All roads lead to Basel
We previously discussed how six technical rails — Identity, Conformity, Data, Audit, Finance, and Procurement — operationalise adaptive management at planetary scale. Each rail performs a specific function in a cybernetic control loop: setting standards, monitoring performance, evaluating compliance, adjusting behavior through consequences, defining participants, and propagating requirements through networks.
This essay asks a structural question: Who controls the cybernetic actuator?
In any adaptive management system, the actuator — the mechanism that translates measurements into behavioral adjustments — determines who holds power. The six rails can measure, monitor, and evaluate continuously, but without Rail 5 (Finance) to reward compliance and punish deviation through automatic economic consequences, the system merely observes without governing.
Central banks control Rail 5. They control the Finance Rail because they control the monetary substrate itself — the base layer of settlement, the definition of money, the collateral frameworks, the credit conditions, the monetary base... the unit of account.
But Finance isn’t the only actuator. The system operates through multiple enforcement layers:
Platform Infrastructure:
Cloud providers (AWS, Azure, Google Cloud), app stores (Apple, Google), DNS/Certificate Authorities can deplatform actors entirely — denying not just payment but digital existence. When Parler lost AWS hosting in 2021, payments were irrelevant; the platform couldn’t operate.Telecom and Identity Infrastructure:
SIM registration requirements, mobile OS wallet controls, eID provider lockouts can brick user access before any financial transaction occurs.Procurement as Co-Actuator:
Government procurement (Rail 6) doesn’t just propagate requirements — it functions as a parallel enforcement mechanism. Deny vendor onboarding and you deny market existence, especially in sectors where government is the primary or sole buyer.
These secondary actuators create defense-in-depth: even if a transaction clears the Finance Rail, platform or identity rails can block participation. The system is redundantly enforced.
Yet, finance is the apex actuator; platform, identity, and procurement are secondary enforcement layers.
Hierarchy of Control
Finance (primary) → Platform/ID/Procurement (secondary)
Secondary actuators can exclude, but only the Finance Rail can precisely calibrate behavioral adjustment through pricing (setting interest rates, capital charges). Finance rewards and punishes continuously across the entire economy. Platform deplatforming is binary (on/off); financial conditioning is graduated and universal.
This makes central banks the apex: they control the primary actuator (Finance) that makes the entire system adaptive, while secondary actuators provide backstop enforcement.
In September 2022, the UK’s Truss government announced unfunded tax cuts1. Gilt yields spiked, creating cascading margin calls in pension fund derivatives. The Bank of England intervened with emergency bond purchases despite being mid-QE-tightening, effectively backstopping the market. Truss fell within weeks. Her fiscal policy didn’t fail through parliamentary vote — it became financially impossible because central bank balance sheet positioning made it so. Policy had to clear the central bank perimeter first.
Operation Chokepoint 2.02 (2023) demonstrated financial infrastructure as enforcement mechanism. US banking regulators issued guidance discouraging banks from serving cryptocurrency firms. Without formal prohibition or legal proceeding, major banks closed accounts for crypto companies. Signature Bank and Silvergate voluntarily wound down rather than face regulatory pressure. The businesses weren’t declared illegal — they simply lost access to banking infrastructure. No court hearing, no legislative action, infrastructure denial executed policy.
These weren’t exceptional events. They’re the operational norm.
The conclusion is structural: if power flows through the rails, and the rails implement adaptive management, and central banks control the actuator that makes the system adaptive, then central banks sit at the apex.
From Moral Economy to Technical Infrastructure
This architecture represents the technological culmination of a 150-year intellectual project to achieve international social justice through expert economic administration, synthesising three distinct strands:
Moses Hess (who influenced Marx and Engels) argued the economy must serve moral law rather than material self-interest—establishing that economic governance is fundamentally about enforcing ethical principles.
Eduard Bernstein rejected revolutionary rupture in favor of gradual ‘evolutionary socialism’ — embedding socialist principles into capitalism’s machinery through incremental institutional capture, making each reform create necessity for the next. His strategy: work through existing structures, use democracy and institutions to progressively reform economic life, focus on concrete incremental progress rather than revolutionary transformation.
Alfred Zimmern advocated for international administration by enlightened technocrats operating above democratic politics — transcending the ‘messy’ contestation of nation-states through expert governance.
