One of the central passages of Thrive is a section often referred to as “Follow the Money,” which Thrive fans treat as some sort of slogan. This section contains Foster Gamble and others’ views on fractional reserve banking, the Federal Reserve, the economic crisis, and conspiracy theories related to these. This article debunks those ideas.
Fraction Reserve Banking
Before the Wikipedia bashing begins, I’m using Wikipedia for two reasons: (1) Simplicity, and (2) it works well for summaries of information, even though I will provide further sources and more detailed information links than Wikipedia can provide.
PS: This part of the movie is incredibly complicated for anyone involved here to deal with, as given that most people don’t understand how economy and politics work by themselves, much less together, unless you’re well-versed in mathematics, economics or political science. Comments that simply complain about how wrong or rigged the actual political and economic systems are will be seen basically as an opinion and not fact.
It also doesn’t help that for the makers of Thrive the current economic system is a scam/conspiracy created by a powerful Financial Elite to perpetuate their own power. Arguing the existence of this conspiracy (Thrive mostly uses misinterpretations and opinions that they exist instead of verifiable facts) feels like beating a dead horse, thanks to our good old friend Confirmation Bias.
When they begin talking about Fractional Reserve Banking, Foster Gamble and and David Icke get a few things right at the beginning. They are right about how saving deposits are used by banks for loans and financing, but the film cuts short the explanation of why this happens and the economic reasons to use fractional reserve banking. Instead of explaining the real reasons behind this, the movie simply dismisses it by saying “it creates money out of nowhere.”
What is Fractional Reserve Banking?
Fractional Reserve Banking (FRB) is a form of banking where the deposits made on the bank are separated in two parts. The first is the amount the bank is allowed to loan and the second is the part the banks is obligated to keep as a reserve. This amount is dictated by the central bank of the country where the bank is operating.
Does it really “create money out of nowhere?”
The answer will depend of which kind of money you’re talking about. If you’re referring to printed money, it can’t “create money out of nowhere,” as the values being loaned and being circulated haven’t been made or printed yet.
If you’re talking about value: yes it can create more value since there is more money circulating than there is physical printed money.
This is much better explained by the links I’ll provide.
Why do banks work with FRB and how come they don’t “run out of money”?
Because it is fluid, FRB allows banks to generate profit and still provide access to people or business to acquire money for whatever reasons they need it–for example, to buy a house or start a business. FRB guarantees there will be money circulating for investments, consumer goods and to accommodate a growing and active economy.
[Muertos comment: this is not a new invention. If we did not have FRB in some form, our economy would be stuck in the early 19th century. The whole concept of modern banking, historically, developed as a means to permit sufficient capital to be accumulated to fund large-scale projects, both public and private. Without something like FRB, we would not have public works projects like dams, sewer systems or transportation, and we would not have privately-funded industries such as computers and information technology, because it simply wouldn’t be possible to get enough capital together to even begin to pay for these things. This is the historical reality that critics of FRB refuse to understand.]
The influx of savings deposits and payments on loans that they make usually are enough for most banks to be secure they will have the money needed to honor the withdrawals, as there are more people making payments and saving deposits than there are people making withdrawals of their own savings and assets.
What if there are more people making more withdrawals than the bank has money on reserve?
Remember the credit crisis that started in 2008 and is still kicking? One of the reasons why it went from bad to worse and from worse to a total disaster was because of this–people making more withdrawals than banks had in reserve. In times of economic crisis, if there is a doubt that the banks will be able to honor the deposits made on them, this leads to people and investors to withdraw all their assets within the bank in a really short amount of time, before other depositors can withdraw their share. This creates a cascade effect that can possibly (almost certainly) cause a bank run. This forces the bank to call in its short term loans, draw upon credit lines with other banks or ask for last resort rescue loans from the central bank.
Okay, but how this is bad for people?
In time of a stable economy this not bad for financially responsible people, those who take out loans that are smaller than their average yearly income and can make sure that the accumulated interest won’t surpass all their earnings during the intended financing period. Take for example financing the purchase of a house with a 10 year mortgage plan. It is, however, extremely dangerous for people who to borrow who are in unstable financial situations (like no job security, health problems, addictions) or do not measure how much interest they’re incurring compared to how much they earn, or people who simply don’t care about the long term consequences of their lack of foresight (I can’t miss the chance to throw this jab at the American reader).
In times of instability, however, irresponsible borrowing (and lending) can hit hard even the responsible people hard. This is what happened in 2008.
Gamble continues with a story telling how the fractional reserve banking system was born.
Setting aside Mr. Gamble’s implications of how it is used to create money on the backs of people (which is an arguable question), if you want to know how central banks and fractional reserve banking came to be, look for the history of the Bank of Amsterdam.
