April 1, 2007
Neo Liberalism revitalizes Adam Smith and sends him on a world cruise. Friedrich von Hayek and his Chicago School students, including Milton Friedman, resurrected the 1776 author of “The Wealth of Nations” and eventually terminated, starting about 1970, thirty years of Keynesian/New Deal progress to bring on the past 35 years of retrograde re-concentration of wealth. “But the economy’s booming! The stock market is doing great.” The rich, their sycophantic wholly owned economists, CEOs and politicians are fat but for most of US that’s a lie. We aren’t doing well at all. Though they’re doing great, they’ve stupidly sown the seeds of their own destruction. To see the truth of the fantastic, magic bean economy, look at the size of your debt. In fact, look at the debt in general, which has grown from that germ. Most of you are starting to understand the finite nature of the market, especially w.r.t. the real estate boom. It’s impossible for everyone to have more than average. It’s even more difficult for US all to be rich investors. Grown ups should not believe in childish fairy tales. The story can’t end that way . . . in the real world.
The pursuits of profits [on investments] predicated on cheap labor are the seeds of destruction. Optimism’s not inspired, when it’s noted that China’s controls our destiny through their production of the goods we need to live and investment in our governments deficit spending. They’re also getting our money back to US for another round of consumer spending by buying our bundled mortgages and nation’s infrastructure. And we pay the interest, on the money borrowed in our name, and more when it’s loaned to US at a profit. This is an economic time bomb. It will destroy US. Further, even without the outsourcing and looting of pension funds of the displaced workers at home through fraudulent corporate bankruptcies, the pyramid scheme nature of banking, insurance and finance, in short, of capitalism, like any Ponzi, is unsustainable. All usury, all abstract profits, are imaginary and inflationary. They are an attempt to create perpetual motion. All the evidence that’s needed to know this is inherent in the understanding of equilibrium.
We have a thirteen trillion dollar economy. We have an 80% service economy. That means that eighty percent of the activities, much of which are abstract, cause real goods to be consumed, though they produce none themselves. If twenty percent of the economy is productive, it must support the rest. We can’t borrow money to offset the trade deficit forever. The money we produce, by the service economy, has no more real goods to represent it, than those that we make in America. Eighty percent of the $13 trillion is inflation of the money supply by non productive services. It’s dependent for its value on the twenty percent of activity that produces the real goods, in America, that we consume or trade. Our money and economy has one fifth of the value it claims. The service economy is grossly dissipative. It has upset the real economic equilibrium of production and consumption by workers. Even the Neo liberal colonial violence and raiding will not sustain US. [As if it was intended to work for more than a few elites anyway.] Look around at the violent reaction against the neo-con’s neo-colonial economic empire fantasy. But maybe they’ll drop the big one and signal Armageddon and the rapture. What? Me worry?!
In the beginning is the “economic liberalism” of Adam Smith. The present end of Capitalism is Neoliberalism, which is really neo colonialism that relies more on “free trade” treaties, banking and finance and less on guns and religion to concentrate the wealth in a few elite hands, at the expense of nation communities both domestic and foreign. Take a hard look at Friedrich von Hayek/Milton Friedman’s neoliberal resurrection of Adam Smiths “free market.” See the growing poverty in the U.S. and Latin America as XNATs [multi-national corporations] monopolize the people’s resources, whose privatization was dictated as a condition of World Bank loans. As with American investors, such as those in Halliburton, a few rich elites pocket the cash and the majority of the people pay higher prices and receive lower wages. Look at the subsistence farmers, who’ve survived for thousands of years in the valleys of India’s rivers, when they’re displaced and moved into poverty in the cities to make way for an IMF funded dam. See the former residents who can no longer afford water from their river, much less the hydroelectric power generated.
Compare neoliberal economic tyranny to slavery to the production of wealth for the rich. There’s no essential way to differentiate the two for most of US. In both cases, many do the work and a few take the profit. The same fool who claims, “live free or die” for his motto, turns and kowtows to the boss and obsequiously begs for the paycheck that represents a fraction of the value of his work. Each succeeding decade sees real wages decline for the majority but we don’t complain that our work doesn’t sufficiently benefit US, as we should. In America we’re pacified with cheap plastic junk and if we notice that we must work much harder and have two incomes to buy 80 percent of what one job could command of the low quality baubles in 1970, our masters point out how much worse it is for third world victims of the neoliberal [World Bank/IMF global corporate empire] hegemony. Few of US notice the implied threat or that it will be realized no matter what we say or do. You’ll get the lump of coal in your stocking, even if you’ve been a very good little girl or boy.
