Posts Tagged ‘Capital in the XXI Century’

ADDED VALUE IN THE XXI CENTURY

March 9, 2015

PRODUCING SUPERIOR THINKING TO IMPROVE NOT JUST WORLD SOCIO-ECONOMY, BUT SURVIVAL:

Capital Exponentiate, Decapitate Wealth To Feed Minds:

Piketty’s “Capital In the XXI Century” argues that the return on capital is greater that that on labor: r>g. All economists from the pseudo-left fell on their knees, astounded by the depth of that observation. They obviously never studied history, let alone archeology.

In truth, Piketty’s big deal inequality, that r>g has been known for 12,000 years, as I have emphasized in countless essays, for years. I have even explained the mathematical-psychological reasons why r>g. Piketty has smirked that he discovered r>g when he wrote the book. (A case of arrogant ignorance buttressed by colossal stupidity: that r>g ought to have been the first law of economics. That it took centuries for economists to discover this cannot possibly be a matter of stupidity, but of the will, on the part of economists of not understanding how the masters who fed them got their power from.)

So Piketty claims he just discovered that r>g: maybe economists are not idiots, but they play some on TV? (Some are bound to think that Piketty should be my ally, and thus I should be nicer to him; however, correct philosophy tends to be done by being only friendly to truth.)

Homo Thrived In This Cold Climate For 2 Million Years (Georgia, Tusheti NP.) Thanks To Science & Technology

Homo Thrived In This Cold Climate For 2 Million Years (Georgia, Tusheti NP.) Thanks To Science & Technology

It was so well known, that the return on capital was higher than that on income, r>g, that all reasonably sustained societies had colossal, decapitating taxes on wealth.

By law, hook, or crook. And when this was not the case, when wealth became hereditary in an exponential way, disasters happened. Generally invasion and destruction.

This happened to all the plutocratically corrupt Chinese empires when Genghis Khan’s Mongols came down.

The peaceful variant is revolutions such as 1789 (for twenty years the king had been meekly trying to make the aristocracy pay enough taxes).

When a great Native American, or great Viking chief died, much of their possessions (it could thousands of horses) would be redistributed.

Time to re-learn the wisdom of the ancients.

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SUPERIORITY OF THE WEST?

Why did the West become so superior? Or China, for that matter?

Technology. Superior technology. Coming from superior thinking. Both the Greeks and the Chinese had colossal contempt for barbarians. (In both cases it went so far that the Greeks lost everything, and the Chinese came very close to annihilation).

Around the year 1000 CE, the Vietnamese (it seems) invented new cultivars of rice, which could produce an entire crop, twice a year. The population of East Asia exploded accordingly.

A bit earlier, the Franks had invented new cultivars of beans. The Frankish Tenth Century was full of beans. Beans are nutritious, with high protein.

Homo is scientific and technological. Thus, two million years ago, pelt covered (tech!) Homo Ergaster lived in Georgia’s Little Caucasus, a pretty cold place in winter. And the population was highly varied genetically (showing tech and travel already dominated).

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A GREATER OBSESSION WITH FREEDOM MADE THE WEST SUPERIOR:

Here is the very latest. Flour was found in England, in archeological layers as old as 10,000 years before present. It was pure flour: there were no husks associated. The milling had been done, far away. How far? Well the cultivation of wheat spread to Western Europe millennia later. The flour had been traded, and brought over thousands of miles. Most certainly by boat. Celtic civilization, which would rise 5,000 years later, was expert at oceanic travel.

What’s the broad picture? Not just that prehistoric Englishmen loved their flat bread, no doubt a delicacy. Advanced technology has permeated Europe for much longer than is still understood now by most historians. Remember that the iceman who died in a glacier, 5,000 years ago, was not just tattooed, and had fetched in the lowlands a bow made of special wood. More telling: he carried antibiotics.

China and the West diverged, because the philosophies of the Franks and the East were different. The Franks had outlawed slavery four centuries before the great divergence started. This helped freedom, especially the freedom to think of new technology and science.  (Frank = Free.)

The more enslaved a population, the less inventive. It is not just a cultural-psychological phenomenon. It may be epigenetic. The Franks were more ethologically correct, and that enabled to unleash full human epigenetic.

(Being endowed with full human capability, is perhaps why G.W. Bush was incredibly brazen when he became president, going to invade Iraq, whereas Obama was subdued, and just worked, under Summers’ orders, to save the established plutocratic order, like a little boy, obsequious servant of the great white masters; OK, Obama did not descend from slaves, yet he was exposed to the black slave culture, throughout, and somewhat clueless about it.)

