This article was written by Gary North in 2006.

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Before I identify what has to be the most successful fraud in the history of the United States, I should first define my terms.

Fraud: A deliberate attempt to deceive a targeted victim, so as to obtain something of value from him that would have been difficult to obtain, had the victim known the truth.

Success: Securing an advantage for yourself and your heirs that is almost impossible to lose, even under competitive conditions.

I offer the following criteria as characteristics of a successful fraud.

First, the perpetrator who designs the fraud and then executes it is subsequently hailed by the victims as a hero, a genius, and indispensable to their own well-being.

Second, the perpetrators must be bound by an oath of non-disclosure, which all of them keep until they die, yet which leaves no trail of paper for historians to discuss.

Third, the nature of the fraud is well known by critics, who tell their story in full public view at the time the fraud is committed, but a majority of the victims reject this story.

Fourth, the critics’ negative assessment is forgotten over time, leaving the victims’ heirs convinced that the original fraud was a great idea and well worth defending.

Fifth, anyone who discovers the true nature of the fraud cannot gain a hearing because the heirs of the victims dismiss him as a crackpot, either in general or else regarding this specific issue.

Sixth, the heirs of the perpetrators extract a growing percentage of the wealth of the heirs of the victims.

Seventh, the fraud must have a slogan, preferably very short, easily memorized, universally accepted, and devoid of content, just in case someone should try to sue the perpetrator or his heirs for the commission of the crime.

Eighth, the heirs of the victims then consent to the plans of the heirs of the perpetrators to extend the original fraud, whether by additional fraud or else force, to new groups of victims, who whose ancestors were not parties to the original fraudulent transaction.

Ninth, the heirs of the original victims pay all of the costs of this extension of the original fraud to a new generation of victims.

Tenth, the new generation of victims is then persuaded to bear a growing percentage of the costs of extending the fraud to still more victims.

Eleventh, the bulk of the net return on the extension of the fraud continues to flow to the heirs of the original perpetrators.

Twelfth, the process must go on for more than a century; two centuries are better.

There may be additional features of a successful fraud, but I think the presence of this dozen constitutes a highly successful fraud.

Can you think of a fraud in American history that has these twelve, or even more? If so, you should draw up your case in writing and submit it for consideration to this site’s editor, who loves a good fraud story better than silver. Tie it to a conspiracy, and he loves it more than gold. Get the government involved, and he cannot resist.

But you cannot match mine, for mine tops them all.

AND THE WINNER IS. . . .

James Madison and his unindicted co-conspirators.

First, the perpetrator who designs the fraud and then executes it is subsequently hailed by the victims as a hero, a genius, and indispensable to their own well-being.

Madison is universally heralded as the father of the Constitution. This is an accurate assessment of his role. From the Annapolis Convention of 1786, which called for the Constitutional Convention of 1787, which (1) closed its doors to the public and the press, (2) did not amend but instead replaced the Articles, in specific violation of the instructions officially given by several state legislatures to their attendees; (3) unconstitutionally (Articles of Confederation) ratified the illegal document in 1787—88, Madison was there, running the show. Everyone knew it at the time.

Second, the perpetrators must be bound by an oath of non-disclosure, which all of them keep until they die, yet which leaves no trail of paper for historians to discuss.

No member of the Convention ever revealed what went on behind those closed doors. This included the opponents of the Constitution. Luther Martin of Maryland, a signer of the Declaration of Independence, opposed the Convention’s plan within days of his participation. He kept notes of the debates, but his notes were not published until 1838, two years after Madison’s death — the last member of the Convention to die. Martin’s notes were published along with Robert Yates’ notes, who also attended and opposed what had been done there: Secret Proceedings and Debates of the Constitutional Convention, 1787. Today, this book is unread by most graduate students of the era, let alone by the general public. I cannot find it on-line in text form — just offers to sell copies of the book. When a document of this level of historical importance is not on-line for free, the memory hole is still operating.

Madison turned over his notes to George Washington, who took them back to Mt. Vernon. Madison knew that no one would or could force Washington to surrender them. His notes were not published until 1845.

What could have kept opponents like Yates and Martin from publishing? One explanation is obvious, yet rarely mentioned by historians: The members took a vow of secrecy. That was an era in which oaths were taken seriously.

Third, the nature of the fraud is well known by critics, who tell their story in full public view at the time the fraud is committed, but a majority of the victims reject this story.

