Hubbard’s 1960’s Bizarre Vision for the Global Economy

In 1964, the Church of Scientology published a small document authored by L. Ron Hubbard called “Scientology Plan for World Peace,” which set forth a vision of a “one world government” headed by the UN, with all decision-making to be handled by diplomats and bureaucrats resident in a giant “International City” to be built in North Africa.  This document was only circulated for a few years, perhaps only until the early 1970s, when it apparently was allowed to fade quietly from sight.  While it’s been available on the web for a while, it hasn’t been the subject of much scrutiny.

We’ll give a general overview of the proposed structure of Hubbard’s world government but we’ll focus on the economic prescriptions Hubbard throws out to solve all the world’s ills.  Unsurprisingly, they’re the usual Hubbard stew of naively simplistic ideas presented with unwavering confidence in their brilliance.

The biggest conundrum is why Hubbard would propose something under his own name that’s so far left on the surface.  Hubbard’s political views, especially in the 1960s, were so rabidly anti-communist that they could have been lifted wholesale from the propaganda of the John Birch Society.  We take a guess at Hubbard’s real motivation.  In particular, the bland assurance in the introduction that “the following programme has no other purpose or interest than attaining these ends” is highly suspect. 

Overview of Hubbard’s Plan

Here are the key points of Hubbard’s overall plan for world peace.  Some of them are quite left-leaning, including:

  • The UN will become the world government, and all national capitals will be moved to neighborhoods in a single “International City,” to be built from scratch on the North African coast.
  • All nuclear weapons will be turned over to UN control, and countries will be forbidden from having their own armies that are not under UN control.
  • Forbid military alliances; each country is on its own against any aggressors.
  • The UN would have full power to engage in regulation to preserve the environment.

However, there are a number of policies that sound like they’re straight out of the playbooks for various forms of conservative thought:

  • Voting in the UN will be with one or more delegates per country, with those apportioned based on production, land values, and other economic criteria. No more of that “one country, one vote” democracy nonsense! The United States would, under such a scheme, get 30% of the delegates today, a bit more back when this document was written.  And make sure to get rid of the veto power of the UN Security Council.  In other words, the UN deck should be stacked so the US can do whatever it wants.
  • Ensure that the world government has power to enforce debt collection, enforce laws, and engage in other regulatory activities that supposedly bolster commerce, but stay strictly out of anything that governs workplace behavior, controls religions, or has any oversight over the private sector whatsoever.
  • The “International City” would be governed by 2,000 people who would contribute $1 million each for the privilege of electing a 20-man city council.  Though the “International City” would house the UN and the central governments of all the world’s nations, it would thus be run by whoever can pay the entrance fee, without regard to their nationality. In other words, it can be run by 2,000 Americans without other countries having a way to override their hammerlock on power.

Finally, a few rules have been slid into the deck, perhaps in hope nobody would notice, that appear to be intended to benefit Scientology and perhaps few others.

  • Forbid all sorts of regulations from the UN government including taxation, labor wage/hour rules, and all sorts of other pesky nuisances standing in the way of real progress.
  • The UN would be forbidden from: “defin[ing] or outlin[ing] ‘orthodox science’ or introduce any idea of orthodoxy into any science or the humanities except government; nor should it be permitted to attempt reforms in genetics, nor should it define sanity or insanity or label or care for the insane; nor should it be permitted to engage upon propaganda campaigns for any science or practice beyond the halting or isolation of disease epidemics.”  As sneaky as a hippopotamus on meth, that Hubbard!
  • “The United Nations should not be permitted nor should any national government be permitted to prescribe curricula or demand or regulate attendance in any school, public or private, whether maintained by International or National funds, nor define the requirements of a degree or demand the attainment of any scholastic standing of any kind, or regulate in any way the education or religion of any individual by whatever circuitous means, nor should the United Nations or National Governments be permitted to require the indoctrination in any way of the citizens of states or counties, nor pronounce upon their mental fitness or lack of it.”  In other words, the “right” of Scientology to spread “study tech” shall not be infringed by any evil, corrupt government bureaucrats.

We recommend taking the time to read the entire document; it’s an easy read and it’s fascinating.

Hubbard’s Economic Vision

Here’s what Hubbard had to say about how the New World Order should handle economic affairs.  Spoiler alert: it’s the macroeconomics version of the banal platitudes in “The Way to Happiness” booklets.  Patronizing, pointless and, where correct, utterly trivial.

Note that I’m not a macroeconomics guru; in my work at Global Capitalism HQ, I’m focused on a very narrow segment of the market and don’t have to pay much attention to macro issues to get my job done; we have macroeconomic strategists who advise clients  about such things.  But it doesn’t really take more than a standard college macro course to have the information needed to understand exactly why this is so ludicrous.  I may get some of the details wrong, so if there’s someone out there who is a card-carrying Econ Ph.D., I’d love to hear a more rigorously grounded critique and also anything I got wrong.

Base economics on the most fundamental definitions of inflation and deflation, wherein inflation is the result of more money than goods and deflation the result of more goods than money, and maintain financial matters accordingly.

