ONE of Karl Marx's quotable quotes includes his comment that history repeats itself first as tragedy, then as farce. So much of the twentieth century will be remembered as tragedy. So much of the last century will also be seen as farce.

This is because while we had two world wars, we then followed them by a cold war and the idea of a mutually assured destruction which was supposed to ensure the peace. Is it any wonder that one of the hit comics to come out from the 1950s was Mad with its farcical mascot Alfred E. Neuman and the incessant intrigues of “Spy vs. Spy” an espionage spoof.

From the quasi-serious and stylish early Bond films to the movies becoming caricatures of themselves in the 80s, and in the epitome of the cold war which culminated in a sense with the farce/slapstick of Austin Powers: you knew something bizarre was afoot in the mass psyche.

Ultimately, the whole idea of a nuclear sword of Damocles masquerading as an ‘umbrella’ meant to keep the peace (sic), was meant by the controllers of our world to initiate planet earth into an armed camp scenario. The manifesto of the 20^th century is clearly the perverse obverse side to the Orwellian axiom 'war is peace', where peace would also mean war in some form.

We also had the revolutions of the 1960s which resulted in a kind of change that descended into drugs, riots and assassinations throughout the world of various leaders. The global stage was fast becoming a multifarious drama aptly expressed by Polonius as “tragedy, comedy, history, pastoral, pastoral-comical, historical-pastoral, tragical-historical, tragical-comical-historical-pastoral” and whatnot.

But we took it some steps further. War is peace and peace is war. We started to wage peaceful war and have war within the ambit of peace. We started blind material obsession, profit mongering and a death-wish driven consumerism (in the background, like music from the Doors, were many so-called low intensity conflicts of which Vietnam was a highly intense one).

Yet we became sophisticated. Our consumer death-wish would see us decide to ‘shop till we drop’ and have euthanasia via ‘death by chocolate’. We would allow our unbridled appetites and destructive individualism to be manipulated by the media and legislate politically various ways to allow ourselves to die (politely called ‘pulling the plug’). We also took experimentation with execution ranging from hemp rope, bullets and electricity, to chemicals with lethal injection.

We used the knowledge gained from biological and chemical warfare from world wars to start poisoning one another. Logically, it meant we ended up using stuff like DDT in pesticides and called it progress: what was used to kill other humans in battle zones seeped into the food chain and destroyed not only various life forms and upset the ecological balance, but also had a nefarious effect on people. Yes, malaria and other diseases need control but do we have to harm ourselves as well?

In the name of science and progress, we have the mash up of big capital with scientific endeavour and academic research, and we discover that scientifically – regular and extensive use of synthetic chemicals in our food (and continued mass use of pesticides) are good and profitable. Any attempts to criticize any of this is a sign of unscientific irrationality. We learn that smoking doesn't necessarily cause cancer, and radiation from electrical equipment, hand phones and worse, microwave ovens, are not only profitable with the correct perspective but anyone against it lives in the dark ages.

The point is we are in the dark ages, the age of  Kalki as the Hindus would call it. We have reached the point where we believe that science and technology are in themselves an amorphous new Acropolis of human civilization while becoming completely cut off from our spiritual roots, and we wonder why the world is the way it is. This is farce-slapstick and well beyond Polonius's combinations.

But what takes the fruit cake is our belief that the vacuous ideology of Democracy is the ultimate goal of civilization. The West will even go to war to not only defend but spread it like a virus. This is where we come to the point in the 21^st century where we go beyond Marx's dictum and have evolved our history inexorably into slapstick.

Make no mistake, slapstick is appropriately defined as that which involves “exaggerated violence and activities which exceed the boundaries of common sense”. If that isn’t a defining characteristic of the world, nothing is.

Despite all the fuss over elections in so-called democracies, the millions spent on advertising and marketing, media commentaries, stump speeches, and all sorts of promises, are people really better off?

Curiously, things are worsening economically and politically worldwide. The counterpoint to this is that the change in the Middle East is a sign that even there one finally encounters limits to what people will take. It shows just how low things have gone that people are starting to rise up in places they normally don't against their regimes anyway. This is only the beginning.

The reason is that despite the rhetoric of politicos the world is governed, not by politicians (though they may think they are in charge), but by vested interests that actually determine to a large extent (for the worse) how things go. We mean here the international banking cartel and their families and children in the form of mega corporations and defence industries world wide: most born out of wedlock.

All these not only operate in the dark, with as much lack of transparency as possible and have produced and proliferated a scientific-technological dark age. These efforts are abetted by our ignorance and unwillingness to face up to many truths about the world. Science, tainted by self serving ego and big money is sadly the willing handmaiden of corruption in its many forms.

This is the high end dark age where we have reached the point of no return and must find our way back into the light. And it is going to be a struggle. Why would the dark age perpetrators make it easy for anyone to escape their clutches? This is still not the funny part, but here it comes.

With each successive 'democratically' elected government you have the same situation which is unemployment, deep emotional imbalance in homes and the work force, divisiveness and resentment expressed through high-tech means, the rich getting richer (though some get their hands duly burnt) and the poor spreading everywhere. Even to be middle class now is to be poor in some way. Global currencies are generally running on empty and the US dollar is a joke (trying not to use 'farce' too often).

No one government dares to challenge and upset the banking and corporate cartel because they are either hostages to them or are party to their intrigues (sometimes a combination). How many governments dare to tell banks and corporations to get their act together, enforce discipline and ensure transparency in their activities unequivocally? Until laws are changed to make banking and corporate institutions accountable to governments and the public, they will never serve the interest of the people.

For governments to actually act like governments would be to risk the banks and businesses telling some governments to take a hike (and give somebody else their tax hikes, like the people), as they threaten to go pack up their stalls and go to some other market place (when some do so, experts call it 'globalization'). In other words, governments – especially democracies – shiver in their pants when confronted by the dark spirit Mammon who says it, and it alone -- the guiding spirit of the money changers of the world who are always uniting -- is responsible for the circulation of money and work opportunities for the measly citizens.

Marx was wrong in that it was not the spectre of communism that was haunting the world as it was already possessed by the dark forces of capitalism. And as in the case of most exorcisms, it isn’t secular stuff that is going to rid the world of incubi that have impregnated the world with the money changers’ teachings of neo-classical economics, greed, constant sense of lack, mindless competition, and fear mongering. Sometimes a war or two are thrown in at bargain prices.

