This is Not Democracy

There are no genuine democratic countries in the world today. ‘America’ has been hijacked by the cabalists and ‘democracy’ there is like a deadly virus they hope to spread everywhere. It is hard to determine when, in a long time, in human history there existed any genuine Democracy. The ‘democracy’ of today is but a sham in which people are enslaved to serving the diktats of OT. The cabalists have come close to winning their game, but they will not as many of us have started to awaken to their activities.

The cabal’s 9-11 attacks on America was a replay of creating similar conditions that allowed the Nazi’s an excuse to push for fascist control of Germany. The cabal ambitiously combined the 1933 burning of the Reichstag (German parliament) and the 1938 Kristallnacht in an attempt to assert control over the world’s sole superpower to initiate their agenda of an old world order of domination (typically these bozos call it a ‘new’ world order -- it’s the virus hiding itself in doublespeak).

Do some research on America’s so-called Patriot Act instigated conveniently by the 9- 11 ‘terror’/Terrror attacks, and what the Nazi’s initiated in those fateful years of the 1930s. The papers of the day in Germany described the attack on the Reichstag as a “most monstrous act of terrorism”. The fire was blamed on Communists whom the Nazi’s wanted to counter so as to gain a parliamentary majority and thereby start their plans for fascist domination of Germany. So the official account of the Reichstag burning played along the terrorist lines to stoke up fear among Germans and send them into the arms of the Nazis (italics mine):

“The burning of the Reichstag was intended to be the signal for a bloody uprising and civil war. Large-scale pillaging in Berlin was planned.... It has been determined that ... throughout Germany acts of terrorism were to begin against prominent individuals, against private property, against the lives and safety of the peaceful population, and general civil war was to be unleashed....” (this and the German newspaper quote above are from the Wikipedia)

Hitler, who was just made chancellor weeks before the fire, managed to coerce through the Reichstag Fire Decree which effectively curbed most civil liberties of the Weimar constitution, and the preamble of the act stated that (bold and italics mine):

“On the basis of Article 48 paragraph 2 of the Constitution of the German Reich, the following is ordered in defense against Communist state-endangering acts of violence:

Articles 114, 115, 117, 118, 123, 124 and 153 of the Constitution of the German Reich are suspended until further notice. It is therefore permissible to restrict the rights of personal freedom [habeas corpus], freedom of opinion, including the freedom of the press, the freedom to organize and assemble, the privacy of postal, telegraphic and telephonic communications. Warrants for House searches, orders for confiscations as well as restrictions on property, are also permissible beyond the legal limits otherwise prescribed.” (taken from Wikipedia)

Does this have a familiar ring in post- 9-11 ‘America’?

But this was the tip of the iceberg: what Hitler and his hooligans were aiming for was to get their Enabling Act through which would allow him and his chief thugs to make dictatorial laws without the approval of the Reichstag, thereby establishing a fascist state.

With the Enabling Act passed, Hitler would be given the control that developed into his dictatorial powers as he could do what he wanted through decrees that bypassed the Reichstag nor his having to discuss anything with other political players.

The 9-11 attacks were not a terror attack but a Terror attack by OT. It was hoped that this act of high treason would start the effective move of America away from civil liberties and the total undermining of the US Constitution and Bill of Rights (whatever is already left of it). This would place the cabalists in control of the world’s sole superpower and to do as they pleased anywhere. The FEMA CCs which thrive on the term ‘emergency’ -- which was what the Nazis also used to justify their tyrannical takeover of Germany -- is the logical extension of the cabal’s attempt to control things thereby giving them the leeway to target those they would prefer to get rid off/contain (including masses of people who could protest the eradication of their civil liberties).

Then there was the Kristallnacht of 1938. With the murder of a German diplomat in Paris that year by a Jewish youth (as reprisal to the over night expulsion by Hitler of thousands of Polish born Jews from Germany), the Nazis instigated a nation wide anti-Jewish pogrom. Jewish homes and businesses were ransacked and destroyed in the thousands which not only resulted in deaths but the start of mass deportation of Jews and other ‘undesirables’ to CCs. The ‘Night of Broken Glass’ was the staged vendetta of the Nazis against their opponents. It was also the first steps towards all the horrors associated with the Nazis and terrors of the CCs.

The transfer of people to CCs and the systematic mass destruction of human beings was all part of an organized wave of terror that merged with “forcible coordination’ as part of the overall concept of Terror.

This ideology of Terror is precisely what the cabalists of today also want to enhance throughout the world. Create the materiel you need for the material world and force a planned obsolescence of culling people so that the ‘wealth’ of plunder that comes from war and from the formulation of so-called lebensraum (Nazi thought is very much alive today) ensuring economic/political incursions into the sovereignty of other states for one group which results in the death/slavery of another. Zero-sum all the way.

So the current cabalists in a fit of ambition and, what to them must appear as use of the imagination, decided to combine the Reichstag burning and Kristallnacht through pulling off the 9-11 Terror attack. They launched perhaps the mother of all false flag operations in recent times to blame the destruction of the twin towers in New York on terror groups (who would form the kernel of the ‘enemy’s’ identity, that is anyone who is Muslim); this was the Reichstage fire aspect of things except that the cabal’s work that September day was far more violent.

The cabal ambitiously used 9-11 as a Kristallnacht too and (since Americans were also killed in the attacks) as a platform for reprisal against not just certain targets in the Muslim world (the nutcake Saddam being a prime example), but to initiate instability world wide through the move into Afghanistan and raising the general ire of Christians and Muslims around the world who saw this more as an extension of the old drawn out drama from the Crusades of yesteryear.

All this was dissonant music to cabal’s ear as spreading instability and creating a scenario of divide and conquer kept all of us even closer to the ground with faces shoved into the troughs of not only daily survival, but now fear, anxiety, loathing and anger against one another. Yet the cabalists wanted to go the whole hog this time, so they ‘imaginatively’ tried to go for the CC idea of their revived Nazi ideology by raising ethnic/religious issues within America.

Not long after 9-11 the Bush appointed Peter Kirsanow head of the U.S. Commission on Civil Rights nicely stated that “if there’s another terrorist attack and if it’s from a certain ethnic community or certain ethnicities that the terrorists are from, you can forget about civil rights in this country.”

Kirsanow eloquently added that if there was yet another attack, there could possibly be internment camps (CCs) such as those built to hold Japanese Americans in World War II. But the man was on a roll, so he had to continue with, “Not too many people will be crying in their beer if there are more detentions, more stops, more profiling…There will be a groundswell of public opinion to banish civil rights.” Hell, yeah. (Quote taken from: here)

I ask you, not so bloody minded gentle reader, would a democracy (forget Democracy) have created CCs for its Japanese American citizens many of whom were just decent patriotic folk anyway?

Then just in case you thought this was all just a…coincidence with 1930s Germany, please bear in mind that there were deportations of Muslims, seizures and interrogations of American Muslims by the FBI, as well as thousands of American Muslims being told that their jobs in the US, particularly within the civil service couldn’t be guaranteed now that we know conclusively (it would appear) that it was a bunch of Muslims who did 9-11.

All this frenzied activity sounds a trifle, uhm,…terroristic upon ordinary people, won’t you say?

To think that some outstanding universities and institutes of learning exist in America – but wait, Germany had even more to offer like Beethoven, Goethe, Kant, Marx (ah, the fella was Jewish) – yet, all decent and rational thought was suspended in subservience to “forcible coordination”.

But let us not underestimate the cabalists; if you’re visionary you go all the way, so the cads came up with plans for a subsidiary of Halliburton KBR to be given a US$385 million contract by the (Right Honourable) Department of Homeland Security to build detention centres in America. These centres might be used for illegal immigrants, to house victims of disasters like Hurricane Katrina, or perhaps those who start protesting against the cabal if ever their plans were seen through (part of this could stem from riots breaking out due to the collapse of the cabalist capitalist economy).

So the whole idea of the CCs apart from taking care of ‘undesirables’ was to also boost the gDp by increasing expenditure on camps which would go to companies run by the cabal (yup, them Halliburton guys are it). This attitude of cannibalization and going into any part of the world using force or threats and getting whatever materiel needed to expand gDp, and to exercise control and spread ‘American democracy’ or “forcible coordination” is truly the bedrock of much ‘American’ foreign and trade policy today.

This is the zero-sum winner take all and death-and-damnation-to-all-else attitude that is also the skull and bones foundation on which all feudal and capitalist systems are based. The whole idea of such an approach is to ensure that humans see their existence as nothing more that an animated pile of dust that returns to the ashes that issues forth from crematoriums.

Our entire economic edifice is built on such a system at the moment that fits in with the cabal’s way of thinking. Just go through all the quotes from Sofsky mentioned here and you will see that the Terror promoted in the camps, and the sense of constant surveillance and control, fear and anxiety that such a system promotes is the extension of what the Nazis did in the 1930s to establish their OT.

Right till today, through political, economic and social control with the triumph of the will of materialism the cabal hoped to destroy anything of a spiritual nature in humans by creating their ultimate goal: the world as a concentration camp writ large. But they are not going to be able to do it as we have started to finally wise up.

It is almost a scenario out of H.P. Lovecraft where the cabal are like beings from another planet unleashing everything that we know is inhuman and inhumane, as they turn our world upside down. And it is no surprise that the Nazi idea of a ‘master race’, and many other practices and symbols used by them, have occult roots. Do some research to see how they used dark forces that seem to be the underlying template of Nazi ideology.

And in case there are still those who are recalcitrant in their beliefs that ‘America’ is a democracy and that there is Democracy on planet earth, please remind yourself about what took place at the Abu Ghraib and Guantanamo camps, and ponder if that is reflective of democracy. Whatever the excuses or rationalizations, the horrors of CCs worldwide throughout history may project many things, but they are not representations of Democracy. If you say that such instances cannot be helped because of the way things are, the response is: precisely, there is no democracy or Democracy today, and we have not in living memory have had any actual experience of it.

Delusional Democracy

What we call ‘democracy’ today is nothing close to any idea, much less an ideal, of Democracy that a decent person would like to see in the world. How can there be Democracy in a world that is at war with itself, under the constant threat of ‘terror’, real and imagined, and the sway of Terror (real, not imagined). We are stuck in a world where people are burdened by debt and meaningless work cycles of ‘productivity’ that seem to get us nowhere (for the vast majority) within an economic system of greed, exploitation and total non-sustainability. How can a world scenario like this ever give rise to Democracy?

What of the current system in so-called western ‘democracies’? By and large that system is represented by the image above this section. We have less developed countries (yes, they are responsible for their own problems too) which have been consistently exploited and kept in debt by inequality and coercion as represented by most world bodies of which the WTO and World Bank are prime examples. The commodities from poorer states are made through cheap and mercilessly exploited labour to support a silly and self indulgent lifestyle of people too busy to consider the morality of their actions, usually spending their leisure welded to their TVs and engaged in other mind and soul numbing activities like shopping for what you don’t need (but told is necessary by advertising and marketing), and voting in people who are beholden to big business and banking cartels.

Dwight Eisenhower’s farewell speech at the White House had the iconic reference to the military-industrial complex that is behind ‘America’. But some research will show that Eisenhower had wanted to mention Congress too, which would have been the devastatingly accurate statement that ‘democratic America’ was beholden to a military-industrial-congressional complex, and so it is (the US Federal Reserve was the missing link in the chain).

Kennedy famously talked about the secret government and the reprehensible idea of government by secrecy. He had plans to stop the US involvement in the burgeoning conflict in Vietnam as well as introduce a hard currency backed by precious metals (contra the useless fiat money of the US Fed) which were to be called US Treasury notes. These hard currency notes were conveniently recalled from circulation soon after JFK’s murder. It is no surprise, in retrospect, that he was eliminated before he could do further harm to the ‘democratic’ interests controlling ‘America’.

It is also no secret that Kennedy said after the CIA's Bay of Pigs fiasco that he would "smash the CIA into a thousand pieces and scatter it to the winds". There was no love lost between him and the cabal.

The entire structure of the state in so many ‘democracies’ is designed to protect those who run the corporate, financial, and war mongering apparatuses to keep the so-called voters mind-numbed through fear/anxiety saturation using unending world wide conflicts, the daily grind of work and constant debt/mortgage through an economic flow that promotes crazed credit expansion through borrowing beyond what you can pay. This entire rotten and crumbling ‘golden calf’ is supported gleefully by the media so that it can also sustain itself and the fluff work of not reporting the actual state of affairs of the world.

Sure, this is part of the actual state of affairs of the world: ‘a bomb has gone off in…”, “China has recalled its envoy from…”, “the newest strain of the H1N1 virus has led to the WHO asking…”. The second half of the news may include: “Tiger Woods says he’s sorry…again…”, “Stephen Hawking has decided that God doesn’t exist…”, “Is the hair of XYZ celebrity for real…?”

What you don’t hear, because it would throw the present disgraceful and immoral morass of a world economic system into its widely deserved grave, is “Steps to reconfigure the entire world banking systems are being unveiled, experts finally get off their a**e* to discuss how…”, “More and more Americans and people all over the world are demanding a reinvestigation as to whether the September 11^th attacks were a false flag operation – coming up after the break…other examples of possible false flag operations by major governments of the world…”, and how a couple strive to survive in these times through forming a cooperative with their close friends.

There can be more human interest stories that show how people overcome adversity or how the human spirit shines through normal daily activities, but the main items always play into the cabal’s hands to keep the world hostage to a self created drama of violence and mayhem. Of course, disasters must be covered and people given advisories etc about trouble spots, but the entire mainstream media is mostly aping and competing with one another to see who can be the most bloody minded in its reporting: and this poppycock reporting is given the misnomer journalism (this offers serious competition as to who are the real bozos).

More people, including those who are asserting their discernment again in the US, have come to realize that most of the characters they vote into political office are serving interests other than that of the people. So many politicians in the sole superpower on earth tend to openly support the cabalists monstrous structure of deceit, greed, exploitation and violence.

How much longer is it going to be before people across the globe take back their power and the planet? We are indeed like the prisoners in Plato’s ‘Allegory of the Cave’ from his great work, The Republic. In his famous analogy, Plato explains how people are chained into a certain direction facing the wall of a cave and made to believe the shadows cast on it from objects and light behind them are real. From time to time, someone from the outside of the cave comes in and breaks a prisoner free, and drags him out kicking and screaming (he’s unwilling as he prefers his comfort zone of indoctrinated ‘truth’) to see the world outside.

There is pain of adjustment to the eyes as the newly freed prisoner turns his focus to the world outside of the cave and sees an incredible vista filled with the light of the sun and the objects as they are rather than their shadows. He rushes back to tell his fellow prisoners about this, and they of course think he is bonkers, and start to regard his claims as a threat to their comfort zone engendered by the slavery to the puppet masters casting shadows on the wall. Sometimes the prisoners are so incensed by the ‘nonsense’ of the guy who came back to help free them that they would rather kill him than face the truth about the false world they live in.

It is not that difficult to think of some spiritual and other leaders who have been murdered because they tried to do the same. The cabalists are the shadow masters who operate away from light and transparency; they thrive with cloaks and daggers. So many of us are still prisoners in the cave. But we can still make the journey out together with courage and effort and with the help of those who have slipped out of the cave – thinking through their ideas like those of Plato and Kant; heeding the examples like that of Gandhi, Mandela and Mother Theresa of Calcutta; and observing the leadership of some like the Brothers Kennedy.

We have to leave the shadow play behind on the wall of illusion and take on the difficult task and challenge of breaking free from what is considered ‘normalcy’. Our very survival and that of the planet rests on our forcing ourselves away from the delusional images we are coerced to watch on the wall of the cave (think mainstream media) glorifying fears, anxiety, violence and excessive self indulgence.

We have been force fed a homogenized genetically modified murderous diet to convince us that the world we live in is one of despair and that we are mainly material and negative beings who need control and who only can end up as a handful of dust. But this is where the cabal has seriously miscalculated. Because when the human species starts to wake up, it cannot be stopped, and we can all -- if we work collectively on this -- make it up the slope from the innards of the cave: back into the light from which all life originates.

What Needs to be Done

We have to throw away preconceptions and what we’ve been indoctrinated with from birth through most of our adulthood – that we are not spiritual beings and that material needs can never be met if we prioritize our lives by giving equal weight to our material and spiritual needs. Let each person decide for themselves who reads this what being a spiritual being means for them, and see if by extension some of the points raised below includes what is needed to provide for our material well being and spiritual growth thereby creating a balanced and sustainable world in which war, poverty and the slave-type labour of our working world imbued with “forcible coordination” can be finally eradicated.

