformly subordinate to the same external pressures, regardless of which colour rosette it wears. The Conservative governments of the 2010s administered austerity at the bottom of the ladder while doubling the Bank of England’s balance sheet to subsidise the top. The Labour government that succeeded them has, within months of taking office, announced cuts to pensioner heating allowances, increases to employer payroll taxes, and a fresh round of regulatory burdens on small business, while simultaneously waving through every defence appropriation, every immigration target, and every BlackRock-friendly infrastructure scheme that crosses the Cabinet table. The two parties differ on which symbolic causes they will perform for their respective bases. They do not differ on the substance, because the substance is set elsewhere.

The Manufactured Migration

Of all the policies that the Western political class has imposed on its electorates in defiance of the electorates’ clearly expressed preferences, the policy of mass immigration is the one that most plainly betrays the deeper logic. No electorate in Western Europe, asked the question in plain terms, has ever voted for the demographic transformation that has occurred. The polls have been consistent for forty years. The governments have proceeded regardless. When pressed, the governments have offered explanations that contradict each other from one decade to the next: the migrants are needed for the economy, the migrants are a humanitarian obligation, the migrants will pay our pensions, the migrants are a tiny minority, the migrants are a great many but they are integrating, the migrants are not integrating but to say so is racist, and so on through the cycle. The contradictions are themselves diagnostic. A policy that requires its proponents to change their reasoning every five years is a policy whose real reasons are not the stated ones.

The real reasons are several, and they reinforce each other in a way that ought to give pause to anyone who has spent their adult life being told that the policy was the unintended outcome of a series of well-meaning errors. Mass immigration suppresses wages at the bottom of the labour market, which is useful to the corporate sector that hires at that level. It inflates rental yields, which is useful to the institutional landlords who have spent the last fifteen years hoovering up the British housing stock. It expands the welfare client base, which is useful to the political party that organises around welfare. It generates a permanent low-level civil tension that the security apparatus then requires expanded powers to manage, which is useful to the security apparatus. It atomises the host society, which is useful to anyone who would prefer that the host society not be capable of organised political resistance. It pleases the international institutions that grade Western governments on their commitment to liberal universalism, which is useful to the political class that lives in the milieu of those institutions. And it provides, on the margin, a reservoir of imported tension that can be activated, through the right news cycle and the right viral provocation, into the kind of disorder that justifies whatever digital identity scheme, biometric border, or social credit pilot was already on the drawing board.

The Christian moral tradition, which produced the European nations and built the institutions that the modern bureaucracy is hollowing out, has always taught both hospitality and prudence. The stranger is to be welcomed; the household is also to be governed. A family that throws open its doors to every passer-by, refuses to lock them at night, and tells its own children that to feel uneasy about this is a moral failing has not achieved holiness. It has abdicated responsibility. The same logic, scaled up, applies to a nation.

A government that imports more people in a single decade than the country absorbed in the previous five hundred years, that refuses to ask the new arrivals to share the host culture’s deepest commitments, and that prosecutes its own citizens for objecting in plain English, French or German, is pursuing something other than charity, whatever the word the bishops use.

The Surveillance State Wears the Mask of Safety

Every functioning empire has needed to keep records. The novelty of the present arrangement is the scale and granularity of the recording. A medieval monarch knew, at most, the names of his lords and the rough output of their estates. A Victorian Home Secretary had a network of police and informers and a card index in Whitehall. The current British state knows what every citizen has searched for online, what they have purchased, where they have driven, who they have called, what they have texted, and, increasingly, what their face looks like under the lens of a roadside camera that compares it against a national database in real time.

None of this required parliamentary debate. Most of it was procured under contracts whose terms remain commercial in confidence. The contracts have names like Palantir, like Salesforce, like Amazon Web Services, and the politicians who signed them assured the public, when pressed, that the data would only ever be used for narrowly defined purposes. The narrowly defined purposes have, in every documented case, expanded.

The American firm Palantir, founded by Peter Thiel with seed funding from In-Q-Tel, the venture capital arm of the Central Intelligence Agency, now holds the contract for the National Health Service’s federated patient data platform. The same firm holds analogous contracts in the United States Army, the United States Department of Homeland Security, the Israeli Defence Force, and, through subsidiaries and partners, the policing systems of half a dozen European countries. The firm’s products are used to predict which residents of a given postcode are likely to commit which kinds of crime, to score the loyalty of which officials, and to identify which patterns of speech on which platforms warrant intervention. The technical capabilities are real and impressive. The political safeguards are negligible.