Here are some links that further explain what FRB is and how it came about:
https://www.youtube.com/watch?v=nH2-37rTA8U (Khan Academy on FRB, quite educational I must add, as long as you avoid the comments section).
http://econpapers.repec.org/paper/wpawuwpma/0203005.htm (look for the download link)
Later Gamble states how FRB is used to create a population that is tied to their debts to the bank.
Then Thrive provides us with this quote: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning” – Henry Ford, 1922
The quote appears to be completely fake. Although it is commonly cited on conspiracy theorist, 9/11 Truth and “End the Fed” websites, there is no source and no context linking it to Henry Ford. Not even the dates that Ford supposedly said it are consistent.
[Muertos comment: conspiracy theorists love to use fake quotes, and this is not the only fake quote in Thrive–there’s a quote by Henry Kissinger that is equally false. The problem with these quotes is that, once it gets out there and conspiracy theorists decide they like it, a quote gets repeated all over the place on all sorts of conspiracy theorist websites–thus creating the erroneous impression that, because the quote appears so often, it must be true and accurate. If you don’t believe that this happens all the time, just think back on all the things comedian George Carlin is supposed to have said–only a small fraction of them are actually real Carlin quotes, and as he is dead, he can’t dispute that he didn’t say them.
When conspiracy theorists are challenged on fake quotes, many of them will say something like, “Well, you can’t prove that he didn’t say it!” That, of course, is asinine. You can’t just make up any crap you like, put it in someone’s mouth and then challenge people to prove they didn’t say it. But, sadly, this is how conspiracy theorists think. Quotes about banking are particularly attractive to conspiracy theorists because they love the idea of respected figures from history having supposedly “warned” us about the dangers that they (conspiracy theorists) insist are right around the corner.]
After the fake Henry Ford quote, Gamble resumes his rant on how we have become debt slaves of a financial elite who has rigged the system to their benefit.
Take this as you will, but you’ll become a debt slave if you decide to acquire (too much) debt in the first place. For many this seems unavoidable.
[Muertos comment: the term “debt slave” bothers me because it’s misleading. Suppose you have a good job and a family. You take out a 30-year mortgage at a reasonable interest rate in order to buy a bigger house to raise your kids in. You can easily make the payments and your house increases in equity in the meantime. Are you still a “debt slave” for the next 30 years? If you decide to sell the house you pay off the mortgage, and can take the equity and invest in a bigger house elsewhere. How is this “slavery”? And what’s the alternative–live in a smaller, crappier place and try to raise your kids there, where you don’t have room for them? Why is taking advantage of the opportunities that debt creates necessarily a bad thing? Thrive doesn’t see distinctions along these lines. In its ideology, all debt is bad.]
Catherine Austin Fitts
“Catherine Austin Fitts was Assistant Secretary for Housing in 1989-90 under the first George Bush. She is also a Wall Street banker. She currently works for an investment advisory firm called Solari, Inc.”
Ms. Fitts, along with Mr. Gamble, keeps reaffirming how FRB is used to print more money and enslave more people through debt. Later she makes a comparison with ordinary people counterfeiting money being a crime, while the [central] banks printing money being called “increasing the money supply” as if there’s no distinction here. There is a distinction. I don’t know, maybe it’s related to the fact that central banks are trusted institutions, and they are an effective way to control interest rates and the amount of money being circulated so as to make sure hyperinflation or hyper-deflation do not take place. Yes, said measures can fail, but it’s certainly not the same as “printing money” just for the hell of it.
Gamble then cites the gathering of the “secret” Morgans and Rockefellers on Jekyll Island, where (he says) the draft of the Federal Reserve was created.
First he fails to mention that a central banking system was already in place in Europe–especially in Germany–long before the bankers and politicians in US were considering using a central banking system. Second, politicians in US were already studying alternatives to the US Treasury bonds and lack of liquidity and access to credit, mostly in response to the Panic of 1907.
After this Gamble beings talking about the creation of the Fed and the Internal Revenue Service in the same year, “forcing us to pay for the politicians’ debt”, and introduces the viewer to G. Edward Griffin and his book.
G. Edward Griffin
Writer of “The Creature from Jekyll Island” which is about the creation the Fed, Griffin is a critic of the current banking system and advocates private currency as being “real money.” Needless to say, his ideas are quite popular amongst libertarian circles.
(If you want to know how bad this idea of “real money” is, just imagine going to the state next to yours just to find out that the private currency of your local bank, backed by a commodity like silver or gold, is worthless because the other state operates at different standards or doesn’t accept your currency. Or, worse yet, imagine if the bank goes bankrupt, all your assets in said bank are gone, and there is no central bank or institution to guarantee the bank will have the resources to honor its deposits).
[Muertos comment: we had precisely this problem in the Great Depression, which resulted in an entity called the Federal Deposit Insurance Corporation–an agency that makes sure that you, as a bank depositor, will be able to retrieve your money from that bank (up to $250,000, I think) even if the bank fails. Where would the money come from if the FDIC had to make you whole after your bank fails? It would come from a fund administered by the federal government. Doesn’t sound so bad when you think about it like that, does it?]