The Fabian Society operationalised Bernstein’s strategy in Britain through ‘In Tandem’3 — the gradual fusion of the elected Treasury responsible for fiscal policy with the technocratic Bank of England responsible for monetary policy. Rather than seizing the state, slowly merge the executive branch with the central bank, crisis by crisis, committee by committee, until fiscal policy — parliament’s constitutional power — becomes conditional on central bank approval. The shift happens through ‘coordination’ that accidentally-on-purpose sidelines democracy.
What began as ethical imperative, evolutionary strategy, and international administration has become central banking networks coordinating through the BIS, six rails enforcing compliance automatically, and a monetary unit of account as universal control interface — all justified by moral frameworks (environmental, social, intergenerational justice) that make resistance appear unethical.
The Settlement Layer: All Roads Lead to Central Banks
Every significant financial transaction ultimately clears through central bank money. This creates a structural chokepoint where all payment flows terminate.
High-value payments, retail transactions, foreign exchange settlement, and securities all resolve on central bank balance sheets or through central bank-supervised entities. Payment messaging standards (ISO 200224) embed rich compliance data directly into transactions, enabling automated screening at the settlement layer. The CPMI-IOSCO Principles for Financial Market Infrastructures5 function as the binding constitution for all systemically important payment systems, placing them under central bank oversight.
This architecture has deep historical roots: the clearinghouse logic evolved from private banker clearinghouses in London through international clearing proposals to the 1930 establishment of the BIS as the central bank of central banks. What began as private coordination mechanisms became public infrastructure, and eventually global coordination apparatus.
If a transaction doesn’t meet the technical requirements programmed into these systems, it doesn’t clear. There’s no appeal, no legislative override — the infrastructure simply denies the payment.
Appeals processes exist in theory but operate on timescales measured in months while exclusion operates in milliseconds. The burden falls on the excluded party to demonstrate error rather than on the system to verify before denial. By the time remediation occurs — if it occurs — commercial damage is done. Service-level targets for error resolution often lack binding enforcement, making the operational gap between denial and remedy a feature rather than a bug.
The rails deny first; remedies come later, if at all. Enforcement happens automatically, at the point of transaction, entrenching technical authority over legal process.
The principle is straightforward: own the pipes, control the flow.
The Rulebook Layer: BIS Coordination
Central banks don’t just control settlement infrastructure — they coordinate the rules that govern global finance through BIS-hosted committees that function as the de facto global financial constitution.
Basel Committee6 sets capital and liquidity requirements that determine which activities banks can engage in and at what cost. These are not suggestions — they’re implemented through national supervisors as binding operational requirements.
Financial Stability Board7 (hosted by the BIS) develops resolution frameworks8 that pre-code crisis outcomes — which creditors get bailed-in, which liabilities convert to equity, who survives and who doesn’t — all determined before any crisis occurs.
CPMI establishes the Principles for Financial Market Infrastructures9 — the binding constitution for all systemically important payment systems, CCPs, and depositories, placing them under central bank oversight.
NGFS10 (central bank network, hosted by the Banque de France, coordinate with BIS) produces climate risk scenarios that member central banks implement in supervisory stress testing—creating coordinated enforcement of environmental policy through financial regulation.
FATF11 operates the money perimeter — identity verification and traceability requirements that gate access to the financial system. You cannot access payments without satisfying FATF-compliant verification.
These standards get written in BIS-centric forums, translated into supervisory rulebooks by national regulators, embedded into platform requirements by infrastructure operators, and executed by gatekeeping algorithms. This is policy implementation without parliamentary debate, global rule-making without treaty ratification.
The Producer-Consumer Control Pattern
Marx’s circuit analysis reveals a fundamental pattern that the six rails operationalise: the producer-consumer relation is in essence controlled through making access to what is produced conditional on compliance. This archetype begins at the apex and replicates recursively through every level.
The Apex Relationship
Central Bank (Producer) → Government (Consumer)
The central bank creates the monetary substrate — the base unit of account that serves as ultimate settlement medium. The government, as primary consumer of central bank money (through sovereign borrowing), faces increasingly conditional access: hitting fiscal targets, adhering to policy frameworks, submitting to international surveillance, maintaining market confidence.