Despite pomp and circumstance of political office as in that of the President of the United Corporations of America (USA), for instance, you see in action those who are impotent to effect any real change. Whatever change that is enacted must result in confrontation with the money changers and then who cares what your title/post is? You can talk and shout all you want in congress and parliament, but you know bloody well who runs things around here.

Democracy today is the hiding place of fear. It is the fear and subjection of people and their elected representatives in not angering too much the money changers. We have bamboozled ourselves to thinking we are in charge and that democracy means freedom and a whole lot of other niceties: but ask yourselves – how much has really changed?

Don’t be fooled by the ‘human nature’ argument. Sure, the inability of humans to govern their emotions has resulted in their having to elect others to govern them; the inability of humans to have self control has resulted in their surrendering their moral conscience to institutional religion and corporations. We even have to surrender our sense of ethics to nebulous and harmful notions of ‘corporate social conscience’ (here farce turns into slapstick) and thinking that what causes harm to humans and the planet can actually do good to one and all.

It’s like killing all that’s good in one part of the world and then going to some corner and planting a fruit tree, which in turn gets killed etc, and there will be no amount of fertile earth left to make reparations for the ambition of the money changers.

We can travel into outer space and get involved in the pornographic details of nano technology but are unable to create sustainable, healthy, ethical and abundance sharing enterprises (guess why?).

There is something wrong on Earth.

We have reached such a point of pathology that we can listen to the mainstream media with all its amorality and immorality as stories flit from heinous crimes and acts of brutal violence, to royal weddings and scores of football games. We have become so desensitized that we can discuss the destruction of a human being’s life or reputation and with aplomb switch to the weather and what stocks to invest in.

This schizophrenic tendency which is regarded as normal today, also sees in democracies huge amounts spent on annual dinners, official openings of events and launches of some damned thing or the other; but all the time we have people who are in need and want.

Here comes more farce-slapstick, where you don’t know whether your tears come from laughter: we can even use scripture to deviously say, ah, but there will always be the poor. Must we deprive others of a good time as there will always be those in dire straits. Come on and think of all the money that is splashed around, what? This is scientifically proven by economics as ‘Growth’.

There is no reason for us not to celebrate and be happy. It always helps to smile and show kindness to people around you as that tends to generate a similar response. But in public life there must always be a sense of balance, decency and morality to know that you can’t throw state money on banquets when your citizens are going through difficult times. Some call this is disgraceful, most call it democracy.

Is it any wonder then that no matter who you vote for, things are the same? Unless things actually become worse as is happening now and as it will continue. Some resolution must be in the offing as this state of international debt and swindle is obviously reaching critical mass.

Instead of clinging on to worn out and failed ideas like democracy, which hide the grip of the money changers of the world, we need to look at new ways and ideas of empowering citizens. Democratic practices in the use of elections and ensuring a broad representation of citizens in decision making will be a necessity. This will tend to provide the ethical leavening necessary to raise some sort of system that serves people and life in general. It might even reduce wars.

The changes needed to initiate most of the positive aspects indicated here involve not changes in the poorer countries, though it helps. The world changes and bringing about a just, fair, and ethical grounding to local and international affairs starts with the democracies. They are the source of so much of the world's trouble. Once the democracies change, the world will follow suit. If the people in democracies do not push for change through citizen activism and new ideas on governance and economic practice, then things are going to get a lot rougher.

And this would also require visionary and moral leaders, and those who are not afraid of the money changers. None at present seem to exist that any of us are aware of in a manifest manner. We need leaders who realize that there’s more to life than protecting one’s bank balance. We need citizens who realize that they have to stand up for what is right and that they need to let go of fear and stop allowing themselves to be kept in perpetual thralldom by the money changers.

Which also means that if you fear adversity, you will fear change. No one wants unnecessary hardship but unless we speak up and act now, difficulties can only mount.

The solutions to many of these problems are spiritual ones which involve not only acting from conscience, but understanding that there is divine purpose to everything. That when faith, compassion, common sense, forgiveness and daring are mixed judiciously, the people of the world will finally be able to chase the money changers out of the temple once and for all.

But it starts from chasing out fear from the temple of our hearts.

We are fast approaching the event horizon in history where we will have to create and adopt a new way of living that safely takes us into the time and space of post-capitalism and post-democracy.

To end, I must mention a joke from many years ago about how in the Soviet Union scientists managed to revive the embalmed Lenin (this is actually miraculous as the man’s brain and all his organs have been removed as part of the preservation process).

Vladmir Ilyich was then sequestered in a comfortable room to acclimatize to the world he was living in. As the days went by, he asked for and read voraciously many newspapers to catch up with what was happening in the USSR and the world. After several days of this routine, his handlers entered the room as usual to bring him his tray of food. But the man was gone.

There on the table, was a note: ‘We must begin again!’

We have to put aside all preconceptions and ideologies and, most of all fear, and open ourselves to the truth we have always known within but have refused to acknowledge, that indeed – we must begin again.

 

 

Dear All

Yet again, another letter to the press and this time to highlight the need to go beyond the economically unsustainable and socially damaging system that is usually sealed by the manufactured consent between the mainstream media and corporate interests.

The idea of profit sharing has been explored in previous posts here but it needs repeating as an idea that works (just do a search on the Net to find out more), and there is the constant need to remind ourselves to treat one another with common human decency.

“…There are two root issues that need to be looked at if any reasonable solution is to be found to the perpetual problem of low wages and hiring foreign workers instead of locals for such jobs like those of a cleaner.

The first is the mindset change needed in moving away from the pyramid structure of many businesses, especially of large corporations.

As long as what may be perceived as low-level work is placed at the bottom of the rung in a business, wages will follow suit.

But as…[pointed] out, what will happen indeed when we run out of people to clean up after us?

Instead of a pyramid, a web of interconnection should be envisioned for businesses in which everyone - management or non-managerial staff - has a role to play.

A cooperative approach can be taken, moving away from that of accumulating profits above all else.

Have a fair wage where all in a firm share in the profits made, with ratios of sharing in earnings established depending on the contribution an employee makes to the firm.

This beats relying on "market forces", which are a means for companies to offer staff as little as possible while squeezing the maximum from them.

The other issue is ensuring that all in a firm are treated equally, with due respect. There is excessive focus on the salaries of CEOs, instead of what are economically sustainable and ethical workplace scenarios.