Griffin goes on about how the central banks are cartels that work with governments and have the legal power to create money out of nothing when the government needs it.
I think the “out of nothing” part of the money is not entirely nothing. There seems to be a massive misconception that when a central bank prints more currency, it’s simply creating more money out of nothing. First, it doesn’t happen this way. Even though the money is not backed by a scarce commodity (like gold), the value attributed to it is related to how trusted and reliable the country’s central bank is. Printing more money without the generation of wealth decreases the value of the money. This is why you can trade one US Dollar for 10,000 Zimbabwe Dollars, and the same reason why the Zimbabwe 1000 Dollar bill is worth less than the paper it’s printed on. Printing more money without generation of wealth will lead to inflation and the loss of value for the currency.
[Muertos comment: this has been proven time and time again historically, such as in the U.S. when “greenbacks” were printed to help finance the Civil War. It didn’t work then either.]
The central banks are not only able to create more money. They are also capable of removing money from circulation when needed. For example, during Christmas the US Federal Reserve prints more money to assure all the withdraws will be possible, and then they remove the extra bills from circulation afterwards.
When this happens, the fiat currency doesn’t lose its value because it is just a representation of the wealth that already does exist, even though most of this wealth is in form of data like the amount you have in your bank or how much all your declared belongs are worth. It doesn’t mean it’s worthless. It’s a representation. It’s not wealth itself.
Let’s put this way. The amount of wealth in dollars is X and the amount of printed paper money is Y. Because most of the wealth being traded, stored or transferred is in the form of savings, credits, stocks, checks and representations other than printed fiat currency, X will be always higher than Y, but when people are making withdrawals, collecting their payments or selling things, more money will begin to circulate from hand to hand. Since there is more money in data form than there is in the form of printed money, the Central Banks print the money and send bills to the local banks to make sure they are capable of handling all the money being moved and spent. This will make Y approach the amount of X, but if the amount of Y being printed and in circulation is getting closer to the amount of X, there is a chance that Y will surpass X. This will lead to the devaluation of the currency on which X and Y operate, leading to inflation.
To put it in even more simple terms: when you print currency to represent wealth, you’re not creating money out of nowhere. When you print more currency than you have wealth, you’re lowering the value of the money. The amount of wealth is still the same but the value of the currency changes.
Bill Still on the Federal Reserve
Bill Still is another Libertarian film producer, highly critical of the monetary system in US. He is also seeking the nomination from the Libertarian Party for the 2012 elections.
During his short appearance in Thrive, Mr. Still claims that the Fed is a privately-owned bank made to look like a government bank. To get his point across he says the Federal Reserve, instead of being on the blue government pages in the Washington DC area phone books, is on the white pages. He thinks this is evidence!
Since I don’t live in the US and I didn’t look at a phone book from the DC area during my short but pleasant stay in US, I have to say that was a really bad choice for evidence.
[Muertos comment: there are a lot of stupid assertions in Thrive, but this one has got to be in the top five most ridiculous things in the entire movie. I can’t believe Mr. Gamble let this one through–it’s simply insulting to the intelligence.]
Alan Greenspan on the government’s relations with the Federal Reserve
At 1:00:02 of the movie there is a short video clip in which Alan Greenspan claims that the Federal Reserve doesn’t take direct orders from the president or the Congress. This is used to show the Fed as a rogue agency that answers to no one.
This is totally wrong. Mr. Greenspan’s quote is taken out of context.
For starters, all members of the Federal Reserve Board of Governors, are handpicked by the president and approved by Senate vote. They are required by law to have a “fair representation of the financial, agricultural, industrial, and commercial interests and geographical divisions of the country.” This means they have to be scholars in economics, politics and above all they must represent the economic interests of the nation, not the interests of the Congress and not of the president. They are accountable for their actions which can lead to members of the board not being nominated again as well the formal and informal relationships of the board members with the president and the Congress.
There is a really good reason why the central banks usually don’t answer directly the executive chief in office and the Congress: if they did, politicians could use these banks for political gain and directly affect the economy. We need an independent Federal Reserve.
A brief study of history, especially looking at some South American countries and African countries, will show that when the politicians can control the decisions of the central banks and therefore dictate the course of the economy, the results are not pretty. More often than not this is completely disastrous for the country.
Even though the title of the linked video and the comment section of the youtube page follow the same line of thought of the people featured in Thrive, I’d like the viewer to see the part beginning at 8:00 where Greenspan remembers that the actions taken by the Fed would hurt G.H.W. Bush’s reelection. Just think about that for a few minutes. What if Bush was able to change the decisions of the Fed for his own political gain? What would that do to the economy of the United States? This could potentially harm the economy more than it was already harmed in 1992 (which at that time was in a deep recession). This is why the Congress and the president don’t have much say in the decisions of the Fed, but the Fed is still accountable for its decisions. The people on the Federal Reserve Board were chosen by the president and approved by the Senate in the first place, making them accountable for their actions inside the Federal Reserve.
