The question serious analysts must ask is not “why do governments expand?” That is self-evident, a structural feature of any bureaucracy.
The appropriate question is “why do populations permit it?”
The answer requires understanding the propaganda apparatus that Western states have built, refined, and now operate at industrial scale.
The modern architecture of consent management dates to the First World War. Woodrow Wilson’s Committee on Public Information, run by George Creel, demonstrated that a population could be mobilised for any purpose — including a war most Americans had no interest in fighting — through systematic control of information, the manufacture of enemy imagery, and the weaponisation of social pressure.
Edward Bernays, Freud’s nephew and the inventor of modern public relations, drew the explicit lesson: the techniques of wartime propaganda could be applied in peacetime, continuously, to manage democratic populations who had been given the formal appearance of self-governance.
Bernays wrote in 1928: “The conscious and intelligent manipulation of the organised habits and opinions of the masses is an important element in democratic society.” He meant this approvingly. The masses, in his view, required management. The only question was who would do the managing.
Walter Lippmann, a despicable little parasite who was also the era’s most influential political journalist and advisor to presidents, concurred. In “Public Opinion” (1922), he argued that the complexity of modern society exceeded the cognitive capacity of ordinary citizens.
The solution was an expert class — a “specialised class whose personal interests reach beyond the locality” — who would process reality and present the public with a manageable, simplified version of it.
Democracy would be preserved as ceremony; governance would be conducted by administrators insulated from democratic pressure.
This was not conspiracy. It was, in its originators’ minds, practical social engineering for the modern age. The conspiracy came later, when the machinery was captured by interests with specific agendas — and when those agendas diverged sharply from the welfare of the managed populations.
Credit Expansion as Social Control
The propaganda apparatus alone is insufficient to maintain compliant populations. People who are struggling economically have little to lose and much to gain from resistance.
The second pillar of modern social management is therefore material: keep the population comfortable enough that compliance feels rational.
The credit expansion of the post-Bretton Woods era served this function with extraordinary efficiency.
The Nixon Shock of 1971 — the closure of the gold window, the final severing of money from any physical constraint — did not immediately impoverish ordinary people.
Instead, it created something more insidious: the illusion of prosperity, financed by debt, distributed through asset price inflation, and sustained by ever-lower interest rates.
In the United States, median real wages stagnated after 1971. The economic pie did not stop growing, but the share accruing to labour contracted sharply relative to capital.
The compensation was the credit card, the home equity line, the student loan, the 30-year mortgage on an asset perpetually inflated by the monetary expansion that was compressing real wages in the first place.
People felt wealthier because their houses were worth more. They did not feel wealthier because they were more productive or better compensated.
The distinction matters enormously.
One generates genuine capital; the other generates a debt-financed simulacrum of capital that must eventually be reconciled.
The political consequence was exactly what Hyman Minsky would have predicted: financial stability bred risk appetite, risk appetite bred leverage, leverage bred fragility.
But crucially, the fragility was concentrated in the financial system — not in the felt experience of ordinary households. As long as asset prices rose, people felt fine. They did not ask questions. The combination of material comfort and media management neutralised the impulse to resist.
Comfortable people do not revolt. The genius of the modern system is that it has made debt feel like wealth and dependency feel like security.
Editor’s Note: A system built on propaganda, debt, and manufactured comfort can appear stable—right up until the illusion breaks.
When confidence in the dollar begins to crack, governments may move quickly to protect the system at your expense through inflation, capital controls, and restrictions on your savings and financial freedom.
By then, many of today’s best options may already be gone.
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