Even sovereign governments operate as consumers whose access to monetary resources is conditional on demonstrating compliance with frameworks defined outside democratic processes. Sure, large banks (primary dealers) are technically the middlemen buying the bonds, but the reserves originate with the central banks themselves — regardless of reserve ratios.
The British mediator is the Monetary Policy Committee, primarily controlled by insiders of the Bank of England. While the fiscal objectives at present are set by the treasury, that dynamic would change given the Fabian ‘In Tandem’ policy proposal12.
The Pattern Cascades
Commercial Banks → Corporations: Credit access conditional on ESG scores, financial ratios, compliance track records.
Corporations → Individuals: Employment and market access conditional on credentials, identity verification, credit scores.
Prime Contractors → Supply Chain: Contract opportunities conditional on certifications, ESG compliance, flow-down clause acceptance.
What makes this powerful is that control happens through conditional access rather than direct command. The six rails implement this producer-consumer dynamic at every level of the economic holarchy. Every participant becomes a ‘consumer’ whose access depends on meeting requirements in order to access producer output — with the central bank/government relationship establishing the archetype that replicates throughout.
Balance Sheet Tools: Silent Steering
Central banks influence markets and sovereign finance through instruments that require no legislation:
Collateral Frameworks as Industrial Policy:
Central banks decide which assets qualify for their operations, set haircuts determining liquidity value, and maintain eligibility lists. These choices function as de facto industrial policy — channeling trillions toward preferred asset classes (green bonds, specific sovereigns) without ever explicitly prohibiting alternatives.Swap-Line Networks as FX Sovereignty Valve:
The Federal Reserve’s standing dollar swap lines with select central banks (BoE, ECB, BoJ, BoC, Swiss) control international dollar liquidity in real-time. Nations outside the swap-line club face dollar scarcity during crises, forcing policy alignment to access emergency liquidity.QE Indemnities Formalising Fusion:
Legal instruments formalise fiscal-monetary fusion through binding agreements. When the central bank holds massive government debt and the Treasury guarantees to cover losses, operational separation between monetary and fiscal policy becomes fiction.
The macro-prudential toolkit extends this: countercyclical capital buffers adjust credit availability over the business cycle, sectoral risk weights channel lending toward or away from specific activities (the UK’s Financial Policy Committee operates these without legislation13), and loan-to-income caps directly limit household borrowing14.
Each crisis expands central bank tools and normalises intervention. The trajectory: lender of last resort → market maker of last resort → increasingly, the entity whose balance sheet position determines what fiscal policy is viable.
The Fabian Fusion
The Fabian strategy of working ‘in tandem’ explains how fiscal and monetary power fuse without revolution or overt seizure — through crisis-driven coordination that becomes permanent institutional architecture.
What ‘In Tandem’ Means:
Traditional constitutional separation maintained distinct spheres: Treasury (elected government) controls fiscal policy — taxes, spending, redistribution; inherently political, subject to democratic debate. Central Bank controls monetary policy — interest rates, money supply, financial stability; granted operational independence to insulate from short-term political pressures.
The Fabian strategy dissolves this separation not through confrontation but through collaboration that ‘accidentally’ sidelines the democratic component of the state.
Every financial crisis creates ‘need’ for seamless Treasury-central bank coordination. This emergency response becomes institutionalised through a predictable cycle:
Pilot/Research Phase: Central banks explore new tools through ‘research’ projects (commonly BIS Innovation Hub staff papers on unconventional policy)
Crisis Deployment: Emergency justifies immediate implementation (‘unprecedented circumstances require unprecedented response’)
Post-Crisis Analysis: Academic papers and official reports document the intervention, normalising it as ‘prudent crisis management’
Standing Facility: What was emergency becomes permanent institutional capacity, available for future activation
Each crisis expands: Discount window → expanded collateral → QE → market-maker-of-last-resort → direct fiscal-monetary coordination. The cumulative effect is revolutionary: complete transfer of economic sovereignty from democratic institutions to the fused technocratic apex.
And that it was the central banks mandate to stop the crisis in the first place doesn’t even factor in. Central bank failure only ever leads to an expanded set of powers.