Well, Ron, that’s sort of what central banks already do.  When this was written (though the picture is a bit more complex today), banks mainly did this through controlling interest rates, lowering them to give producers incentives to increase production, and raising them to take production offline.  The reality is a bit more complex in mature G-20 countries today as interest rates aren’t that effective in a primarily service-based economy.

So why would Hubbard put something so banally obvious as the first step in his economic “vision?”  This appears to be a subtle way to do what Hubbard has done countless times in his lectures: imply that there’s a simple solution to a complex problem that only he can see, and the experts are unable to see it.  Once again, it’s a mechanism for getting his followers to think he’s the Smartest. Guy. Ever., and follow unquestioningly other stuff that really matters.

Persuade the turn over of the International Monetary Fund to the United Nations.  Persuade the turn over of all central banks of nations or central banking to this Fund.  Establish a branch of this Fund in every state or county through the national or central bank of that nation.

This implies a global currency under one set of rules.  Not a good idea fifty years ago when that was written, and even worse today.  The monetary policy needs for small countries like Yemen, to pick one at random, are totally different from the monetary policy needs of a large, complex economy like that of the US or (today) China.  By tying the hands of policy makers in developing countries, Hubbard is basically sentencing them to a form of economic death, where they can’t take measures to boost the value of their exports and drag themselves out of poverty, like pegging exchange rates artificially low in order to make their exports cost less on the world market.

The other idea in here that’s naïve and wrong is the idea that a central bank (well, actually, the IMF is like the central bank for central banks around the world) should be subject to political oversight.  That’s an idea that’s so dangerous that it should never be taken seriously.  And it’s a favorite of the ultra-right crowd. The “Audit the Fed” nonsense that Ron Paul fans have been clamoring for in the last couple elections is a thinly disguised version of this.  And again, anyone with a couple of college-level econ classes can easily explain why this is  really bad idea.

And lastly, Hubbard seems to think that central banks should act like regular banks, with convenient branches near all sorts of convenient locations, in every town and city. That’s not how central banks either should work or actually do work.  The lack of understanding of what central banks do is fatal to any credibility Hubbard would earn among people who actually know anything about economics on hearing Hubbard theorize.

Allocate to each state or county as its money the exact value of its property, real or personal, and exchange the new money for existing monies in the hands of persons or corporations. Permit no other monies to be printed or issued.

In other words, the money supply should be determined by the value of the goods and services in an economy. This is just another version of the political idea, where UN votes are divided up not on the basis of “one country, one vote” but where existing rich countries essentially control the money supply.  Once again, this chokes off the ability of smaller or poorer countries to increase their lot in life.

There’s an embedded variant on the “return to the gold standard” nonsense here. But in Hubbard’s model, instead of gold setting the “real” value of money, Hubbard proposes using value of real estate and tangible property to determine the money supply.  The arbitrary establishment of some tangible commodity as the upper bound of a country’s money supply, limiting the ability of governments to change money supply to boost a country out of recession by Keynsian intervention, is the hallmark of economic incompetence.  Pegging the value of a currency to a tangible and limited underlying asset would basically drive the global economy back to the stone age, regardless of what that commodity is.

Finally, this is a ludicrous suggestion in today’s world because so much value is stored in intangible property such as data, patents, scientific processes, etc.  Your money supply would be artificially limited because of the huge value in that sort of asset.  Intellectual property was not a significant percentage of the value of assets when Hubbard was bloviating in the 1960s, but surely his trillions of years of experience on the “whole track” would have led him to predict that, only a few years after his death, that that would change significantly.

Each year, by careful survey, increase or decrease the extant funds in a county or state to match its productivity, the principle being that money must exist to purchase that which exists to be purchased.

Circular logic and nonsense, from an economic standpoint.  More of Hubbard trying to make the experts seem like fools, and positioning himself to take over his subjects’ minds.

Continue the value of money against real goods and property.

This seems like a restatement of the earlier paragraph about the basis for his global currency.  I’m not sure why he restated this.

The character or notes and coins should bear on one side their International Value and on the other their domestic or local designations.

This sounds like a fairly trivial point, but it makes sense in the context of global economics when this document was written in 1964.  Only a few years later, most currencies would become untethered from fixed exchange rates and rates were allowed to “float,” being set by the market rather than by legislated “pegs,” which often were inaccurate reflections of the relative strengths of the economies on either side of the trade.

Hubbard surely would have seen floating exchange rates coming, as it’s a fairly trivial Econ. 101 discussion that most undergraduates have sat through in their lives.  Wonder why the whole track was so off track for ol’ LRH.

The handling of future funding should be through the International Monetary Fund to its national or central bank branches of the nation in counties or states to the private banks in that state, all under the supervision and direction of the United Nations through the Nation’s central bank branches in each county or state.

Here, Hubbard appears to be filling up pages.  And he also appears to be suggesting that the IMF should be in the business of lending money to consumers and businesses, a completely bad idea that one can only suggest if one is completely ignorant of the role of the central bank in an economy.  I may be misreading this, because the wording is a little ambiguous on that score, but at best this is obvious and at worst, it’s howlingly ignorant.