We would be looking to achieve:

1. Move away from the largely capitalist driven mind set that growth = gDp which means mainly a monetary measurement for what is economic growth. With the premise that we are spiritual beings first who happen to have physical bodies that need support, we then need a measurement of growth that reflects this as part of our well being. We take the quality of life into serious consideration, not just the quantitative aspect of things. Some of these ideas have been explored in earlier posts at this site

2. That all living things should be respected including the Earth which is clearly a living entity. The Earth is alive because no life can be supported, nor would evolution occur, if the planet is but a large pile of dust. Life comes from life, not death-like inert matter despite the bizarre ideas of those who claim to be scientists (who are in fact promoters of occult beliefs that there are mysterious forces floating out there like ‘gravity’ that just happen to conveniently arrange themselves into ‘natural laws’). If the Earth is a living entity, then we must have a measurement of growth that respects this and includes this notion of protecting and enhancing its eco-systems thereby ensuring the survival of our own economic and social eco-systems, through ethical, responsible and sustainable living and production

3. This means channeling resources away from war and destruction (contra the aim of the cabalists) into positive ideas and green technology to forge a new way of energy creation, productive activities, and commodity exchange throughout the planet among different communities/societies/states. Some resources will be kept for security needs but if war can be lessened and the cabalists taken to task, peace can takeover the planet

4. End the idea of separation through language, religion and race and see the Oneness of all life. Whatever we do bear in mind the golden rule of doing unto others what we want others to do unto us: this implies a system of shared responsibility, tolerance, understanding, mutual support, help and respect – in a word, reciprocity

5. Reciprocity would entail a just and fair economic and political system which will lead us closer to the citizen empowerment that can help form the base and driving force that will help us not only recreate what Democracy means, but help us to try and finally realize a democratic system of citizen involvement, responsibility and consultation in local and national governance

6. Not to be sidetracked by the confusion that rights mean rabid individualism at all cost. All rights imply the duties of respecting the rights of everyone, that is, rights operate within the context of our duties to one another. For unless we have a duty towards others, or reciprocity, how on earth do we have a right to anything since nobody has a duty to respect the rights we claim for ourselves

7. Recognize the fact that we are co-creators of our world and reality. That every invention and commodity we bring out should reflect this for the betterment and highest good of all

8. A system of smaller and manageable businesses and economic enterprises that reflect a community base form (which can cross borders and will not be multi-nationals but multi-communals). No shareholders except those who are of the businesses and these entities, as far as possible, should be owned by all who are of the enterprise and have a transparent system of profit sharing that ensures growth (in a manageable way) and sustainability of the enterprise and all who work for it. Profit will be a term that will belong to the past where a win-lose scenario is envisaged. We are going here for a win-win situation at all times as far as is possible and one of sustainability

9. The complete reinvention and rejuvenation of the world financial and banking scene with community banks taking a leading role. This would work in tandem with the return to hard currency backed by gold and precious metals for all countries thereby giving real value for money

10. That money is seen as a resource that can be re-cycled back as donations and trusts after the death of mega wealthy individuals (e.g., Warren Buffet, Bill Gates who have decided so) to help the underprivileged and raise environmental consciousness

11. Have healthy competition that involves cooperation and collaboration among all towards support for all life as far as possible as the underlying principle of growth, not the destructive kind of competition that hinges on mindless profitability and unbridled exploitation, or zero-sum situations

12. The realization that the world is abundant in what it has to offer us if we channel our learning, science, technology and natural intelligence, not to mention common sense, to come up with ways to produce what we need to support us best we can while giving back to the Earth and maintaining the natural balance of its diverse and miraculous ecosystems

13. That we see ourselves mainly as caretakers of the Earth and caregivers to one another so that our education system starts with these premises and builds societal, regional, international and global responsibility towards one another. So we start with the initial conditions of education with the children outside of ‘the cave’ and get them used to the light soonest – they don’t need to be taught the shadow play we were stuck with but the way of light which is working with one another so that we all gain and benefit

14. A new and responsible media that highlights what is positive, what works for the well being of all and what brings us forward boldly into the new paradigm of getting things right. The so-called bad news will still be there, but balance it for what it is…the aberration in a world that is growing up and maturing into civility. This takes the sting away from those who remain from the cabal who may want to re-assert the old destructive ways

15. That the practice of calming and breathing exercises, meditation and connection to nature be a common aspect of life in schools and the work places. This would be the start of increasing trust, goodwill and even high work output among people. With fair and decent remuneration all round (as opposed to furthering excess and indecently high salaries), the daily work world can be transformed into one that a person can look forward and contribute to willingly and purposively

16. A work/economic paradigm that is successful as it is even joyful because what is being provided and created is for the benefit and highest good of all involved and the world at large

17. Understand and respect the sanctity of all life

Naturally, the nay-sayers will claim that this is not possible in many instances because of the ‘way things are’ (a motto of the cabal) and ‘human nature’ (the cynical view of which the cabal hopes will continue). If that is the case, then these people who claim this are supporters of a dismal determinism where there is clearly no free will; in which case they are already and always will be slaves even if they pretend they are not.

If there is free will, then we can choose. But the fact that we can indeed choose and have ideas of what is good and what isn’t, and that many of us see spiritual dimensions to things, is sign enough of a greater power at work than the limited and childish human ego. We need to start to learn to let go of our limitations and blinkers of controls that have been placed upon us, to create the new paradigm and history of the Earth.

The question then arises so what else can we do now to hasten the positive changes and get rid of the ungodly yoke of the cabal? Perhaps three basic things may be useful here: first, see the economic collapse that is upon us as a good sign and actively find ways to enhance new economic models that are green and people friendly, as mentioned above.

Next, do all we can (this applies to those of us who are not US citizens but affected by the cabal’s ‘American’ policies) to encourage Barack Obama to get going with the arrest of the cabalists behind 9-11 (email the guy, he needs to know that people everywhere are behind him: link). This is the thin end of the wedge that will bring about either simultaneously, or consecutively, the eradication of the US Federal Reserve which is the stronghold of the cabal and its worthless fiat money, as well as the bringing to justice of the key cabalists for Terror against humanity. This will get the ball rolling and the cabal’s operations will start to shut down and operatives throughout the world will be rounded up by various other governments and forces within them (not all are under control by the cabalists) who are waiting for the signal from ole Barry.

If it still isn’t clear, let me for the hell of it just say: we are all in this together, big time.

Finally, we all need to just commit acts of gratuitous kindness, decency, compassion and just plain civility in all situations at all times as is humanly possible. This above all is the start of the People of the world uniting and coming together as a gathering of light that will dispel the cabal’s Terror forever. There can be, if we create it, governments of the People, by the People, and for the People and the Planet that can never perish.

Also, the obvious should still be stated that this post is not the answer to all our problems; we are also creating solutions as we go along and react to events; rather, it is an energetic transfer to the ether and collective consciousness in support of other co-creators who want to see a new and blessed world for us and the next generation to live in.

To those who see how real and how much within our grasp most of the ideas here are that will allow us to create our own destiny, to those who have the courage to turn away from despair and see that there is Divine grace in all life and within ourselves to get rid of the cabal’s influence and create cities of light in a world of light, and for those who have decided that being human is a compliment to what is good in the universe, I can only say with the utmost gratitude:

Thank you for taking back your power.

And peace be with you.

 

[Many thanks for the creative work to all the artists whose pictures, graphics and videos are presented here and on this site]

End of Poverty interview

Plato’s ‘Allegory of the Cave’

Folks

With the dramatic rise in global awareness of what large corporations and the people behind them are doing to the world and its life forms, more people are asking for drastic measures to be taken against them.

Some of these can be identified in the post and the clip at the end of it, entitled “Nationalize BP”.

Yet it is difficult to deny that in wanting some form of justice, it is easy to get swayed with emotion and ask for extreme measures as well. For instance, asking for capital punishment (no matter how appealing this may appear to some) for those who have wreaked havoc across the globe due to greed and mismanagement may not be the best approach to solve problems.

Recently, a letter of mine to the mainstream media looked at this aspect of things in reaction to the bandying about of the ultimate sanction for reckless driving on roads.

This is an excerpt from it:

“But this does not mean that extending the reach of the hangman's rope for every tragic occasion when there is loss of life, even when negligence is involved, is the way to go.

Would it then be necessary to have capital punishment for when things go awry during medical procedures, sports or military activities, group outings, or in situations where someone offers help only to have things end tragically?

And what about situations involving businesses whose products cause death through negligence: why should they not be subject to capital punishment? Should we also call for the death penalty for the many disastrous and irresponsible things done by large corporations, as in the case of [the] BP Gulf spill? Should the chief executive officer, board of directors or shareholders be held accountable with such severity?

Surely, the statistics gathered for death due to negligence arising from greed and incompetence would register in the thousands.

We need to be judicious in punishments and exercise greater emotional control in difficult situations than merely calling for state-sanctioned executions.”

Which brings us to another question -- what do you do when confronted at long last with undeniable evidence that harm has been deliberately inflicted on people over and above the assumed cause of 'greed and incompetence'.

Putting aside the tendency of some to disregard ‘conspiracy' theories and those who see everything as a ‘conspiracy’, it is not unusual to see many groups all over the planet working together often behind the scenes.

Just think of the international banking cartel for starters.

This could help explain what happens beneath the surface of what is perceived in society and represented (or misrepresented) by the mainstream media (much of which is under corporate control anyway) as 'news'.

I recall a friend and former colleague in the media who said: "But you can't always tell the truth". And the contradistinction of that with the delicate irony of the CIA's "the truth shall set you free" under the guise of cloak and dagger, of course.

Meanwhile, what happens on the surface of society has all sorts of ‘sociological’ or other kinds of explanation for it. Bear in mind all these 'explanations' are just another form of theory to explain away something.

The great German philosopher Immanuel Kant wrote an interesting piece late in life called On the old saw: that may be right in theory but it won’t work in practice. Kant’s focus was on moral theory and naturally, those who criticize it inevitably use some theory of their own. Of course, Kant’s work is much more than what appears on the surface as he brilliantly defends his view of moral philosophy which most of his critics were not always able to effectively bring down as much as they wanted to.

So, there are those who will give random or so-called ‘historical’ and ‘economic’ reasons for what happens in the world such as the causes of war and various economic crises etc. This is not to say that there are no valid historical perspectives nor economic forces that underly what happens in the world.

But it doesn’t take too much of a stretch of the imagination to see that wars have a way of occurring and ending in manners that sometimes belie whatever reasons we cook up for them. The convenience of the Great Depression and the rise of fascism and totalitarianism and their coincidental situation between World Wars I and II can be given as many interpretations as what many others may give as to what exactly is the ‘law of gravity’. These are unfinished scenarios and explanations that are to date anything but conclusive.

For one to say, together with thousands of others, that the truth about the inside job for the September 11, 2001 attacks will be out sooner than later, is not to say anything new at all. There is no credible explanation, except for those who indulge in wishful thinking, as to how three towers collapsed when supposedly two were struck by aircraft.

Nor would those who pretend that we are all alone in the universe and that there has been no contact with extraterrestrial civilizations because, well, 'I haven’t exactly seen one and anyone can imagine stuff'.

Yet curiously, the words "but we can't always tell the truth" and the ironic take on "the truth shall set you free" may almost be transposed from A Midsummer Night's Dream if only it caused as much delight in our subconscious as a Shakespearean comedy.

As for extraterrestrial life, Kant too believed in such a possibility ("I should not hesitate to stake all on the truth of the proposition ... that, at least, some one of the planets, which we see, is inhabited."). Instead of setting it far out in the galaxy he thought it possible closer to home.

The explanation for being alone in the universe is yet another theory that sometimes goes 'if were not alone, why haven’t they landed yet?'

But interestingly enough, a lot of us have even more radical beliefs than what has been written above, in the sense of going to the root cause of things: some of us actually believe in God.

Think about what that really implies.

For those who say what’s surprising about belief in God, one would venture to say that they haven’t had a genuine spiritual experience. But again, for those who claim they have had a spiritual experience, ask them why they then think others have not had other experiences that may prove to them conclusively what some others would prefer to be in denial of.

Many of us show daily just how alive Orwell’s dictum is, that all of us are entitled to our pet explanations but some theories are more equal than others (well, a variation of Orwell). Usually, we mean our own explanations are the accurate ones.

But it will be interesting to see the faces of those who have been vociferously denying many things when the truth of so much finally comes to light and hits the fan. And the question is: to what extent will it be possible to hold back a populace that may be screaming for blood in the name of ‘justice’ real or imagined.

Let me explain: the Nuremberg trials in Germany were a world wide catharsis if you like. The great Mandela’s truth and reconciliation approach kept South Africa together during its post-apartheid phase.

Can people learn to bring in punishment that’s judicious and, shocking as it may seem, even learn forgiveness on a mass scale big time, when the truth about many things corporation-political wise come out for what they are at long last.

Or after all our sophisticated theories, can we only see the enactment of 'an eye for an eye' as the sum total of human wisdom?

That part of our human experience has yet to be written and we will each be actively creating that reality even as we observe it purportedly on the sidelines. Each of our thoughts is a vote for a certain outcome,

And somehow we will have to make it such that the truth does set us free.

Below are two clips from the Zapruder film on the tragic assassination of JFK.

Watch carefully the driver of the car (secret service man), pull out a modified gun and shoot JFK in the head with an exploding bullet, put it back in his coat and hit the accelerator. Don't look at Kennedy, watch the driver.

This is the slow motion clip, and watch at the 49-56 second frames:

We will soon learn the truth of Hamlet's words to his closest friend:

“There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy.”

 

 

 

 

 

 

 

 

Dear Friends

The pieces below speak for themselves. Soccer is no longer, as football's world governing body FIfa likes to claim, a game to unite the world but one in which profiteerers of the world unite. The whole game today with the multibillions going between clubs, players, the media, the advertising industry and the profit mongering manipulators behind the scenes, are only part of why there is so much economic difficulty facing us today.

For those who think World Cup 2010 is just a way to relax and unwind, please bear in mind the human cost of such an attitude. We cannot make things better for us nor anyone else if we do not see ourselves as our sisters' and brothers' keepers.

'The sound of vuvuzelas cut through the air in Durban on June 16 -- but for one large group there was little to celebrate. Amid cries of phansi ngama-fat cats, phansi (down with fat cats, down) and a sea of banners proclaiming the government cared only for the rich, civil rights organisations took to the streets protesting against poor service delivery and the World Cup.

Abahlali Base Mjondolo, KwaZulu-Natal Subsistence Fisher's Forum, Clairwood Social Forum and about 17 other organisations gathered for what they dubbed an "anti-Thiefa" protest march which started at Dinizulu Park and ended at City Hall yesterday.

"The R40 billion the government has spent on the World Cup could have comfortably housed three million homeless South Africans", said Alice Thomson of the Durban Social Forum. "Soccer will not make a better life for all -- it will only make the rich richer and the poor poorer," Thomson said.

This week, Thomson was arrested for distributing anti-FIFA pamphlets at the Fifa Fan Fest in Durban.

Bongani Mthembu, of the South Durban Community Environmental Alliance, said that the decision to hold the protest on Youth Day was deliberate. "Youth Day is an opportunity for us as the youth to air our grievances and raise our concerns. We can show the foreigners here the truth about what's happening behind the World Cup", he said.

Chairman of KZN Subsistence Fisher's Forum Essop Mohamed said: "Some people were 'tired of falling by the wayside'. We are marching against oppression."

"They let FIFA come here and do what they want, but they won't let us fish", he said, referring to a city ruling to bar fishing in certain areas along the beachfront.

Said Shamitha Naidoo, community chairwoman in Pinetown of Abahlali Base Mjondolo: "We need to show them (tourists) what's happening. How will these poor people benefit from the World Cup?"

Protester Kirubavathi Pillay, 68, was also angry at what she said was the inability of the eThekwini Municipality to deliver adequate services. "No one worries about us. We can't manage without some help from the government," Pillay said. "They are not fighting for us. We must fight for us", added Jaysh Ramphul, another marcher.'

(Kamcilla Pillay, Daily News, Durban)

MEMORANDUM OF GRIEVANCES

DATE: June 16, 2010

TO: KZN Premier Zweli Mkhize, Durban Mayor Obed Mlaba, Deputy Mayor Logie Naidoo and Durban City Manager Michael Sutcliffe

RE: Grievances about World Cup 2010 management

We are the citizenry of Durban. Our organisations have long registered grievances about the way the city is being run. In recent months, we have found that many of our problems are worsening, especially because of the way the World Cup has been implemented by FIFA, its corporate partners, politicians and bureaucrats.

While in principle we do not oppose Durban hosting seven World Cup games, we are very opposed to many decisions made by FIFA and city, provincial and national officials. The problems we record below require urgent attention and immediate remedial action.

Economic burden

• Whereas Durban’s 70 000-seater Moses Mabhida Stadium cost taxpayers R3.1 billion; the cost escalation for Mabhida rose from an initial R1.8 billion; and redirecting most of this spending could have erased the majority of the vast backlogs Durban faces, of housing, water/sanitation, electricity, clinics, schools and roads;

• Mabhida’s next-door neighbour is Absa Stadium, home of Sharks rugby, which seats 52 000 and which could easily have been extended

(considering that Durban municipality will knock out 15 000 seats from Mabhida after July);

• the companies and individuals that have profited most from Mabhida’s construction include multinational corporations and those responsible for notorious municipal disasters, such as bus privatiser Remant Alton and Point development failure Dolphin Whispers, along with at least one fake Black Economic Empowerment front company;

• the import bill for Mabhida appears unreasonable, as reflected in breakdowns of Mabhida’s Sky Car due to imported German cables held up for repair by the Icelandic volcano, and in imported German tents erected next to Mabhida by an imported German marquee construction crew;

• the soaring foreign and domestic debt we are now suffering because of World Cup expenses will cause untold problems for the SA economy in years to come; FIFA is not subject to South African taxes; FIFA is also allowed to ignore SA exchange control regulations; and the FIFA profit estimate is more than R25 billion;

Corruption and state failure

•    whereas this kind of extreme waste and crony capitalism typifies the relationship of FIFA to host governments; bribery and corruption have been associated with FIFA’s operations (as documented in lawsuits in Zug and New York); bribes have been predicted (by England’s former World Cup bid manager) that would distort play by some of the leading teams coming to South Africa; and corruption whistle-blowing in Mpumalanga Province led to several suspicious deaths, reportedly by organised hit squads;

•    Durban’s own recent corruption in the construction of low-cost housing by Zikhulise Cleaning, Maintenance and Transport became a national scandal; Durban housing official Nigel Gumede and City Manager Mike Sutcliffe rejected the findings of the National Home Builders’ Registration Council report which shows extensive wrongdoing – one third of houses in Umlazi requiring reconstruction - in a R300 million contract begun in December 2006; politically-connected Zikhulise owners Shauwn and S’bu Mpisane have a notoriously luxurious lifestyle with a car fleet worth a reported R100 million;

•    Durban’s Council and ward committee system has become a form of top-down political control; Council does not take our voices upwards; the democratic gains that were won in 1994 are also our victories, but have been taken from us;

•    the September 2009 attack on the Abahlali baseMjondolo (AbM) movement, its leaders and well known members, their family members and its offices in the Kennedy Road settlement apparently received the backing of the local ruling party and government structures; many AbM members cannot go back to Kennedy Road; and several of the Kennedy Road 13 are being imprisoned interminably without bail or being charged;

•    the Durban council has made clear its intent to demolish the Early Morning Market at Warwick Junction in favour of a shopping mall; the Early Morning Market is one of the surviving monuments of the indentured Indian labourers; and hundreds of jobs – as well as affordable edibles – for poor people are at stake;

