Abstract; Free market fundamentalists ignore a paradox of economics: defining what a “profit” is can only be done by the government! Thus, when only profit seems to reign, as now, the real government is hiding. Hiding in plain sight, just as the Saudi criminal organization, manipulating the absence of global legal jurisdiction to implement criminal propaganda, or grand theft. Thus, Apple, Google, etc. have all too much in common with terrorist networks. Understanding much of this, the Japanese PM is suddenly behaving as if he led China. (Precisely because he has his eye on the PRC…)
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Sometimes progress is all about rediscovering what was known for millennia. Sometimes progress is all about unlearning outrageous propaganda. An example? The public is increasingly stuck in the West. From a very deep lack of understanding.
The richer the lords, the poorer the commons.
The degeneracy of the public is directly related to a lack of philosophical definition of what “profit” means. If one does not have a philosophical definition, one has no practical definition, either.
The graph of profits above is, in a sense, a joke; Apple, to single the typical case of the most prominent corporation, has tremendous profits in one sense, for would-be share holders, and none for fiscal authorities.
That lack of definition of “profit”, in turn leads to fiscal imbalances, that lead to rising plutocracy, its accompanying rising unemployment, and general impoverishment of the commons while our lords thrive ever more.
There are still more than four times as many long-term unemployed workers in the USA as there were before the 2007-2008 financial crisis. Europe’s economy is back in recession, and has grown less over the past six years than it did between 1929 and 1935 (yes, that includes Thatcherian Great Britain!), while hitting ever higher highs for unemployment.
Yet there is no major change in policy in sight. Savage, even criminal, austerity programs are imposed by Brussels and Berlin on the most indebted nations. Children go hungry, life expectancies are going down.
Why the unfolding disaster? The way the role of government in economics is looked at is key.
In his first inaugural address, Ronald Reagan said: “In this present crisis, government is not the solution to our problem; government is the problem. From time to time we’ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden.”
Neofascists have misused that quote ever since, extracting from it the aphorism that government was the problem. Worse: under Clinton, Bush Jr., and Obama, they put that scheme into action, deciding that finance would be self regulating.
Ever since the Medes-Persian empire of Darius and contemporaneous Athens, all serious countries acknowledged the overwhelming, domineering role of government in economics. The rise of Frankish Europe of the High Middle Ages, England 1066, or the Italian republics, France in 1600 (Henri IV’s “chicken in every pot”), or Great Britain, later, were all tied in to massive redefinitions of the socio-economy by the government.
(Anglo-Saxon academics love to throw in the word “Keynes” at this point, but Keynes’ suggestions were minimal relative to what serious governments have done in economics for millennia before him, or even since! The only thing about Keynes is that he lived in the 20C and spoke English, enough for simple minds to adulate.)
The government does two things, ever since serious civilization has been instituted: first, government insures enough fundamental economics, to make the basic functions of society possible: defense, police, justice, and basic food and water procurement possible.
Secondly, the government determines and regulates the arena of the “free” market. In other words, there is no “free” market, just a market the government decides is free.
Unfortunately, rogue economists, in the last 35 years have imposed a view, in South America, the USA, and the UK, and then Russia, and worldwide, according to which the free market determines everything, including the government, that it, somehow self generates. One may as well let a headless chicken guide us all.
Mr. Abe was Prime Minister of Japan seven years ago. Illness forced him to resign after a year. Now he is back, with more impulse. Although a conservative politician, he understands well that, when the economy is stuck it needs to be stimulated directly by the government. Abe’s 100 billion dollars stimulus would be equal to roughly 300 billion in the USA. That big stimulus does not contradict a loose monetary policy. Nor does it contradict extinguishing Japan’s more than 200% debt/GDP, because for governments, only growth (or default) can extinguish debt.
The first results of Mr. Abe’s policies have been very encouraging (after a 55% rise, a sharp correction in the stock market was caused by fears that the central bank would not keep on giving enough money to the financially starving economy.)
So why does not the rest of the Western world copy Mr. Abe? After all, is not Mr. Abe just trying to do what China has been doing ever since Deng Tsiao Ping decided that “getting rich was glorious“? That has worked splendidly: open the free market in full, and the governmental stimulus too. It’s actually what the Western governments did after 1945, for thirty years, when they were obsessed by growing the economy (before getting obsessed by fighting inflation).
Why is the rest of the Western world insisting upon guidance by the headless chicken of the free market? Simply because plutocracy is the new world order, and that’s best insured by restricting access to money to the very richest. Austerity is not about balancing the books, as much as it is about restricting the money going to the populace (hence the power it disposes of).
