Sunday, November 29, 2009

Reexamining Convention: Part Three - The Root of All Evil


In this work, I will refer to various rather complex systems with single words. I will define them here to maximize clarity.

Monetary System - An economic system in which currency is used to represent value.

Currency - An artificial representation of value, physical or electronic.

Capitalism - I am referring to Free-Market capitalism when I reference it in this work. In a broader sense, I define Capitalism an economic system based on private, as opposed to state, ownership of capital. In the modern age, a capitalist economy must be a monetary system in order to function. Thus, the two are intertwined inextricably.

Socialism/Mercantilism -I define these as an economic system based primarily around public or state ownership of capital for forwarding the public welfare, or the state's welfare, respectively. As in modern capitalism and all other economic systems of this day and age, it must be a monetary system in order to function in the modern age.

Communism - Quite apart from Socialism, I define Communism as most would refer to "Pure Communism". This is the original, Marxist definition of Communism.

Section One - Production and Consumption in Capitalism

Capitalism functions on an ever-widening cycle of production and consumption, referred to as Cyclical Consumption. This forms the basis of the phenomenon called "Economic Growth"; it is essentially how much "stuff", a given society is producing. Economic Growth is vital for a monetary, capitalist economy's continued survival: they must either grow or die, because the profit motive will always drive an economy to expand to its greatest extent. This has immense ramifications for the society in question, because heightened production must always be accompanied with increased consumption, or an economic depression will ensue, which will reverse the growth gained in a very severe way.

There are three main consequences resulting from this motivation economic interests have to increase consumption.

Section Two - Delusions of Illusions

The first is materialism. Promoted through advertising in every avenue available to the elites, it helps keep people oblivious of what's really going on in the world.

Materialism is a distraction, like religion is, like politics is. They all synergistically react with each other to create imaginary conflicts that distract from the true issues, and as a bonus create mindless loyalties and divisions between people. This, in turn, creates neuroses and thus corrupt and criminal behavior: People kill for their religions and nations in war, steal things they don't need in order to further their social status, and anyone with an opinion is sucked into often bitter debates about things that really don't matter. Things like religious debates between theists of opposing traditions, Democrats and Republicans engaging in a debate about, well, anything, and Kanye West's latest shenanigans.

We talk about this, while billions suffer. While even we ourselves, the privileged and fortunate, suffer mental abuse and clandestine slavery.

Think about it. Does a nation really exist outside the minds of people? If nobody believes a religion, does it exist, either? They're all only tools to help organize our society: and they're now very old, outdated tools. We don't need nations, or politics, or religions to ensure our well-being. We need technology and sound economics.
Can the Vatican provide bread to the hungry? No. A farmer can. Can a politician build a road? No. An engineer can. Can a rich man sail a ship? No. A navigator can.
All of these people: politicians, priests, and the pecuniary-blessed, can ultimately do nothing to help society. They can only enslave it. This is because they are trained to be part of a system that is focused on preserving the institutions of currency and capitalism, and thus a small, unnecessary elite, enthroned at everyone's expense.

Realizing this, we must refocus our human society on these most essential topics, and abandon these institutions detrimental to ourselves, both as a society and individuals.

Now, what are we all being distracted from, exactly? This is an awful lot of effort society seems to be putting into keeping people ignorant of its own workings.

Turns out, what we don't know does hurt us.

Section Three - Planned Obsolescence

The second result of cyclical consumption is called "Planned Obsolescence".

Planned Obsolescence is a relatively simple concept. It's the artificial limiting of a product's potential lifespan or utility, for the purpose of selling more products to fulfill those roles. This can happen either intentionally, with a manufacturer consciously choosing to make sub-standard products that expire right after the warranty does, or unintentionally, as a side effect from the general drive for quantity over quality in a profit-based economy. Either way, the quality of products is far below what it could be.