•    Durban fisherfolk have witnessed rich people fishing off expensive boats and yachts unhindered while working-class subsistence fishermen suffer police harassment and arrests; fishermen have recently been denied access to New Pier, the South Pier, the Bluff military base and the quayside shore (Gunter Gulley, Yacht Mole, Lucky Dip); and there is worsening sea-water pollution – rubbish, oil and chemicals in the harbour – and apparently no environmental precautions being taken;

•    Durban’s hundreds of thousands of immigrants are under sustained attack; the May 2008 xenophobic attacks demonstrated a failed municipal state which by August washed its hands of ongoing xenophobia crisis and by November used police brutality to displace desperate refugees; Lesotho migrant workers are protesting the revocation of the ‘six month’ system of border concessions; there remain inadequate support systems and preventative measures against another xenophobia attack; and immigrants continue to face oppression in their dealings with the South African government and police;

Workers, the poor and communities under attack

•    whereas this country is rich because of the theft of our land and because of our work in the farms, mines, factories, kitchens and laundries of the rich; and that wealth is therefore also our wealth;

•    the working class and poor of Durban are under severe pressure because of the world and SA economic crises, which have not yet lifted for us, costing the country more than a million lost jobs and leaving Durban badly exposed in sectors like shipping, clothing and textiles; poor and working people are being pushed out of any meaningful access to citizenship; recent government statistics prove the urban poor are becoming poorer; and we are being forced off land and out of our cities;

•    too many of us who have formal water and electricity connections have not been able to afford the fast-rising costs of these services and face disconnection; the promise of housing has been downgraded to forced removal to a transit camp more like prisons than homes; housing that has been built exists in human dumping grounds far outside of the cities and far from work, schools, clinics and libraries; and there is a new, heavy-handed, privatised municipal debt collection strategy that is wrecking state-community relationships;

•    poor flat dwellers have suffered from unaffordable and exploitative rents; and the poor have been forced to sign exploitative rental agreements under duress and threat of eviction;

•    farm dwellers have suffered the impoundment of cattle, demolition of homes, denial of the right to bury loved ones, denial of basic service and brutality (and sometimes murder) at the hands of some farmers; and a biased justice system which has systematically undermined farm dwellers;

•    outsourcing of casualised labour has become a full-fledged crisis, as witnessed in the revolt by Stallion Security workers who were exploited at Moses Mabhida and four other stadiums to the extent of protesting in the face of police stun grenades, tear gas and rubber bullets; crises caused by Durban’s labour brokers include the ports – partly responsible for a recent three-week strike by transport workers – and the University of KwaZulu-Natal, where underpaid workers (less than R1000 take-home pay for UKZN cleaners) are suffering;

World Cup’s pro-rich bias

•    whereas while the rich have benefited from the World Cup, the poor have not; the Zakumi doll mascot and other memorabilia were made in China not South Africa; Durban’s informal street traders have been displaced and barred from selling in the vicinity of stadiums; and Durban fisherfolk have been evicted from the city’s main North Beach and South Beach piers;

•    township soccer facilities were meant to be created and maintained with state subsidies but have not been; and street kids were brutally displaced from central Durban in advance of the World Cup; according to former chief executive  of the South African Premier Soccer League Trevor Phillips; “Durban has two football teams which attract crowds of only a few thousand. It would have been more sensible to have built smaller stadiums nearer the football-loving heartlands and used the surplus funds to have constructed training facilities in the townships”;

•    FIFA’s tourist initiatives are based on what it calls ‘luxurious ambiance’ not working-class hospitality; promises of 450 000 international visitors for the World Cup were high overestimates; and many jobs in the tourism sector were shed when the overestimates became apparent;

Public transport

•    whereas many in Durban continue to be dependent upon private automobiles (with resulting adverse impacts on climate change); there has been a sharp decline in Durban’s public transport compared to other South African cities which have begun investing in the Bus Rapid Transit system; a government web-site (www.sa2010.gov.za) promised benefits for the host cities of the 2010 FIFA World Cup Soccer including “a fast, comfortable and low cost urban transport system … for central business districts but also in townships”;

•    Durban officials have implemented air-conditioned “People Mover” buses with security guards at every stop, running every 15 minutes from 06h00 until 23h00, but only in the city centre and along the beachfront, mostly for the benefit of tourists; there is still terribly inadequate public transport in both the townships and suburbs, and many areas are currently unserviced, and others have an infrequent and unreliable service with no bus timetables available;

Environment

•    whereas the ‘greenwashing’ of the World Cup includes incorrect claims by Durban officials that the CO2 permanently emitted in the vast cement construction plus increased air travel can be ‘offset’ by planting trees (which themselves are only a temporary, fragile container of CO2 because they emit the same carbon when they die and biodegrade); officials brag about ‘carbon credits’ from burning methane from rubbish dumps in a World Bank Clean Development Mechanism project (even though such ‘emissions trading’ is a dangerous distraction from fighting climate change), and the poorest people of Durban will suffer the most from climate change;

•    there is no sense in constructing new coal-fired plants (such as Medupi) and nuclear generators so as to give further electricity subsidies to vast multinational corporations such as BHP Billiton (which receives the world’s cheapest power); 100% renewable energy is a pre-requisite to avert global climate disruptions; the refusal to phase out coal, oil and gas also causes military conflicts, magnifying social and environmental injustice; and governments; corporations such as BP continue to support and finance fossil fuel exploration, extraction and activities that worsen global warming such as forest degradation and destruction on a massive scale, while dedicating only token sums to renewable energy, and leaving areas like South Durban with some of the world’s worst air pollution due to oil refining;

•    global climate disruptions – extreme weather events, droughts, floods, increased disease, scarce water - are already disproportionately felt by small island states, coastal peoples, indigenous peoples, local communities, fisherfolk, women, youth, poor people, elderly and marginalised communities;

Our rights of expression

•    whereas according to the bid proposal and subsequent contracts with the South African government, FIFA was given full indemnity “against all proceedings, claims and related costs (including professional adviser fees) which may be incurred or suffered by or threatened by others;” and in addition, “Police officers and other peace officials will be provided to enforce the protection of the marketing rights, broadcast rights, marks and other intellectual property rights of FIFA an its commercial partners” – as witnessed in the ridiculous arrest of Dutch women whose only crime was to wear an orange dress to Soccer City for the Holland-Denmark game;

•    our own leading journalists are stifled from reporting on FIFA’s wrongdoing because of a required pledge not to throw the organisation into ‘disrepute’ as a prerequisite for accreditation, as witnessed by the refusal of the national broadcaster to show the documentary film Fahrenheit 2010 made partly in Durban;

•    the murder of three young men in Phoenix earlier this month is yet more evidence of local police brutality, as was the excessive force – stun grenades, tear gas and rubber bullets - used to subdue non-violent Stallion Security workers protesting at Moses Mabhida Stadium on Monday, June 14;

We therefore demand

• adequate compensation to Durban ratepayers and national taxpayers for the windfall profits made by construction of unnecessary stadiums such as Moses Mabhida, investigations into extreme cost escalations, and a renewed commitment for a fiscal boost to remove South Africa’s vast backlogs of housing, water/sanitation, electricity, clinics, schools and roads;

• immediate imposition of taxation and exchange controls on multinational and local corporations associated with the World Cup, on grounds that contracts entered into with FIFA are legally Odious;

•    investigations into bribery and corruption associated with FIFA contracts and World Cup construction in Durban and especially in Mpumalanga Province, and full criminal investigations into Durban’s own recent corruption scandals;

•    a thorough overhaul of Durban’s Council and ward committee system so as to introduce genuine democracy and popular participation;

•    a commission of inquiry into events associated with the jailing of the Abahlali baseMjondolo Kennedy Road 13, their unconditional release, and the right-of-return of AbM to Kennedy Road;

•    the end of municipal harassment of traders, especially in the Early Morning Market at Warwick Junction, and subsidies that would permit it to become an historic monument, having just marked the market’s centenary;

•    the end of municipal harassment of Durban fisherfolk, the imposition of more reasonable fishing license fees, and a recommitment to cleaning the harbour and beaches of pollution of all sorts;

•    a renewed commitment to combating the scourge of xenophobia;

•    a redistribution of the society’s income and wealth so that South Africa is no longer the world’s most unequal major economy, an end to the municipal debt collection strategy and other systems that worsen inequality, and increases in free basic water and electricity allotments financed through a luxury consumption tax on those who use too much;

•    an end to exploitative rental and housing arrangements, to oppression of rural people and to injustice against farm dwellers;

•    a ban on labour broking, as has long been promised by the ruling party;

•    a dramatic increase in township soccer and sports facilities;

•    follow-through on the promise of “a fast, comfortable and low cost urban transport system … for central business districts but also in townships” and an expansion of “People Mover” buses across metro eThekwini;

•    an end to new coal-fired plants and nuclear generators so as to save the environment from certain destruction, stringent monitoring of air and water quality and public access to the findings, strict law enforcement against polluters and littering, a commitment to proper maintenance of all Durban’s green areas in a cohesive, sensitive, responsible and inclusive manner for the benefit of the environment and the people of Durban not just the city elite, dedication to the eradication and control of alien species with a view to permanent job creation, and strict enforcement of city bylaws by Metro Police to prevent urban decay, slum development and the resultant health hazards and environmental degradation;

•    a retraction of indemnity to FIFA and end to the order prohibiting journalists from throwing FIFA into ‘disrepute’ as a prerequisite for accreditation;

•    an end to police brutality, proper policing of all neighbourhoods, and redirection of policing resources spent on FIFA to all citizens;

•    an end to the arrogant, authoritarian, exclusive, insensitive, parochial decision-making processes undertaken by the Ethekwini Municipality throughout all areas of its jurisdiction.

When considering the speed and lavishness with which services were delivered for the 2010 World Cup, we have no doubt the above demands can be met timeously and professionally.

(Taken from http://links.org.au/node/1747)

 

“I always assumed …that the writers we were studying were always much smarter than I was. If they were not, why was I wasting my time…studying them? If I saw a mistake in their arguments, I supposed they [the philosophers] saw it too and must have dealt with it, but where? So I looked for their way out, not mine. Sometimes their way out was historical: in their day the question need not be raised; or wouldn’t arise or be fruitfully discussed. Or there was a part of the text I had overlooked, or hadn’t read.”

– John Rawls, “Some Remarks About My Teaching”

What does the great Sergio Leone’s brilliant “Dollars Trilogy” have in common with our idea of the so-called Free Market? Well, for a start the titles are enough to give most Capitalists a run for their money: A Fistful of Dollars, For a Few Dollars More and The Good, the Bad, and the Ugly. A careful look at these wildly entertaining films also reveal what most would agree the common idea of the Free Market brings – a great deal of competition to see who is the last man standing after as many Mexican standoffs as possible; who gets the cash at the end; how many bodies you must climb over to get to your cash heap; how much manipulation, lies and betrayal are necessary to make and keep you top dog; how to make as many enemies as possible; how to achieve a life of constant neurosis and paranoia, and a good deal of other niceties.

But there seems to be some whose idea of the Free Market may sheepishly try to avoid all that is described above. Unless you tell them they get to play Clint Eastwood, as that might change the equation somewhat.

This post will look at the common usages of the term the ‘Free Market’ to show that there is no consistent idea (in fact, no sensible one either) as to what this term means, as it is a free for all catch phrase to sum up an amorphous idea of a genuine misconception.

We will also take a look at the much maligned Scotsman Adam Smith and the crazily abused idea of the ‘Invisible Hand’. It will become apparent that Smith has little to do with what Capitalism and the ‘Free Market’ mean. That Smith was onto something else more subtle, accurate, and profound than the mumbo jumbo churned out through the ideological hijacking he has been sadly subjected to.

As the epigraph from Rawls suggests, this post will try to show in its own way that Smith was a far greater and consistent thinker than many have made him out to be.

To Market, to Market, to Buy a Fat Lie

So what does the hagiographical term ‘Free Market’ (FM) mean. The misuse and abuse of this term has led to so much of the world’s problems today. There are numerous definitions for FM but we will look at a rather all encompassing one.

According to the Wikipedia, the definition of FM includes:

A…market without economic intervention and regulation by government except to regulate against force or fraud. The terminology is used by economists and in popular culture. A free market requires protection of property rights, but no regulation, no subsidization, no single monetary system, and no governmental monopolies. It is the opposite of a controlled market, where the government regulates prices or how property is used

The theory holds that within the ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers. By definition, buyers and sellers do not coerce each other, in the sense that they obtain each other's property rights without the use of physical force, threat of physical force, or fraud, nor are they coerced by a third party (such as by government via transfer payments) and they engage in trade simply because they both consent and believe that what they are getting is worth more than or as much as what they give up. Price is the result of buying and selling decisions en masse as described by the law of supply and demand.

Free markets contrast sharply with controlled markets or regulated markets, in which governments directly or indirectly regulate prices or supplies, which according to free market theory causes markets to be less efficient. Where government intervention exists, the market is a mixed economy.

In the marketplace the price of a good or service helps communicate consumer demand to producers and thus directs the allocation of resources toward consumer, as well as investor, satisfaction. In a free market, price is a result of a plethora of voluntary transactions, rather than political decree as in a controlled market. Through free competition between vendors for the provision of products and services, prices tend to decrease, and quality tends to increase. A free market is not to be confused with a perfect market where individuals have perfect information and there is perfect competition.

Free market economics is closely associated with laissez-faire economic philosophy, which advocates approximating this condition in the real world by mostly confining government intervention in economic matters to regulating against force and fraud among market participants. Some free market advocates oppose taxation as well, claiming that the market is more efficient at providing all valuable services of which defense and law are no exception, that such services can be provided without direct taxation and that consent would be the basis of political legitimacy making it a morally consistent system. Anarcho-capitalists, for example, would substitute arbitration agencies and private defense agencies.

In social philosophy, a free market economy is a system for allocating goods within a society: purchasing power mediated by supply and demand within the market determines who gets what and what is produced, rather than the state. Early proponents of a free-market economy in 18th century Europe contrasted it with the medieval, early modern, and mercantilist economies which preceded it.”

This sounds just about right. So what would be a summary of the key ideas here:

1. A FM is one in which there is no governmental intervention “except to regulate against force or fraud”. So no control by governments of any form of economic activity
2. A FM sees to it that the price mechanism operates within the law of demand and supply to ensure people get what they want. Trade is engaged in through consent and gain for everyone results from this
3. Any government intervention means lack of efficiency as opposed to the efficiency provided by the FM
4. The FM ensures the allocation of resources according to consumer satisfaction which is something political interference cannot do. The FM also makes certain that due to competition “between vendors for the provision of products and services, prices tend to decrease, and quality tends to increase”
5. The FM promotes the removal or minimization of taxation. It is also so efficient and brings about so much good that all sectors of a country can be left under the tutelage of FM forces including defence and the law
6. What is not mentioned in the above definition clearly is that many proponents of the FM believe that it is the subset of, if not the main cause for, personal freedom and liberty

Think about these ideas and see how they resonate with you.

And now take a look at what they mean under the scrutiny of common sense:

a. Take a look at (1). If the government is so useless and such a bore to the operation of the FM, why is it needed to “regulate against force or fraud”? If the FM is so effective and useful and powerful, how come it needs government help? For an entity to be able to ensure that the all powerful FM is protected against “force or fraud”, it must be more powerful than the FM in order to be able to so do.

But this is exactly what the FM is trying to avoid, but it needs its nemesis to ensure its survival because a genuine free for all system (which the FM implicitly seems to strive for) would ensure chaos and a cowboy town mentality that is not always conducive to consistent growth and wealth.

So an effective FM it seems always requires a powerful government. It is most unlikely that a powerful government would then sit by quietly and allow the FM to run things without ample kickbacks over and/or under the counter for itself. So (1) is patently absurd.

b. Take a look at (2). Price mechanisms work within the law of demand and supply. There is such a thing as pricing but ‘price mechanism’ is the infantile idea of neo-classical economists who have no idea what the world is about. And what on earth is the ‘law’ of demand and supply (DS)? There is a law of gravity to all intents and purposes, but demand and supply are completely arbitrary.

If demand and supply are a law then why is there always a mismatch between them because of either shortages or excess. The one thing you can be assured of is complete lack of consistency/regularity to this trumped up ‘law’. Pricing is also arbitrary depending on whether these are normal consumer items or luxury brands and goods. But unilateral price adjustments by suppliers and factors that influence them are regarded as interference in perfect market models of the neo-classical economists who claim that if it was not for branding, advertising, marketing, businessmen ascertaining prices, profiteering, people having irregular income flows, why, then you would see a ‘law’ for DS and this strange animal called ‘price mechanism’.

But, the proponents of the FM insist that their idea is different from the silly notion of a ‘perfect market’. But it is just as clear that the FM is based on some weak version of a ‘perfect market’ where apparently you can have the ridiculous situation of an all powerful government who decides to sit on its hands and protect the FM without daring to interfere in it (without considerable gain for itself from the situation).

People never get what they want from the FM because it constantly uses consumerism and all the unpleasantries supposedly avoided by a ‘perfect market’ like human egomania and delusionally driven advertising, marketing, media and banking hype to ensure that you are always dissatisfied with life and what you have. If, heaven forbid, you would actually find satisfaction and peace in life would you really want to be indebted and work for unreasonable bosses to get that X-box or I-pod?

Trade is not engaged for the benefit of everyone. What do these people claiming this know about colonialism and gunboat diplomacy or the so-called ‘free trade’ agreements of today which leave countries, governments and peoples indebted to corporatism and profit mongering?

If there is one New Year resolution for 2010, please recycle all your economic textbooks as they are written by the deluded using a lot of sound and fury signifying nothing.

c. Take a look at (3) and remember that if government interference causes inefficiency then why have the government try to protect the FM. Why not have the FM privatise government and then ensure the framework for the success of the FM. But does that make much sense? Why call it a Government if it has been privatised. In fact, why have any political entities at all, why not just have warring factions of corporations killing and robbing on another to see who survives the competition. (Yes, Leone has a visionary subtext in his “Dollars” films).