The propaganda is upbeat wherever and in whatever language it appears. Negative reactions are ignored or responsibility is diverted. Riots for decent wages and working conditions in China result in concessions [which will raise the prices at Walmart] and beefed up police [which will help to keep down the prices at Walmart] but we’ll be assured that the goods we buy are not extracted from the suffering of the sweat shop workers. How would we know anyway? Such distasteful happenings aren’t reported in the U.S. (except occasionally for propaganda by a department that’s unwittingly at cross purposes with itself) where we’ve become dependent on the goods the Chinese produce. In India, rural unrest is blamed on Maoists, the proponents of a thoroughly demonized philosophy. In Friedman/Pinochet’s fascist neoliberal conquered Chile, “‘It became the day of the young criminal,’ Deputy Interior Minister Felipe Harboe said. . . . The violence was unacceptable, Mr Harboe said, adding that the authorities would be pursuing parents to pay for the damage caused by their children.” 3/30/07 BBC Notice the shifting of blame for the hardships caused by the debt owed the corporate empire’s World Bank onto the parents for not emasculating and stupefying their children, who have demonstrated enough balls and brains to protest their victimization by the rich and their middle class sellouts.
Americans are, for the most part, so completely fooled that, if we even know of Adam Smith, we are totally taken in by his great lie. The fraudulent pyramid scheme economy, which impoverishes most of US for the benefit of a few, is considered a positive good.
“. . . In 1776, British economist Adam Smith published his book, The Wealth of Nations. Adam Smith, who some regard as the father of modern free market capitalism . . .
“Because of the Great Depression in the 1930s, an economist, John Maynard Keynes, suggested that regulation and government intervention was actually needed in order to provide more equity in development. This led to the ‘Keynesian’ model of development and after World War II formed the foundation for the rebuilding of the U.S.-European-centered international economic system. The Marshall Plan for Europe helped reconstruct it and the European nations saw the benefits of social provisions such as health, education and so on, as did the U.S. under President Roosevelt’s New Deal.
“In fact, the Bretton Woods Institutions (the International Monetary Fund (IMF) and World Bank) were actually designed with Keynesian policies in mind; to help provide international regulation and control of capital. . . .
“However, as elites and corporations saw their profits diminish with this equalizing effect, economic liberalism was revived, hence the term ‘neoliberalism’. Except, that this new form was not just limited to national boundaries, but instead was to apply to international economics as well. Starting from the University of Chicago with the philosopher-economist Friedrich von Hayek and his students such as Milton Friedman, the ideology of neoliberalism was pushed very thoroughly around the world. . . .” Free Trade and Globalization
The article quoted above does a great job of tracing the roots of capitalism, especially from the 18th century and Adam Smith. One can easily infer the preservation of the power of the royal aristocracy and their complicity with the capitalists, who ultimately emerged at the top of the heap. The only thing that really changed, with the introduction of the “free market,” is the percentage of the population who had free and independent livelihoods on family farms. Their numbers decreased dramatically, as we grew dependent on technology and progress moderated to serve the profit of the rich investor/capitalists. We lost power, while the elites who had too much already gained even more. Likewise it seems to have undone the American Revolution, which was largely a reaction to the economic tyranny of King and peers. The oppressive regime, from whom we won our freedom, seems only to have been replaced by a “neo aristocracy,” which sprang up with the emerging alpha capitalists at the turn of the twentieth century and has been fixed, with small variation over time, by immortal corporate personhood and inheritance. Somewhat subdued by the failure of the corporatist states of Mussolini and Hitler and mitigated by the New Deal of FDR, our majestic rulers have reasserted themselves as neo liberals and the even less enlightened neo cons.
The Keynesian balancing of the economic equilibrium (the disturbance of which had brought on the Great Depression and in part WWII) by the equalizing effects of non predatory reconstruction loans and sharing the wealth with the workers who produced it, was denounced as immoral by conservative neo-aristocrats, whose principles demand that all profit and wealth is to be hoarded by themselves. The social progress wrought by the redistributions through the action of labor unions and the monetary interventions for post war reconstruction were countered by McCarthyism and the corruption of Bretton Woods institutions to the neoliberal economic tyranny.