The Fashion industry is probably the most obvious employer of this tactic, but it permeates the whole system. In the Fashion industry, artistic creation is exploited, sold for profit in large-scale corporate capitalism, and then constantly replaced by a "newer, hotter" version. So, the wealthy constantly put their money back into the system, keeping liquidity in the economy. Still, a "trickle-down" phenomenon does not occur in a significant way, because due to the corporate nature of that system, most of the wealth is kept amongst the owners of the given company: and they are, unfailingly and unsurprisingly, rather wealthy. This process is repeated in every economic sector, including markets that are comprised. Thus, wealth always concentrates itself with the greatest existing concentration wealth, despite the claims of "trickle-down" economics, and the needs of the working/under classes.

Now, the only significant defense a monetary system will have against this is competition between businesses. In theory, one business would take advantage of the sub-standard quality of another businesses' products, by creating better products. Unfortunately, there are several major problems with this 'defense'. First, it is generally unprofitable for a business to create high-quality products, as due to the nature of the inevitable unequal distribution of wealth in a capitalist system, only the very wealthy (an extremely small portion of the population, and thus market) will be able to afford those products. In addition, largely due to the corporate nature of business today, there are only a couple corporations that control the vast percentage of any given product-market. Thus, these few businesses can easily, and will always cooperate with each other to keep quality, and thus costs, low, instead of competing for the consumers' benefit as planned.

Finally, even in the most ideal competitive market, there is always a real-world ceiling on the quality of the products, because the businesses have an overriding drive to extract some profit from any sale: thus, the cost of any product or service in a capitalistic system will be more than what is required to create the product or service. Interestingly, this means that the sum total of all prices will always be higher than the actual monetary value of all the products and services being sold in a system. This creates perpetual debt, as everyone is always trying to profit off of someone else. Thus, at all times, everyone has debts to pay to everyone else. Remember this: it will be important later.

This is the fundamental drive of the profit system for working-class people: the drive to get rid of an unpayable debt. The only way this can be theoretically attained is the temporary siphoning off of the debt on somebody else. It's almost like a game of musical chairs: someone is always left 'out'. In this terrifyingly real game, 'out' means unemployed, broke, and unable to make ends meet. In reality, a whole lot of people are 'out' at once, in various degrees, because nobody can actually get rid of all their debt; more is always coming, because economic growth is continuing. Regardless, this competition naturally creates further division, which weakens labor and other anti-capitalist movements, thus perpetuating the system and its sick 'game'.

Section Four - An Abundance of Scarcity


The third result has been ironically identified as an "Abundance of Scarcity". 

This concept is, again, not a complicated one. It stems from the laws of supply and demand. If there is an abundance of something, the price of individual units drops. So, corporations will always seek to control market share both for the intrinsic value of doing so, and also for the power that is afforded by unilateral control over the supply of a resource. Essentially, if a company is the sole source of diamonds (as is De Beers and its subsidiaries in a large way), diamonds will be quite expensive (the average diamond wedding ring costing several month's income for an average American), despite the fact that diamonds are actually rather plentiful (dozens millions of carats are mined and produced annually, at the very least).
In cases where this can't be achieved, the main corporations of a given economic sector will unfailingly come to an agreement regarding this issue, just as they do with Planned Obsolescence, working together to both keep prices high and costs low.

So, just as there is a limit on quality, there is also a limit on quantity. This may seem to contradict the focus that capitalism places on quantity: but in truth, in capitalism rewards those who limit quantity from what it needs to be, and quality from what it could be. A sane system would produce what needs to be produced, and makes the highest quality products possible. Under this definition, Capitalism is insane, irrational, and obsolete.

Moreover, money itself is artificially scarce. When a currency is abundant, all individual units of currency are worth less, and everyone suffers, particularly the poor. This is called inflation, for the amount of currency in use has been inflated, or increased, from what it was before, relatively speaking. The amount of value represented by all of the currency in an economy is essentially fixed, and is roughly based upon/correlates with the amount of "faith" people are willing to put in the currency. In modern economics, this "faith" is represented chiefly in how much people are willing to invest their currency in corporations and companies. But this is somewhat misleading, for only a fraction of the people in the economy will have wealth to spare in investing, and those who do will generally have an enormous amount of it. This is due to the wealth distribution gradient of Capitalism; for instance, in the United States the wealthiest 1% control 95% of the wealth in the economy. In addition, the amount of currency in an economy is controlled chiefly by the Central Bank of the given economy.Thus, in any monetary system, and particularly a capitalist system, although the economy is allegedly controlled by everyone, it is in fact directed by a tiny, super-rich elite. This is true in "Socialist" China, and in the Capitalist United States; in semi-socialist Europe and Japan, and indeed all across the world where a monetary system has been established. And that's pretty much everywhere.