But would that really suit the FM? Best to have Government (under its influence and control as far as possible) to ensure that the killing and robbing is done within some form of stability and legitimacy thereby accentuating the ‘Free’ in FM, that is, allowing corporations and Capitalists to do whatever the hell it is they want. What kind of freedom is it if you’re not free to do harm to people around you and not have it legitimized thereby having the best of both worlds.

And how come the FM is more efficient than government? The FM as extolled by Capitalism and driven by the lust for profit has only resulted in massive waste of resources due to destructive competition, devastation to the environment and incalculable human misery. Look at the wastage of money, natural resources and human life that is needed to feed the Capitalistic drive for profits (whether it be the internationally renowned sweated labour of globalization, media hype promotion, inculcation of amorality and immorality, and dumping/destruction of excess goods to create high demand through artificial shortage so that high prices can be extorted).

In short, just look at the current economic and social mess the world is in and ask the proponents of the FM how much more Free Market-ness do they need?

The most remarkable thing is that they even give out a Nobel economics prize to ensure the further spread of economic instability.

d. Take a look at (4). Allocation of resources according to customer satisfaction is not always a good thing. Just think of all the negative products and issues societies have to deal with to realise that pleasing the customer in everything or giving in to unbridled human desire is not what we all need. That’s the kind of thing when advocated ensures the continued existence of laws, prisons, and the security services, not to mention Government -- which FM enthusiasts are supposedly wary of. In fact, it is this attempt to give in to as much as possible to untrammeled human wants that have led to so much of our problems and constant need for media and consumer watchdog agencies, that is, even more forms of monitoring and control (apparently to enhance freedom).

Common sense will show that competition may lead to some form of price decrease (at the expense of the welfare of people and the environment as wage cutting and environment bashing gets top billing), but that hardly correlates to an increase in quality of things. Often it is the case that quality runs short just as prices decrease. Bootleg/’pirated’ editions of things are a good example.

e. As for (5) what results are the unending attempts to avoid and minimize taxation so as to increase profits and satiate the greed of Capitalists/FM proponents. The consumer and the public are then left to carry all tax burdens through goods and services taxes/VATs, higher income taxes, higher interest rates, and/or the tax that comes in the form of inflation which erodes your earnings: just as Capitalists continue to fine tune every form of tax evasion. This has turned out more as an incentive for dishonesty and robbery of the populace than efficiency or effectiveness.

Part of (5) has also been responded to under (c). If defence and the law should be run by private interests then why bother with any government; however, that would result in a situation where no fixed entity with public backing can produce conditions which will allow the private enterprises to make their killings in the market.

f. Then we have (6), an important component of the FM myth. Let’s take a look again as to why this is an illusion. In some cases the only way to ensure the functioning of the FM as Capitalist fantasists have it is to have a powerful government in place. This is precisely why most FM fantasists and hard core Capitalists tend to support fascist regimes. A look at Nazi Germany and fascist Italy confirms the not so subtle role of Capitalists behind these regimes (not to forget global banking cartels owned by gangster bankers/banking mob, a.k.a. banksters).

One glance at the United Corporations of America (UCA) – formerly known as the USA or United States of America – shows how far gone the country is in the hands of Capitalist cabals and banksters (the UC/US Fed being a branch), and how much of the country has been subjected to near fascist control and fear mongering.

And at the end of the day all this so-called freedom of the FM creates a situation that is conducive to the creation of monopolies. These monopolies then grow larger and more powerful and then do their best to shut out all other competitors or gather together to form an oligopoly. All this is at the expense of the rest of society, but that’s the freedom of the FM to do whatever it wants at the expense of anyone whom it perceives stands in the way of profit.

We also need to look at this beast known as the Corporation as the key entity of the FM. If anything, the corporation exists because there is a legal and political framework that emanates from the government. This goes back to the points raised above that ironically the corporations under the auspices of the FM would be non-existent as such without a government to back it up, and a pretty strong one at that in order to protect corporate agendas and profit obsessions.

All this creates a perfect reductio ad absurdum where the FM and their beloved corporations cannot exist unless they put in place what they fear will interfere with their plans most. But as we know, one traditional way round this is for the FM and corporations to have fascist governments (or some form thereof) arise so that they can then have what they think is the best of both worlds: a guarantor of their interests as well as owning the governments it puts into place.

The only loser in all this is the people of a country and the rest of the planet from the shenanigans that arise from such a situation. It’s worth repeating: freedom to the FM and corporations means everything goes to hell except the satisfaction of their profit motive thereby removing the very stability and balance on the planet needed to allow the bad behaviour of the FM and corporations to take place in the first place.

Given the above situation created by the drive for have an apparent FM it is manifest that there is simply no such thing as a Free Market.

QED

It’s in the Way that You Use it

Dear Readers, contrary to popular mythology there is such a thing as a free lunch. It comes from people just being decent and charitable, or altruistic. But there are many who insist that they believe in a FM that is not typical of Capitalism and the negativity that goes with it. The term FM here is used in the most typical and common usage of the term.

Broadly, the main categories of the FM would include:

• The Generic Meaning

• The Capitalist Meaning

• The Right Wing Ideologue Meaning

• The Libertarian Meaning

• The Accurate Meaning

A. The Generic Meaning

This has been covered by the Wikipedia definition delineated above. Essentially it means the unfettered operation of the market through the presumed law of DS and minimal government interference. The absurdity of this definition has been made obvious.

B. The Capitalist Meaning

This would take off from the Generic Meaning but emphasise the right of corporations and businesses (one paragon of how this works is the UC of A) to do what they want, how they want, whenever they want without interference from any form of government, citizenry, non-corporate entities or interest groups, any sense of morality, fairness or human decency. What is right is what greed, selfishness, violence and the profit motive dictates. The exception is a government that is in its corporate controlled form interfering to help corporations/capitalists at the expense of all others.

C. The Right Wing Ideologue Meaning

Using elements from the above, this definition would include that while any form of government interference may be unpleasant, the government ought to somehow ensure its non-interference and allow for the ascendancy of Capitalism, the profit motive and maximum consumer satisfaction. Anything that vaguely opposes this is anathema or smacks of Socialism/Communism or (anything that could possibly be) worse. And state sponsored violence or any form of force instituted by private enterprise is justified if it allows this ‘way of life’ to carry on. Any form of corporate sponsored state violence to support corporate and corporate linked interests, is perfectly normal and should even be extolled. This tends to be consonant with extreme religious and/or racial prejudice. At times certain fanatical religious elements seem to align themselves to this belief or claim that it in turn allows for their zealotry to exist.

D. The Libertarian Meaning

This is usually consistent with the belief in a form of individualism and independence from authority structures that allow for people to do as they please while respecting the rights of others to lead their own way of life. Hence, business models as in certain small business types tend to gravitate towards this interpretation of being economically successful without being driven by monopolists and big businesses that are solely profit driven and which tend to be destructive to communities. There is the belief that the FM offers self regulation as opposed to interference from anyone and that the law of DS takes care of itself.

E. The Accurate Meaning

All of the meanings cited have some form of ideological viewpoint that is projected on the term FM and it always comes out in a way that is skewered and, when pushed to its logical conclusion, inconsistent and contradictory to say the least or has elements that tend to its own undermining and that of the society it operates in. An accurate way of looking at this with minimal distortion in the lens is to realize that the whole of notion of the FM is a fantasy as it is held by most.

All forces of DS are arbitrary. There is no law in economics similar to that of gravity (or as in physics). The idea of imposing man made laws as explanations for human behaviour and motivation is part of the misguided sense of all attempts to mechanistically control human beings who are wholly organic entities.

The space in which commodities are exchanged or are bought and sold can be called ‘the market’. But DS are quite arbitrary. Due to constant mismatching of DS and consumerism and the use of the media to create lust for things there is a constant state of disequilibrium and misallocation of resources. The deluded neo-classicists, of course, then claim that this is due to distortions to the idea of a prefect market (which would allow DS to operate the way it’s meant to!). But it is the silly idea of a ‘perfect market’ that is the distortion of reality or the world as it is.

The realities of the world when open to the arbitrary forces of DS and the profit motive cause the out of sync boom and bust nature of 'economic forces'. There is no FM but arbitrary forces trying to control things to their advantage. This selfishness and greed and amorality which are not only the key to Capitalism but are the empty core of all neo-classical utilitarian principled ideas that revolve around sense satisfaction alone. This is what the market and DS mean.

Left by itself, the FM simply degenerates into monopolies and the quest for dominance, violence and that which is empty of any human value. Greed and profit obsession is expressed through monetary units and status, it has nothing to do with human value which is immeasurable.

Market ‘corrections’ merely mean the unforgiving ruthless forces of selfishness, greed and amorality that ensure the ‘survival of the fittest’ or rather the survival of the most harmful or toxic of entities and activities. This is why the world is largely in the state it is in today. When we say the result of the FM leads to this, it is not the FM per se because the FM as we have seen is a myth. What is meant here are the driving forces of selfishness underlying the so-called ‘FM’ as it exists in our world channeled through its vicious ‘corrective’ and punishing ethos to create a world of endless suffering and environmental desecration.

The term FM has, alas, been nothing more than a place holder for so much that is reprehensible in humanity.

Enter: Adam Smith

Perhaps one of the most misunderstood thinkers of any time has been Adam Smith. What has been done in the name of that man is as shameful as what has been done in the name of Marx. While Marx’s great Capital was partly a response to The Wealth of Nations (WN), he had a much better appreciation of what Smith’s work was about than many after him. Marx insisted that most who promoted Capitalism in Smith’s name had misrepresented what the good Scotsman was saying. And Marx was right on the money.

The many who are FM fantasists and hard core Capitalists often thump WN as if it were holy writ and claim the kernel of their beliefs lie in that tome. To say that the FM, as has been discussed, was proposed by Smith is to genetically modify his ideas into a Frankenstein monster that is in the process of destroying its creators through the economic crisis of our time

It is important to know that prior to writing WN, Smith had written The Theory of Moral Sentiments (TMS). While the former is his best known work, the latter is perhaps his greatest work. Smith was not, thank heavens, an economist. He was a professor of moral philosophy. Think about that: a professor of moral philosophy. Hence, a work entitled TMS.

The key ideas in TMS are worth noting. They are even crucial to a proper understanding of WN. To Smith, human beings have sympathy with their fellow humans as in understanding what joy and pain mean in others because they have experienced it themselves. But there is much more to this. People have a moral conscience and know what is right and wrong. Smith says that no man who is himself at ease can see another on the rack and avoid sympathy with the sufferer’s plight.

But contrary to those who adulterate Smith’s ideas, he clearly believes in Divinity. He regularly refers to the Deity and God in TMS. He even mentions that God looks after the Universe which is benign, and while God’s will is beyond man’s comprehension, man is responsible for doing what is right on earth.

Here is an important passage from TMS, VI.II.49:

The administration of the great system of the universe, however, the care of the universal happiness of all rational and sensible beings, is the business of God and not of man. To man is allotted a much humbler department, but one much more suitable to the weakness of his powers, and to the narrowness of his comprehension; the care of his own happiness, of that of his family, his friends, his country: that he is occupied in contemplating the more sublime, can never be an excuse for his neglecting the more humble department; and he must not expose himself to the charge which Avidius Cassius is said to have brought, perhaps unjustly, against Marcus Antoninus; that while he employed himself in philosophical speculations, and contemplated the prosperity of the universe, he neglected that of the Roman empire. The most sublime speculation of the contemplative philosopher can scarce compensate the neglect of the smallest active duty.

This is one of the clearest indications Smith gives of a moral centre to the universe with God’s Order behind it; where man has his own sphere of responsibility in discharging his duty on earth together with his fellow humans in alignment with what is right. This is the grounded viewpoint of Smith that fills not just TMS but is the basis for WN.

It is clear that Smith believes that there is a difference between self interest and selfishness. He praises the former and denigrates the obvious. In no uncertain terms does Smith condemn unbridled greed, social injustice, anger, hatred and all things associated with negative human attitudes and behaviour.

Self interested man looks after his own welfare and is always trying to achieve his highest good in a decent, fair and reasonable manner; but by doing so he in turn automatically, irrespective as to whether he is conscious of it or not, serves the greater welfare and good of his society.

Lest there still be any doubts as to Smith’s theistic views and the role of providence in his social and economic ideas, these passages from TMS VI.II.44-45 (bold and italics mine) should be of use:

This universal benevolence, how noble and generous soever, can be the source of no solid happiness to any man who is not thoroughly convinced that all the inhabitants of the universe, the meanest as well as the greatest, are under the immediate care and protection of that great, benevolent, and all-wise Being, who directs all the movements of nature; and who is determined, by his own unalterable perfections, to maintain in it, at all times, the greatest possible quantity of happiness. To this universal benevolence, on the contrary, the very suspicion of a fatherless world, must be the most melancholy of all reflections; from the thought that all the unknown regions of infinite and incomprehensible space may be filled with nothing but endless misery and wretchedness. All the splendour of the highest prosperity can never enlighten the gloom with which so dreadful an idea must necessarily over-shadow the imagination; nor, in a wise and virtuous man, can all the sorrow of the most afflicting adversity ever dry up the joy which necessarily springs from the habitual and thorough conviction of the truth of the contrary system.

Smith goes on to further emphasise this view in TMS II.II.19:

In every part of the universe we observe means adjusted with the nicest artifice to the ends which they are intended to produce, and admire how everything is contrived for advancing the two great purposes of nature, the support of the individual and the propagation of the species…[and studying this leads us to admire] the wisdom of man, which in reality is the wisdom of God.

This pursuance of self interest is expected of man, that is his destiny to the way he leads his life on earth but this in turn seems to align his activity to the moral centre of the universe or God’s will. Smith explains this by trying to account for the way things tend to naturally fall into place through a sense of balance as in laws of nature. So behaving in the right manner for oneself which inadvertently or otherwise benefit others, tends to be in line with the natural moral law of the Universe. Smith uses the corollary of showing that if a person does not look after his own welfare and his highest good as in trying to be a responsible and reasonable member in an economy or society he is not looked upon favourably as he may not doing what is right.

Smith does believe in altruism but he prefers to justify it via a grounded pragmatic approach in which people do not have to be motivated to do good for its own sake. People would be more easily swayed to be good citizens when they realize that helping themselves and a sense of self reliance is how they best serve society, and that in turn creates a society that best serves their own interest.

When you now turn to WN written after the bedrock of Smith’s ideas had been established in TMS, his economic opus starts to make a lot more sense. WN in itself is a sprawling work with such variety of observations in it that it is easy to take any passage out of context and say this supports a general view of the world based on a peculiar view of Smith’s.

But what can hardly be doubted is that while Smith reiterates man’s drive for self interest, he contrasts it to the negative effects of selfishness repeatedly throughout the WN. Smith clearly condemns those who tend towards greed and exploitation, and insists on people being treated decently and fairly. He states how grabby monopolists try to undermine the interests of all others as in WN Book I.11.264 (bold and italics mine):

The interest of the dealers, however, in any particular branch of trade or manufactures,is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

The passage speaks for itself despite the attempts of the ignorant and willful obfuscationists to present Smith as a creature from their own black lagoon.

Furthermore, in what may be one of the most memorable passages in WN, Smith describes the ghastly system of division of labour in a pin making industry. While there seems some form of efficiency in this mechanization of human beings as cogs in an industry, the dehumanization of the process is duly noted by Smith. No doubt a great deal of mechanical productivity ensues in a way, but the human cost of this so-called productivity is questioned.

While Marx and Engels went the extra miles and were more impassioned and dramatic in their portraiture of human exploitation and suffering during the industrial boom of their time, it is hard to deny that Smith’s insistence on human decency in economic growth may have urged them to outdo him in what was wrong with Capitalism.

The humane aspect of Smith is something hardcore capitalists hardly mention if they are even aware of it. After considering the moral sentiments in his work, it becomes clear that Smith does not support the belief by FM fantasists and hard core capitalists that he is their guru.

We will finally ‘put paid’ to the false claims of Smith being the promoter of the FM and Capitalism in what follows next.

That Invisible Thingamajig

Perhaps a key weapon of FM fantasists and hardcore capitalists has been the misuse and abuse of arguably the most famous term in economics: the “invisible hand”. It is an understatement to say that lots have been said and written about it. But so much of it has been to fit ideological obsessions of so many that an actual close look at what Smith was saying reveals something quite different altogether.

There are many takes on the Invisible Hand (IH). Four main types of interpretations will be looked at. The generic meaning of the IH is what is most cherished by the hard core fantasists: that the IH shows that an unregulated market, (yes, baby, the FM) in which there is minimal or non-interference from anyone (especially governments) provides a system of automatic equilibrium and matching of DS which not only satisfies everyone but is for the highest benefit of all with the greatest wealth creation possible.

And anytime anyone says “FM-Capitalism good, all else bad”: they follow it up with the chant “Adam Smith-IH”! When you mention the social consequences of Capitalism, the response is “don’t be a communist/socialist”, ‘greed is good’, human cost etc are just ‘externalities’. And then to round it up again, the all conclusive bang on the head or bullet between the eyes: “Adam Smith-IH”! -- and they blow the smoke from their pistols.

Sadly, this pathetic trite falsehood of what Smith meant with the IH has been handed down generations via irresponsible economic instructors to hapless students. Despite that, there have been a number of useful contributions as to what the IH is supposed to mean. But there are three other interpretations which are quite interesting and deserve closer notice.

For the record, the IH in Smith appears only thrice in his works first in The History of Astronomy (HA), next in TMS and finally, in WN. These days, there seems to be a growing trend in economists trying to distance themselves from overt FM fanaticism and capitalist trumpery. So the current view among some economists seems to be that Smith’s use of the IH is more a passing phenomena that is interesting at best, or a baubley trinket at worst.

On to the three interpretations of which Gavin Kennedy’s Adam Smith and the Invisible Hand: From Metaphor to Myth sits happily in the extremity of its claims that the IH, if not just an example of Smith’s wry humour, is but a random term given undue attention. Kennedy starts off promisingly on how the IH is merely a metaphor and shows that it is quite possible that Smith only intended the term to emphasise a system that operates well on its own without interference including any invisible assistance emanating from a mystical or religious source.