The progress in collective bargaining by workers had expanded the middle class and the successful repression of the labor movement, starting in the Nixon years, began the general decline, though the Chicago School still claims we’re doing great. That’s because they now have most of the money but haven’t noticed that the manipulations that they’ve done to get it - the conversion of the economy to eighty percent service; the growth of debt and usurious abstractions - have made the money worthless. Not that they’d care, as long as their stash in the Cayman Islands is secure. Anyway, they have so much more than a fair share that what they’ve gained by the inflation buys more of the products than the more valuable but lesser fraction of the money, which they had before the expanded fraud. It’s all in the percentages.
Though they’ve worked to increase general suffering among decent people, for the individual gain of a few parasites, the Chicago School doesn’t teach it that way. They tell US we have freedom, choice and opportunity, in a “meritocracy.” They lie. That’s neither the nature of capitalism nor the neoliberal reality that has come forth from their absurd theory. Only the rich are free or have any real choice. And since the capitalists are still with US, noone has gotten what they deserve.
The design and purpose of capitalism, including the banking and finance that substantiate the concept, is to concentrate wealth. Free trade and finance must have been an easy sell by Adam Smith to an obsolete feudal aristocracy, which was holding on to power through the constraint to increase their wealth that was placed on mercantilism, during the 15th, 16th and 17th centuries. The introduction of the concept of “free trade” created the illusion of the displacement of the aristocracy. They controlled the economy yet, by virtue of their private property, which was most of the land and goods that had been produced from or on it. They also had most of the money that represented the wealth, which they’d gained both by traditional means and by usuries from the finance of merchants, traders and early manufacturers. Feudalism had concentrated almost all land, goods and, therefore, economic power in the hands of the royal aristocracy. When the merchants and traders of the Renaissance began to emerge from the common population to establish mercantilism, they could only go to the elite rulers to finance their entrepreneurship. Startup, breaking into business, takes more than a good idea and hard work.
After all, if you pull on your bootstraps forever, you’ll never get off the ground. The only way to get a start, without the aid of the monied owners and payment of usuries to that established power, is to steal it. If you steal from the establishment, the elites will react violently, with the full force of the police, courts and military that they are or own to this day. If you steal from the people, the rulers will not tolerate your poaching on their territory, unless you’ve paid off the rich, with usuries or other extortions or bribes, or you’ve managed to become a strong enough force that they don’t care to pay the price to subdue you. Gangsters who keep a low profile and grow up under the radar, and who don’t threaten the existing extortions and frauds of the elites, may become part of the establishment themselves.
With hard work and ingenuity you can create a comfortable existence for yourself. To get rich, though, others must work for you to make you so. You cannot get rich by your own hard work. It’s mathematically impossible to do so. The work of others to produce your wealth may not be direct or apparent. But it is part of any profligately successful formula. It must be so, unless you have, by yourself with no one’s help, developed the resources, transmuted them into usable materials, designed and fabricated all your tools, appliances, devices, clothing, shelter etc. and have grown all your own food, compounded your own medicines, generated your own energy, in short, lived independent of any community whatsoever. If you’ve traded for anything, the work of others is implied. If you bartered only with items that your work produced, you may deduct them from your debt to the community. And that’s the truth. We’re all indebted to our community. Without it we could not live. Most of US recognize that debt by contributing our work to the common well being. But a few of US, the rich, take much more than they give, and are a burden on the work the rest of US do for them.
The percentage of the population who are rich at any given time, and therefore the percentage of the community’s wealth that each of them owns and controls, waxes and wanes. The theories of Adam Smith and the neoliberalism of today are the pitch by which dissipative economic disequilibrium is sold to the general public, and resold each time it fails, as it must. The dogma also attempts to explain the concentration mechanism by which the number of rich are reduced and poverty increases in the waning part of the business cycle, as “market corrections.” The cure for this cycle of progress and re-impoverishment by which we suffer so that elites may hoard the wealth we produce is to know and act on the truth.
The debt slavery of America and the nations of the world to the global corporate empire is the reality of the 21rst century that we must face. The pretension of freedom, choice, opportunity and meritocracy are propagandized so that the wealthy elites may continue to burden our community with their support. They even patronizingly claim that we are dependent on them. The truth is: we don’t need them. We’re better off without them. And with just minor changes to the tax law that will lower taxes1 for the great majority of US, we can be rid of the useless parasites that afflict the Human Race and who threaten our survival by their existence.
1 - the offer is valid only for the duration of the reform, though the reduction in debt and interest on the federal budget may allow permanent tax relief for the majority, who have moderate incomes. In any case, it will be an improvement over today’s system of robbing the poor and middle classes to give our tax money to the rich and to their immortal abominations, the corporations.
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