This apparatus is being assembled, piece by piece, under a series of cover stories whose family resemblance ought to be alarming. Each new intrusion is justified by an immediate emergency. The terror attack, the pandemic, the foreign disinformation, the school shooting, the financial scam, the child online safety crisis. After each emergency the powers granted to handle it remain on the books, the budget for the agency that handles it grows, and the next emergency arrives with the previous emergency’s apparatus already deployed in the background. The trajectory is monotonic. There has not been, in the lifetime of any reader of this essay, a single year in which the scope of state surveillance of the average British citizen has been narrower at the end of the year than it was at the beginning.

The endpoint of this trajectory is a system that the Chinese government has been building openly for two decades and that Western governments have been building covertly for one. It is sometimes called a social credit system; the term is accurate but underplayed. A more honest description is a real-time behavioural enforcement architecture, in which every citizen carries a digital identity that is required for every economic and civic transaction, and in which that identity can be downgraded, restricted, or revoked by an administrative decision against which there is no meaningful appeal.

The digital pound, the digital euro, the digital dollar, the central bank digital currencies whose rollouts are at various stages of pilot in every G7 country, are the financial leg of this architecture. The digital identity wallets, the verified vaccination records, the Online Safety Act takedown powers, the age verification systems, the AI-mediated content moderation regimes, the predictive policing algorithms, are the rest of it. None of these systems, in isolation, looks especially threatening to a citizen accustomed to producing his passport at the airport. The threat is in the integration. When all of these systems are wired to the same identity, the same wallet, and the same compliance score, the resulting apparatus is the most comprehensive instrument of social control ever constructed, and it will not be staffed by men who have read Solzhenitsyn.

The Christian who reads his New Testament with attention will find, in the thirteenth chapter of the Revelation to John, an image of a system in which no one may buy or sell without a mark, and an injunction to refuse the mark whatever the cost. Devout readers have been arguing for two thousand years about what literal form the mark might take, and modern Christians who interpret current events through the apocalyptic frame have a long history of premature certainty.

But one need not commit to any particular eschatological reading to recognise that a financial-administrative architecture that conditions the right to buy and sell on continuous behavioural compliance is, on any moral reading, a structure that the Christian conscience is bound to resist. The bishops, who once would have understood this without prompting, are mostly silent. The silence is, itself, a fact about which institutions have been captured.

The Asset Strip Begins at Home

The phase of the cycle into which the Western order is now entering is the phase that an emerging market economist would recognise without difficulty. It is the phase in which the productive economy is dismantled, the assets are sold off to foreign and quasi-foreign holders, the currency depreciates against hard assets, the political class blames foreigners for the consequences, and the population is offered a digital welfare apparatus to keep it quiet. The countries to which this has been done over the last forty years can be listed in any decent textbook of post-Soviet or Latin American economic history. The novelty, which historians of the future will find difficult to explain, is that it is now being done to the United States, the United Kingdom, France, Germany, Italy, Spain, the Netherlands, Belgium, and the Nordic countries, by the same financial machinery that was previously deployed against Argentina, Indonesia, Greece, and the rest of the lengthening list.

The mechanism is the same. The state runs deficits it cannot service from current taxation. The deficits are funded by issuing bonds that the central bank ultimately buys, which is to say the central bank prints the money to lend to the government. The new money depreciates the currency. The depreciating currency forces savers to chase yield in equities and real estate. The institutional buyers, who can borrow at near zero from the central bank, outbid the individual savers and accumulate the productive assets at scale. The individual savers are gradually expropriated through the inflation tax and rebadged, by the welfare state, as clients. The clients vote for whichever party promises larger transfer payments, which expand the deficit, which prints more money, which depreciates the currency further.

The cycle has a name in the economics literature; it is called fiscal dominance, and it ends in one of two places. Either the central bank is allowed to keep printing until the currency hyperinflates, or the central bank breaks the cycle by raising rates so high that the financial system collapses. There are no third options. The current administration in Washington is pursuing the first option with such enthusiasm that the United States Treasury is now issuing the majority of its new debt at the short end of the yield curve, which is the textbook signal of an emerging market in distress.

The numbers are themselves remarkable. The United States federal debt now stands at approximately thirty-eight trillion dollars, against a GDP of approximately thirty trillion. The interest cost on the debt has overtaken the entire defence budget for the first time since the Second World War, and is on track within the current administration to overtake Social Security. The Federal Reserve owns roughly seven and a half trillion dollars of the debt directly. Foreign holders, of whom China and Japan were once the dominant pair, have been steadily reducing their exposure for a decade.

The marginal buyer at the most recent auctions has been the American commercial banking sector, which is to say that the Federal Reserve has been printing reserves which the banks have been using to buy the debt, which is the continental European phrase for what was once called monetization and is now called liquidity provision. The vocabulary changes; the operation does not.