Kennedy almost pulls off his escapade except that claiming the IH is pure metaphor for the obvious actions of self regulating human behaviour does not quite work (as will examined later); and that he forgets, after admitting the distinction, that there is a clear difference for Smith between self interest and selfishness.

There is the even more interesting reply to Kennedy by Daniel Klein In Adam Smith’s Invisible Hands: Comment on Gavin Kennedy. He prefers to see the “mystery” in Smith and not give in to the prosaic justifications of Kennedy. But Klein believes that the IH is more to do with explaining the self regulating, cooperative activity that takes place between people and which occurs naturally when tending to one’s mutual interests.

Klein thinks that Smith’s ideas take place within a spontaneous order of natural liberty that is unknowable in its particulars (part of the delectable mystery). He insists that teachers of economics make clear to students the wonder to be found within economic principles (while implicitly making clear that there is no Divine Order behind any of this). We will look at this closer later.

Klein then becomes like Kennedy in misreading Smith by stating that the IH in TMS is “a terrible muddle”. He strangely goes on to say that the IH occurrence in WN is less muddled but “not without its mysteries”. Neither is he sure if the IH is “a tag for the comparative merit of freedom”.

The only mystery here is how muddled economists are on what Smith said and in particular what was meant by the IH.

But the most fascinating piece is by Paul Oslington called Divine Action, Providence and Adam Smith’s Invisible Hand . After having myself subscribed to ideas as absurd as what has generally been said of Smith, a rethink was caused by Oslington’s insightful view.

Osilington starts off with how Isaac Newton’s ideas affected Smith who even wrote his HA due to this influence. Newton, perhaps more than Einstein, believed that God does not play dice with the universe and that providence allowed for natural laws to keep the universe in order. But irregular events in the universe were also taken care of by special providence in that it allowed for Divine adjustments to take place and keep the natural order of things. It is this aspect of special providence that is said to have been adopted by Smith.

In his HA Smith mentions how the regularity of natural events like the sun rising and setting is hardly questioned by men during early polytheistic times, but only irregular events are noted like meteor sightings. The IH of Jupiter (king of the Roman gods) was not, says Smith, seen as the influence of regular events (as they were taken for granted); but some otherworldly influence comes into play in order to explain irregular events (e.g., eclipses).

To Oslington what this shows is that Smith was developing an idea to explain how man comes to understand that all events, irregular or otherwise in the cosmos, have divine order attached to it. This Smith then goes on to develop more fully in his later works.

In TMS, Smith talks about how a rich landowner cannot hoard everything he has for himself without ensuring that those who serve him have enough to live on as well, so that they can go on serving him. This leads to the rich man sharing, led by the IH, what he has to ensure everyone gains something, so that despite himself, he has helped the rest of society.

Oslington explains it well as:

The hand here is working against the rapacity of the rich, levelling out consumption, and maintaining the stability of the system. Smith understands that the stability [of] a market economy depends on a modicum of justice and not too obscenely unequal a distribution of consumption. This is why the hand intervening to restrain the consumption of the rich serves to maintain the stability of the market system. In Smith’s providential scheme it is special providence, balancing the general providential force of self interest in markets. (p 9).

But to me, the passage below in TMS is central to understanding Smith and his IH and how it is meant to be understood in its famous occurrence in WN. Here is the passage almost in full and in context -- part IV Section 1 paragraphs 10-11 (bold and italics are mine):

And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe, have turned the rude forests of nature into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence, and the great high road of communication to the different nations of the earth. The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants. It is to no purpose, that the proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest that grows upon them. The homely and vulgar proverb, that the eye is larger than the belly, never was more fully verified than with regard to him. The capacity of his stomach bears no proportion to the immensity of his desires, and will receive no more than that of the meanest peasant. The rest he is obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of, among those who fit up the palace in which this little is to be consumed, among those who provide and keep in order all the different baubles and trinkets, which are employed in the oeconomy of greatness; all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice. The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining. The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. In what constitutes the real happiness of human life, they are in no respect inferior to those who would seem so much above them. In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.

IV.I.11

The same principle, the same love of system, the same regard to the beauty of order, of art and contrivance, frequently serves to recommend those institutions which tend to promote the public welfare. When a patriot exerts himself for the improvement of any part of the public police, his conduct does not always arise from pure sympathy with the happiness of those who are to reap the benefit of it. It is not commonly from a fellow-feeling with carriers and waggoners that a public-spirited man encourages the mending of high roads. When the legislature establishes premiums and other encouragements to advance the linen or woollen manufactures, its conduct seldom proceeds from pure sympathy with the wearer of cheap or fine cloth, and much less from that with the manufacturer or merchant. The perfection of police, the extension of trade and manufactures, are noble and magnificent objects. The contemplation of them pleases us, and we are interested in whatever can tend to advance them. They make part of the great system of government, and the wheels of the political machine seem to move with more harmony and ease by means of them. We take pleasure in beholding the perfection of so beautiful and grand a system, and we are uneasy till we remove any obstruction that can in the least disturb or encumber the regularity of its motions. All constitutions of government, however, are valued only in proportion as they tend to promote the happiness of those who live under them. This is their sole use and end. From a certain spirit of system, however, from a certain love of art and contrivance, we sometimes seem to value the means more than the end, and to be eager to promote the happiness of our fellow-creatures, rather from a view to perfect and improve a certain beautiful and orderly system, than from any immediate sense or feeling of what they either suffer or enjoy. There have been men of the greatest public spirit, who have shown themselves in other respects not very sensible to the feelings of humanity. And on the contrary, there have been men of the greatest humanity, who seem to have been entirely devoid of public spirit. Every man may find in the circle of his acquaintance instances both of the one kind and the other. Who had ever less humanity, or more public spirit, than the celebrated legislator of Muscovy? The social and well-natured James the First of Great Britain seems, on the contrary, to have had scarce any passion, either for the glory or the interest of his country. Would you awaken the industry of the man who seems almost dead to ambition, it will often be to no purpose to describe to him the happiness of the rich and the great; to tell him that they are generally sheltered from the sun and the rain, that they are seldom hungry, that they are seldom cold, and that they are rarely exposed to weariness, or to want of any kind. The most eloquent exhortation of this kind will have little effect upon him. If you would hope to succeed, you must describe to him the conveniency and arrangement of the different apartments in their palaces; you must explain to him the propriety of their equipages, and point out to him the number, the order, and the different offices of all their attendants. If any thing is capable of making impression upon him, this will. Yet all these things tend only to keep off the sun and the rain, to save them from hunger and cold, from want and weariness. In the same manner, if you would implant public virtue in the breast of him who seems heedless of the interest of his country, it will often be to no purpose to tell him, what superior advantages the subjects of a well-governed state enjoy; that they are better lodged, that they are better clothed, that they are better fed. These considerations will commonly make no great impression. You will be more likely to persuade, if you describe the great system of public police which procures these advantages, if you explain the connexions and dependencies of its several parts, their mutual subordination to one another, and their general subserviency to the happiness of the society; if you show how this system might be introduced into his own country, what it is that hinders it from taking place there at present, how those obstructions might be removed, and all the several wheels of the machine of government be made to move with more harmony and smoothness, without grating upon one another, or mutually retarding one another's motions. It is scarce possible that a man should listen to a discourse of this kind, and not feel himself animated to some degree of public spirit. He will, at least for the moment, feel some desire to remove those obstructions, and to put into motion so beautiful and so orderly a machine. Nothing tends so much to promote public spirit as the study of politics, of the several systems of civil government, their advantages and disadvantages, of the constitution of our own country, its situation, and interest with regard to foreign nations, its commerce, its defence, the disadvantages it labours under, the dangers to which it may be exposed, how to remove the one, and how to guard against the other. Upon this account political disquisitions, if just, and reasonable, and practicable, are of all the works of speculation the most useful. Even the weakest and the worst of them are not altogether without their utility. They serve at least to animate the public passions of men, and rouse them to seek out the means of promoting the happiness of the society.

What in summary does this important passage say:

• the rich and wealthy usually are more selfishly inclined than most and could hardly be bothered with the welfare of those less fortunate
• but in order to stay their course they need to let their serfs survive as well and so inadvertently or otherwise ensure their serfs’ survival thereby benefiting the welfare of others
• in making this distribution of things to those lower in the food chain, the rich are led into this by the IH
• man proposes (as in the selfishness of the rich) but providence disposes, as in the balance that ensures some form of fairness to the less well off
• all humans want happiness and all are equal in that respect of wanting peace and solace as well other than the illusory difference produced by status and the master-slave relationship thereof
• with a touch of irony, Smith says even a beggar sunning himself seems to have as much, if not more, peace of mind than kings (who constantly worry about who is about to do them in, etc)
• the balance and seemingly smooth operation of the IH behind the adjustments in society is the same kind of system that when it appears in the general governance of society appeals to a sense of order and artistry which humans have a bias for
• when someone supports the idea of good governance and commerce in his society it is not always out of sympathy for his fellow man
• people tend to be impressed with the smooth automatic functioning of a state and all that takes place within it as it resonates with a sense of balance, harmony and artistry in us
• while we acknowledge that the purpose of government is to ensure citizens’ happiness, we tend to be more appreciative of the well oiled functioning of things rather than whether all of society benefits from this
• a person is not so much concerned with what public policies etc are for the benefit of his fellow citizens as much as realizing the remarkable way his society functions and how it is something that is wondrous and (implicit in this) perhaps worthy of emulation by others: this makes him interested to ensure the well oiled functioning of his society
• if the proper and effective operation of a country can be justified via just, reasonable and practicable ways, people may be inspired to seek the means of seeking the happiness of their society

It is important to note that in TMS Smith seems to be saying four things:

First, that through sympathy with his fellow man and through serving one’s self interest a person tends to serve, often times inadvertently, the interests of society.

Second, the above tends to happen because it is aligned to a force of balance that resonates with the moral centre of the universe which ensures regularity in human affairs. We usually don’t question this but take it as a given, knowingly or otherwise.

Third, and importantly, even if an irregularity occurs such as man serving his own selfish interests as opposed to his self interest, there is an IH that rebalances accordingly to ensure that there is some form of redress and justice in distribution to ensure that those exploited still manage to subsist.

Fourth, that people seem to be caught up more with the artistry and smooth functioning of things (that is, regularity and order) than whether society actually gains from this. And if this mode of smooth operation can be justified in a manner of justice and fairness, then people will buy into it and thereby, against their will at times, end up benefiting society at large.

In many cases, we have experienced situations where people compare one society and economy with another over an excellent transportation system, well maintained public amenities, health and educational facilities that are people friendly, etc. In most instances, we also wonder why we can’t have what works smoothly and well in other countries in our own, and are willing to ask or push for, or work towards manifesting this in our own societies. In this, Smith has given an accurate description of things which resonates with many of us today.

It is clear to me, that Smith has ideas here that both Immanuel Kant and John Rawls would have been fascinated by. More will be said of this, especially of the influence Smith has on Rawls.

The third point on how the IH comes in to readjust seeming irregularity in the general balance of things is consonant with what Oslington claims it does in terms of special providence. But Oslington does not mention clearly enough how the irregularity occurs: it occurs because even selfishness vis-à-vis self interest gets the touch of natural re-balancing to even things out a little. In all this, it appears Smith is far more consistent in his thinking on the IH than many thought him to be.

When it comes to WN, Oslington mentions that special providence also comes in again to ensure that despite greater profits available through trade abroad, the merchant paradoxically keeps capital at home thereby benefiting the home front. But as a close reading of that particular passage in WN shows, Oslington and others are not quite right about thinking that is how the irregularity appears. The irregularity in WN in relation to the IH arises from the ambiguity in what Smith says (we will look at this).

But in case there is still some doubt as to the moral core and Divine Order spiralling through Smith’s work, this brilliant passage with its take on capital punishment must be looked at in TMS Book 2.II.19-III.27 (bold and italics mine). It also reiterates with consistency the idea running through TMS and WN in relation to special providence acting through irregularities in the world as in the case of the IH:

Upon some occasions, indeed, we both punish and approve of punishment, merely from a view to the general interest of society, which, we imagine, cannot otherwise be secured. Of this kind are all the punishments inflicted for breaches of what is called either civil police, or military discipline. Such crimes do not immediately or directly hurt any particular person; but their remote consequences, it is supposed, do produce, or might produce, either a considerable inconveniency, or a great disorder in the society. A centinel, for example, who falls asleep upon his watch, suffers death by the laws of war, because such carelessness might endanger the whole army. This severity may, upon many occasions, appear necessary, and, for that reason, just and proper. When the preservation of an individual is inconsistent with the safety of a multitude, nothing can be more just than that the many should be preferred to the one. Yet this punishment, how necessary soever, always appears to be excessively severe. The natural atrocity of the crime seems to be so little, and the punishment so great, that it is with great difficulty that our heart can reconcile itself to it. Though such carelessness appears very blamable, yet the thought of this crime does not naturally excite any such resentment, as would prompt us to take such dreadful revenge. A man of humanity must recollect himself, must make an effort, and exert his whole firmness and resolution, before he can bring himself either to inflict it, or to go along with it when it is inflicted by others. It is not, however, in this manner, that he looks upon the just punishment of an ungrateful murderer or parricide. His heart, in this case, applauds with ardour, and even with transport, the just retaliation which seems due to such detestable crimes, and which, if, by any accident, they should happen to escape, he would be highly enraged and disappointed. The very different sentiments with which the spectator views those different punishments, is a proof that his approbation of the one is far from being founded upon the same principles with that of the other. He looks upon the centinel as an unfortunate victim, who, indeed, must, and ought to be, devoted to the safety of numbers, but whom still, in his heart, he would be glad to save; and he is only sorry, that the interest of the many should oppose it. But if the murderer should escape from punishment, it would excite his highest indignation, and he would call upon God to avenge, in another world, that crime which the injustice of mankind had neglected to chastise upon earth.

For it well deserves to be taken notice of, that we are so far from imagining that injustice ought to be punished in this life, merely on account of the order of society, which cannot otherwise be maintained, that Nature teaches us to hope, and religion, we suppose, authorises us to expect, that it will be punished, even in a life to come. Our sense of its ill desert pursues it, if I may say so, even beyond the grave, though the example of its punishment there cannot serve to deter the rest of mankind, who see it not, who know it not, from being guilty of the like practices here. The justice of God, however, we think, still requires, that he should hereafter avenge the injuries of the widow and the fatherless, who are here so often insulted with impunity. In every religion, and in every superstition that the world has ever beheld, accordingly, there has been a Tartarus as well as an Elysium; a place provided for the punishment of the wicked, as well as one for the reward of the just.

Nature, however, when she implanted the seeds of this irregularity in the human breast, seems, as upon all other occasions, to have intended the happiness and perfection of the species. If the hurtfulness of the design, if the malevolence of the affection, were alone the causes which excited our resentment, we should feel all the furies of that passion against any person in whose breast we suspected or believed such designs or affections were harboured, though they had never broke out into any action. Sentiments, thoughts, intentions, would become the objects of punishment; and if the indignation of mankind run as high against them as against actions; if the baseness of the thought which had given birth to no action, seemed in the eyes of the world as much to call aloud for vengeance as the baseness of the action, every court of judicature would become a real inquisition. There would be no safety for the most innocent and circumspect conduct. Bad wishes, bad views, bad designs, might still be suspected; and while these excited the same indignation with bad conduct, while bad intentions were as much resented as bad actions, they would equally expose the person to punishment and resentment. Actions, therefore, which either produce actual evil, or attempt to produce it, and thereby put us in the immediate fear of it, are by the Author of nature rendered the only proper and approved objects of human punishment and resentment. Sentiments, designs, affections, though it is from these that according to cool reason human actions derive their whole merit or demerit, are placed by the great Judge of hearts beyond the limits of every human jurisdiction, and are reserved for the cognizance of his own unerring tribunal. That necessary rule of justice, therefore, that men in this life are liable to punishment for their actions only, not for their designs and intentions, is founded upon this salutary and useful irregularity in human sentiments concerning merit or demerit, which at first sight appears so absurd and unaccountable. But every part of nature, when attentively surveyed, equally demonstrates the providential care of its Author, and we may admire the wisdom and goodness of God even in the weakness and folly of man.

It is even of considerable importance, that the evil which is done without design should be regarded as a misfortune to the doer as well as to the sufferer. Man is thereby taught to reverence the happiness of his brethren, to tremble lest he should, even unknowingly, do any thing that can hurt them, and to dread that animal resentment which, he feels, is ready to burst out against him, if he should, without design, be the unhappy instrument of their calamity. As, in the ancient heathen religion, that holy ground which had been consecrated to some god, was not to be trod upon but upon solemn and necessary occasions, and the man who had even ignorantly violated it, became piacular from that moment, and, until proper atonement should be made, incurred the vengeance of that powerful and invisible being to whom it had been set apart; so, by the wisdom of Nature, the happiness of every innocent man is, in the same manner, rendered holy, consecrated, and hedged round against the approach of every other man; not to be wantonly trod upon, not even to be, in any respect, ignorantly and involuntarily violated, without requiring some expiation, some atonement in proportion to the greatness of such undesigned violation. A man of humanity, who accidentally, and without the smallest degree of blamable negligence, has been the cause of the death of another man, feels himself piacular, though not guilty. During his whole life he considers this accident as one of the greatest misfortunes that could have befallen him. If the family of the slain is poor, and he himself in tolerable circumstances, he immediately takes them under his protection, and, without any other merit, thinks them entitled to every degree of favour and kindness. If they are in better circumstances, he endeavours by every submission, by every expression of sorrow, by rendering them every good office which he can devise or they accept of, to atone for what has happened, and to propitiate, as much as possible, their, perhaps natural, though no doubt most unjust resentment, for the great, though involuntary, offence which he has given them.

What Smith in essence is saying here is that most people while understanding why capital punishment was meted out to the sentry who falls asleep at his post, would still see it as an extreme measure. The same people would have a sense of outrage that would support a capital sentence on someone who commits a heinous crime like parricide, and in our time, mass murder. People can be so enraged that they may also believe such punishment to go beyond mortal realms to punishment in the after life as some form of universal retribution.