Here are some documents containing detailed explanations of the relations of the Federal Reserve with other branches of the US Government. As you will see, it’s far from an unaccountable rogue entity.
After this, Mr. Gamble and Ms. Fitts give us analogies on how the bankers use their data on the economy to benefit themselves at expense of others. I won’t argue much with that because it is happening, but not for the reasons Gamble & friends would you like to believe.
Since it is Mr. Gamble talking about the FBI raiding her (Ms. Fitts’s) company not her saying it, and nowhere in her company’s website or her bio mentions the said raid, I’m skeptical that it even happened. I also tried to look for news articles mentioning this raid hoping to see something like the paper shot Gamble gave us on the screen, but the only places I saw any mention of it were 9/11 Truth websites and a few truthers’ blogs without any external links or sources to this event beyond what their word for it.
[Muertos comment: always be skeptical of anything that appears on 9/11 Truth websites and nowhere else. 9/11 Truthers are notoriously incapable of getting almost anything right.]
Unless Ms. Fitts herself can come forward and explain in her own words what happened, or if someone can provide me a reliable link or newsfeed with info validating Mr. Gamble’s characterization of what happened, I’ll keep my sense of disbelief about the big government suppressing her findings, specially someone with credentials and political reach like her. (Blogs or forums do not count as reliable source; I’m talking about newspaper articles or public data).
[Muertos comment: given the fact that ten people who appear in Thrive have signed a letter repudiating the film and saying the movie was misrepresented to them, I wouldn’t be at all surprised if what Ms. Fitts would say about what happened would differ significantly from the way Mr. Gamble puts it in the film.]
The Dollar and the Sub-prime crisis:
Gamble begins this part with a moot point about the devaluation of the dollar, showing it from 1913 to 2010.
Remember when I discussed the matter of currency in circulation vs. the real value of wealth? Well, this is what happened: when the Federal Reserve came into being, having a regular universally recognized currency made trade easier both on the internal market as well the international market. It made the US economy more open to these markets, generating more trade, and as result more currency started to circulate. To compensate for the new amount of money circulating and more people earning more money, prices rose, because people where consuming more. This effect is called “demand-pull inflation.” This is regarded as the good kind of inflation because it shows that the country is THRIVING.
This doesn’t make people poor. If the prices are rising, so are peoples’ wages. Even if products have higher prices they still hold the same value. (The kind of inflation that rises both price and value is called “cost-push inflation,” and this happens due to the increase of production cost or scarcity. This is the bad kind of inflation).
But why doesn’t the currency return to its original value after a while? This happens because of an economic effect called “built-in inflation,” where past experiences dictate how the wages and prices will rise. Workers expect inflation to pinch in the future, so they start asking for higher wages to compensate. As a result, companies start raising the price of their products so they don’t lose their profit margins. Because this builds over time it becomes something like a change of currency or a hard economic crisis, where money is being hoarded and trading comes to a halt.
Even if you look to Mr. Gamble’s graph you’ll notice the periods when the dollar’s value rose were in the interwar period and during WWII, when US was still suffering from the 1929 stock crash that brought the US economy to its knees, and during WWII where all the US economy was focused on the war effort instead of producing consumer goods and trading. After those periods were over, trading resumed and, as expected, the value of the dollar declined as more currency began circulating again.
Same case as the “economic parasite” claim: the gap in wealth is a big problem, but Thrive has the wrong take on what is the cause.
No, I don’t have a magic bullet solution for wealth disparity. No one does. I do, however, support several policies involving fiscal responsibility, fair taxation, better public health and education plans, transparency from both government and corporate business and not reelecting the same politicians with histories of corruption and incompetence.
Bankers and crisis
Gamble tries to correlate the stock crash of 1929 and the Great Depression to the creation of the Fed. Logically correlation does not equal causation. If you take a look at what happened, the stock crash of 1929 was caused by reckless investments on high risk and speculative shares. With the investments boom more people where buying shares and raising market prices. This would only become viable if the stock market kept rising at a quick rate. If the rise wasn’t fast enough, halted or went into a downturn, those shares would lose their value. This was combined with the massive loans stock brokers were making to investors (called “margin”). The investor only had to pay 50% of the share value and the broker would complete the rest with his own money. Thousands of people taking loans to purchase more shares didn’t help as it was creating a massive economic bubble. As expected, once the stock market faced a downturn, mass panic selling followed, forcing the share’s values down creating a cycle where investors had to sell their shares to pay their brokers and avoid losing too much money with shares that by this time had lost all their value.
