Ding Jiang: The United States Has 'Small Government, Big Capital'

The U.S. government has been “closed” since Oct. 1 and has remained closed for several days. This sort of situation has already occurred in the U.S. 18 times since 1976. Many scholars believe this indicates that America has a “small government, big society” complex. That is to say, even if the government is temporarily unable to provide public services, all of society is still able to function normally. However, this author believes that focusing on the U.S. through the government shutdown does not allow us to deeply understand the essence of American government. The United States does not have the “small government, big society” complex imagined but rather “small government, big capital” nature.

During the past several days of the U.S. government shutdown, nearly 1 million federal employees have been furloughed, public hospitals have stopped accepting new patients, tourists are unable to visit national parks and the public cannot obtain marriage certificates. These numerous embarrassments and disorder all reflect the fragility, division and chaos of American society and shed light onto the artificially thriving nature of “big society.”

Interestingly enough, when numerous U.S. governmental organizations closed their doors, the U.S. Federal Reserve remained open and is even preparing to welcome its new leader. This is “because it does not rely on funds appropriated by Congress to function.” Of what nature is a “government organization” that does not need to rely on funds appropriated by Congress? American scholar Eustace Mullins analyzed this topic in his book “The Secrets of the Federal Reserve.” The U.S. Federal Reserve, which undertakes the function of central banking, is not a government agency, but rather a private company controlled by shareholders like the Rockefeller Foundation and J.P Morgan. According to his theories, every time the U.S. government issues a dollar bill, it is equivalent to the Federal Reserve extracting one dollar in debt. The Federal Reserve creates one dollar of debt out of thin air, upon which the American public must pay interest. This continuous accumulation eventually creates astronomical figures. Chinese people assume that the U.S. government issues dollar bills, but in actuality the U.S. government fundamentally has no authority to issue banknotes. If the U.S. government wants to obtain currency, then it must give Americans’ future tax revenue (government bonds) to the Federal Reserve as security to be used to issue “Federal Reserve notes.” This is the essence of the “U.S. dollar” and is one of the profound reasons that the U.S. Congress must continuously raise the debt ceiling.

This shows that the professed U.S. political doctrine dictating the “separation of powers” is at its core a capital controlling administration. The federal government may shut down, but the Federal Reserve cannot close even for a day, and a very small number of financial groups are firmly controlling the United States through the Federal Reserve. When the federal government shuts down, “big capital” continues to hold together the overall functioning of American society. One could say that the Federal Reserve has unsupervised financial privileges; its nature virtually decides the essence of U.S. politics. With this in mind, 2008 U.S. presidential candidate Ron Paul expeditiously wrote in his book “End the Fed”: “Ending the Fed would be the single greatest step we could take to restoring American prosperity and freedom and guaranteeing that they both have a future.”

Aside from controlling banking, these financial groups also control many other aspects of the United States. For example, they can stir up trouble for diplomats through the U.S. Council on Foreign Relations, also a nongovernmental organization, established in 1921 with the funding of the Rockefeller, Carnegie and Ford foundations. Thus the Wall Street financial family became the target of public criticism during the “Occupy Wall Street” movement, and closing the Federal Reserve, the representative of “big capital,” became one of the clear-cut demands of the movement.

The great dynamism and deep degree of financial groups’ control over America terrorizes the imaginations of noncitizens. The true heart of American power is in fact the Federal Reserve, an organization that will never close as a result of a two-party rift, yet an organization that people have always known very little about. The U.S. government shutdown and the continuous operation of the Federal Reserve show that the United States is certainly dictated by a relationship of “small government, big society,” but is rather more aptly described as “small government, big capital.”

To only observe one point will lead to a one-sided conclusion. Strengthening the research on the U.S. Federal Reserve and its background of financial capital strength will not only help to more deeply understand the United States, but may also help guide us in completely and objectively studying contemporary China.

The author is the deputy head of the Jiangsu Research Institute of Administrative Management.