The fusion doesn’t announce itself. It happens through technocratic institutional structures that blur boundaries:
Debt Management Offices:
Sitting between Treasury and Central Bank, coordinating bond issuance with monetary operationsFinancial Stability Boards:
Where the Central Bank effectively sets the agenda for what constitutes ‘sound’ fiscal policyFiscal Councils:
’Independent’ bodies enforcing central bank-defined sustainability metricsJoint Committees:
Institutionalising continuous coordination between Treasury officials and Central Bank technocrats
Fiscal policy gets reframed from political choice (‘Do we invest in healthcare or cut taxes? What priorities do citizens want?’) to technical problem (‘What’s the debt sustainability trajectory? What maintains market confidence? What’s the credible fiscal path?’). The metrics defining sustainability and credibility come from central bank frameworks and models, not democratic deliberation. The debate moves from parliaments elected democratically to technical committees run by central bank-associated ‘experts’.
Operational Enmeshment:
The central bank’s balance sheet becomes the primary tool for managing government debt:
Asset purchase programs (QE) directly influence the state’s borrowing costs
Central bank becomes government’s largest creditor through sovereign bond holdings
State becomes central bank’s largest counterparty through debt management operations
Their fates operationally fused: Central bank ‘independence’ becomes paradoxical when it holds massive sovereign debt positions and direct influence over borrowing costs
Legal frameworks formalise the fusion through QE indemnities (like HM Treasury’s guarantee of BoE QE losses — the Treasury legally covering any losses on bonds the BoE purchased makes the operational dependence explicit15) and fiscal responsibility rules that constrain parliamentary budget authority.
Thus, ‘In Tandem’ process creates not two separate entities but a single, fused apex:
The Central Bank provides brain and nervous system: sets targets, defines conditions, controls monetary substrate, operates six-rails infrastructure through international networks (BIS, NGFS, Basel Committee)
The Executive Branch provides muscle and legitimacy: conducts spending, signs contracts, uses sovereign power to propagate conditions through Procurement (Rail 6) and regulation
The Legislative Branch is left outside: Parliament’s constitutional authority to debate, appropriate, and set national priorities is hollowed out. The important decisions are made in the fused technocratic apex that operates according to models and indicators, not political platforms or electoral mandates
This is Bernstein’s evolutionary socialism made operational. No one votes for this transfer. No single law announces the change. It happens through thousands of technical memos, committee meetings, ‘independent’ reports, researched in advance by the central banks who stand to gain.
Each step seems logical, a necessary response to complexity. The cumulative effect is revolutionary — the quiet, complete transfer of economic sovereignty from democratic institutions to technocratic apex. While ‘In Tandem’ calls it ‘cooperation’, the UK gilts 2022 episode showed what happens when elected officials try to act without clearing fiscal moves with the central bank first.
The central bank becomes the dominant partner — the apex producer that conditions the state itself. Fiscal policy choices, once the domain of elected representatives, become constrained by technocratic requirements defined by central banks and international financial institutions. Initially only during ‘emergencies’, but eventually the ‘lessons learned’ are progressively integrated.
Conditionality at Three Levels
Access to finance increasingly depends on continuous compliance with predetermined conditions, cascading from sovereigns through corporations to individuals.
Sovereign Level
IMF and World Bank programs impose structural benchmarks as conditions for disbursement — specific policy reforms (privatisation, spending cuts, regulatory changes, tariff free trading) required to receive funding. OECD/G20/FSB peer review creates ‘voluntary’ standards that become binding through market mechanisms — countries that don’t comply face rating downgrades and capital flight.
Conditionality is framed through ethical imperatives: Environmental Justice (carbon targets, renewable quotas), Social Justice (inequality metrics, labor standards), Intergenerational Justice (debt sustainability, infrastructure investment). These frameworks transform economic requirements into moral obligations, making resistance appear unethical.
Ukraine demonstrates the template: IMF programs with comprehensive benchmarks, World Bank Disbursement-Linked Indicators, EU accession requirements, reconstruction funding through conditional mechanisms, Diia digital identity infrastructure. Policy autonomy operates within a framework where survival resources depend on continuous compliance with externally-defined conditions.