[Muertos comment: the causes of the Great Depression are still highly controversial today. There is no one clear answer, but what you’ve identified is clearly part of the problem–any basic book on the crash will make this case. It’s also not limited to 1929. I was working in the financial sector during the “dot com bust” of 2000-2001, and much the same thing happened–shares were grossly overvalued, and there was too much credit attached to financial speculation. When dot coms started to post less than impressive profit numbers, the whole thing collapsed. Something similar happened in 2008, except instead of stocks it was financial products tied to real estate.]
It is also worth remembering that the both people buying and selling the shares are normal people, prone to make mistakes, get nervous or act on impulse. This means one bad rumor in a highly volatile place such as the stock market can cause many stocks’ value to plummet. Do this on a large scale and you can get yourself a nice big crisis on your hands.
http://stocks.fundamentalfinance.com/stock-market-crash-of-1929.php (this is a TL;DR version of the previous link)
I also would like to have access to this “research” Mr. Gamble claims did on the “major banks” moving their money away from the stock market before the crash, because I’m not able to find any reliable link or article showing that this in fact happened.
The 2008’s credit bubble crisis
This is the only thing preventing me to copy paste the debunking of Zeitgeist here and calling it a day.
But where do I start? First Foster Gamble and David Icke and their “research” (really, I’d like to see the data Gamble uses to make his statements) want to lead the viewer to believe the 2008 economic crash was a ploy engineered by the major banks to consolidate their power by breaking smaller business and seizing their assets.
But there are a few problems with this. For one those assets (mostly houses) have become worthless, and the bail outs are not even close to the amount lost by the banks during the crisis. Plus, why create an economic crisis in the first place? The last thing you want, if you’re a banker or an industrialist, is an economic crisis where people stop spending and the economy stagnates.
So what happened in the 2008’s subprime crisis?
It was caused by a combination of lack of foresight, greed, high interest rates, high risk investments and a complete lack of regulations for the financial sector (I can hear from here all the libertarians shrieking in horror after reading this).
Putting it in layman’s terms, before the 2008 crisis the housing sector in United States was one of the most attractive investments for a few reasons. First, the continuous rise of housing prices and the demand for new houses, and second the too low interest rates from the Federal Reserve that were not attractive to the investors anymore (they were around 1% during 2008).
Okay, what was the banks’ deal then?
They were buying the mortgages from lenders and then reselling them to investors looking for investments with better rates. The banks would proceed to lend more money, mostly from other major banks and from central banks, to acquire more mortgages. Then the banks would generate massive profits from all the homeowners paying their mortgages.
So far so good. But for them there was a problem: since this was one relatively safe and high profit deal, the banks wanted more people paying more mortgages on the rising housing prices.
When a financing company sold the mortgages for the banks, if the homeowner went into default the bank would get the house. This was attractive for the bank because the housing prices were rising at the time. This meant that when the mortgage broker sells the house at a new higher price, the lenders and the banks would make a better profit with the new mortgage payers.
Okay, but where do the problems begin?
The number of AAA home buyers (meaning, reliable and financially responsible people) buying houses was too low to sustain the kind of profits they wanted to make selling and flipping mortgages. So, not wanting to miss the opportunity of selling the houses at higher prices and collecting the higher mortgages, the banks and lenders started selling the houses to subprime families (non reliable people) that they knew would go into default in a matter of time so they could resell the house again and again. Major profits were made this way. The lender would sell the mortgage for the banks and then the bank would sell it to an investor willing to take the risk.
With this happening soon the number of houses going into default was increasing. The number of houses being placed on the market for sale was also rising, but the number of people looking for a house was not. Actually most of the people who could afford a house already had one and with the subprime families simply not paying, this was starting to drive the housing prices down. To make things worse, the people who could afford their high mortgages simply started abandoning their houses because now they were worth a fraction of what they used to be worth, and yet their mortgage was the same.
This left the banks with a lot of houses, but with no one paying for them. The banks borrowed massive amounts of money to buy those mortgages, and the lenders had a lot of houses with people who were going into default, and the investors had a lot of high risk deals that have become worthless. The investors were not able to sell the risk to anyone because by this time everyone noticed that things were not going as planned and stopped buying or selling, essentially freezing the banking and the financing market, bankrupting the banks, the investors and the lenders.
And the banks owned a lot of money they couldn’t pay back, usually to other large banks either in US or Europe, thus dragging those banks down into the crisis with them.
This is the simple explanation, but there are other factors that contributed to the crisis. For example, easy credit (it stimulated not only banks to borrow huge sums of money but also common folk), predatory lending (lending deals so long and prone to change that people were deceived into deals that aren’t what they are advertised) and underwriting (banks with mortgages that didn’t meet proper standards and selling them to other banks and investors) and deregulation of the banking industry (this made easier for banks and financing companies to pull their stunts without the government being able to interfere).
This showed that the banking system had serious problems both ethically and financially, but the reality is much less Machiavellian (and boring) than Gamble would you like to believe.
Back to the movie. We have Mr. Gamble explaining the crisis using a fish hook analogy to show how the financial elites consolidate their power. I’d bother to explain who this logic is wrong if I didn’t do it already above.