Britain runs the same play with a smaller balance sheet and an older infrastructure. The Bank of England’s quantitative easing programme, suspended on paper, is operationally unwound only when the gilt market permits it to be unwound, which has not happened for any sustained period since 2009. The Treasury’s debt issuance is now structured to roll within five years for the bulk of the stock, which means that any sustained rise in short-term rates would, within a single Parliament, push debt service costs above the National Health Service budget. The Chancellor knows this. The shadow Chancellor knows this. The news editors who decide which questions are asked at the Chancellor’s quarterly press conference also know this, and the question is not asked.

The Asset That Cannot Be Confiscated

A Christian view of money is bound, in the long tradition that runs from the Hebrew prophets through the Schoolmen to the social encyclicals of the modern Popes, to insist on two propositions that the present financial order has spent three centuries denying. The first is that money should be a measure of real value and not a manufactured claim on the future labour of the unborn.

The second is that those who issue money are stewards, not sovereigns, and owe an account to a Judge who is not impressed by the thickness of their prospectuses. A monetary system that violates both propositions, as the present one does on a scale unknown to history, is not a morally neutral technical arrangement. It is, in the older language, a structural sin, and the suffering it produces in the lives of ordinary families is not bad luck but moral consequence. Inflation is theft. The men who design inflation know what they are doing. There will be an accounting.

In the meantime there is the practical question of what one does about it within the economy of the visible world. The honest answer is that the political instruments through which one might once have hoped to address the problem have been, for the present generation, comprehensively captured.

Voting harder will not work; the menu is curated. Marching will not work; the security apparatus is now equipped to manage marches at a scale that the marchers’ grandparents would not have believed possible. Standing for office will not work, because the financing is in the hands of the people whose interests the office would have to challenge. The men who tell you that there is a single charismatic leader on the horizon who will fix all of this, if only you would buy his book and donate to his campaign, are themselves part of the apparatus, and the function of their performance is to absorb the energy that might otherwise be directed into more useful channels.

The useful channels are several, and they are unglamorous. They will not produce a column in the Sunday Times or a slot on the evening news. They will, taken together over a generation, produce the only kind of restoration that has ever worked in any civilisation that has been through this kind of decadence, which is restoration from the bottom up, family by family, parish by parish, town by town, refusing to participate in what the apparatus offers and patiently building the alternative.

The first useful channel is monetary. A man who holds his savings in the currency that the state is busy debasing has consented to be robbed at the rate at which the state debases it. A man who holds a portion of his savings in physical gold, in productive land, in tools and stored food and skills, in shares of small businesses run by people he trusts, and in Bitcoin held in his own custody, has placed a portion of his estate beyond the reach of the printer.

Bitcoin is the modern instrument and the one that the financial apparatus is, despite enormous and ongoing efforts, unable to capture entirely. The apparatus has tried. The largest American banks now run Bitcoin exchange-traded funds that centralize custody in Wall Street vaults, and the corporate treasury vehicles that have accumulated several million coins on borrowed money are, at the limit, doing the asset managers’ work for them. But the protocol itself remains in the hands of the global community of node operators, miners, and individual holders, and so long as that community holds, the apparatus cannot complete the enclosure. To run a node, to hold one’s coins in self-custody, and to refuse to mortgage them back to the lender is, at this hour of the world, a small but real act of civic resistance. It is also a hedge. The two are not in conflict.

The second useful channel is local. The small economy of the parish and the market town has been dying for two generations, and the dying has been heavily encouraged by a regulatory apparatus that imposes fixed compliance costs which are trivial to a multinational and lethal to a sole proprietor. To buy from the local butcher when the supermarket is cheaper, to bank with a credit union when the high street bank is more convenient, to send one’s children to the parish school when the academy is better resourced, to drink in the pub that is owned by the man behind the bar rather than the chain that is owned by a private equity fund in Delaware, is to take an economic loss in the short term in exchange for the building of a community that will be standing when the supermarket closes. The supermarket will close. The supply chains that built it are not, in the medium term, sustainable in the form they currently take, and the towns that have nothing left except the supermarket will, when it closes, have nothing left.

The third useful channel is familial and spiritual. A civilisation does not survive the destruction of its families and the loss of its shared faith. The Western nations are at present making heroic efforts to destroy both, and the institutions that ought to be defending them, including most of the established churches, have been captured by the same managerial class that captured the universities and the broadcasters.