Talk to the people who sweep our roads and those who clear our garbage daily and you'll realize they are human beings with dreams of their own.

Giving proper societal and economic recognition to all may help realign our viewpoint on what workplace dignity is about.

It is not always about the money.”

It is time for discernment, thinking and starting to see the interconnectedness of all life. It is time for us to wake up, get real and finally start to grow up.   

It is with great irony that we read the venerable Chairman of the US Federal Reserve Ben Bernanke's recent words on his idea of happiness:

"Another thing that most people value is a clean environment. Air and water quality are not included in the broadest measure of economic activity emphasized in government statistics, the gross domestic product (GDP), although some economists have worked on ways to do so. But again, rich countries have more resources to devote to maintaining a clean environment and do tend to have better air and water quality than poor and middle-income countries, notwithstanding the fact that rich countries by definition produce more goods and services. Rich countries also generally provide people more leisure time, less physically exhausting and more interesting work, higher education levels, greater ability to travel, and more funding for arts and culture. Again, these linkages, together with the benefits of enjoying a wide variety of goods and services, are the reason that economic policymakers–at the behest of the public–usually put heavy emphasis on job creation and growth. Along with price stability, maximum employment is one of the Congress’s two mandated objectives for the Federal Reserve. And, indeed, economists researching happiness and life satisfaction have found that both inflation and unemployment detract from happiness, consistent with the focus on these macroeconomic conditions in the mandate of the Federal Reserve." (quoted from here: link)

The dishonesty that underlies his attempts to pretend that all is well, thanks to the old paradigm of doing things which has created the current economic hardship of our planet, by implicitly re-stating the monetarist mumbo jumbo of his federal reserve is mind boggling.

The notion of economic growth as we understand it today as enshrined by the GDP measurement of Gross Domestic Product has been invented by the pathological, applauded by the ignorant and continually promoted by the mischievous.

This is a letter of mine just published in a local newspaper to try to add some balance against the indoctrination we have all received as to what the measurement of "growth" and "happiness" consists of:

"I REFER to the insightful commentary, "Hatoyama, a victim of iPad shock" (June 4). The need for new ideas by many countries to make it through the current global economic debacle is inescapable.

The current oil spill fiasco in the Gulf of Mexico thanks to BP's bungling has resurfaced the question: What price economic growth?

Measurement of a country's gross domestic product does not take into account whether it is a source of benefit or a cause of damage. The multi-billion-dollar cleanup that will hopefully end the massive oil spill will be added as a "plus" to a country's GDP, in the same way that expenditure on prosecuting a war and cleaning up after traffic accidents are.

This is counter-intuitive to common sense, which would suggest "growth" refers to something positive.

We need to balance the current GDP ledger with new measures of progress like the GPI (genuine progress indicator), variations of which are used around the world. In essence, only that which is genuinely positive for a society adds to a nation's GPI rating. Anything which is negative, like criminal or harmful environmental practices, detracts from the score.

Indicators that capture increased quality of life as a positive under the GPI can then be used as an additional barometer for decision makers on the efficacy of national policies.

So, increased time spent by a parent with a child, volunteer work, improved green spaces, better healthcare and implementation of ethics modules in schools and business education - just to name a few examples - would add to a country's GPI.

As Singapore progresses, we need accurate tools to capture the growth and development of its various social life cycles, such as its family, health, educational, economic, financial and sports ecosystems.

The GPI measurement here would have greater moral weight than simply GDP monetary inputs.

This will, in turn, help ensure that as investors come to Singapore, they will have to also adapt to our more streamlined approach towards sustainable and socially-responsible economic development, rather than be driven solely by profit motives.

This shift in mindset is crucial for us in developing an even keel in the way we lead our lives and how our society is run."

 

 

 

“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.

Sergio Leone Does Adam Smith

Before looking at the issue of markets again and how the so-called Free Market has no relation to what Smith was talking about, it is worth looking at the relevance and application of the IH notion of adjusting irregularities as special providence. So far, Smith’s examples as used here may seem a little abstract but his ideas are far more potent for reasons beyond the claims of FM fantasists and hard core Capitalists.

Take look at A Fistful of Dollars. When Eastwood, or the man with no name, pits one rival faction against the other in the nihilistic town he visits, he is only interested in earning money. He amorally and immorally manipulates and shoots his way into earning his coins. But he decides to help the wronged woman kept as a mistress by the villain of the piece (Gian Maria Volonte) and unites her with her son and husband. In the process he kills her captors and even gives all the money he has to help and her family.

As a result Eastwood pays a terrible price; but on the mend from his punishment he invokes a revenge that brings down total destruction on the rival clans. As Smith says, when Eastwood pursues his own interest (mixed up with greed and a trigger happy style) he ironically -- against his own intentions -- ends up helping the woman and her family, starts a chain of events that rids the town of its corruption thereby playing an unwitting balancing force that allows the town to start anew.

It is almost like there is an IH that sweeps through the drama to provide some form adjustment via the irregularity of self interest and selfishness of the Eastwood character. Just as in Kurosawa’s original masterpiece Yojimbo on which Leone based his film, Leone’s “Dollars Trilogy” and the ones that follow it have a moral centre.

The other fascinating instance is in a Leone film called A Fistful of Dynamite, but now in its fully restored version is known as Duck, You Sucker. James Coburn plays a weary Irish Republican Army man running from his past who ends up teaming up with a notorious bandit, played by Rod Steiger, in Mexico. Though each pursues their self interest and in the case of Steiger, his greed: they both despite trying to avoid getting caught up in the Mexican Revolution end up doing just that. In the process they help the revolutionists fight the fascists of their time through set pieces of violence.

Again, in the most unlikely manner a balance is restored as the characters follow their interests and destinies to the end under the Direction of a greater force, as if by an IH.

Also, on a more personal note, I have rarely (in the Smithian sense) managed to persuade someone to a cause by telling them that it is for the good of humanity. But on explaining to them how this would be in their interest to do so, and that of their close ones, have managed to get people involved in good causes. In that process they bring others onboard and before long a virtuous cycle is created of getting done that which, in the medium to long term, benefits the environment, society and/or the underprivileged. This process happens automatically and adjusts itself accordingly almost as if guided, as in most other cases, by an IH.