Again the banks won’t make major profit from a lot of houses with devaluated prices and with their credibility shot.
Gentlemen! Behold the links!
http://crisisofcredit.com/ (a friendly video explanation about how the crisis came to be)
“Give me control over a nation’s money and I care not who makes her laws.”–Baron Mayer Amschel Rothschild
I can’t find this quote in any history source or website. The only result that purported to show where it came from besides attributing it to Amschel Rothschild is from The Creature of Jekyll Island.
And it featured in America: Freedom to Fascism.
Too bad Mayer Amschel Rothschild died in 1812, virtually a hundred years before the quote started making its first appearances during the early 20th century.
Bank for International Settlements (BIS) and the International Monetary Fund (IMF)
There isn’t much to talk about the BIS and the IMF. The BIS acts like a hub for central banks to organize themselves, regularize the sector and push for transparency on the business. The IMF is a bank responsible for money lending programs enjoyed by its contributors. It is infamous for cases of sheer incompetence due to lack of touch with the reality of the countries they were lending money to or how the assistance programs are perceived by the local population. Depending on who you ask or which country you’re talking about, the IMF can be either seen as a major tool for the development of a country or just a means for the developed and industrialized nations to explore the undeveloped ones.
Like the Federal Reserve and other “major banks,” Gamble also claims they are controlled by the financial elite.
As with much else in Thrive, the “Follow the Money” section is long on rhetoric and short on identifiable facts. There are oversimplifications, important concepts left out, quotes whose truth can’t be identified, and a lot of distortions. This section isn’t done very much better than any other section in Thrive.
As difficult as this subject is, hopefully this analysis gives you something to work with as you evaluate the claims made by the movie.
I posted an article today at my other much more long-established (and less well known) blog, the Muertos Blog, entitled The Conspiracy World is Changing: Are You Ready For It? Follow that link to read it in full. I decided to post it there because the subject matter of that article goes well beyond Thrive, thus exceeding the scope of this blog; however, as Thrive and its place in the seedy world of conspiracy theories are an important example of the effect I want to discuss in that article, I thought I would do a quick post here mentioning it and directing interested readers to it.
My main argument in that article is stated thusly:
“The best and most concise way I can put it is this: conspiracy theorists do not want, today in 2012, what they used to want ten, five or even three years ago. The endgame for them—the “finish line,” if you will—is no longer to convince significant numbers of people in the mainstream that Conspiracy Theory X or Y is factually true. Nowadays, conspiracy theories are being used as a vehicle to advance other ideas, usually a set of ideological or even religious principles. The factual veracity of conspiracy material is no longer as important as it once was. Consequently, debunkers of conspiracy theories—who are focused on what is factual, rational and supportable in objective terms—are going to find themselves increasingly outclassed in this new environment.”
I believe Thrive demonstrates this effect in a very profound way. We are now moving toward a world in which the factual veracity of conspiracy theories is being questioned less and less often, as believers in conspiracies are herded with increasing fervor toward predetermined, pre-packaged ideological conclusions. The article over at the Muertos Blog goes into great detail about how we got there (hint: Zeitgeist was the unwitting trailblazer), and most of the Thrive material is at the end. I stress that context is important, which is why I strongly suggest reading the full article, but here is an excerpt of my discussion on Thrive and what this blog has taught me about conspiracy thinking as it exists today:
“I’ve already noticed this trend on the Thrive Debunked blog. Although the majority of people who post comments on the blog are Thrive fans who are angry that anyone would criticize the movie, a surprisingly few number of them seem to be angry because they think the facts are something different than what I demonstrate they are. Indeed, most of them seem to be angry because they say that by criticizingThrive I’m preventing the world from becoming a better place by not acceptingThrive and its messages as true. This is why so many comments take a tack similar to, “you’re missing the point” or “the movie isn’t meant to be debunked.” When the movie is attacked, its fans instinctively leap to the defense of its ideology, whereas leaping to the defense of its facts seems to be a secondary consideration.”
For those who may be interested in a wider view of how Thrive fits into a broader context of conspiracy thinking and New Age belief systems, I hope this article gives you some food for thought. As always, thanks for reading.
This blog has not dealt much with Thrive’s political ideology. That has been by design. The main focus of this blog is to evaluate Thrive from a factual standpoint: are its assertions and underlying assumptions accurate as a matter of objective fact? Discussions of politics are mostly beyond the scope of this inquiry. Nevertheless, it is undeniable that Thrive has a strong political undercurrent, and the orientation of that undercurrent is strongly libertarian. Foster Gamble, creator of Thrive, has endorsed Ron Paul for President in 2012. Furthermore, some of the “solutions” proposed by Gamble in Thrive, and on the associated website, are similar to libertarian planks.