The recovery of Christian seriousness about marriage, about the duty of parents to children, about the discipline of the body and the formation of the soul, is not a private hobby that the serious-minded can pursue while the public square attends to weightier matters. It is the foundation of any conceivable public restoration. The men and women who are now, in increasing numbers, walking into the older liturgies, baptising their children, learning the catechism their grandparents stopped teaching, and refusing to outsource the education of their families to the state, are doing the most politically consequential work that is now available to do, and they are doing it whether or not they understand it in those terms. The American, British, and all other European nations of importance were Christian nations before they were anything else, and they will be Christian nations again, or they will not be nations at all.

The fourth useful channel is, plainly, geographical. Some readers will conclude, after honest reflection, that the country in which they were born is no longer a country in which their children will be permitted to grow into the adults their parents hoped for. This is not a conclusion to be reached lightly, and there is something morally serious about staying with one’s ancestors in the soil that holds them. But there is also something morally serious about getting one’s children out of the path of a clearly visible tide, and the men who emigrated from Ireland in the 1840s, from Eastern Europe in the 1900s, and from southern Africa in the 1970s, did not do so out of cowardice.

The rising civilisations of Asia, of certain pockets of central Europe, of the more sober Christian nations of central and eastern Africa, and of those Latin American countries that have at last shaken off a century of foreign meddling, are not utopias and will not be. But they are nations whose elites, for the present moment, are still aligned with the interests of their populations in a way that the elites of the United Kingdom and the United States no longer are, and a Christian family with the means and the courage to make the move is not betraying anything by doing so.

The Question of Hope

This essay has been, by design, a bleak one. The case it has made, if its central premises are correct, is that the political institutions through which Western publics have been taught to seek redress have been captured beyond the point at which redress is available through them, and that the economic arrangements under which most Western families have planned their lives are arrangements that will continue to extract from those families until there is nothing left to extract. A reader who has accepted any significant portion of this case is entitled to ask whether there is, at the end of it, any reason for hope.

There is. The hope is not the hope that the next election will deliver a leader who fixes the system. It will not. The hope is not the hope that the institutions will reform themselves under public pressure. They will not, because the public pressure has been carefully fragmented, and the institutional incentives are aligned against reform.

The hope is the older and more durable hope on which the civilisation of the West was built in the first place, and which has carried it through several previous collapses of its visible governing arrangements: the hope that history is not ultimately written by the men who hold the levers, that the asset managers and the lobbyists and the compromised politicians and the captured journalists are themselves dust passing through a moment of dust, that the truth has a way of being recognised in the end, and that the patient labour of ordinary people building real things in real places, raising children in fear of God and contempt of fashion, is the labour out of which every recovery in the history of our civilisation has been built.

The financial apparatus that this essay has described is enormous, sophisticated, and, in its short-term tactical operations, almost irresistible. It is also brittle. It depends on the continued willingness of the populations it preys upon to participate in its arrangements, and that willingness, for the first time in three generations, is visibly fraying. The pension fund customer who moves a portion of his account out of the index funds and into productive land. The shopper who walks past the supermarket and into the butcher’s. The mother who pulls her child out of the academy and teaches him at the kitchen table. The young man who refuses the credit card, the mortgage, the office job in the city, and the sterile flat above the chain restaurant. The parishioner who returns to the pew. The investor who takes his Bitcoin off the exchange and onto a hardware wallet in a drawer at home. None of these people, on his own, threatens the apparatus. All of them, taken together, are the only thing the apparatus is afraid of, and the apparatus knows it, which is why so much of its energy is now devoted to algorithmic herding, to digital identity, to the closing of every exit ramp.

The exit ramps are closing. Some of them are not yet closed. A man who has read this far, and who is not paralysed by the picture it has painted, has a window of years and not decades in which to make the arrangements his children will thank him for. The arrangements are not glamorous. They will not feature in any newspaper. They begin tomorrow morning at the kitchen table, with a notepad and a cup of coffee and a conversation with one’s wife about which of the family’s affairs are now in the apparatus’s hands and which can be brought back into one’s own. They continue at the parish church, at the local market, at the credit union, and at the small business that one might once have built and now, with the grace of God and the discipline of a long view, will. The state will not help. The state is, on most of the questions that matter to a family, the problem. The recovery, when it comes, will be the work of men and women who decided not to wait for the state, and who built, in the gaps between its diminishing competences, the institutions of the next civilisation. It has been done before, in worse conditions than these, by people with fewer tools and shorter lives. It will be done again. The only question worth asking, on the morning of any given day in the present period, is whether one will be among those who did it.

Meanwhile the FTSE will print another high, the Chancellor will deliver another speech, the news at ten will lead with a story that has been chosen for its capacity to inflame the right segment of the audience, and the asset strip will continue. The men who run it are not afraid of you. They should be.

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