In a monetary system, currency, and thus wealth, is hoarded by a small elite. The ramifications of this are enormous, for the vast majority are left to compete amongst themselves. This stops collaboration and communication that are necessary to a healthy, progressive society, and reinforces, out of artificially-created necessity, the selfish impulses and behavior characteristic of immaturity. In addition, those born into wealthy positions are also corrupted, though more subtly. People of wealth and privilege are indoctrinated to increase their wealth and power above most other concerns, and thus are also pressured into refraining from mature behavior. This causes society to be lead not by an "enlightened elite", as will sometimes be claimed. It is almost invariably directed by the immature and selfish, and thus society itself remains selfish and sick.

Section Five - The Profit Motive, and Other Consequences Thereof

The profit motive in its current context requires Cyclical Consumption and all it's consequences, and at the root of Capitalism is the profit motive. All three of these grievous issues enumerated prior are caused ultimately by the focus of human society on profit and individual gain: they are caused by our infatuation with capitalism. The Profit Motive also independently accounts for many other plagues on society.

First and perhaps foremost of these is crime. Criminal behavior is fostered, encouraged, and even endorsed by any monetary, and thus capitalist, system. With the perpetual scarcity of money and abundance of debt created by a monetary system, people of the lower economic tiers will be pressured to engage in criminal activity in order to survive in a world of scarcity, and all people in a monetary system will be tempted to participate in such activity in order to progress higher up the economic ladder. This is due to the competitive mentality promoted by capitalism, which ultimately finds root in the scarcity created by a monetary system in all things.

War is, in a different sense, a crime. It is murder, theft, and fraud on the grandest scale possible; it is the greatest of the many cons preformed throughout history. War between nations is unnecessary, and yet hundreds of millions have and continue to die in the practice of it. War is the result of the elite aggrandizing themselves further, by "investing" the lives of their soldiers in a cause. It is capitalism in its truest, dirtiest form.
Moreover, nations themselves are maintained by capitalism, for they are a useful means of division to further prevent productive, collaborative thought that would eventually eliminate capitalism.

Monetary economics also promotes focusing on short-term profits, another immature behavioral pattern. This is at the root of the inevitable "business cycle", a cycle of relative growth and recession characteristic of Capitalism in particular. Due to the decentralized nature of capitalism, although power is concentrated amongst a few people, it is very hard to promote cooperation amongst those few when it comes down to seeing through long-term goals. For although it is attainable enough to reach a tacit agreement on keeping product prices high, it seems that reaching long-term goals, like reducing carbon emissions from factories, that require multiple companies to cooperate and keep sacrificing profit for long periods of time, is usually too much to ask of the "invisible hand of the market". This is probably due to the fact that keeping a Status Quo is much easier for a capitalist system than introducing progressive reforms. This is another way the system remains at odds with fundamental facts about society and the environment, both fundmentally emergent beings.

Finally, one of the greatest consequences of a monetary system is the perpetual necessity of employment. A capitalist system that employs fewer people is one that will collapse sooner. This is due to the fact that people need to feel invested in a society, and this is provided by employment. This is also the reason why the U.S. Government is so keen to provide people with homes, even to the extent of assisting in creating huge economic recessions such as the one we are seeing now: being a homeowner promotes loyalty to the economic system, because you are now invested in that system. A 10% unemployment rate is generally acceptable for a modern economy: not stellar, but somewhat sustainable. The U.S. has currently hit 17.5% unemployment, and it continues to rise. This obviously does not bode well for the nation, for a system that does not provide for the basic bare necessities of life for a significant percentage of its population will be undone by said percentage. This will lead to increased welfare to combat the rise of unemployment. In turn, this will cause the still-employed masses to be squeezed for money, because the rich, vastly more powerful elites will be extremely reluctant to let go of their money. This will in turn cause exponentially expanding, cyclical poverty, and eventually an uprising or revolution in order to deal with the problems that the establishment will not be able or willing to solve. A new elite will likely lead the revolution, and establish themselves at the head of a much less free, totalitarian state that will do what democracy under capitalism could not: provide for the basic needs of its citizens.