Corporate Level
Sustainability-Linked Loans and Bonds tie interest rates to ESG performance. Hit renewable targets → rates decrease; miss targets → rates increase. Cost of capital becomes continuously variable based on compliance.
Index inclusion based on ESG ratings determines access to trillions in investment flows. Supply chain requirements cascade through commercial relationships — fail an audit at tier-3 and the entire chain faces penalties.
Individual Level
CBDC pilots demonstrate transaction-level conditionality: China’s e-CNY with one-week expiration windows and merchant restrictions16, Bahamas Sand Dollar with tiered access and geographic limits17, BIS Innovation Hub Project Rosalind developing API infrastructure where central banks operate as system administrators setting transaction parameters18.
The pattern operates identically across all three levels: comprehensive data collection enables continuous audit, which produces compliance scores, which automatically adjust financial terms or gate access entirely.
The Global Substrate
This operates globally because monetary policy has been harmonised through BIS coordination — exactly what was explicitly called for.
Henry Steele Commager’s ‘Declaration of Interdependence’19 (1975) stated plainly that solving global challenges requires surrendering national monetary sovereignty to coordinated international frameworks. This document which further explicitly calls for a ‘New World Order’ was historically hosted on the Global Interdependence Center website (serving central bankers) on the Federal Reserve Bank of Philadelphia’s website — representing a central bank calling for the monetary policy harmonisation that has since been implemented.
The result is a networked apex structure: nationally, each country has its fused central bank/treasury relationship; globally, these are nodes in a coordinated network (BIS, IMF, FSB, NGFS); operationally, monetary policy is harmonised through the network, then enforced nationally through the six rails.
BIS coordinates capital standards through Basel, climate scenarios through NGFS that member central banks implement nationally, resolution procedures through FSB. IMF enforces harmonised policy through structural adjustment programs. ISO 20022 creates global payment system interoperability enabling real-time compliance checking across borders.
Not all standard-setting occurs at the BIS. IOSCO (securities), IASB/IFRS (accounting), and the European Commission (CSRD, eIDAS) operate independently. However, what converges at central banks is settlement infrastructure (all pipes terminate at CBs), collateral policy (CBs decide what’s eligible), and supervisory authority (CBs oversee systemically important institutions).
Even when standards originate elsewhere, enforcement runs through central bank-supervised infrastructure — making the central banking perimeter the ultimate chokepoint.
The objection ‘this isn’t world government’ is technically correct but substantively misleading. It is government by technical infrastructure which performs governmental functions through technical systems rather than statute.
The Endpoint Trajectory
The current system, where commercial banks create ~97% of money through fractional reserve lending, represents incomplete centralisation. The architectural logic points toward consolidation.
Marx and Engels prescribed in the Communist Manifesto’s fifth plank: ‘Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly’. This can be implemented through ‘positive money’ proposals and retail CBDCs, presented not as revolutionary transformation but as technical modernisation responding to crises, financial stability needs, and payment system efficiency.
What was explicitly communist policy in 1848 gets implemented as ‘capitalist reform’ in the 21st century, justified by technical necessity and moral imperatives (climate action, financial inclusion).
CBDC adoption remains uncertain and faces political resistance. However, this objection misunderstands the architecture:
Wholesale Programmability Delivers Retail Control:
Wholesale tokenisation projects (mBridge, Dunbar, others from BIS Innovation Hub centers) bring programmability to the settlement layer itself. When banks settle through programmable wholesale CBDCs, they can implement retail-level policy rules through their own systems. The bank becomes the policy engine executing central bank parameters — no retail CBDC needed.Existing Rails Already Enforce:
The six rails operate effectively through existing digital payment infrastructure — bank accounts, card networks, payment processors — all supervised by central banks. ESG-linked loan terms, payment screening, account closures, and transaction monitoring already deliver conditional finance without retail CBDCs. Retail CBDCs would complete the architecture through implementing fine-grained control over individual transactions, but conditional control mechanisms operate through existing infrastructure.Stablecoins Are Not an Escape:
The objection that stablecoins (USDT, USDC) or tokenised bank deposits bypass central bank control misunderstands their dependency. Stablecoin issuers hold reserves in the traditional banking system, under central bank supervision. They require banking relationships for fiat on/off-ramps, while the FATF Travel Rule increasingly binds cryptocurrency transactions to identity verification. Stablecoins may relocate transactions to blockchains but they don’t escape the settlement layer or regulatory perimeter that central banks control.