And Justice For All

Let us come back to the so-called markets. As can be seen Smith was not promoting Capitalism. Neither was he promoting a so-called Free Market. The idea of the FM is not only a contradiction in terms but does not allow any notion of balance and fairness to come into play. By now we can see that Smith was more concerned with a social-economic system that promoted balance and harmony rather than the free-wheeling framework of wildly shifting disequilibriums promulgated by Capitalism and neo-classical economics.

Back to another passage in TMS, where Smith writes in I.I.36 (bold and italics mine):

To see the emotions of their hearts, in every respect, beat time to his own, in the violent and disagreeable passions, constitutes his sole consolation. But he can only hope to obtain this by lowering his passion to that pitch, in which the spectators are capable of going along with him. He must flatten, if I may be allowed to say so, the sharpness of its natural tone, in order to reduce it to harmony and concord with the emotions of those who are about him. What they feel, will, indeed, always be, in some respects, different from what he feels, and compassion can never be exactly the same with original sorrow; because the secret consciousness that the change of situations, from which the sympathetic sentiment arises, is but imaginary, not only lowers it in degree, but, in some measure, varies it in kind, and gives it a quite different modification. These two sentiments, however, may, it is evident, have such a correspondence with one another, as is sufficient for the harmony of society. Though they will never be unisons, they may be concords, and this is all that is wanted or required.

What this passage encapsulates is the sympathetic vibrations of energy people tend to set up in relation to one another in functioning together as a group of people or society. Emotions and thoughts are adjusted through conscious or unconscious effort when collaboration and consensus is being built to move things forward. A strident tone, no matter how justified, tends to lose support, hence, the need to “flatten…the sharpness” to get some form of harmony among people. Consensus building is a good thing.

This is radically opposed to the rampant egoistic obsessions that many ideas of Capitalism and the FM tend to promote. Smith’s ideas have to do with people getting along not through compromising of values, but by consensus building. Which also means it eschews insistence of things through the barrel of a gun (and the ideologies that go with it).

Smith, in always trying to keep things real, makes it clear that the process of consensus building and cooperative ventures do not create unisons so much as concords and that, indeed, is as good as it gets. It is analogous, in a way, to unity in diversity, or vice versa. Individual identities and ideas are kept but they are adjusted to see what in common can get things working. This somehow resonates with most people’s idea of democracy.

This does not imply being able to suddenly propose revolutionary ideas that can shift paradigms to a new level, but on a closer look this paradigm shift may be achieved through the use of persuasion, and convincing others of how it benefits them individually etc that result in ideas for the good of all.

This contrasts with the jaded and predictable manner that extremists and hard core Capitalists do things. It always has the use of force underlying it or overlaying it or pointed at you in the form a gun. Apparently, that’s a sign of freedom and the way to keep it going. Naturally, when you rob others’ land, property, livelihoods, families, life blood and consciences for the sake of selfishness and blind capital accumulation you have to do it through force and keep it via domestic and international violence.

But as Smith says, even such irregularities from what can be seen as regular peaceable behaviour between peoples is given balance and readjustment which sees a reordering of society. Hence, the current economic crisis sweeping the world which while causing so much problems for us, is the cleansing process which will bring down the old, corrupt, violence drenched past that will get us to work together inevitably to issue in a new age of peace, harmony and prosperity which may also have existed in other times not subject to the ‘officially’ promulgated history of the world.

This process of building ideas up to principles that can be used or applied throughout a society is a process of social constructivism that in a way is in concord with that of the moral constructivism of Kant and, almost without doubt, the political constructivism of Rawls. Smith’s social constructivism allows his economic constructivism to take place. The IH as a function of Divine teleology allows for social processes to be generated thereby creating situations for economic practices to be in concordance with them. Economic ideas come forward for the good of the individual and society, and are balanced, fair and just for all.

A more detailed look at this can be found in Justice as Fairness Revisited and The Awakened Eco-nomy. In the end this post too is just a blog, like any other, and it is hoped that those with sharper minds and a more intense passion will develop things from here to see where it can go.

End of the Reign of the Magicists

So where does this leave those Nobel prize winning ideas for economics and all other dandy econometric models and stuff taught at universities to churn out more intellectually misguided people (having partially suffered from this, I know whereof I speak)?

Hey, what about those Laws or Demand and Supply (DS), Say’s Law, Taylor Rules, NAIRUs (non-accelerating interest rate of unemployment) and those of the sublime perfect market which talk about Pareto optimatlity curves, (false) equilibriums where everyone has to use cost-benefit analysis to fight for scare resources to maximize utility. Everything else outside of this is that inconvenient thing called an ‘externality’.

Milton Friedman delusionally described the difference between ‘good’ and ‘bad’ externalities where being charitable would be a ‘good’ thing but aiming for so-called corporate social responsibility (another contradiction in terms) is a ‘bad’ thing which bucks (no pun intended) econometric models because it could undermine the sole reason for corporations existing which is, of course, profit making while the world goes to hell.

What this means is that if you ask a corporation or a capitalist to factor in human decency and fairness into a ‘law’ of neo-classical economics or its profit taking model, you are talking ‘externality’, man.

But my friends, what is this so-called Law of DS or equilibrium? Let’s go against what our schools and many tertiary institutions teach you not to do, let’s actually think a little and try a bit of common sense (no certificates awarded for this). Apparently there are these kind of push and pull factors which seem to be observed when wants for commodities are met with a flow producing them that intersect at the right price. What are these forces that create such wants and flows and intersections and push and pull like the tide of the sea?

What is optimum growth and equilibrium? Are these points of description of the most suitable or desired or needed form of growth in given circumstances as decided by curves, governments, societies or people’s feedback? Or are they what economists claim they should be? What is this idea of balance, and rising and falling of forces that produce new forms of things and energies? You have nothing but economic and social theories and models to explain this.

If you ask what gravity is, well it’s this force that’s composed of gravitons. How did this come to be? Well these are natural forces, just like DS or equilibrium or optimum growth that are codified by professors in academic ‘disciplines’ and don’t need anything else to explain them. If you ask what is behind gravity or equilibrium you are told that is not necessary to ask because the current theories are borne out by empirical observations and that sufficiently explain things.

So is there a giant squid at the centre of the earth whose suction causes gravity? Sure, possibly, but why do you need that when you have a law of gravity? The latter is a sufficient explanation so the squid can be left to Captain Nemo and his like. Is economic ‘equilibrium’ a sign of the IH, yes, in so far as it describes ‘economic forces’ and any notion of some other elements behind the IH is mysticism and irrelevant (‘economic forces’ being sufficient to let us sleep soundly each night). It is not scientific or modern nor a reflection of ‘enlightened’ reasoning to go beyond a ‘satisfying’ set of theoretical explanations.

