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.

Metaphysical Interlude

i. This in turns means that most ventures would be cooperative based including the financial organizations that grow and support this.