The Germans had been obsessed with freedom since ever, and, since in particular, their first contacts with the Romans. All that Germanic freedom led to population explosions, and invasions of Greco-Roman lands, which, for centuries, were systematically cut down by hyper-disciplined Roman armies.

All this was brought into one mold by Consul Clovis, who, as Roman Imperator, and himself son of Roman Imperator Childeric (also elected king of the Salian Franks), made the soldiers of his army understand that they would have to be extremely disciplined too, under the penalty of death (Roman style, a revolting notion for free Germans).

Militarily, the Franks by combining freedom and discipline, were an undefeatable force ever since (the Mongols knew this all too well, thus did not send their scouts west of Croatia; then allied themselves to the Franks to capture Baghdad and Damas).

Free peasants had no slaves, but they needed help: domesticated beasts and mechanical advantage were thus evolved by Frankish society. When Europeans made it to China, they were astounded that people did everything, without using machines or beasts.

So not too many children, but then communal living: Middle Ages villages in Europe were commune-ist regimes. Exploitation of property was divided according to how many could work.

The end result was strong philosophical pressure for ever more advanced technology. Although China was ahead in some tech, as soon as Europe heard of it, it captured it greedily. That philosophy permeated all of Western European society. Peter the Great, emperor of Russia knew this so well, he went to study incognito as a worker in Dutch naval shipyards.

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AMERICAN ECONOMIC DISCOURSE: A TROJAN HORSE

Does the drive to advanced tech dominate now?

Not as much as it used to.

Why? American plutocracy. And the “Nobel Prizes” of a whole army of obsequious plutophile servants thereof.

Because the spirit of all-conquering technology has been displaced by Capital in the XXI Century. And more specifically its USA monopolistic operators (such as the insufferable Bill Gates, and cohorts of financial operators). Technology is, and will stay, of course, the main and ultimate capital of humanity. That’s how Homo colonized the Caucasus, two million years ago.

Piketty, in his book, brushes technology off. Absurdly, he believes that tech can provide only a 1% return. That’s thoroughly stupid: inventing full Quantum Computers, for example,  would have tremendous consequences, as any device could be made hyper intelligent.

Yet, this sort of attitude makes Piketty an object of admiration in USA Academia.

Why? Because USA Academia is plutocratic through and through. Piketty’s ideas do not threaten plutocracy. Quite the opposite: they will allow it to survive. Diminished, true, but alive. My ideas would destroy plutocracy. Let alone the fact that it would take a long time to implement Piketty’s scheme. My schemes, being multi-dimensional, could be implemented faster, and start to bite right away.

(I do agree with several of Piketty’s propositions, such as a world cadastrum, and progressive taxation on capital: I have advocated them for more than a decade!)

***

PLUS OULTRE:

However, a European solar plane just took off from Dubai. It will go around the world on solar power alone. The main force behind this project, the inventor and pilot, the engineer Picard (scion of ancestors just like him) asserts that the global adoption of such technologies would lower energy waste by half.

Europeans, following the Europeans who had migrated to North America, were the richest, most powerful, better nourished people in the world, for five centuries, because their economies produced more ADDED VALUE than any other economies (in particular, better guns).

To re-establish relative riches, Europeans need to focus on what produced that superiority in added value production. That means technological superiority, and this is fed by a more educated population. More educated scientifically, and thus philosophically.

Philosophy, done in a humanly ethologically correct way, is the metaphysics of science. It all fits together. Anything else is an amputation of the possible. Of the humanly possible.

China understands this very well. At least the science part. (Not too sure about the philosophical part; without it, China may well follow the path of fascist Germany. It’s going that way, with a military budget bigger than France, Britain and Japan combined: $145 billion.)

How to do this?

How to add so much value from mind that superiority is re-established?

Well establish the correct philosophy, put it in power, teach it, finance free maximum quality education, free at all ages.

Pay by taxes on wealth, and large incomes, fortunes, in such a way that there would be a practical cap on wealth, as the Roman Republic used to have, when it really worked.

Decapitating wealth is important for the youth: it will show youth that material wealth to excess is such a bad thing, it had to be made unlawful. It will replace mind at the apex of what youth ought to aspire to, and be programmed by.

***

KEEPING A CIVILIZATION GRADIENT WILL SAVE BILLIONS:

Billions of lives, that is.

The usual partisans of insignificance, nihilism and masochism will no doubt whine that Euro-American economic ascendency is a bad thing. They prefer to be haughty slaves than responsible masters.