But Smith says that this apparent inconsistency or irregularity in views of people as to who deserves punishment is something that should be determined not from their thoughts but by their actions. He believes that if people were to judge others based on their thoughts and potential for thinking evil as opposed to someone caught in the act of enacting the thought, then there would be no end to inquisitions throughout society. (This would be equivalent to a type of ‘thought crime’ in Orwell’s great Nineteen Eighty Four).

Judgment of what happens in the human heart is not for man to make as it is in the province of the Divine. Humans can look at actions and determine the nature of them thereby making judgments on that. We can judge on actions, but not on thoughts or we will want accounting for every negative human thought even when it doesn’t result in any harm to anyone. The sentry, though his intentions were not based on malice, is judged based on the fact that his lack of alertness could have dire consequences for all.

If there appears any irregularity in this aspect of human judgment and thinking as to how people react to punishment, it is a good thing which prevents ‘witch hunts’ and allows for some semblance of order in society. To Smith this falling into place of things naturally despite the irregularity in response to, for instance, capital punishment, is due to the special providential adjustment of Divinity.

Smith is not proposing here a system of legal justice and how a judiciary should work. He is commenting on the moral and social nature of man in relation to the Divine and how we operate in our daily lives.

Then as is typical of Smith, he provides a countervailing view to show that there are instances of intention in humans that must be considered as in the case of someone who did not have intent to cause suffering to others but does so as in accidentally causing someone’s death. There is atonement that is necessary though he is not culpable for what happened. The sanctity of a human being and his innocence cannot be infringed upon under any circumstances especially via some form of revenge.

In doing this, as he does in many instances, Smith does his best to explore the complexities in human affairs and tries to show that they are consistently taken care of via a kind of natural balance, harmony and adjustment that takes place in the universe, world, and society which is the underlying Divine Order for the good of all.

In using this approach, Smith seems to be allowing for the rationalisation of how we act and react to things in line with the greater architectonic of Divine Order.

All apparent irregularities are Divine ways of adjusting the seemingly imperfect into perfection. That is principally the phenomenon of the IH. There is hardly a coincidence in Smith using the phrase “as upon all other occasions” relating to irregularity above from TMS with the mention of “as in many other cases” together with the operation of the IH in WN – as in the passage below.

In both cases, the occurrence of the IH as special providence making adjustments for the good of all is a regular and natural phenomenon.

Now take a detailed look at the passage where perhaps the most famous term in economics finally appears in WN Book 4 chapter 2 (bold and italics are mine):

 

IV.2.1

By restraining, either by high duties or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them. Thus the prohibition of importing either live cattle or salt provisions from foreign countries secures to the graziers of Great Britain the monopoly of the home market for butcher's meat. The high duties upon the importation of corn, which in times of moderate plenty amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woollens is equally favourable to the woollen manufacturers. The silk manufacture, though altogether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides towards it. Many other sorts of manufacturer have, in the same manner, obtained in Great Britain, either altogether or very nearly, a monopoly against their countrymen. The variety of goods of which the importation into Great Britain is prohibited, either absolutely, or under certain circumstances, greatly exceeds what can easily be suspected by those who are not well acquainted with the laws of the customs.

IV.2.2

That this monopoly of the home-market frequently gives great encouragement to that particular species of industry which enjoys it, and frequently turns towards that employment a greater share of both the labour and stock of the society than would otherwise have gone to it, cannot be doubted. But whether it tends either to increase the general industry of the society, or to give it the most advantageous direction, is not, perhaps, altogether so evident.

IV.2.3

The general industry of the society never can exceed what the capital of the society can employ. As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital, so the number of those that can be continually employed by all the members of a great society must bear a certain proportion to the whole capital of that society, and never can exceed that proportion. No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain. It can only divert a part of it into a direction into which it might not otherwise have gone; and it is by no means certain that this artificial direction is likely to be more advantageous to the society than that into which it would have gone of its own accord.

IV.2.4

Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society.

IV.2.5

First, every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry; provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock.

IV.2.6

Thus, upon equal or nearly equal profits, every wholesale merchant naturally prefers the home-trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home-trade his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. He can know better the character and situation of the persons whom he trusts, and if he should happen to be deceived, he knows better the laws of the country from which he must seek redress. In the carrying trade, the capital of the merchant is, as it were, divided between two foreign countries, and no part of it is ever necessarily brought home, or placed under his own immediate view and command. The capital which an Amsterdam merchant employs in carrying corn from Konigsberg to Lisbon, and fruit and wine from Lisbon to Konigsberg, must generally be the one half of it at Konigsberg and the other half at Lisbon. No part of it need ever come to Amsterdam. The natural residence of such a merchant should either be at Konigsberg or Lisbon, and it can only be some very particular circumstances which can make him prefer the residence of Amsterdam. The uneasiness, however, which he feels at being separated so far from his capital generally determines him to bring part both of the Konigsberg goods which he destines for the market of Lisbon, and of the Lisbon goods which he destines for that of Konigsberg, to Amsterdam: and though this necessarily subjects him to a double charge of loading and unloading, as well as to the payment of some duties and customs, yet for the sake of having some part of his capital always under his own view and command, he willingly submits to this extraordinary charge; and it is in this manner that every country which has any considerable share of the carrying trade becomes always the emporium, or general market, for the goods of all the different countries whose trade it carries on. The merchant, in order to save a second loading and unloading, endeavours always to sell in the home-market as much of the goods of all those different countries as he can, and thus, so far as he can, to convert his carrying trade into a foreign trade of consumption. A merchant, in the same manner, who is engaged in the foreign trade of consumption, when he collects goods for foreign markets, will always be glad, upon equal or nearly equal profits, to sell as great a part of them at home as he can. He saves himself the risk and trouble of exportation, when, so far as he can, he thus converts his foreign trade of consumption into a home-trade. Home is in this manner the centre, if I may say so, round which the capitals of the inhabitants of every country are continually circulating, and towards which they are always tending, though by particular causes they may sometimes be driven off and repelled from it towards more distant employments. But a capital employed in the home-trade, it has already been shown, necessarily puts into motion a greater quantity of domestic industry, and gives revenue and employment to a greater number of the inhabitants of the country, than an equal capital employed in the foreign trade of consumption: and one employed in the foreign trade of consumption has the same advantage over an equal capital employed in the carrying trade. Upon equal, or only nearly equal profits, therefore, every individual naturally inclines to employ his capital in the manner in which it is likely to afford the greatest support to domestic industry, and to give revenue and employment to the greatest number of people of his own country.

IV.2.7

Secondly, every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry that its produce may be of the greatest possible value.

IV.2.8

The produce of industry is what it adds to the subject or materials upon which it is employed. In proportion as the value of this produce is great or small, so will likewise be the profits of the employer. But it is only for the sake of profit that any man employs a capital in the support of industry; and he will always, therefore, endeavour to employ it in the support of that industry of which the produce is likely to be of the greatest value, or to exchange for the greatest quantity either of money or of other goods.

IV.2.9

But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

What in essence does the passage say:

1. domestic industries can be protected by trade tariffs on imports


2. that domestic monopolies may result due to this but government may be in cahoots with local industries in doing so to the disadvantage of citizens


3. that this tendency to profit taking via monopoly tends to reallocate resources to serve monopolistic interests and the benefit of which, to the country, is ambiguous


4. some form of interference can see to the reallocation of capital away from monopolistic tendencies but it is uncertain as to the benefit that arises from such moves


5. individuals who seem to pursue self interest in the way they allocate their capital may, in effect, actually be benefiting society without their knowing


6. merchants would on the whole prefer to keep capital at home because they can monitor its progress and gains better that way


7. this results in the home country of a merchant engaged in export trade to also having a variety of that produce sold there as long as some form of profit taking can be managed in the process


8. since most gain seems to arise from deploying capital within the home country there is a tendency for capital to be kept home which results in industry and employment growing and revenues rising


9. those who adopt this strategy will want to see that the produce of such industries be of the greatest value


10. in such a deployment of capital the merchant intends to gain the maximum profit he can


11. through such moves of maximizing profit the revenue in a country is increased and the motivation behind this is not related to society’s benefitting consciously or otherwise


12. by supporting domestic industry in this manner over foreign ones the merchant is only pursuing his own interest


13. via this mode of operation he seems to be led by an IH to promote an end which was by no means his original intention


14. he ends up promoting society’s interests more than he would have if his intention was to serve mainly society’s interests


15. not much good arises from commercial transactions that are solely for society’s good

It would be hard to prove that Smith does not here advocate keeping capital at home as opposed to investing it overseas. But there is more in all this than just that. This passage is one of many that are ambiguous in WN. Yet within the ambiguity lies the special providence that accounts for the irregularity that accompanies the use of the IH. How does this ambiguity work?

From (1) – (3) we see that merchants are quite happy to exploit cornering the domestic market to set up some form of monopoly aided by government tariffs on imports. This is consistent with the reading of selfishness (as opposed to self interest) of those tending toward monopolies. There is no doubt that Smith is against the selfishness that stems from monopoly and greed as shown earlier with the quote on the critical clash of interests in Book I.

But with (4) the transition to ambiguity begins as Smith says interference to regulate some of this monopoly is not always advantages. In (5) the ambiguity comes full circle as Smith implies that even with monopolistic ambition allocation of capital may be for everyone’s good. This is the ambiguous merger of selfishness and self interest which can sometimes describe what does happen in reality. The rest of the passage shows how the tendency to maximize profits through favouring domestic to foreign industries leads to greater produce, labour and revenue for the home country.

So even if the merchant is driven by selfishness or a mixture of self interest and selfishness -- hence the irregularity -- the special providence of the IH steps in to adjust things such that society gains even when the intention of such societal good wasn’t there in the first place. This is consistent with the irregularity of selfishness in the TMS that also sees the IH adjust things such that everyone gains all round.

Not much good arises from commercial ventures that work consciously to solely benefit everyone as an end in itself. So it becomes clear that there is a kind of teleology to Smith and a natural order to things in a Divinely guided universe with a moral center: that while self interest ensures smooth functioning of things in a society, the imbalance of selfishness is also readjusted into a kind of balance that is in the end for the good of all.

This does not imply that overtly destructive activities like rampant monopolies and the ills of capitalism as we know through hindsight, and still live through today, will have the IH come in and rescue everyone. There will be consequences for bad actions and they are inescapable just as the consequences of war result in unimaginable human suffering.

Yet under Smith’s scheme of things, the broad architecture of the universe with its Divine Order and moral center will still see a balance come into play, as life does go on albeit sometimes on quite a different paradigm.

The Overdue Sunrise

Bailouts are not the answer. It is time to go beyond economics as usual and look into the metaphysical ideas which can take us out of the current economic quagmire. And we can get out of this mess.

For now, there seems to be no end to it. There seems no end to attempted bailouts for industries and attempts to fix a tail spinning US and world economy through lowering interest rates, and pumping in more money. The solution for banks, big businesses and governments (3BG) seems to be that when there is a problem, throw money at it and maybe it will go away. The ideas in this piece will look at how we got into this mess and a possible scenario of getting out of the quagmire.

The first part looks at our three dimensional economy (3D), which reflects the world as we live it. This analysis will be done under the auspices of Karl Marx’s ideas. This is not an apologia but a use of Marx’s ideas as a platform to bring forth my own.

The second part will look at what is termed a fifth dimensional (5D) economy. The 3D economy is an ego based one which we have been weaned onto since birth and have been led by the nose to believe is the only way to live. The 5D economy is a heart based one, in which we go beyond the claptrap that has held back the species and the planet all these years. In the latter, basic spiritual and metaphysical ideas will be looked at to help give a different perspective to where we can be heading, if we so choose, in our economy and our lives.

Please read this piece in order of Part 1 first and then Part 2, as the 5D ideas will sound like they are the product of hallucinogens that Coleridge may have used when writing Kubla Khan -- which they are decidedly not -- unless the reasons for the collapse of the 3D model have been examined.

The point of this piece is that we are not due for an apocalypse if we choose to create the reality that reflects the better angels of our nature.

The Economics of the Third Dimension

Marx has been misunderstood. Seriously. And I am convinced that he, above all other political thinkers, had seen right through the veil of ignorance of what a capitalist system based on its foundation of scarcity finally leads us to. Neither the hardcore capitalists nor diehard communists (those who are still alive) have any notion of what the Big M was up to. Marx was a philosopher who turned a devastatingly critical and accurate eye on what was happening around him.

Watch these wonderful films by the great Charlie Chaplin, and have an idea from film what Marx was on about: Modern Times, The Great Dictator, Monsieur Verdoux, A King in New York. In the first one you see man becoming a cog in the whole system of the assembly line of industrialization. In the second you see how industry and the vast maximization of capitalism works hand-in-hand with fascism. In the other two, see how trying to stay alive in the capitalist system means you have to live off the life of others (literally at times), and how the system is a natural bedfellow for all forms of dishonesty and hypocrisy. (The films are also very funny and entertaining.)

But does the world have to be this way? Chaplin gives some of his responses in his films, whereas Marx hits you with a velvet gavel via his great work. Most of the ideas in this piece are based on a reading of Marx’s major works: his biography written, and selected works edited, by David McLellan; Marx’s Grundrisse ("Foundations of the Critique of Political Economy"); his ineluctable Vol. 1 of Capital (and parts of Vol. 2 and 3); An Outline of the History of Economic Thought by Screpanti and Zamagni, and all major works of George Orwell.

Basically, what Marx was on about was this: that the neo-classical economists who come up with dandy ideas of supply and demand, and all those wonderful little curves and bizarre calculations have perpetrated one of the greatest frauds of all time (that was a euphemistic paraphrase of Marx). That notions of land, labour and capital as economic entities and products that, if juggled right, would lead us to utopia are what has gotten us, in many ways, into the rut we are in. Rather than focus on the unrealistic assumptions and nature of neo-classical economics, let’s look at the real thing.

Marx essentially claims that anything to do with the world of a human being has to do with human nature and human interaction with one another and the environment. The economy is a purely human affair because it has man in the centre, at the beginning and at the end. The whole purpose of an economy is to serve as a means for humans to deal with one another in a balanced and meaningful manner so as to lead fulfilling lives. So any aspect of an economy must be examined by its human relational aspect. This seems like common sense.

So the economy is all about how we relate to one another. The system of economic production used and the products that come from it are the result of human interaction; and how we relate to one another impacts how we lead our lives; that in turn coupled with the way we perceive the world etc determines our existence and the way the world operates. So it starts with man and ends with man.

However, the capitalist system is a different animal altogether. This is a system which with the connivance of 3BG has created a mechanistic behemoth of using land, people (labour) and capital as that which is turned into the cog of an industry (which includes the service industry) which then churns out a product that is thrown out for people to consume. This is then regurgitated back via income earned into more spending so that the whole glorious cycle can be repeated.

Some call this life, Marx calls it Capitalism, the rest of us call it the disaster unraveling all around us.

But Marx’s point was that when people as workers/labour are treated as a means to an end, as is what capitalism prides itself in doing, then there are consequences in terms of our relations to one another. Because what happens is that women and men who are supposedly born free to fulfill their destiny are now here to fulfill the destiny of capitalist production.

When the economic perspective is framed by capitalism then this is what occurs: all aspects of production, including human beings, are mere instruments for production for that which is meant for consumption. But this is a process that allows for labour (people) to be treated as instruments and dehumanized by the bosses/superiors/capitalists as functional tools in an industry (media, food, cars, education, health, military, etc).

Taking a different tack: I have taught at tertiary/college level institutions where teachers/instructors are told that they are hired to produce a product for the consumer/client/customer, that is, the student. If this is the attitude of education in many places today, do we still wonder why the world is where it is at? Many of the students I have taught say they wanted to go into ‘business’ (the ‘business’ of ‘business’ being ‘business’), or the ‘medical business’, or the health and education ‘business’ or the media ‘business’. When asked why they chose these fields, most honestly said: to make a lot of money -- the kind that today you can use as a substitute currency in your Monopoly game.

And as Marx rightly points out, what happens is that as in the education ‘industry’ or ‘business’ the relations between students and teachers change due to their mode of production. So I was told by my superiors back then to deliver a product (lessons) to my customers (students), and fill in forms to satisfy bureaucratic structures and feedback mechanisms as to how the product delivery went. The only thing missing here was the Ford motor assembly line.

In other words put on the work apron, and to hell with the students, their welfare and whether they learn anything, much less if they become ‘educated’ (what on earth does that mean today?); just churn out the stuff, make sure it meets the industrial ISO standards, do and say the right things to get my capitalist-inspired bonus for churning out as many courses, lesson plans, extra school/curricula activities, and (if I can be popular with the students at the same time) perhaps get some good feedback from my customers.

This has led to teachers becoming indifferent to their students, and simply seeing them as a means to an end, that is, their salary or rather their wage. There is hardly any concern for what happens to the student than a guy doing the rivets for a car in an auto manufacturing plant (those that are still open) cares for who owns and drives the eventual vehicle made, or how it is used.

But it cuts both ways for I have heard many students in the past complain to me about their other teachers and say that they do their readings or assignments because they choose to do so and depending on whether they like a teacher (!). And that the teacher should adapt to them, and not them to whatever ideas (which may be demanding) the teacher is trying to bring across because they pay the teachers’ wage/salary via their tuition fees.

Look at your own workplace and environment and see how working conditions and attitudes from this capitalist system makes people unreasonably competitive, confrontational, unforgiving and egomaniacal. This is the price we pay for an ego based system of reality that Marx warned us about.

For the capitalist system, it is not about people, our societies or the world, it is about our egos. And what would 3BG do without it. The cornerstone of the capitalist system is the feeding of egos, creation of scarcity, fear mongering, and enslaving of labour (people) in order to create more and more capital. For further insight into this please see The Economy of Scarcity.

Capital begets capital and all human relations are force fed into this structure of production which creates havoc among people relating to themselves and others. This in turn creates class, in which people seek to belong to a controlling situation or position which allows them to exercise power over others. This has little to do with putting a good person in charge to does things competently, fairly and reasonably. For Marx, the need for capital accumulation and results can change a decent person into a megalomaniac.