But all these explanations are circular at worst or question begging at best for each time you ask what causes these phenomena like equilibrium, they are ‘economic’ forces and what are these forces….these are theoretical constructs to explain this that and the other…what is the basis of these constructs…observations backed by hypotheses or vice versa as tested against the world….that show that these forces are indeed at work…ah ha…back to square one with stunning clarity.

When pressed as to why they do not go beyond such silliness in their theoretical reasoning -- it’s to avoid mysticism. So what we are offered in effect is this: there are mysterious forces at work, just at Klein describes the IH and other things in Smith in a manner that would make Agatha Christie proud, but we have some ‘explanations’ that should do the trick. Aren’t you impressed by our intellectual sleight-of-hand; see how clever we are; we are the smartest of the species coming up with all kinds of reasons to explain and make more things convoluted and complicated so that we can progress onwards in a civilized manner devoid of mysticism.

The illusional, delusional, tricks-of-academia and intellectual-do-it-with-mirrors is just that – magic. In place of the genuinely mysterious, the mystical, and the miraculous we have Magicism. Magicists, like many economists and scientists, believe that things just happen to be. These are natural forces which coincidentally are what they, well, are! There is no reason why the whole universe, solar system with its bodies moving around without crashing into one another, and sudden life that evolves with spectacular biodiversity cannot be explained away by theories and constructs as one massive coincidence. In other words, magic. It all happens to be there, presto! Just like that.

This Magicism has no bearing on what we use to describe an extraordinarily beautiful sunset or a special moment with a loved one: that kind of magic is an analogue of the miraculous and has an alignment with a moral centre and Divine Order.

Magicists also denigrate religious or spiritual experiences as purely personal ones peculiar to an individual or if shared then part of mass delusion. There are countless theories to explain this…why all this supposedly occurs and why life, the world and humanity is the way it is…meaning, it is what it is: abracadabra. You just explain away anything that’s greater than the human ego and its obsession with itself and excessive sensual indulgence by theories and magic.

So the IH and market forces happen as a result of magic. If you want a spiritual explanation to things then you have to rely on mysticism. Smith as a FM proponent and glorifier of Capitalism cannot simply be subscribing to that, now, can he? Notice the circularity as to how Smith has been appropriated? If you want only reason and scientism to show you the way forward solely through ‘hard’ facts and math etc, then you have Magicism.

Not that you cannot have theories balanced by the spiritual and a moral centre to the world and the universe (e.g., Newton, perhaps Einstein, Kant, Smith and Rawls – though the latter would prefer not to bring in the spiritual overtly). But to do that is to slide into mysticism. Why do that when you can be inaugurated as high priest in Magicism and be a Magicisit cum laude at an accredited Institution of Learning, or be called an Expert and win International Prizes?

Then you have philosophers who are Magicists. They will talk about a metaphysical basis to things and when pressed beyond that will tell you either what they say is sufficient, or that they cannot or don’t see why they have to say what exactly it is behind the Metaphysics. This is a metaphysical smoke screen to hide their ill concealed Magicism.

Those that have a metaphysics and believe there is Absolute Mind behind it like Hegel or the World as Will and Idea as Schopenhauer, are partial Magicists. There is an Absolute but it is devoid of love, compassion and the miraculous. Such ideas sadly get misappropriated by ignorant and rascally elements who then turn them into an excuse for totalitarian ideas or mind bogglingly self defeating pessimism. So partial Magicism has its dangers too.

Or, there will be thinkers, writers or philosophers, eminently talented too, who opine that there is some ‘centre of life’ which, well, is a centre of like, all that is, etc…doesn’t necessarily mean Divinity, but there’s something out there…Magicism bordering on the occult or vice versa. At best one can ascribe partial Magicism to them.

In fact, if you take the trouble to look closely at the ideas of full blown Magicists, you will find that they are inadvertently (or otherwise) occultists. They will tell you that the truth (if it can be known and to what extent it can be know, etc, etc) comes via their full blown or partial Magicism, the ‘clarity’ of academic jargon, econometric models, theories that are constantly outdated/replaced, and formulas of politically correct commonality by the self serving media or politicized hype to show you why you ought to remain disempowered and beholden to their incantations and…Occultism.

Where does life come from, what happens at death, why do people believe in Divine Order/God/Supreme Being…well, here are the theories, degrees, and career paths to sort that out, and a whole lot of magic and occultism to boot. Why? Because, the spiritual like all else that matters in life like justice, fairness, and compassion are externalities.

When you bring in externalities into academia, science, the workplace or the corporation you ruffle feathers because it gets in the way of ego, material grasping, profits and whatnot. Magicists and occultists do indulge in a quick mention that there ought to be a balance between being reasonable and ‘getting the job done’ (because apparently being unreasonable is the way to really professionally effectively get things done). But here again, where does the notion of balance come from…magic.

We have reached that point when all that defines existence and human decency and social and planetary responsibility are externalities that are the adjunct of mysticism, while all else like profit margins, banksters (gangster bankers), big bonus freaks and greed and perpetual war are at least theoretically explained as part of the reality of life…a.k.a magic: because it just happens, that’s the way it is. Things being the way they are without much to explain for them (beyond egocentric opinions and selfishness or endless theories) are just an unsubtle code for: yes, you guessed it, Magicism.

But we are now at long last on the path to seeing the end of the reign of the Magicists and Occultists. People are finally, after being led to near global bankruptcy using useless paper fiat currency backed by printing presses and endless war, starting to wake up and say enough is enough. That there is a moral centre to life, to the world and to the universe and that we are not going to take this violence and ignorance and nonsense anymore.

The Fair Market

There are indeed natural forces at work in the Universe that govern all life on earth as well. This must be the truism of the millennium. All life is part of a natural force. As Dylan Thomas wrote “the force that through the green fuse drives the flower Drives my green age”, and “Time held me green and dying Though I sang in my chains like the sea”.

The only externalities are the Magicists promoting their Magicism. But like all else in nature that has had its time, the Magicist structures and mechanisms are starting to decay, fall apart, and will eventually be reabsorbed into the world as part of the cycle of things guided by forces more powerful than egomania, celebrity cultism, media manipulation et al.