The “Chicago Boys” (followers of Hayek and Friedman) proclaimed that profit was the optimal organizing principle of society. Their students were the perfect decoys for neofascist plutocrats to take control in Chili, Argentina, Brazil. in the 1990s Jeffrey Sachs and Larry Summers went to Moscow to teach that greed was the royal road to progress, and they had an eager audience among the new potentates, who loved to hear that plutocracy was morally correct, and economically optimal.
However, this is all hogwash. The foundational work has not been done well enough.
“Profit” means augmenting “property”. Yet, “PROPERTY” CAN ONLY BE DEFINED BY GOVERNMENT.
For example, the Babylonian state, the Roman state, 15 centuries later, and the USA, 33 centuries after, allowed to own people as “property”. However the rights of those slaves were vastly different: Babylonian slavery was not “racially” based, and slaves could become immensely richer than their owners…
In the Roman Republic, for five centuries, “property” was defined as land, and as such, it was limited, by law. In other words, Roman plutocracy was strictly limited by law. Thereof the secret of the success and longevity of the Roman republic.
However, the rise to Rome into a global empire, beyond the jurisdiction of the city of Rome, exploded both the application of the law and its relevance. Plutocracy got unchained, and wrecked its natural enemy, the Republic.
The present situation is technically similar to what happened to Rome when it went global: armed forces, finance and the economy have gone global, but NOT LEGAL JURISDICTION.
Western civilization has got global, but not its root, the rule of democratic law. One may as well transplant a giant tree in the desert, leaving its roots behind where they grew. This is not going to work.
The problem of international terrorism has two faces: international finance and the bombs it (indirectly) plants.
Indirect action can be extensive, along vast causal chains. For example giant kelp forests are disappearing off Alaska. Why? Because of (over)fishing.
How does that work? Extensive indirect causality. Human overfishing makes orcas hungry. The killer whales then go eat sea otters. Then urchins, now uneaten by sea otters, proliferate, and eat the kelp. hence the apparition of a lot of clear coastal waters off Alaska. Pretty, but not what the ecology used to be.
Indirect causality chains relate and entangle religious and financial terrorism. And they have a common cause: no global legal jurisdiction.
Consider Salafist terrorism, as exemplified in Toulouse, France (killing of Jewish children and adults by a Salafist fanatic), or in the USA (killings by Salafist fanatics within the army, or in Boston), or in London (several times). How is it related to the tax terrorism practiced by Apple Inc, or Google, IBM, etc.?
In all these cases, it’s the limitation of legal jurisdiction that allows the growth of the criminal activity. The Salafists get their ideas according to what plutocrats in Saudi Arabia want them to have. The ideas the Saudis, a family of gangsters who have given their name to a country, wanted people to have are conveyed by considerable amounts of money. The Saudis pose as the guardians of Salafism (the way of the old ones). They actually seized power, 90 years ago, by spilling oceans of blood.
The promotion of bloody ideas and ideals the Saudis extol should all be illegal, and those instigating plutocrats ought to be put in prison. However, Western law does not reach within Saudi Arabia, for the exact same reason that it does not reach within global corporations.
The Saudis are, arguably, the world’s largest and most criminal corporation. (Qatar is only an also ran.)
Global corporations’ main business model consists in claiming to have no, or little, profits, outside of tiny jurisdictions that basically don’t tax them. Others claim to be made of subsidiaries that are citizens of nowhere (that’s Apple’s method). Apple ferries more than 100 billions of profits through the British Virgin islands. The British Virgin islands have 20,000 citizens, and more than 500,000 global companies registered there.
As the Wall Street Journal just noticed, global corporations are now even hiding the thousands of subsidiaries they own, and through which they ferry profits, thanks to new USA laws. Many of the biggest USA companies have removed hundreds of offshore subsidiaries from their publicly disclosed financial filings over recent years. They are taking advantage of SEC rules that demand disclosure only when subsidiary operations are “significant” (meaning siphoning 105 of the business)
Oracle, for instance, disclosed more than 400 subsidiaries in its 2010 annual report. By 2012 the list had been whittled to eight—five of which were located in Ireland. Similar decreases in the number of disclosed subsidiaries were found in filings by Google, FedEx, Raytheon and Microsoft. Presto, no more traceable profits!
In the European Union alone, tax evasion by large crooks is evaluated at more than a trillion dollars, much more than all the national deficits combined.
Apple makes billions in the United Kingdom, while using services there provided by British society, still does not contribute to pay for any of what it exploits. It apparently pays a 2% global tax in Ireland alone. Amazon does something similar, paying basically no tax, while devouring local bookstores, which, submitted to local jurisdiction, pay huge taxes (thus have to sell their books at a much higher price).
Governments, all over the West, having learned their masters’ lesson well, have defined profits of said masters are inexistent, fiscally, while the masters are making the greatest profits ever, and unemployment is at a fifty year high in the West.