But this does not mean that no good ever came out of capitalism. It has provided great material wealth, and in modern societies many have acquired this material wealth. But capitalism’s unending, unthinking, knee-jerk reaction of continuing to voraciously expand itself via greed and the need to sustain itself has reduced humans to being desensitized to acts of violence between themselves.

The Capitalist Grind Mill

How exactly is the worker/woman/man/child dehumanized by the process of capitalism. Marx shows that labour loses out twofold via unjustified surplus value extraction and theft of the product of labour. A person is paid a wage that is sufficient for him to live and reproduce himself (as in supporting a family).

This is a minimal or necessary wage. The wage system is a reminder to a person that he has sold his labour power to someone who gives him money in return. This is like being paid to lick stamps in that your bodily fluid (for Marx labour power) of saliva has been sold for a service provided. This is a process of alienation for the individual from his human essence when he parts with something that he was born with and is to all intents and purposes sacred, but has been de-sanctified because it can be purchased and traded for money.

And people have been led to believe that this is the only way to live. The capitalist system as Marx keenly points out is really a snazzy version of feudalism, which for us means some credit cards and mobile phones thrown in.

The feudal lord owns the land and he determines who does what for whom and how, for what it is worth. The serfs, peasants, tenants or what you will, serve at his pleasure. He in turn is supposed to ensure their welfare in that they have enough to get themselves and their family through the day and reproduce themselves; this is important because the class of serfs must be maintained and kept in their place to continue serving the ruling class of landlords.

Bring all this forward to the industrial and information revolution and see how the feudal system of production has been reproduced in the form of capitalism which we have been indoctrinated to believe from birth is how the world is. Marx’s point, and that of any clear thinking individual, is that it is not the way it is or has to be, but how we have been brainwashed into accepting to keep the status quo.

Remember, when you a born, you come into a flow of time and activity which has preceded you in this master-slave relationship and your parents, family, society, and government all take it as a natural progression of things mostly out of ignorance. But the manipulators of the world know that the only way to keep the master-slave class structure is to control the financial and banking industry and buy over support through coloured paper that is printed willy-nilly as fiat currency.

That is why we need a comic genius like Chaplin to show how funny and ridiculous we are in accepting the agenda of manipulators and dictators.

Democracy today by any name is largely a capitalist master-slave relationship. We have been conned into accepting it by the illusion of material wealth that provides us and the world anything but peace, security and happiness. Because as Marx points out, the capitalist mode of production of alienation of our labour and labour power through a system of wages, takes away most people’s creative drive and sacred core by making them serve capital accumulation so as to accelerate it even further. Can this really be living?

Now we can take a closer look at the two fold deception that capitalism has used on us as Marx would put it. A person is made to work long hours and over time, as far as possible, to squeeze the maximum out of his time and effort thereby allowing for maximum product creation that can then be sold for as much profit as possible. This has got nothing to do with leading a balanced and fulfilling life.

First, there is the profit made from the surplus value of labour as explained by Marx. After all the costs of production are deducted including the wage paid, the capitalist makes a profit based on value gained from labour power, that is, the surplus value of labour. This means the exploitation of what labour can produce via a minimal wage paid to abstract its profit creating output. This is the only way for the capitalist to make a profit through the exploitation of variable capital, that is, labour. Labour is variable because it is born, can grow sick, old and die and needs constant reproducing to keep the machinery of production humming.

Most people are also eminently suited for manipulation (variable) and can be made to do more for less. It is hard to make a profit if labour is paid fairly for what it is worth for it needs exploitation to ensure value from which profit can be drawn.

Another classic example of surplus value extraction is the use of domestic maids. Take a situation of a maid coming from a third world country who will be paid in a currency of a richer country for her services. She comes to a household and, depending on how she is treated, in effect comes under a master-slave relationship with her employers. The maid is caught in a 24 hour cycle of being at the beck and call of her employers.

She not only cleans the home, she markets for them, washes the car daily, waters the plants, does baby sitting, cooks, washes up, endures the baiting of badly brought up kids, looks after the family invalid, and is taken to the employer’s business or relative’s home to do even more work.

Hey, maximization of the buck.

Now if different people were hired to do all this work, imagine the cost: in other words the fair wages that would have to be paid. But for a fistful of dollars, and a few dollars more thrown in as an annual Christmas bonus, the master-slave relationship ensures that the surplus value of the maid is exploited to the hilt thereby making it a profitable enterprise for her bosses.

Rank capitalism in a nutshell.

Sure, more people today are enlightened in their treatment of maids, but only after human rights groups caused government intervention in many instances of abuse. [This does not in anyway exonerate maids/employees who themselves have been guilty of nefarious conduct while at work]

Also look at the busy executives of today. Many have the favour returned for the way they treat their subordinates. The person is on call a lot of the time via email or mobile phones. There is an almost 24 hour work cycle to produce things. All technology produced is but a tool to impinge on labour in producing products for capital, since the nature of capital is to keep growing insatiably until its own collapse -- as is happening now.

Virtually everyone is exploited in one way or another as it is the nature of the capitalist beast to do so. So time and effort of labour is stolen to maximize production, hence, surplus value. The so-called ‘market pay’ (not that of top CEOs) for most people are usually less than what they are worth, and if they get what they think they deserve, they are worked to the bone to get every drop of surplus value out of them to maximize their firm’s production and profit margin.

Second, the product made by labour is in effect stolen from it. Here Marx uses his concepts of use and exchange values to explain how this sleight-of-hand is pulled off. Anything manufactured under capitalism is considered a product if it has a use value. So widget X is a product because it can do Y number of things deemed useful.

Exchange value is what is given in return for something, namely, wages paid to labour are an exchange for its labour power in production. So when the capitalist pays the minimum amount it can get away with (a.k.a ‘market rates’) to labour to produce, it has bought labour power to produce something. This is the transfer of cause and effect -- you buy something in return for something.

But, Marx points out, earnings that come from the sale of the produce of labour is a separate thing altogether. The sale of widget X for profit is not only sloughing off from surplus value, but getting paid for something for its use value. So the product of/from labour has exchange and use value, but while the capitalist provides some compensation in terms of wages for labour’s time and effort via wages (exchange value), he steals the product of labour for widget X (use value) by selling it for his own gain and profit.

It is testament to the great propaganda and brainwashing that we have undergone that most people -- never mind the economists who justify and perpetrate this scam -- will say ‘Wait a minute, but that’s how it works. The boss pays you, you work the machines, computers, phones and paper to get widget X out and he sells it, and gets his keep from it.”

No, not at all, says Marx. And he is spot on. Widget X could not be created if not for labour. You can get all the machines, and capital together, throw in a few MBA types and then say “Wallah!” But guess what, no widget X! To get the latter you need people/human beings/homo sapiens to put in their power to create widget X by working the capital and resources. And in most cases, people have surrendered without blinking an eyelid their product to the capitalist, which is the direct result of their time and effort and slaving away. This is a consistently ego based good thing for the capitalist.

What this means is that while the capitalist is entitled to some form of remuneration for his so-called work in getting everything together to ‘make it happen’ so to speak, he no more owns the produce of labour which he sells (widget X), than does the line manager who supervises production. Only the people who put their shoulders to the wheel can rightly say that widget X is the product of the sweat of their brow, everyone else just played a supporting role.

It needs to be said again and again: Widget X cannot exist without labour power, and if the capitalist claims neither could it without his role thrown in, then he is welcome to put his shoulder to the wheel and see what widget comes out of it. The workers/people can always till the land and grow things to eat and sell and survive as was done since time immemorial, or form a cooperative venture of their own to create a just and equitable system of work, and profit sharing based on their own use of their surplus value for themselves without exploitation.

But the list goes on. Marx further explains that labour in this system becomes alienated (as discussed above) by the capitalist system of production which is simply designed for a utilitarian result oriented approach irrespective of the harm it does to the individual, families, societies, the environment or the world. It is about making and accumulating things never mind how and what the consequences are.

Marx makes the powerful but subtle point that people are born, live their lives and die based on the capitalist and industrial demands of how they should fit into the world, follow a wage system that inordinately rewards greed, and the excessive and wasteful bonuses of ‘managers’ who have not done an honest day’s work in their life in the sense someone says of his parent: ‘my mom or dad wasn’t very rich, but she/he was an honest hardworking nurse or postal worker’; as opposed to ‘my dad works the politicians, nightlife, golf course, stock markets and earns tons for making sure that everyone else who supports that fat cat life of his continues to live on a minimal amount’ (hey, someone’s got to make those profits to give back to shareholders, man!).

People are alienated in their work and their lives. They clock in, clock out, and pay their bills and wonder what it’s all about: welcome to capitalism.

Man’s alienation from his work, from his colleagues and the class structure set up in making him jump to everything the boss says is a sign of a human being who has abrogated his or her right to be just that, a human being. The capitalist system of production produces relations that denigrate a person’s dignity to living in subservience, and fear with an entire legal system and state structure supporting it, thus spake Marx.

Not only because the system may not know better, but it’s a means of controlling people. The capitalist system of scarcity mongering, unhealthy competition, confrontation and instilling the fear of losing work and being unable to survive unless you are cog in the machine earning a ‘market decided’ wage is the reductio ad absurdum of undermining what it was meant to serve – human interest.

And this is done, as Marx pointedly notes, by having a large reserve army of unemployed out there to ensure that the system can throw out those who demand what is fair, and hire those who are more accommodating and willing to accept a lower wage, produce more, create more surplus value from which to abstract more profit: look and behold the wonders of globalization!

But the more capitalism exploits people to keep wages low, profits high, and CEOs and shareholders’ returns stratospheric, the more it creates problems in having consumers who increasingly end up joining the ranks of the unemployed reserve; and people become ravaged by the system, and they soon can no longer afford the products they once made.

This in turn leads to more fiat currency churned out via low interest rates, sub-prime lending mortgages, and credit card promotions to increase borrowing and spending. And if industry needs a hand, just give a billion dollar bailout and add that to the taxpayers bill. So in addition to all this, labour/people are saddled with currencies that fluctuate in value and taxes that sooner or later have to be paid, all in the name of capitalism.

Which brings me to one of the final insults to all decent people -- that labour, after its shortchanging, gets paid in funny money that is debt based in which the currency is backed by nothing other than a dollar that is but an IOU for nothing (no gold backs it to give it any value). And you can tell its funny money because its value changes all the time. Please see New Money to End All Money: Part 1 and Part 2.

And it does not stop there.

The Formula that has Brought us to the Brink

With his characteristic trenchant insight Marx describes beautifully how the general formula for capital works. There is, first, the process of C-M-C in which commodities are produced in exchange for money which is in turn used to acquire more commodities. This is the natural process of a healthy economy in which, e.g., crops are grown which are then sold and the money gained from that is used to get seed, fertilizer, animal feed etc. It is a sustainable process that keeps the economic cycle going.

But the capitalists opt for M-C-M in which money is used to gain commodities so that their sale can generate more earnings in dollars. So the economic cycle in capitalism is one that ensures that what was a means of exchange – money -- is used to create commodities for the sole purpose of accumulating more money. The focus of an economy is no longer on the production of commodities that best suits people as much as a means of churning out goods and services to materialize more money out of thin air (and banks abet in this activity with alacrity), so as to lead to even more money being produced.

The sole purpose of an economy becomes one in which the financial markets, speculation, manipulation of interest rates, faulty and shady loan and investment schemes bubble up from the cauldron of greed which has thrown into it: human dignity, sanctity of life and respect for the environment stirred into a witch’s brew of capital accumulation and financial meltdown. If this sounds bewitchingly familiar, it is because that is exactly where we are at.

Marx was prescient in saying that why even bother with having the C in the M-C-M formula, one might as well as remove the C and just look for M being created to generate even more M. And this is, sadly, precisely what has happened with the capitalist system of interest rates and fiat currencies. If in doubt in a capitalist system:

a. lower interest rates

b. lower it even further

c. find if it’s possible to just print and give out money, don’t bother paying it back because we ‘need to jumpstart the economy’

d. cut taxes to increase spending (especially for corporations and high income earners)

e. multibillion dollar bailouts that mean injecting more money to chase more money around (somehow the idea of more effective and meaningful production of commodities seems secondary)

f. forget Gresham’s law of bad money chasing out good money, you now have money chasing its own tail until it collapses from fatigue-neurosis and results in massive currency devaluation (a.k.a. inflation)

g. if necessary start another war, a great way to ‘jumpstart’ spending and create bombs and, even better, employment for people by sending them out to fight; and a little population control from this would even make Malthus proud – keep excessive human growth in check, after all balance is everything.

Today the inversion of Marx's dictum holds: a capitalist is a miser gone mad and a miser is but a rational capitalist.

When will we start to wake up?

Interlude: Reverse Engineering

Let us still hold on to the idea of the ego based self-first-everyone-else-last-approach-of-capitalism’s 3D economy. Even within the 3D system, we can see a way to stem the downward spiral and turn things around. Look at the C-M-C formula again. This is the approach that is needed. This starts with a massive restructuring of the monetary system and cold-turkey cure out of the addiction caused by the M-C-M drug.

The C-M-C approach is one which promotes commodity generation as opposed to $ generation as the purpose of an economy is to provide things of use and value for people, not hoard money as a means of greed, domination and manipulation of others. So every monetary transaction, as Marx explains, is a circuit that starts with the sale of C and ends in the purchase of C. The M is given to one person who gives it to another. That is the end of the transaction.

In the C-M-C approach, money is part of a transactional process, it cannot be used as a basis to generate further fictitious amounts by lending institutions or banks that leads to hoarding and speculation of it on financial markets.

If $100 is out there for something, then it returns back as $100 and remains as such. It started out as $100, it remains $100. It does not become $1000 from the vagaries and shenanigans of fractional reserve banking.

What is recommended here is that any investment made should be dealt with in a green friendly and win-win manner which will be looked at in the later section. In other words, honesty is the policy of the day (and for every other one after that).

What does this mean in concrete terms. It means looking seriously at creating a four tiered monetary system and the use of local/complementary currencies as explained in New Money to End All Money: Part 3.

What else would follow from this:

a. establish a gold standard (or something similar) for national currencies

b. use international and regional currencies that involve the use of (a) but are convertible into a basket of natural resources and social commodities which bring wealth back to people, societies and the environment

c. local or complementary currencies (as explained in link on “New Money” above)

d. international and governmental policies that see to it that ideas, resources and effort are channeled into production to ensure Green and People Friendly (GPF) solutions (see Genuine Progress Indicators for details)

e. establishment of interest free-ethical banks (see JAK Bank of Sweden) and those that use innovative methods and ethical policies (see the UK Cooperative Bank for details). It is also useful to have a look at Islamic banking guidelines which disallow the charging of interest and insist on an ethical framework for doing business.

f. no more financial markets (essential in removing the M-C-M equation from the system) but have saving and investment opportunities involving GPF activities with yields in terms of gold backed national currencies or local currencies. The yields/rewards from these investments can also be in term of points that can be transferred or created into local currencies.

g. creation of local, community, national and international job banks and data centres (which will also create employment opportunities) to facilitate transnational job placements for people and families (where necessary). This would be in line with GPF solutions that will also ensure a smooth and legal fast track in clearing immigration matters for qualified people on the move. This is NOT globalization, but global realization of a fair and just system of employment (to be looked at in later section). Governments and people will have to grow up and get past paranoia and prejudice to get things rolling on this score.

This is well within our grasp. It is time for people to wake up, get real, take their lives into their own hands and pressurize their governments to start in this direction. There is really no need to wait till some ‘doomsday’ scenario kicks in before we kick ourselves into action.

The Economics of Abundance

If duality seems to be a central problem of human nature, how are we exactly going to change that? It seems that we may have little choice but to deal with changing it or at least making a serious effort at it. The current problems of the economy, apparent shortage of fossil fuels and environmental issues coming to the fore will necessitate, it does seems, an entire re-look at how we intend to lead our lives.

Some assumptions need to be made here. That the inability to squeeze more oil out of where we choose to squeeze it out from is going to lead to more scientific research on alternative energy sources, which is happening right now. For instance, perhaps the means will be found to harness not just solar and wind power, but the power that comes from the tides that rise and fall all the time. Turbines under seas and means of converting, storing and transferring such power could provide a serious alternative to fossil fuels.

Also let me further clarify what I mean by Scarcity and Abundance. The term scarcity was used in an economic sense earlier, but the mention of duality was meant to focus on a more esoteric sense of the term. With duality and a sense of mistrust we build among ourselves, we convince ourselves of lack and scarcity which is only reflected in our economics. This is not to say that fossil fuel is limitless and we can go on using it forever. This certainly doesn't seem to be the case. But when we live in a state of competition with everyone around us thanks to the Triumvirate among other things, we live in scarcity of what we can gain from life around us.

Abundance here means a mindset change that will lead to a change in the way we do economics which should lead to an economics that focuses on abundance. And that is looking at what is not only immeasurable in the im0 sense of the term, but what is truly Immeasurable or Im0.

Let's ask ourselves, what exactly is the value of the earth, the water, the plant and animal kingdom, and the human life on it? Is there really a $ value to this? Whose currency are we using? Is this a fiat currency whose value is less stable than that provided by the game money of a Monopoly set? Does this value vary? Can it ever be fixed? Who gave us this planet anyway? Are we just here by accident and so we can do whatever we want, to whomever we want, however we want? Does the concept of stewardship and passing on the world from one generation to another in better condition, or just as good a one, from when we inherited it make any sense?

What is being suggested is to look at one possible scenario. As more of these ideas come to the surface it is easier to interface with them and to put it this way: a more community driven approach is what is needed, and that is probably what we will be forced into anyway.

Part of this involves looking at a new currency system as mentioned in posts recommended above. It would also mean a way of looking after people and societies belonging to low income groups in a sustainable manner, as opposed to just giving aid or charity, or hoping they will die off with as little inconvenience as possible. One direct link to this concept of social businesses can be found here:

Social Business

This will also call for greater use of local/new/complementary currencies. Another direct link:

Complementary Currencies

This would take place within a broad political framework as envisioned by the great political philosopher John Rawls. His vision is for a political conception of justice in democratic societies. A link to help see more of Rawls's ideas in detail:

Justice as Fairness

What these ideas allow for is to try to lessen the view of duality of ourselves and to see ourselves as One. This is a hard call, but no less difficult than problems we are heading into. My point is, for those who don't believe in altruism and the like, learn to accept the fact that we may not have a choice but to work with one another closely, which may be bad news for the cynics out there.