Contrary to the dying exhortations of FM fantasists and hard core Capitalists, freedom doesn’t guarantee fairness. The well worn adage that your freedom to swing your arm ends where the other person’s nose begins still rings true. There is simply no unbridled freedom to do as you please because we live in society and have a responsibility; and if we want things to go well for ourselves, to also see that things go well for others. There are limits to freedom. Try jumping off a skyscraper to show that you can do anything you want with impunity and you will discover the parameters imposed by what we call gravity.

As part of all natural forces in the universe and our planet, everything is subject to parameters. That’s why there’s life in the first place. Given the conjunction of conditions at the right time and place the synchronous and miraculous happens. There are indeed natural laws that affect us all as there are moral laws that affect us all which help us to maintain sanity and balance in our lives thereby allowing us to create the society we dream of living in, if we so choose.

What is this moral centre? Just look into the human heart: there is a sense of right and good there. The mystery is how it came to be there and why virtually everyone resonates with it. But there is no befuddled mystery, as Smith would say, if we recognize the Divine Architect behind things. What we need to do is concentrate on doing what is right for ourselves and thereby others which is fulfilling that part of the plan on Earth.

But the human ego gets in the way. It gets in the way to cut off that Light and enhance the Darkness, and from that shadow world comes fear, doubt, scarcity, greed, envy, anger, hatred and resentment. From that sense of Darkness comes fear that unless you can be free to do whatever you want irrespective of the consequences you -- your ego -- will be harmed. Speak to anyone who claims to believe you can be free to do anything you want and to hell with everything else and/or who are hardcore Capitalists and they will show you the obverse side of Fear.

Bring out cooperation, collaboration, justice, fairness, compassion and decency and those who live in Fear will tell you why something might happen that leaves them at the mercy of others whom they despise and want to lord over because they judge that everyone else is like them. Naturally, in that case, the only option is to fight tooth and nail to support ego based desires, wants, fantasies and Fear.

Fairness, however, does allow for freedom. As Rawls points out, in order to be fair you would have to have these basic principles of liberty of allowing as much freedom to others as you allow yourself, fair and equal opportunities for all, and look after the interests of the least advantaged and certainly those of the disadvantaged. A mature democratic society would also be based on overlapping consensus and through ground up working of self interest creating the principles by which your society should be governed. There is a moral centre for Rawls because people intuitively have a sense of what is good and fair.

Smith goes beyond Rawls in believing there is a Divine force behind the moral centre. And in doing so, and has been discussed, believes not in a so-called FM or Capitalist way of doing things but in a Fair Market. All the ideas of Smith and those that resonate with him (and in his own way this would include Marx) are proponents of a Fair Market. A system where when most things are carried out in a fair and reasonable manner and aligned to a moral centre, will ensure balance and harmony not just for the individual but everyone.

Market corrections are the realigning of things as if by an IH, to be in resonance with a moral centre (which we intuitively are aware of when we are open to Divinity and the fact that God does exist). This is about balance and harmony.

What are termed ‘market corrections’ today is within the heartless framework that treats compassion as an externality thereby promoting the notion of punishment to set things right. The market or FM of today is a blind godless unforgiving system of punishment for what ‘delivers’ and what doesn’t because it is based on Fear. In new ways of doing business and having a natural flow of a community based nature of running society (as discussed in more detail in The Awakened Eco-nomy) we move away from Fear and all its concomitant horrors.

There is freedom for all human beings as we have been given the gift of free will and choice. But this is choice with an understanding of the reality that there are always parameters to everything: free will means the ability to choose between aligning oneself to the moral centre of Divinity or choosing not to align to it. The consequences are obvious and all around us as we can see the choices made which have resulted in a collective consciousness in the world which largely chose Magicism and the Fear, destruction and suffering it brings.

Fortunately, more of us are slowly coming to realize that we can choose the Fair Market, which allows for all of us being able to fulfill our positive potential to the highest.

In his own way Smith is in good ancient company, he is in effect promulgating a Tao of Economics: Yin-Yang balance that is the expression of the Creator in a Universe and world whose physicality we seem to experience most of the time without always being conscious of that beyond the immediate perception of our limited senses.

But when you open your heart, your mind will follow it to the moral centre within and align everything to the Source where all life comes from. When Fear drops away and the veil is lifted, a re-visioning of the world takes place and you can actually see that the Invisible Hand has been visible all along.

 

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.

That's the Way it Goes

Things seem to fall apart, and the centre cannot hold. The economy is going into a shambles, exploitation in all fields of life still goes on, violence and mistrust among people and governments are rampant. Somehow, this is what we have come to create as we have come to believe what we have been indoctrinated to believe among many things, such as the ‘free market' and that Capitalism is God.

But Capitalism has turned out to be the God that has failed.

This piece will look at how we have come to be hoodwinked and have tragically bought into the myth of Scarcity and what this means as current economic events unfold inexorably before us. It will also look at a possible scenario for the future, if we so choose to take that route, which can be described as the path towards Abundance.

The first thing we need to do is take a look at the Triumvirate of Trouble, meaning interest rates, fiat currency, and a closer look at the surplus value of labor (henceforth, referred to as the Triumvirate).

The first two have been dealt with in these posts (as well as posts embedded within them) and for those who would like an in-depth look at those notions, these are good starting points.

The two links are:

GPI

Money the beginning of the End: Part 1

But a little should be said about the first two aspects of the Triumvirate before more is said on the third aspect: the surplus value of labor (SV).

It is the Triumvirate that has led us to believe in what the capitalist system has done for us: apparently great material wealth, money all around, high growth, military and political power, and well, what more could you ask for?

Yet not all is well. Throughout history and over the last century in particular, abuse and violence domestically and internationally has seemed the norm. Poverty has been the defining characteristic of many in so-called poorer states at the end of the last century and the beginning of the current one. Now, poverty and uncertainty are fast becoming the hallmarks of even more countries including some of the most developed ones.

What has gone wrong? Naturally, there will be numerous theories and reasons for this. But one aspect of the situation that cannot be ignored anymore is the abject failure of the capitalist system. The Triumvirate in seeking to carve up the known world into areas that it can govern indefinitely has inevitably led to creating the contradictions that are now coming home to roost, big time.

Some of the major culprits in this game of debt and deceit are Big Businesses, Banks and Governments affectionately known as 3BG. Through ignorance and willful manipulation, the Triumvirate has been the ruling façade for many 3BGs.