The nightmare scenario is made infuriating when you realize that people do not need to be employed, in the traditional sense of the word, in the first place. Most jobs today are meaningless: service jobs, transportation jobs, and production jobs could all be automated to a much larger extent than they are even now. As for command jobs, such as CEOs, Senators, and the like: they would be unnecessary in certain alternative-model systems, where everyone can participate equally in decision-making as is relevant to their lives, as they are essentially the unnecessary by-products of a self-sustaining capitalist-monetary system.

Section Six - Modern Currency

Wealth is represented by currency. Currency, in of itself, is supposed to be worthless; this way, its value comes solely from the wealth that it is supposed to represent. The first currency was created in Lydia, around 500 B.C.E. Gold, however much it is glorified, is generally useless. Barring some relatively new industrial applications of the metal, it is generally not useful for any practical purposes. Silver and Diamonds, being more useful, were relegated to subservient roles in currency. Sometimes used by societies without access to scarcer mediums such as gold, diamonds, and silver, sea-shells and the like were generally avoided by economies with alternatives due to the fact that shells were simply so plentiful; something already established to be detrimental to a currency's appeal in a monetary system. But, since all of these mediums had some value intrinsic to them, eventually paper or cotton money was invented to support and eventually replace these other mediums. Today, all U.S. currency is "fiat", meaning that the value it has is entirely based upon what the economy as a whole says it is worth. For example, when a company raises its prices, it is "voting" to devalue U.S. currency. This has the effect of giving those with more invested capital and property, and thus the wealthy, more say in how the economy is run. This is inherently, and obviously, unfair.

Moreover, the monetary system's method of distributing value not only delivers power and control of all economies under the system directly to the elite, it disassociates value from resources to attribute it to currency simply by the nature of the system. This has vast implications on people's mentalities. Instead of asking, "Do we have the resources to solve this problem?", instead it is asked "Do we have the money to solve this problem?". Because money is an artificially scarce resource, and due to the profit motive's effect of causing selfish behavior even in the face of long-term self-interest, many societal problems will go unsolved. This helps to maintain the status quo, and thus the established institutions dependent on capitalism to remain relevant.

But perhaps most appalling is that current US Currency is, in fact, debt. All U.S. currency goes through the Central Bank of the United States, the Federal Reserve. However, the Federal Reserve is technically a private corporation, and this has, again, broad ramifications for the economy.

Let's say, hypothetically, the United States Government wants to create 1 Trillion dollars, as was done in the bailout. It has to go to the Federal Reserve and ask them to buy 1 Trillion in government bonds (Treasury notes). The Federal Reserve then accepts the money, and gives back 1 Trillion dollars in Federal Reserve Notes, the currency we use on a day-to-day basis, and refer to as "U.S. Currency". The government then deposits the currency in various banks, and the banks invest their money in other corporations. The corporations use that to pay their expenses, such as workers' wages. The workers then use their wages to buy products from the corporations, who use that to pay their workers' wages, and voila! Money has now been added to the economy.

Unfortunately, you can't create value out of nothing. When the Federal Reserve "buys" the bonds from the government, it is actually loaning money to the government, taking the Treasury Notes as a "down payment", of sorts. There is an interest rate attached to the whole transaction.

Which begs the question: where does the money to pay the interest come from? The fact is, it doesn't exist. All the money there is in the whole economy was created by this method! There are only two ways for the government to raise the money to pay for this. One is to raise taxes. This doesn't really help matters, as all the money that people are going to have is going to be less than the debt attached to that money. The second is for the government to borrow even more money. Which it does, especially in wartime. Seeing as the same small elite control both the government, the Federal Reserve, and the corporations, and war is an excellent way to aggrandize the Federal Reserve (Because more money must be borrowed due to war expenses) and the corporations (Because the government contracts out all its' manufacturing and even some soldiering jobs to them), it should come as no surprise that the U.S. has been at war, somewhere, constantly, since the Second World War. That's 64 years of war, and the taxpayers, the common man, gets to foot the bill both through direct taxes and inflation.