It is interesting to note that a film like The Dark Knight addressed some of these issues. For those who saw the film, you will remember the ending when different boats of people (one full of convicts) had the choice to blow the other up so as to save themselves from all being blown up by the Joker (played magnificently by Heath Ledger).

Sorry for the spoiler here, but duality and the mentality of scarcity almost led each boat to blow the other up, yet somehow neither did so. And Batman, of all people given his issues and complexes, says that people are capable of much more than just survival instincts that have been ingrained into them.

But going beyond the movie, there needs mention of the ideas from a fascinating thinker -- Georges Battaile. In his masterpiece The Accursed Share, Battaile talks about how economies are driven by exuberance and waste. A rich economy or the very wealthy exemplify this by being wasteful and extravagant to show that they can afford to destroy surplus. The ultimate capital accumulation devaluation as Battaile himself concludes is the destruction of humans via war (for example), and that is because that ‘surplus' human being can be ‘wasted'; hence, that particular human is becomes the accursed share.

This resonates with Marx's notion of how capital leads to the contradiction of devaluation and destruction of itself and all that it requires to keep itself going. This in turn rests on the fundamental view of duality between us and others that engenders the exploitation of the world and one another.

Battailes raises another important point. If there is scarcity around, how is it that we have population explosions or life coming into being. There is, if anything, a great deal of energy and exuberance around the planet and in life forms. There is plenty. There is abundance.

We simply choose to believe otherwise and to live in duality from others. With the belief of scarcity and competition (reinforced by 3BGs) we exploit, abuse and waste resources as a result of following a system of capital accumulation and devaluation

What we need is balance.

If, as this thought experiment goes, we do see ourselves as One. Then in a community form of living within the context of our larger society, country, regional grouping, the world, we will start trying to build collaboration and trust. Some of these ideas are eloquently explained in Deep Economy: The Wealth of Communities and the Durable Future by Bill McKibben.

In terms of the new kind of money we can use, there are complementary currencies used in the form of time banks. For instance, people do services and give things to others in exchange for other services based on the time they log in which is generated into a form of points/currency. So some people may car pool and someone does the groceries for a neighbor, in return for someone doing their laundry or cooking a meal.

In terms of straight forward barter, a couple I know in England exchange the local produce from their backyard for produce from their local grocer.

As things in themselves are im0 and in the greater scheme of things Im0, barter exchanges, time banks, and complementary currencies as means of value, use value, and exchange value make complete sense, and are non-exploitative. There is no surplus value being skimmed off, as what is being done is largely from goodwill and cooperation.

But many have questioned this idea of goodwill, and one person told me that goodwill is not the answer because in the ‘Real World' that's not how things work.

Well, we are all still awaiting for someone who actually is the expert on the ‘Real World' to help solve the world's problems. My counter query to the ‘Real World' exponent was if he fell down on the street and needed help to get up because he was injured, would he ask for help? Or did he think that in the ‘Real World' no one would bother?

The answer was since it had not happened to him, he could not know but he knew many instances when people wouldn't bother to help others (presumably because they were answering to the dictates of the Triumvirate)...and that's in essence the ‘argument of the Real World'.

Yet, everyday, we manage to get by with our difficulties because many times people just decide to try and be decent about things. Amazing, but true. A community that sees itself as One, and a society and world that see itself that way, can slowly but surely edge past the Triumvirate which is in its state of final decline and move onto a new paradigm.

Perhaps, to the ‘Real World' enthusiasts they may grudgingly accept that if for no other reason than to survive, we will have to make a move towards community living and use different ways to measure progress.

This will make us see that if we do not rush and want MORE all the time, that there is such a thing as enough, that there is such a thing as balance; and that people who have had enough of the way 3BGs have been doing things will take advantage of the coming economic difficulties to demand from their leaders that things have to be done differently, and a new way of thinking can be brought into place if only it is given a chance.

It will be rightly pointed out that perhaps I have not given enough details here about what this Abundance really is and I would humbly agree to that. Perhaps we are still some way off from things like genuine trust, neighborliness, mutual respect and consensual agreements in deciding things; where people and the environment are given a priority and go beyond mere $ measurement, because the human species and the planet it lives on is Im0 in value. Pehaps that's because we are in the process of creating it and we haven't gotten there yet.

But I would also point out this parallel. Many never could have imagined the depths of suffering and horror that people could live and survive through. Yet the species has gone through innumerable wars, concentration camps of all types and tortures of the vilest sorts.

Is it so hard to imagine a human resilience in a reverse situation that goes onto a different paradigm where the horrors are a thing of the past and, while there will still be some fighting and differences among people over various issues, we start to live with a sense of justice and fairness, of balance, of community; and in the good that comes from this a mindset of Abundance, and an economy that finally reflects it.

To all the nay sayers I have only this to add for now.

Has it ever striked you as strange that we live on a planet, in a solar system, in a galaxy in constant motion in a Universe that is Im0 (which may be just one of multiverses as science now reluctantly admits), while many still think that the purpose of the human race is to make more Coca Cola and bombs?

It takes a certain kind of Ego to think the Universe revolves around us.

The Copernican revolution was meant to show us how wrong we have been, and we still are.

It is time for us to try something different.

Link: RFK on Vietnam War

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin . . . . Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again. . . . Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. . . . But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit."

-- Sir Josiah Stamp, director of the Bank of England,
speaking at the University of Texas,1927

Money to end all Money

This piece will look at the new money that is coming into being and which will replace Money as we know it. Money will still be in use, but it will be of a nature that reflects the social relations between people as one that engenders cooperation and mutual respect. As such, I will not traverse more familiar territory that has been explored and expressed better than I could ever do. What I will do, is look at three stages in the move from today’s crumbling debt based monetary system, to the transition and establishment of complementary currencies (CC) holding sway: this would signify the end of Money as we have known it.

For those of you who may not have heard much about CCs/new money before and how they are the part of the wave that is cresting and which will move with us right into the future, then I would suggest some excellent starting points. To have a good acquaintance with the current crisis in money and credit and to get a better perspective of what follows please check out the following:

Reality Sandwich blog entries on “The End of Money?” at http://www.realitysandwich.com/end_money by Daniel Pinchbeck and “Money: a New Beginning, parts 1 and 2” by Charles Eisenstein at http://www.realitysandwich.com/money_a_new_beginning and http://www.realitysandwich.com/money_a_new_beginning_part_2
The other site that is recommended strongly is Eisenstein’s “The Currency of Cooperation” which is an excellent primer on what the new money is about.

For those not familiar with CCs/new money, and who have not taken the time to look at the above sites, I humbly absolve myself for any boggled minds in what follows which may start of as a familiar language, then turn to one of only verbs or nouns, and finally metamorphose into hieroglyphics.

The Three-Step Move

The three stage move I am looking at towards new money is descriptive as it is prescriptive. The first stage will involve a move to a new gold standard due to the impending collapse of the US dollar (USD) and other major fiat world currencies. The dollar will still be in use in the future of course, but it will collapse mainly as a global trading currency and in being used as a reserve currency by national banks of some countries. The second stage involves the rise and enhancement of social businesses as envisaged by Nobel Peace laureate Dr Muhammad Yunus. The third stage will see the establishment of CCs/new money as the prime form of value exchange, relegating national currencies to a limited role.

We need to be clear in understanding that national currencies will not just disappear. The role of CCs is that of complementing other forms of currencies. What will transpire in the years ahead will be the rise of a highly sophisticated system of barter with decentralized sources of new money taking centre stage thereby relegating national currencies to a disciplined and specific role.

The current credit crisis the world is facing is a result of an untenable debt based system of monetary expansion. This is primarily due to the effect of central banks like the US Fed which expand the money supply through the banking system via a pyramid scheme of expanding money which does not actually exist. This comes about by a system of double entry book keeping and expansion of credit. To get a good idea of how this works, check out the wonderful The Creature from Jekyll Island by Edward Griffin.

This pyramid method of expanding money supply has been possible largely due to the use of floating fiat currencies, meaning money that has been unhinged from the gold standard and subject to being printed whenever it is convenient for it to be cranked out. This is soft money that has no tangible backing. A gold backed currency is a hard currency. The US only went off the gold standard in 1971 thanks to President Nixon thereby forcing other nations, by 1973, to all have full floating currencies as well. The reason for Nixon’s move was manifold, partly due to a misunderstanding of how the gold standard works and also, as is sometimes mentioned, the need to print more money to finance the Vietnam War.

Politicians tend to veer away from the discipline of the gold standard because it forces them to stay within the base money supply and ensure convertibility of their national currency into gold. This makes it difficult for self serving political projects and what are now known as earmarks (of the pork barrel kind) to be fully put into play unless there are lots of cash swirling about. But too much money in the system tends to lead to devaluation and eventually inflation which is devastating especially to low income people and the middle classes. Ron Paul’s latest book The Revolution: A Manifesto touches on this specifically.

Please do check this out for greater insight into the matter:

http://www.lewrockwell.com/paul/paul319.html

The fact is the gold standard has long been a preventive cure for unnecessary wars. That is because politicians cannot just print cash to justify their next act of international ambition. It may be of interest that as this is being written, USD has fallen to almost $1,000 per ounce of gold. This is just the beginning. This fall in USD value is a massive vote of no-confidence in the politicians at Washington, politicos at the Fed and chieftains of the banking industry.

Recent headlines are the rising of oil prices to USD135 per barrel. What is not fully explained by the media pundits is that this is due not to a shortage of oil as such, but to the devaluating USD. There is far more money in the system than demand for it, which is the classic cause of inflation as we know it. So calls for oil from strategic reserves to be used, and trashing the arctic and other areas for even more oil is NOT the answer.

Fiat currencies are among the principal causes for misdiagnosing problems and leading to even worse ones. A similar spike occurred in oil prices, as research will show, in the early 70s after Nixon wrenched the US off the gold standard. Yes, there were problems in the Mid East (when were there never?) but the surge in quantity of fiat USD was central to the rise in energy prices.

But the monetarists and the neo-classical economists that are largely responsible for the economic rut we are in are great believers in fooling around with the money supply. It not only, they think, gives us lots of “moolah” but allows the economy to expand. Yet, what it does do instead is lead to bubbles and booms and busts. Money becomes a tool manipulated via interest rates by unelected super bureaucrats at various central banks.

For instance, check out a recent book by one-time Fed governor-general Laurence H. Meyer in his A Term at the Fed during the crucial years of 1996-2002. He states that the key things the FOMC (Federal Open Market Committee) were interested were NAIRU (Non-Accelerating Inflation Rate of Unemployment) and the Taylor rule. What this basically means is that Fed gurus would manipulate rates based on economic theories of the Phillips curve and what the acceptable rate of unemployment was before inflation would kick in; and also when GDP would move away from expected/estimated GDP growth: all this would make it necessary to raise/drop rates based on projections. How effective do you think these people can be within the constraints of the highly charged political framework they operate in? Look around you for the results.

Also, it is worth checking out Bonner and Wiggins’s book Empire of Debt to see why the USD cannot last as it is the way it is going. How can the world’s greatest debtor nation with trillions of dollars of debt carry on by increasing expenditure, lowering rates, and not a sign of increasing taxes on the horizon? How much of this money that is being pumped in can stay the course without leading to severe devaluation? Is there productivity to match this artificial influx of cash into the economy? To what extent can you tell a drunk that the way to get over his inebriate state is to drink another bottle of vodka 75 proof? Who will pay for all these debts (or clean up after the drunk for that matter)?

What is happening now is similar to Americans who go to a diner, have a meal and tell the cashier to pass the check to their grandchildren. The future generation will have to pay for all the current debt. It looks like there is going to be a massive devaluation of the USD coming up (best way to settle debts is to lower the value of what you owe too) and, alas, record hyperinflation. At the first sign of this, or something to this effect, states like Japan and China are going to throw their US bonds in saying “Give me the money!” When that happens there will quite likely be a run against the dollar world wide, and then my friends, financial meltdown takes on a new meaning.

All that Glitters is Sometimes Gold

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
-- Henry Ford

That is why the historical move as practiced in the past will be the viable return to gold. It has been tried, it has been tested, it leads to economic growth and expansion because it is stable money and brings along low taxes. But we will also have been so badly bitten by fiat currencies, that CCs and new money will be the answer whether anyone likes it or not. If you do some research you will find that even Marx advocated a gold backed currency.

We will finally come to see the need to move beyond the blinkered cost-benefit analysis of neo-classical economics to a new kind of economics. Part of that involves going back to basic human values, of older ways of life, of ancient spiritual teachings and practices, and an ecological approach to economics. Part of this process involves going back to mutual trust and reciprocity between people and to the system of barter represented by CCs. Part of this also involves going back to what has worked for millennia, the gold standard.

A new gold standard does not mean 100% reserves of gold backing a currency hiding in a vault somewhere. The new gold standard would be something as advocated by Nathan Lewis in his outstanding Gold: the Once and Future Money. Basically, how it works is that all the currency in a nation will be backed by a value of gold per ounce. What Lewis suggests for the US is a range of USD 360-380 per ounce of gold (lots of USD will have to be recalled and done away it).

The issue of convertibility comes in when the government authorizes banks to give back gold certificates (representing the gold) to those who want to cash the USD for gold. The use of gold certificates is how gold is bought and sold today, nobody goes around lugging nuggets and bars anymore (as some critics think). The banks will hold enough gold as reserves to provide for conversion if required, but this will not happen often as long as the money supply stays disciplined to the value of gold at the fixed exchange rate.

This is where the value of convertibility comes in. Convertibility ensures that the Fed/Treasury maintains and adjusts the base money supply to allow for the demand and supply of USD based on people’s use of Money aligned with the backing in gold. This calls for financial discipline and an end to fiat money 100%. If the supply of money exceeds the gold backing, and that leads to people trading in cash for gold, the Treasury sells gold to banks and takes in cash. If and when the opposite occurs, the Treasury buys gold back and provides cash accordingly. This is a self regulating mechanism akin to what Adam Smith envisioned. The interest mongering monetarists will no longer be the uber bureaucrats controlling fluctuating rate mechanisms and swinging currency values.

The range of movement for gold prices will be minimal. One reason is because only 2% of gold is mined worldwide every year and there is only limited use for it. Apart from dental work, limited industrial use and jewelry, gold is a singularly useless metal. Apart that is from being used as an ultimate Monetary measurement – its sole purpose of existence. And anyone deluded enough to try to hoard gold is going to find that he is going to need cash sometime and will have to, well, trade the gold in back for gold backed currency. With the rise of CCs and new monies, there is hardly going to be a scarcity of national currency. This will also spell the death of the money markets as we know it. In itself, when the gold standard is in play, the gold does nothing for hoarders because the national currency is now as good as gold.

The system would work the same on the international level and unlike what Nixon feared was happening, countries that move back to gold and trade with the US are not going to start throwing USD back and say “Send me the bullion, dude!” They will have the same process in exchange for gold certificates as individual users of currency. What matters is that as long as the US money base is not inflated (as per fiat currencies), the strict discipline and convertibility of USD to gold means they do not need gold to be shipped to them. When they know they can convert USD to gold and trust has been sealed on this, they simply exchange the gold certificates again to buy back the very stable and clearly guaranteed USD. Also, in all this exchange the gold does not physically ship away; what happens is as was done in the post Bretton Woods period, the gold is shifted to an account of the country in the secure vaults of a bank.

So now we have a stable money system backed by gold. There is a fixed exchange rate that ensures this. Gone are the days of currency speculation and falling USDs. But wait, shout the final coterie of monetarists out there, how are we going to create money now that the Fed has been reinvented, and since fiat money and its printing presses cannot just operate to satisfy the political whims of those in charge: how are we going to create jobs, they scream.

Well, by being actually productive for a change and not via the so-called productivity of the wild speculative frenzy of money markets. Interest free banks will operate (some research will show that they exist) and the pyramid scheme of double-accounting-money- expansion will be replaced by the rise of social businesses and CCs. We do not need so much money to make things work. National currencies backed by gold will serve the purpose of official government transactions and trade, while the new system of money will complement this and start a new productive and healthy drive to creating genuine wealth.

A Marxist way to be Capitalist?

Then comes stage two of the Three Step Move. In order to lessen the burden and need for national currencies, the social business model will start to play a prominent part around the world. This idea is an extension of what was put forward and practiced by Dr Muhd. Yunus who won the Nobel Peace prize for his idea of the Grameen Bank which gave microcredit to the world’s poor. In his latest book, Creating a World Without Poverty: Social Business and the Future of Capitalism, Yunus explains that a social business is an enterprise quite different from a cooperative or a charity. It is essentially a business set up to provide necessities for the poor like drinking water, food or healthcare.

In Yunus's own words on social businesses from the book:

So companies or people put in capital to set up the business and provide low cost products for the poor. Once the money invested is earned by the initial investors, all other money that comes in goes towards financing the business itself. Hence, this becomes an exemplar of a self sustaining enterprise. This is a non-profit, non-loss business which does not answer to shareholders in providing them great returns on equity, just the basic sum they put in for that equity. The example looked at in detail in the book is how French corporate giant Danone provides daily yogurt cups which cost 6 euro cents (9 cents US) for the Bangladeshis.

Check this out for more:

http://www.danonecommunities.com/?page_id=145

This will ensure that the poor and even those belonging to low income groups and not necessarily classified as the poor, can also have similar set ups working in their favour all over the world. This concept is spreading throughout many developing countries even as of now. So in the long term, the need for national currencies when such businesses are up and running will be for a limited period. Money given as aid and charity will be lessened as more of such social businesses take centre stage. And these businesses can also eventually, operate under the auspices of CCs and the new money, which leads to even less of a demand and strain in siphoning off national currencies to meet the needs of commerce, etc. The days of scarcity of national currencies will slowly become a thing of the past, and so will all the negative competition that this process engenders.