Interest rates on money loaned are usually nothing short of usury which has been frowned upon by virtually every major religion in the world. Simply making money out of lending money has been a traditional way of forcing people to compete among themselves for even more money to pay off the interest on loans. A useful story to look at on how this works is the one on "The Eleventh Round" here:

The parable of the Eleventh Round

As for fiat currencies (see link on A new kind of money to end Money above), they have been the bane of economies in creating currency devaluation, unstable money, and constant inflation. A useful example is one taken from Ellen Brown's The Web of Debt.

Here we have an example of how 30 cents can get you a dozen eggs, but due to the currency fluctuations of fiat currency, the next day your 30 cents is actually worth 5 cents in purchasing power. But, does it mean that a dozen eggs are now transformed into 2 eggs (worth what 5 cents should be able to buy)? This is the price of not having a type of fixed exchange rate, but one that moves wildly depending apparently on the ‘free market'.

Thirty cents should be worth 30 cents, not 5 cents the next day. Twelve eggs are just that, not two. Yet that is the system we have bought into. We have allowed the manipulation by the US Federal Reserve and many other banks to issue currency based on nothing more than double accounting and a pyramid scheme with interest to boot. This is a system in which we are taxed in every sense of the word to sustain the interests of 3BG.

Think about it, a game of Monopoly has more stability built into it than the fiat currency system which we have taken to be as ‘normal'. In a game like Monopoly you get the same $200 dollars when you pass Go, you know what the fee for getting out of jail is etc. But in the game world of our current lives, we have allowed 3BG to determine the impossible, that is, we allow them to morph 12 eggs into 2 eggs overnight via the fiat currency system of arbitrary finance.

Does this make sense? Does it accord with any sense of reality? Does this sound like a just and fair system? Does this sound like what capitalism promised? Is there even a vague semblance to what democracy is supposed to be about? Who actually gains and is enriched by this? Look at your current economic situation and bank accounts and see part of the answer there. Think about this for a moment.

Let us take a look at a concept that is regaining prominence and use as a means of analyzing what has been happening around us, the surplus value of labor.

The Economics of Scarcity

We have been led to believe by neo-classical economists that there are limited resources for which we have to compete to create a sound economy. We have been led to believe in things called ‘factors of production' and how income comes from these factors; and that via the use of money and productivity we create growth. But pause for a moment and ask ourselves how we have come to believe such myths, which in the end increasingly hold no more credence than the story of Cinderella or Sleeping Beauty in the minds of many.

Simply this, that there has been an unprecedented amount of material growth and so-called wealth created since the start of Industrialization from the late 19th century onwards. We have bought these products, and seen many of them on TV, and are convinced that they ought to be sought after by media, marketing and advertising. A system that can deliver all this stuff and then some, surely WORKS. Communism has also failed (meaning the USSR and its brand of ideology) and remaining Communists (e.g. China) seem quite capitalistic these days. And yet, the housing crash in the US and the upcoming demise of Fanny Mae and Freddie Mac, and all that this is symptomatic of this tells of a different narrative.

To the surprise of many, Marx is coming back into intellectual fashion. It is also worthwhile looking at his notion of surplus value of labor (SV). My interpretation is an extrapolation of the ideas from the key works of Marx, including some brilliant expositions of his ideas in the form of David Harvey's The Limits to Capital and Resnick and Wolff's New Departures in Marxian Theory.

Basically, one of Marx's many conceptual breakthroughs in understanding how the economy, and capitalism in particular, works is his idea of SV. What we term as profit is basically skimmed off the value gained from what is produced by labor or all the rest of us working stiffs (irrespective of whether you sit in front of a computer...).

To simplify, when we pay labor X amount and sell its product for X + n amount and after cost deductions we have P as profit. The reason for that P is due to the fact that we have paid labor less than what it should have been paid for in the first place. It is exploitation plain and simple that allows for profit and, thereby, capital to grow.

What we think of as income that comes from various ‘factors of production' like land, labor and capital is essentially skimmed off SV that is recycled back into the economic system. So that the wages we receive are also from SV taken not only off our backs, but the backs of others.

Marx, of course, has a whole body of work to show this in all its complex and myriad forms. And most frightening of all, he not only largely makes sense these days, he seems to be well on the way to being proven right about capitalism in the way we are experiencing it today with all the hindsight and bloodbath of history to support it.

The thing is Marx has captured the essence of the way we live our lives in a world of duality. Because we believe we are all separate and are not One, we naturally fall into economic belief systems that lend ourselves to support the system of belief of 3BGs that convince us we live in Scarcity. There is a need to scramble for things and fight even more to keep them, and keep on fighting even much more to get more of them. It is Us against Them. The whole class structure to Marx is predicated on SV.

As long as one group of people live off and profiteer from the SV of others, they are the class of capitalists. So you can have people who profit from SV in the common work place or offices, and you can see the class structure there immediately: in the form of conspicuous consumption - the larger office, the bigger PC (or newest mobile phone), the car, the private secretary, the jet, the etc, etc. And due to duality we have been ingrained into thinking that it is what we should be aiming for as well. So we need to compete more (thinking that means being more productive), to move up the scale (class) so that we can be on the higher end of the food chain (SV exploitation), and finally we can then be the ones others kow tow to (success).

And yet we are so unhappy about many things, and the economy is falling around our ears. The thing is this, as Marx wonderfully points out, the whole capitalist system of duality leads to contradictions. Capital takes on a life of its own. In order for the system to sustain itself, it must create more capital. This leads inevitably to devaluation and the destruction of capital.

Capital has to insist on more 'productivity', more innovation to increase 'productivity', more markets, lower salaries (meaning ‘competitive') for most in the work force so that SV can be increased, and this can also be recycled as big bonuses for corporate bosses and shareholders (rewards).

The workers in the firms and those who buy the products are mere cogs in the system: the whole purpose of the engine of capitalism is to create more capital ad infinitum.

Just talk to those you know in the corporate world and those who run large companies and they inevitably tell you about answering to the board of directors about growing markets and raising profits, and answering to shareholders. Where in all this is the welfare of their staff and the quality of products that they are churning out?

It is all about profit and SV (even if they are worried about the quality of their products). The more the drive for SV ratchets up, the greater the need for even more capital accumulation. Couple this with interest on loans and fiat currencies and you begin to see why most people seem to be working harder, and yet not knowing how they are going to afford to retire in peace (if at all).