European scientific superiority led to a reasonably stabled world order. (Except for some populations of the Americas who got exterminated, thus clearing the lands for Europeans.)

In a world where everybody has the same weapons, and ecology is collapsing (still not raining in California, fourth year in a row, in the greatest drought in several millennia), it is to be feared that disorder will express itself as it has in the past: the sort of massacres that make entire populations disappear. That is what Netanyahu is thinking of…

So defining properly Capital in The XXI Century is not just economically and socially important. It is morally important, in the apocalyptic sense of “moral”.

Superior mind is the ultimate capital. Obviously hardly a notion that comes naturally to economists. As what is called “economics” is mostly a fake science, and famous economists are mostly people who have learned to lie about that fact.

When Piketty claims he just discovered r>g, 10,000 years after most of our ancestors, he demonstrates that. More generally, the same critique can be directed at entire fields such as most of theoretical physics and even mathematics, as funding from plutocrats has become ubiquitous. By buying the hierarchy, the plutocrats bought the thinking. That’s what they wanted. Thinking to be directed incorrectly.

We have see this before: this is how Aristotle, or more exactly his sponsors, nearly destroyed civilization. The difference? The stakes are much higher now.

Can I be more specific in my critique, give a hint of what is wrong with Academia? Most thinkers in Academia are too specialized. Right, much science requires hyper-specialization. Say when one is studying Pluto’s atmosphere (the Solar planet not the god of planet finance). One needs hyper-specialized science. However, there is also the science, and the thinking, about big questions. In those fields, hyper-specialization, unguided by the broad picture, can lead to error: look at much of theoretical physics, much of philosophy, much of economics.

It is precisely because Thomas Piketty is obviously pretty ignorant of history, that he believes he just discovered r>g. After 10,000 human societies made the  notion central to their cultures. It is also why economists do not even know that, during most of humanity’s history, money creation was not farmed out to private individuals (the bankers). So they cannot even feel that there is anything wrong with the present money creation system.

Ignorance allows the devil to hide in the details.

Patrice Ayme’

Picking Piketty Peeks

February 13, 2015

Thomas Piketty, a young and successful French Science Po economist wrote “Capitalism in The XXI Century”. I bought it ASAP, and then did not read one page. The reason is that there was a waiting list. By the time I got the book, it was clear it was rehashing part of what I have been saying for years.

For example, to my knowledge, I was the first to make the rapprochement between the present situation and the Ancient Regime. The Nobles (2% of the population) did not pay (most) tax.

Piketty recognizes that he just discovered “his book’s principal idea” that the “taux de rendement du capital” (return on capital) was higher than return on work. “Moi je ne le savais pas avant”. I have been pounding that fact for a decade or so.

The Higher The Return On Capital, The Lower the Growth (Piketty)

The Higher The Return On Capital, The Lower the Growth (Piketty)

It is nice to see Piketty saying these things I have been saying, now, but I have moved on, long ago. I condemn the very way money is generated (by the private-public banking system).

It is first obvious to whoever has studied past societies. Plutocracies are basically those societies where, at some point, taxation on the wealthiest has not been applied enough to limit the EXPONENTIATION of capital.

I do not find alluring to listen to my old observations. Not to demean Piketty. Others such as Saez in Berkeley, also French, had published enlightening research on inequality, for years.

I agree with all what Piketty proposes. Yet, many of his answers are all too mild.

In the period from Roosevelt to1981 (arrival of Reagan), the upper marginal tax rate of the USA averaged 82%. It applied above one million dollar income (constant dollars). Growth was maximum.

What Piketty did not say: In the next 20 years the maximum margin on the richest came down to (less than) 15%. Yes, less than secretaries.

Piketty wants to rise the upper margin tax rate of income millionaires to 80% or 90%. I agree.

To this critics of Piketty, in France or the USA, reply that will kill innovation. A French cutie interviewer told Piketty that with rates like that the robot who heads Facebook (OK, she did not use “robot”) would not have been motivated to invent Facebook.

Who cares?

As it is, Mr. Z from Facebook stole an idea from France. Besides, Facebook-like companies already existed (Myspace). There is also plenty of evidence Facebook was a government operation (the protégé of Larry Summers, parachuted to the USA government under Clinton, was parachuted to Google, and then parachuted to Facebook).

Piketty vaguely mumbled something about the research which really mattered was public. But he was weak and indecisive.

Why? Well, after all, Piketty teaches at Science Po, a place full of young arrogant greedsters who think they are becoming qualified to lead the world. They live according to a principle that Piketty himself condemns: politics as a profession. Piketty said that the fact Hollande had been in politics all his life was a problem (the same is true for roughly all politicians).