It gets worse. According to current banking regulations, the Federal Reserve can create an additional $900 Billion on top of the original $1 Trillion, if it so chooses. The $900 Billion is then distributed to various banks by the Federal Reserve, and loaned and invested out to corporations and individuals. This creates even more debt out of thin air. To make matters worse, 90% of the $900 Billion can again be created out of thin air, if the banks request the Federal Reserve to do it. That's another $810 Billion+ in debt created, and the cycle can continue until only a cent remains of the newly created money.

Thus, it should again come as no surprise that the current amount of debt in the U.S. economy, public and private, is about $52 Trillion, while the total amount of currency in the economy can be generously estimated at around $15 Trillion.

There will always be debt as long as there is money, and thus there will always be huge amounts of coercion, control, competition, and corruption as long as we maintain a monetary system. In fact, if everyone, including the government, could pay off their debts tomorrow, there would be no money left in circulation. As Marriner Eccies, former Governor of the Federal Reserve, said, "If there were no debts in our system, there would be no money".

Of course, that can't happen, because there will always be more debt than means to pay off that debt in a monetary system. This is the driving mechanism of capitalism; everyone always needs more money than exists to pay off imaginary debts.

Yeah. That makes sense.

Section Seven - Closing Thoughts on Capitalism

Organizing society around the profit motive, as capitalism does, creates problems. Problems like crime, corruption, greed, exploitation, near-universal psychological trauma, technological and economic stagnation, rampant scarcity, constant economic/social exclusion due to debt, and ultimately stagnation of societal development.

No wonder the establishment tries to blind us with religion and materialism and patriotism: this is a mess! The only way you can possibly keep the status quo is to first stop people from realizing what a crappy deal the current system is.

Thus, the institutions of class, politics, and religion. All of these are created to preserve the "ultimate insitution", the underlying system of capitalism. So, in a sense, the old saying is right: money really is the "root of all evil". And as a wise man once said, "You can't regulate evil". People are quite innovative: as long as their incentives are to aggrandize themselves materially while disregarding any cost to society, their fellows, the environment, and even themselves, they will find ways to subvert any regulations. The only way to create a sane, sustainable society, is to use incentives to promote these goals. Capitalism and Monetary systems cannot, and do not, do this, as is now evident.

It follows, then, that we must find another way to organize our society superior to our current capitalist catastrophe.

Section Eight- The Constant Social Endorsement of Capitalism

Now, how does this system perpetuate itself in society?

...The rich men telling you their money means something, of course.

It's through all of the intellectual warriors who tell you that society cannot exist without money: that there would be no incentive, that society would collapse, that people would be lazy and do nothing and we'd all starve.
That we'd lose our freedoms.
That it's disloyal to even think about that.
That it's just too idealistic, and we have to deal with the "reality" of the "necessity" of a monetary system.

But, the facts remain. No large-scale society has been without currency. They also have always had war, poverty, and social stagnation in irrelevantly varying degrees of counter-productivity. Correlation does not imply causation, but I believe I have already given extraordinary amounts of evidence to back up that relatively extraordinary claim.
There are also many, many proposed alternatives to capitalism that could work. Sadly, due to this widespread, point-blank rejection of alternatives to money and capitalism, they have been marginalized and ignored in the popular mind.

But even this continual campaign of misinformation is not enough to preserve the system: other mechanisms are in place, the removal of which will cause global collapse.

Section Nine - Capitalism's Enclosing Self-Destruction

Most successful, long-lived societies since the Renaissance, and even before, have had a sizable class of middling wealth, large enough to provide them with a vested interest in society, but small enough to keep them out of the ruling elite, thus concentrating wealth and power to a mostly hereditary, oligarchic group. Interestingly, in the decline of many societies comes the elimination of this class by the ruling elite's machinations for their own short-term profit, thus bringing the system down upon itself.