But it gets better.

You see, there is a terrible price to pay for all this capital accumulation -- it devalues. This is part of the contradiction that sets in. And in order to prevent and counter the devaluation yet more capital must be produced, more people and markets must be squeezed as even more devaluation sets in.

Among the many aspects of the price of devaluation:

1. Currency devaluation (inflation) and collapses due to excess fiat money being created.
2. Economic bubbles start and burst as in the Asian currency crisis in the mid 90s and the current housing collapse in the US.
3. More manipulations of financial markets to counter devaluation which leads to more financial and banking problems (as in Europe). The current shocks to the banking industry are a prime example of capital devaluation of playing the SV game in an unbridled manner. And there will be more to follow.
4. Globalization and the discontent this seems to be bringing to many. Not only does capital need newer markets to expand in, but cheaper labor to skim SV from, or how else does capital sustain itself and pay CEOs their fat salaries and shareholders their ‘hard earned' bonuses? And many in the West are wondering why they are facing unemployment as jobs flow to other places where it is easier to gain the edge on SV through much lower wages there than in the capitalists' home countries.
5. The ultimate form of devaluation: war. This also comes from the need to grab more resources (which we are constantly told are scarce) and expand markets to keep Capital alive and kicking. Also, when you have that much capital there's nothing like expanding your military, testing its equipment and munitions, and doing some population control at the same time.
6. Devaluation of human life which has become a means to an end, because people become capital. An entire matrix of politics and economics is created through the mythology of ‘free markets', ‘democracy' and ‘freedom' to allow capital and the 3BGs to gain from this (and those who hope to gain from this by aligning themselves to this class structure). People are there to fit into GDP figures and fight wars.
7. Alienation of humanity from doing any form of meaningful work or leading their lives the way they think they should be able to lead it. To many people, work is ‘just a job', it ‘puts food on the table' and it doesn't have to mean much more than feeding the three headed hydra of the Triumvirate and trying to stay alive.

One of the things Marx also introduced, especially in the path breaking volume 1 of Capital is to show that there are three basic ways of placing values on things, that is, we have value, use value and exchange value. The question Marx was aiming at but never seemed to quite ask and answer (though he may have done so in a way that was not clear enough to me at least) is what exactly is the value of something, or a product?

Recently, I asked a friend of mine who is a CEO of a company that is part of a multinational conglomerate what he thought was the value of a glass tumbler on the table we were sitting at. I told him discount the water in it, just consider the value of the tumbler itself.

He answered, as we all have been trained, that depending on the market and where it was sold the value of it would vary. This would depend on how useful it was (use value), and what its value was ($ amount). So I asked him, what did he think the so-called $ value of it was. He said that it could range from $5 per piece to even $50 depending on how it was marketed and what kind of demand there was.

So here it is, the ‘free market' and so-called 'demand and supply' are quite arbitrary. It does seem that the whole field of neo-classical economics has grown from this mythology in working out fantastical realms of ‘perfect markets' with ‘perfect equilibriums' while all those wonderful marginalist theories and intricate calculations are there to show that you can just charge what you want for a product if someone wants to pay that amount. There is no value as such, it is an arbitrary amount we place just like our fiat currency, that is, today $10 is worth so much, tomorrow thanks to manipulation or poor policies emanating from 3BGs, it's worth something else, more or less.

What this proves is that there is no way to actually ascertain a value of a thing. Without being too metaphysical, its value is, in all honesty, immeasurable (or im0). If it was not the case, then how is it possible for such wildly fluctuating prices to be given to a glass tumbler depending on ‘the market' and ‘demand and supply'?

Unless we want to insist that it has no value: now that takes us into even deeper waters which we shall stay out of here.

Because everything is im0 we can assign whatever value we want to it, including the failing fiat currency money value based on mythical theories of economic equilibrium (when in reality we are in a constant state of Disequilibrium).

[In due course, a piece will be done on how faulty the neo-classical concepts of economics are and possible ways to work round it and undo the damage it has done to us all. Fortunately there are pioneers in this, and it is a matter of taking the trail up from them.]

But this is the point I am trying to make: if an inanimate object is im0 how much so a human being? Can value actually be placed on humans in terms of $ and their output etc? This is what I believe Marx and many others, who see the severe problems of neo-classical economics, are trying to point out in their own ways.

A slight detour on this: just take a look at the wage system that has been introduced. This is what we believe to be ‘normal' and which we all live by largely because ‘we have no choice', etc. Peter Linebaugh in his The London Hanged provides some interesting insights on how capital punishment in English history (specifically in the 18th century) was a means of punishment by Capital.

That the landed interests of capital introduced and supported the gory mass killings of those who stole and defied the authority of the ruling class as a means of keeping people in their places.

The wage system is a means of telling everyone to know their proper place and not rock the boat and the structure of 3BGs so that everyone gets what they are told they are worth, take it or leave it. If you challenge this, then there will be laws that will deal with you. That seems to be one of the messages from Linebaugh's book.

When you can put a price on a person's head, literally or otherwise, it is easy to take the next step in the commodification of a human being: which is killing them.

Of course, it can be argued by many that severe crime needs to be punished and that psychotic murderers should not be able to walk freely, and many would agree to that if only to preserve some sense of order and sanity.

But the subtle point being made by Linebaugh, for instance, is that many laws and punishment (especially of the capital variety) are a form of punishing many who have come to their ways of crime because of the way capital accumulation and its devaluating effects have shaped people. When you live in duality, it is easy to harm or steal from someone else because after all it is robbing someone else and it is for your 'own self interest and is that not what society teaches we have look out for first and foremost...?'

Coming back to the point on value: the moment we place $ value on a person and his output and relegate this to ‘market' forces which are subject to the dictatorial vagaries of the Triumvirate and the self interest of 3BG, we begin to see why we are to a large extent in the situations we are all currently in around the world.

The cornerstone to this is our sense of duality in which we live in fear of scarcity of products, and $ (even though there is a lot of it, it is just not distributed evenly enough), anxiety over health, family and many other issues. After all, the other guy is out to get us (not that there is never any truth in this). It is this paradigm of scarcity, doubt and fear that lends us to control by 3BG and others. Greed is not good, manipulation of others for personal gain is not the high point of existence.

So where do we go from here? Perhaps, as a form of a thought experiment, we can look at one of many different possibilities. One such modality I would term the new Economy of Abundance.

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