This week, the Praxis Peace Institute, a progressive think tank founded by musician and longtime political activist Georgia Kelly, issued a 56-page pamphlet entitled Deconstructing Libertarianism: A Critique Prompted by the Film Thrive. Because several readers of this blog have directed me to the pamphlet, I thought I would do a brief article on it. It’s impossible to avoid touching the political implications of the film in an article like this, but I do want to stress that, regardless of my personal political beliefs, my primary arguments with the film are factual, not political.
Praxis Institute’s Critique of Thrive: The Basics
You can see the Praxis pamphlet here (note, clicking that link will begin a download of the pamphlet itself in .PDF format). As suggested by the title, the main purpose of the pamphlet is to address libertarian philosophy and explain why, from the point of view of a political progressive, it doesn’t work. Georgia Kelly is the editor of the pamphlet. She came into conflict with Foster Gamble and Thrive back in December when she posted a sharply critical review of the film on Huffington Post. In the pamphlet, she and other writers from the Praxis Peace Institute deliver a double-barreled blast against the film and its political agenda, analyzing many of the assumptions and philosophies behind libertarian thought.
Ms. Kelly states in the introduction why Thrive prompted her to issue this pamphlet:
“Through discussions of the content in the film and the written material on the Thrive website, we realized that many people viewing the film would not readily perceive the libertarian political agenda behind the film. Because many people are confused about libertarianism and its impact on the current political landscape, we felt it important to plumb this political philosophy, particularly during an election year. The articles written in this booklet cover a range of topics that deconstruct libertarianism and place it in the context of our current political environment.”
A bit later, in an article within the pamphlet entitled “Deconstructing the Political Agenda Behind Thrive,” Ms. Kelly writes:
“The website’s “Liberty” page (in the “Solutions” section) is a real shocker. Peppered with quotes from Ayn Rand, Ron Paul and Stefan Molyneux, the page even includes an attack on democracy. Gamble lumps democracy in with bigotry, imperialism, socialism, and fascism, and claims all of these — including democracy! — violate the “intrinsic freedom of others.”
The pamphlet proceeds through several articles written by various authors critiquing the ideological assumptions behind Thrive in much the same terms that Ms. Kelly uses. For example, in an article by Ben Boyce entitled “Challenging the Hidden Political Underbelly of Thrive,” this criticism is given:
“Make no mistake, the actual policy solutions in the documentary constituted the norm in the first Gilded Age of ‘laissez faire’ capitalism, that is, the McKinley Era at the end of the 19th century, for which the libertarian/conservative movements seem to still pine. That was a time when there were minimal taxes on corporations, no worker’s rights, no pesky EPA environmental regulations, no minimum wage, no social safety net to prevent families from tumbling precipitously from marginal employment and insecure housing to abject penury and homelessness. Everywhere in the world where the libertarian ideology has been put in practice, this condition of mass immiseration and concentration of wealth in the hands of the 1% has been a consistent historical fact. This ideology has been tried and failed.”
Another contributor, Gus diZerega, argues:
“[M]y problem with Thrive is the movie’s failure to adequately understand the principles it itself advocates in order for us to create a more humane and sustainable society. It presents one dimension of a problem that is multi-dimensional. The core insight lacking in libertarian thinking is the failure to grasp the centrality of relationships as constitutive of individuals, and to recognize that relationships are the key to understanding property rights and just politics.”
My Take on the Praxis Critique
Having read the Praxis critique, I think it’s self-evident that it is primarily a political document. Its purpose is to criticize the underpinnings of libertarian political thought that surface in Thrive and its milieu as opposed to really critiquing the movie point-by-point. Indeed, while I think the Praxis pamphlet is a very useful tool in evaluating the political agenda of the film, I’m somewhat disappointed by Praxis’s lack of engagement with factual matters asserted in the movie. There is very little discussion of conspiracy theories at all or their relationship to libertarian thought. I think this is a missed opportunity, and could have opened an interesting discussion on the role that conspiratorial thinking plays in political movements both historically and in contemporary society.
Case in point: the Federal Reserve. Mr. Gamble leaves no doubt that he absolutely detests the Federal Reserve, as most libertarians do; he blasts it as a tool of the “Global Domination Elite” to control the money system and hence the world. As a matter of economic policy, what the Federal Reserve does and should do is certainly a legitimate political issue, but aside from that, it is an absolute magnet for conspiracy theories. (Don’t ask me to opine at length on the Federal Reserve. I hate talking about it because it’s intensely boring. For a very good debunking of most of the popular FR conspiracy theories, go here). Mr. Gamble’s hatred of the Federal Reserve may be ideologically oriented, proceeding from libertarian thought, but I suspect at least part of his animosity may also stem from his obvious belief in Federal Reserve-related conspiracy theories. Here we have a prime example of a libertarian political goal—“End the Fed!,” as politicians like Ron Paul like to sloganize—that is being advanced through the spread of paranoid conspiracy theories. I would have liked Praxis to address how, from a progressive political standpoint, this could best be handled. How do you separate legitimate and rational political motivations from illegitimate and irrational belief in conspiracy theories? The pamphlet doesn’t go there. Indeed there are only a few perfunctory mentions of the Federal Reserve at all.