It’s also striking that, although the greatest heists ever, have been revealed since 2007, no one, absolutely no one, has gone to jail for this. A striking example is the LIBOR CONSPIRACY. Many billions were stolen, however, none of the bosses of what is, therefore, twenty of the world’s largest criminal organizations, went to jail. It seems the largest thievery is perfectly profitable. 80% of financial derivative trading is through tax havens, and thus is hidden too.
Who profits from the new world order is becoming something to hide, and that has gone deep underground, all the way to Hades. The Sicilian mafia does not behave any differently.
Thus one can see that the neoconservatives advocates of predatory finance harbor contradictory notions; they claim profits should rule, but then their heroes, wealthy corporations and individuals, hide them as much as they can, just as predators hide their excrements. So what are profits about? Heavenly stuff, or something one cannot speak of?
The economy should not rest on what its beneficiaries want to hide.
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Patrice Ayme
Share this: Please do share, ideas are made to spread and enlighten!
Basic income is necessary for the indigent. However, basic income is not a new idea. It is as old as imperial Rome, where it was implemented. Thus, basic income has more to do with a system friendly with slavery.
The argument has been made by Silicon Valley that no one should know our data, thus the need for absolute encryption. That’s hypocritical: as I said, they use our data. Thus they say: fear the thieves, while stealing us.
Paul Handover worries that:”Millions of people with nothing to hide are, nonetheless, deeply concerned about a general loss of personal privacy.” That’s ironical, considering what the tech monopolies are doing with our data.
If people have nothing to hide, they have nothing to hide. They can stand in plain view of the governments. So they should not do what the tech giants want them to do. They should not behave as if they were plutocrats, and had something to hide. If they have something to hide, that nothingness should be exposed. And if the government cannot be trusted, it should be fixed. Right now, as it is, the tech giants of the USA, giants in unlawful profits, of the USA, are completely entangled with the government in Washington, DC. That should be exposed, made transparent, revealed, dismantled.
I have nothing to hide, the government can follow me all day long. What I fear is terrorists: I was attacked several times, and even bombed by right wing fascists in Europe, and got death threats. None of these attacks or threats ever came from a government, although I lived in Algeria, Ivory Coast, Senegal, Mauritania, Niger, Mali, Peru, Bolivia, Iran, Mexico, Canada, USA, the EU, etc. Yet, everywhere I went, I did not keep my mouth in my pocket.
Transparency is not something we should fear. It is something we need. We need it for two main reasons:
Our future world will be transparent, or it will not be. The Roman Republic, since inception, was friendly to the rich.
However, the same Roman Republic blocked the rise of plutocracy absolutely, by limiting how much power individuals could control. In particular, the wealth of the richest families was capped absolutely. How did the Roman Republic do this? With the Cadastrum, the registry of all private property.
Right now, there is no world cadastrum. The plutocrats hide their money in various ways, mostly through anonymous companies. Some treasures islands have several times more anonymous companies registered than they have inhabitants. (It’s no coincidence that these treasure islands are often British, or Dutch owned, that is why the UK is so rich. And this part of the reason why it is so hard to change.)
The plutocrats want others to live in misery: this is how they feel like Gods. San Jose, the USA’s richest large city is a place, partly of utmost madness, destitution and people living in garbage. This what the Silicon Valley cool billionaires in jeans organized. Here you go, and it’s the same squalor all over the Bay Area, except in the billionaires’ enclaves:
San Jose, 2014. While Billionaires Fill Their Jumbo Jets At Government’s Expense, Normal People Can See Such Scenes Everyday, A Few Miles Away
[People walk along a thrash-lined trail at the Silicon Valley homeless encampment known as The Jungle, Monday, Dec. 1, 2014, in San Jose, Calif. City officials began posting notices on hand built structures, tents and tree trunks warning the 200 residents of what is likely the nation’s largest homeless encampment that the bulldozers are coming. People living in the Silicon Valley camp had to be out by Thursday, Dec. 4 or face arrest for trespassing. (AP Photo/Marcio Jose Sanchez)]
In the greatest scheme of things, it is plutocracy and the world of organized crime which has brought worldwide instability and terrorism (I have explained how in hundreds of essays, going along many threads; it’s the main story of the twentieth century). Should we not apply the brakes now, things will get much worse (think middle ages with nukes, spaceships and engineered life forms). Nazism was greatly a product of German plutocracy, aided and abaited by plutocrats from the USA. Should we want to repeat fully the performance, it would be much worse. Last time felt like the apocalypse, but it was just a warning.
Ordinary people commit, at most, tiny little crime. The plutocrats who “lead” the world (into the abyss) commit gigantic crimes, they depend upon the lack of transparency to operate. As Quantum encryption (completely unbreakable) is on the rise, it’s urgent to require a transparent world. Moral people have nothing to fear, crooks, plutocrats, and criminals, everything.
Patrice Ayme’