The anti-Federalists published numerous criticisms of the secret Convention and the proposed Constitution. Yet in every state ratifying convention, the Federalists won. Madison was a consummate political organizer. More than this: He is arguably the most organizationally successful political theorist in man’s recorded history. He even took notes of the Convention and revised them just before he died — the very records that would shape what historians would record. Solon and Lycurgus left no body of theoretical works. Madison did. So, only Lenin comes close to Madison in this regard. But the product of Lenin’s conspiratorial revolution only lasted for three-quarters of a century.

Fourth, the critics’ negative assessment is forgotten over time, leaving the victims’ heirs convinced that the original fraud was a great idea and well worth defending.

The first complete collection of the anti-Federalist papers was edited by Herbert Storing and published in an expensive collection aimed at university libraries by the University of Chicago Press in 1981. You can find these documents on the Web today, but in 1981, the Web did not exist.

Typical of the attitude of twentieth-century historians is the title of one of the most well-known articles in my graduate school days of the 1960s, Cecelia Kenyon’s “Men of Little Faith: The Anti-Federalists on the Nature of Representative Government” (1955). She was selected by the editors at Bobbs-Merrill to edit the collection of Anti-Federalist papers that grad students in my day read, or were supposed to have read, before their Ph.D. exams in colonial American history.

Fifth, anyone who discovers the true nature of the fraud cannot gain a hearing because the heirs of the victims dismiss him as a crackpot, either in general or else regarding this specific issue.

I offer as evidence my book on the Constitution, Conspiracy in Philadelphia (2004). I have posted it free on-line. I wrote the original as Part 3 of my 1989 book, Political Polytheism. This may be the least popular book I ever wrote, even among my targeted audience. I can recall one dedicated lady, a stalwart in the independent Christian day school movement, who told her son, “Why did he have to write that?”

Sixth, the heirs of the perpetrators extract a growing percentage of the wealth of the heirs of the victims.

Consider the United States government’s budget, its annual deficit, its on-budget debt, and its off-budget debt. If you do not know where to begin, start here: M. W. Hodges’ Grandfather Economic Report.

Seventh, the fraud must have a slogan, preferably very short, easily memorized, universally accepted, and devoid of content, just in case someone should try to sue the perpetrator or his heirs for the commission of the crime.

“We the people.” Want to try to match that one?

Eighth, the heirs of the victims then consent to the plans of the heirs of the perpetrators to extend the original fraud, whether by additional fraud or else force, to new groups of victims, who whose ancestors were not parties to the original fraudulent transaction.

I offer as evidence the Spanish American War, World War I, World War II, Korea, Vietnam, Panama, Desert Storm, Afghanistan, Iraq. Then there are these: foreign aid, the State Department, and innumerable CIA coups.

Ninth, the heirs of the original victims pay all of the costs of this extension of the original fraud to a new generation of victims.

What are these costs? Read the collection of essays compiled by John Denson, The Costs of War: America’s Pyrrhic Victories. If this is too much, then at least read David Gordon’s review.

Tenth, the new generation of victims is then persuaded to bear a growing percentage of the costs of extending the fraud to still more victims.

The acronym NATO comes to mind. More recently, the Bush Administration assumed that Iraq’s oil revenues would pay for the reconstruction of the war-devastated country. There were actually people who believed this. John Kerry’s entire campaign position on the Iraq War was grounded on the assumption that the Administration should have sought allies, who would then have shared the costs. Desert Storm was his model. He promised that, if elected, he would line up such cost-sharers.

Eleventh, the bulk of the net return on the extension of the fraud continues to flow to the heirs of the original perpetrators.

If you want to read one book on this — well, three — read Philip Burch’s three-volume work, Elites in American History (1981). The complete set is out of print, and it was published by an obscure publishing company. You probably have never heard of it. I bought two sets, just in case.

With respect to the nature of the net return, consider the crucial slogan of modern American politics. Although he went to his grave denying that he ever said it, the archetype of this policy prescription is still attributed to Harry Hopkins, the senior advisor to Franklin D. Roosevelt: “We will spend and spend, and tax and tax, and elect and elect.” The constituents of whichever political party is incumbent still accept this.

Twelfth, the process must go on for more than a century; two centuries are better.

This one has gone on since 1788.

CONCLUSION

The most accurate assessment of this incomparably successful fraud was Patrick Henry’s. When asked why he did not attend the Constitutional Convention, he replied: “I smelt a rat in Philadelphia.”

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Republished from the archives of LewRockwell.com