The conflation of conspiracy theories with politics is a dangerous trend and one of the main reasons why I push back against conspiratorial thinking. It is well known, for example, how an undercurrent of anti-Semitic conspiracy thinking in Europe in the late 19th and early 20th centuries provided a fertile breeding ground for the rise of Nazism in Germany in the 1920s and 1930s. Those theories are still with us—in fact David Icke, one of the chief talking heads in Thrive, pushes a thinly-veiled science fiction redress of these anti-Semitic conspiracy theories with his ludicrous “shape-shifting reptilian alien overlords” theories that, while they do not refer specifically to Jews, are eerily similar in tone and function to those traditional anti-Jewish theories. Conspiracy theories corrode the ability of people to think rationally about real political solutions. The rise of fringe candidates, like Ron Paul, spouting bizarre philosophies and openly employing racist and conspiratorial language to motivate supporters, is a disturbing effect of this tendency. I would like to know what the Praxis Institute thinks we ought to do about this trend.
Personally, I oppose libertarianism as a political philosophy. I don’t like its emphasis on so-called “free market” principles, its hostility toward taxation and responsible government, and its demonization of any form of collective societal action toward social justice. However, my political beliefs are small issue to Thrive, and are not the primary motivation, or even a significant motivation, for me to push back against the film on this blog. Even if Thrive’s politics were squarely in agreement with my own I would object to its use of conspiracy theories and conspiratorial thinking to advance its aims. Georgia Kelly and the Praxis Peace Institute seem to care much more about Foster Gamble’s politics than I do. That’s not a criticism at all; different viewers of the film will have different approaches in reacting to it. Nevertheless, in their critique of Thrive from a political standpoint, I would have liked to have seen more emphasis placed on the ethical dimensions of using demonstrably false conspiracy theories to advance whatever agendas—be they political, social or religious—lay at the heart of this deceptive film.
Foster Gamble’s Response to Ms. Kelly’s Original Huffington Post Article
What does Foster Gamble have to say to Georgia Kelly? To my knowledge he has not (so far) come out with a response to the Praxis pamphlet itself, but he did respond to her original Huffington Post article, an expanded version of which forms the basis of the first chapter of the pamphlet. Here’s how Mr. Gamble responds:
“Georgia Kelly, founder of the Praxis Peace Institute in Marin County, has posted a fearful review of THRIVE on the Huffington Post. Ms. Kelly has been active in Liberal Democrat politics, and she mistakenly assumes that I am a covert Right-winger, and then goes about attacking that position and me. Her supposition is not true, so she seems to end up missing both the value of THRIVE and critical insights that can inform breakthrough solutions strategies to help humanity escape our lethal situation and flourish…
Ms. Kelly has mislabeled me as “right wing” and started lobbing word grenades over a self-created ideological fence. What I want to explore is “What is just” and “What works?” So I challenge Ms. Kelly and any who are interested in this conversation to answer the most fundamental moral question I know of:
Just exactly when, for you, is it OK for one human being to take your property — be it your body, your wages, or your privacy — against your will and under the threat of violence?
That is what mandatory taxation is…”
This is only a tiny portion of Mr. Gamble’s response, and I encourage you to read the rest for yourself. It’s lengthy, and deals mostly with ideas of political philosophy, which seems to be the primary battlefield on which Ms. Kelly wishes to engage Thrive. I do not find, anywhere in Mr. Gamble’s blog, anything that addresses the factual problems with the film. As Ms. Kelly on Huffington and Praxis Peace Institute in their pamphlet did not focus on factual issues, I see the debate between them and Mr. Gamble on ideological matters to be essentially a political argument, and thus only tangentially relevant to the issues raised on this blog.
Speaking only for myself, I would rather engage Thrive in the arena of what is provable fact as opposed to what is desirable public policy. That doesn’t mean that I don’t have my own opinions on political philosophy or public policy, nor does it mean that I whole-heartedly endorse (or condemn) either the political agenda of Thrive or of the Praxis Peace Institute. My political opinions are not very relevant to the matters I created this blog in order to explore. In short, I’ve read the Praxis Peace Institute pamphlet. I agree with some of it, I disagree with other parts of it, but, while it’s certainly an interesting take on the Thrive phenomenon, if your main interest in the film is (as mine is) whether it is a credible source of factual information about what’s happening in the world around us, the political argument is largely irrelevant to that concern. Let’s certainly be aware of Thrive’s political agenda, but I for one don’t intend to make political disagreements with the film or its makers a significant point of contention. I’m willing to let others, like Georgia Kelly and her friends at Praxis Peace Institute, do that, and I wish them all the best in doing so. The movie has enough problems simply stating what it thinks is factual truth before it even gets to the realm of politics and policy.