The direction is clear even if the retail endpoint timeline is uncertain: more programmability, tighter coordination between central banks, integration of climate scenarios into policy creating default credit steering.
The Philosophical Implication
The six rails operationalise a fundamental shift from Liberal Humanism (valuing individual choice and democratic deliberation) to what Yuval Noah Harari terms ’Dataism’20 (viewing optimisation as calculable algorithmically).
The rails translate this philosophically: Rail 5 (Data) captures behavior, Rail 4 (Audit) evaluates compliance, Rail 2 (Finance) automatically adjusts access. The closed loop — measure, compare, actuate — runs continuously without human judgment. Instead of parliament debating whether to fund a coal plant, the system’s carbon metrics (NGFS scenarios, ESG ratings) make financing prohibitively expensive through Rail 5. No debate occurs. The infrastructure simply executes the ‘correct’ decision automatically with limited possibility of appeal.
Before any democratic process begins, technocratic frameworks (Basel standards, ISSB disclosures, SDG indicators) have predetermined which choices are financially viable. Democracy becomes theater — citizens vote on how to implement what the system has already determined is necessary.
What replaces democracy is the system itself: The ‘good’ is pre-defined as predetermined targets programmed into KPIs (Net Zero, ESG metrics, SDG indicators), set by ‘expert’ bodies (UN, OECD, BIS, ISO, IIASA) operating entirely outside democratic capacity, with accountability practically non-existing. Disagreement becomes deviance — you’re not an opponent to be debated but a non-compliant node to be corrected or excluded through automated financial penalties.
You don’t have to be ‘useless’ to be excluded — you simply have to be non-compliant. Conditional relevance replaces absolute exclusion: you can participate, but only by continuously demonstrating compliance with externally-defined conditions.
Conclusion: The Structural Reality
The evidence is straightforward: Settlement terminate at central bank balance sheets. Global financial rulebooks are coordinated in the BIS ecosystem. Balance sheet tools steer portfolios and sovereign finance without legislation. Crisis responses expand central bank scope and formalise fiscal-monetary fusion. Conditional finance operates at sovereign, corporate, and individual levels. Monetary harmonization makes this global and simultaneous.
Because settlement, collateral, and credit creation sit with central banks, Finance remains the top layer even when secondary actuators bite. Platform deplatforming, identity lockouts, and procurement exclusions can deny access — but only central banks control the pricing, eligibility, and settlement mechanisms that make the entire adaptive management system function continuously across the economy.
The BIS-centered central bank network, with apex nodes like the Bank of England and Federal Reserve, constitutes the apex of contemporary global governance — government by infrastructure rather than statute.
This represents documented institutional development following architectural logic. The infrastructure is being built openly. The intellectual justifications are published. The ‘moral’ frameworks are widely accepted.
What 20th century systems theorists could only model has become 21st century operational reality: a globally-scaled, hierarchically-organised, automatically-enforced system of conditional economic participation, controlled through programmable money, implemented through technical infrastructure, justified by moral necessity, and operating above democratic accountability.
This is government by infrastructure. Central banks, coordinating through the BIS, control its cybernetic actuator — making them the apex. And should you fully accept this trajectory, perhaps you will be picked as a ‘stakeholder’ to ‘participate’ in the future ‘Inclusive Capitalism’.
But perhaps an in-depth technical analysis isn’t even required; perhaps the fact that much of the Western world was teetering on the brink of economic collapse in 2009–12 is evidence enough.
Because had BIS-connected central banks not opened the spigots in early 2020 — enabling broad monetisation of deficits across the West — the COVID-19 lockdowns, amid spiking interest rates, would almost certainly have become unaffordable almost immediately, triggering yet another debt crisis in the troubled Club Med economies.
Consequently, regardless of whther you choose the scenic path of technical analysis or the straight path of simple logic — all roads lead to Basel.
Inspired stuff
I wrote a song (rap) with ideas Re banks in 2021. It's aged well
https://m.youtube.com/watch?v=mmAhPm8deMs&pp=ygUTTW9jayB0aGUgc2V0dXAgc29uZw%3D%3D