The financing of the governments of cities, counties or states should be as usual by their own taxation and the government of the nation should receive its money for all its expenses and management only from their counties or states and never from individuals or companies directly, the amount for the nation not to exceed fifteen percent of the gross revenue of each county or state, paid directly by that county or state to the nation’s capital in International City.

OK, so here Hubbard is saying that the federal government of a country should only receive tax revenue from the governments of its constituent states.  This is completely stupid and unworkable. But it hides Hubbard’s real intent: to enshrine his pathological fear of paying income taxes to the US government.  It seems a little impractical to try and exact revenge on the IRS by creating a One World government and then using that to forbid the IRS from touching Hubbard’s money. Of course, in this One World government, the US would hold all the power anyway, so it’s not clear that a law cleverly trying to ban the IRS would actually be passed by the US.

The financing of the United Nations should consist of an additional ten percent of the gross revenue of each county or state paid directly to the United Nations and eight percent of the gross revenue received by each national government from whatever source, and from interests paid into the International Monetary Fund.

This is a howler, especially given Hubbard’s John Bircher leanings. That particular fringe ideology thinks the United Nations is a front group for a great conspiracy to erode US sovereignty.  Hubbard could get thrown out of the John Birch Society for daring to suggest that the US taxpayer send 10% of his money to the One World Government.

And at a time when the highest marginal tax rate in the US was somewhere around 75%, slapping a 10% surtax on high end taxpayers would have caused a pretty interesting rebellion among certain strata of society.

The collection of taxation funds by any state, county, nation, or the United Nations to be strictly forbidden to be on a net basis, thus inhibiting the invasion of the financial privacy of individuals, companies, cities, counties or states, or nations, and reducing the complications and expense of collection.

Obviously, here’s Hubbard trying to find another vector to abolish income tax.  What he’s saying here is that if the government would tax gross income (the raw money you make) rather than net income (what’s left after you subtract out a bunch of deductions), so that it would not have to invade privacy.  This is horrendously stupid and it contradicts the first point of Hubbard’s economic plan, the importance of containing inflation.  The ability to take deductions when one spends money in ways that tax policy is trying to encourage, is a fundamental tool for governments to shape citizen behavior.  Worried about land use? Grant a deduction for people to move into high-rise condos.  Take away the deduction and nobody will engage in behavior that lawmakers wish to encourage.  Yes, deductions can be misused, either by citizens or by policymakers, but the mechanism is important.

From these tax funds all expenses of whatever kind should be paid without further recourse to special United Nations or National taxations independent of the counties or states, a practice which should be forbidden.

It’s not clear what this is saying as Hubbard might be trying to say that the UN should be paid with the “simplified” income tax in the prior paragraph but that federal governments should not.  That’s my best guess, but I could well be wrong.  Regardless of what he actually intended, it’s pretty clear this is another attempt to exact revenge on the IRS by taking their place at the taxation trough away and giving it to the UN.

Why Hubbard Thought this Was Worth Proposing

Hubbard’s entire “world peace” document is nonsensical. It’s a random jumble of ideas grabbed from across the political spectrum with little thought to unintended consequences, or even any significant thought to how the inherent conflicts between the provisions of the document itself should be resolved.  Successful politics is the art of preventing unintended consequences from being created by legislation, or even more importantly, by provisions in the constitutional framework for government.  And by that standard, Hubbard’s document here is a dismal failure.

Soon after this document was written, Hubbard set out on several attempts to try to take over various governments, including his bizarre adventure in Rhodesia where he was thrown out days after he offered to rewrite their constitution as a public service and his first step in trying to take over the country, his recently uncovered attempt to buy Malawi, and his attempt to ingratiate himself with Morocco when he was sailing his motley navy around the Mediterranean.  We think this document may thus be the first example of Hubbard’s delusional and narcissistic dreams of global conquest.

Here, it appears that by centralizing the world governments in a single “international city” away from the countries they actually serve, that Hubbard would thus be able to take over countries by preying on their isolated lawmakers.

While this document didn’t really stay in circulation all that long, the idea of mounting a clever, fast takeover of governments that they thought of as easy marks is a hallmark of Scientology thinking that survived Hubbard’s 1986 death.  Under David Miscavige, several Scientologists proposed a plan to create a single country out of Bulgaria, Greece, Albania and Yugoslavia, called “Bulgravia.’  They thought that a little education in capitalistic principles would cause the countries involved to fall in a grateful heap at the feet of their new Scientology-driven conquerors, creating the world’s first Scientology-run country.  As backward as the Albanians were in many ways (a few dozen miles of paved road in the entire country at the time their Communist regime fell in 1991), they weren’t stupid politically. There’s no evidence that the cult took any steps to implement the “Bulgravia” plan, but they were certainly thinking about it, and imagining its success.


Author: John P.

John P. is a Wall Street money manager and IT technologist fascinated by irrationality in all its forms, and Scientology most of all. He's a lifelong Steely Dan fan.