Professional politicians should not be condemned to clean the toilets exclusively, but certainly ought to be left to sort out the details, of the laws passed by the People, like they increasingly have to, in Switzerland. That’s the only exclusivity they should pretend to.

In truth, business creators are nothing much. Business creators motivated first by money are even less.

Piketty to Bill Gates: ‘If 30 years ago, one would have told you: you will earn one billion dollars, not 50 billion, would you have refused to invent Windows?’ Of course not says Piketty, answering his own question.

Piketty: Without counting that all these innovations rest on an ecosystem of public research.

Piketty missed the obvious remark that France was at the forefront of the electronics age: transistors and CPUs (chips), and even the Personal Computer (PC), were all invented, and produced first in France. He probably does not even know this.

And the fact he does not know is testimony enough to the dirty ways of money.

The hard creative work is from engineers, scientists and the philosophers who back them up, not forgetting the historians, sociologists, writers, artists and poets helping to inspire the preceding crowd.

All the world of lasers and the like came from publicly funded lab in Paris. In 1953, Kastler invented optical pumping:

https://patriceayme.wordpress.com/2013/06/20/genius-irreplaceable-jobs-follow/

The same lab has made more Nobel prize winning work founding outright a completely new field: how to see light with atoms (my own formulation, don’t accuse Serge Haroche!)

Such labs are now starved by austerity.

If you ask people at Apple Inc. why they are so good, they don’t say “Steve Jobs”. It’s not just that Steve has experienced technical difficulties, it’s that Apple engineers feel empowered. Apple has $700 billion in market cap (twice Google).

After a level of inequality, it has no effect on the motivation of individuals: why to pay traders millions of Euros? Say Piketty.

What I say is that much of trading itself, should not exist.

Much of what Piketty says about Europe and the Euro Zone is correct. One should homogenize the core part of the Euro Zone, and those who don’t like it, like Luxembourg, can stay out.

Right now in Europe, large companies pay less tax than medium and small ones. It’s even worse with middle class people versus the wealthiest.

A point Piketty makes is that inequality is not everything, but opacity also matters. He mentioned that Carlos Slims (world’s richest man) obtained juicy contracts from the government. (Piketty is careful not to say that this was a case of obvious corruption; he obviously knows this, but he wants to be keep on being invited in the power circles, and his books to create the buzz that brings millions of sales).

An objection made to Piketty is that the classification of the richest people has changed over 30 years. To this, Piketty has not clear retort, but I do.

That is indeed a silly objection: The founder of Walmart passed away. His heir have, all together, more money than Bill Gates.

More historically, under the terrible Roman plutocracy, the richest of the rich changed all the time, for similar reasons. But, although it was hard to maintain just as high a status, it was easier to maintain one just below. The Curial class (= local plutocracy) survived for 4 centuries.

Karl Marx? Piketty rightly points out that Marx wanted to cancel private property, but did not think about what would happen the next day.

Piketty suggests to create new notions of property, including hybrids between public and private property as conceived now.

Piketty was asked why he was so keen, him, such a young guy, to go all around the world, to be received by Obama, to be admired by all, etc. … Instead of being working hard? Especially with the crisis we have now?

Piketty replied he believed in the power of ideas. He believes politicians are just into doing what they believe is the dominant thinking We The People (he did not use that expression) go by. So, in the democratic debate, one should try to modify this dominant opinion.

Notice the naivety: one is very far here from my Satanic interpretation of common human behavior, especially at the leadership level

The answer to this is simple: some play, some think. Real thinkers are not in the White House, they are in distant caves, watching the sea. Occasionally, when not thinking deep.

Piketty points out that oligarchic regimes bring social problems, thus scapegoats, thus nationalist drift, and then, ultimately, like Hitler, or Putin, war.

All right, truth be told, Piketty did not mention Hitler, but he did mention Putin. Not a word on the problem of banks. Out of 29 extremely dangerous banks, the equivalent of potential super-novas on the verge of explosion, four are French. BNP is roughly the same size as French GDP. Those banks are the main engines of inequality, besides the fact any of them, by imploding would make the situation instantaneously worse than in 2008.

Those banks are still allowed to engage in a form of trading which is the modern equivalent of slavery. Piketty does not mention the problem, which is at the core of the money generating-austerity craze.

And he is not afraid to say that many of the time honored ways of economics are actually outright insanity (he repeatedly uses the word “delirium”). Piketty is no genius, but he makes an excellent impresario.

Patrice Ayme’