We see this pattern emerging in the United States today, where the middle class continues to shrink, the wealthiest 1% have more wealth than the bottom 95%, and the disparity between rich and poor continues to grow. Seeing the US as a dying economic power also accounts for the relatively recent development of US currency being, essentially, debt.

You simply cannot form a society on the basis of something as fundamentally destructive as greed, and expect it to sustain itself. Capitalism, being based on profit, actually creates and encourages massive amounts of criminal activity. Sooner or later, the ruling elite will "forget themselves", and move to aggrandize themselves at any cost, without any attention paid to the well-being of the system that sustains them. By the time those in power realize their collective mistakes, if they even do, it is always far too late to do anything. Such is the fate of any system that puts individual profit, power, and aggrandizement over the basic interests of the society itself.

Including ours.

Under the combined stress of the elites' unfettered self-aggrandizement, constant economic growth and thus cyclical consumption, and the usurping of human labor by machine technology, Capitalism cannot survive. It is an obsolete system, unfit for the modern world, its challenges, its resources, and its opportunities.

Fortunately, it's just a tool. Capitalism is merely a means by which to organize ourselves: if we replace it with something more suitable, not only will we continue to survive, but we will thrive on a scale never before seen in human history. Because the only sophisticated system we have ever tried is Capitalism.

And it's time to move on.

Section Ten - Forming A New Society

Those last few sentences may have led you to protest:
"But Communism was tried in Russia, and China! It failed utterly, and led to huge steps backwards in economic and political freedoms and prosperity!"
But this is not true.

The USSR and China, and all their subsidiary puppet-nations, were mercantile-totalitarian states. They were not communist states.
First of all, Communism is a stateless society. A communist nation is an oxymoron in of itself. Second, all of these "Communist nations" used and use currency (the Soviet Ruble, Chinese Renminbi); a, and perhaps the, quintessential hallmark of modern capitalism. Third, their economies were organized in the same totalitarian, dictatorial/oligarchic way that a corporation is. In fact, the only significant difference between those economies and the American economy is the amount of freedom and choice people had/have in using their money, in company with how centralized, planned, and state-controlled the economy is/was.

Don't be afraid of change.

What if we lived in a world that was completely unified: without any nations at all. In this world, all manufactured goods were centrally produced entirely by machines, and managed by a central "nervous system" of a computer mainframe, which would assist teams of human technicians that maintain the system. These production-machines would rarely break down, because there would be no repair industry to profit from them doing so, but when they did, human technicians would work to fix the problem immediately.

These technicians would be all-volunteer teams, working perhaps ten to twenty hour weeks. They would constitute perhaps a gross maximum of 10% of the world population upon the inception of such a system, and that number will steadily decline with time; the rest of the world's population would be free from any kind of traditional labor.

In this world, no money would be used either. With all consumer goods manufactured in abundance and excellent quality, it would be like putting a price on air. Food, water, and shelter would be seen as human rights, and provided on request, along with a dizzying array of manufactured goods. Still, nobody would feel the need to stockpile or accumulate products, because there would be no point. Wealth would disappear as a measure of status, when everyone has the same amount of wealth. All the same, some limits would be placed at least initially, like, only twenty Laptops to a given individual. These would disappear over time, in all likelihood, as the leftover associations of status with wealth ebb away.

Everyone would be equal, and able to participate in the system to the degree that it concerned them. This means that economic decisions on what to produce would be made by the society as a whole, and individual's choices on what to consume would be almost entirely up to the individual. Human liberties to thought, speech, life, personal property, etc., would be preserved. Democracy would finally be established, with what laws that remain to be enacted proposed and voted upon by citizens, without representatives or other.

Without money, crime would fall exponentially, to merely insignificant levels: who would steal in a world of abundance? Police forces would probably fall into irrelevance, and armies into total abolition along with their nations. What little serious crime is left can be managed by society in a constructive manner; instead of prisons, mental hospitals would be built to better understand and hopefully help these individuals.

Education would be refocused onto a grounding in the scientific method, and branch out into generalist education. People would not be bred and trained for jobs, but given opportunities to participate in what interests them as a human being, whether it be art, or engineering, or science, or philosophy. Involuntary religious, political, and ideological associations would be abolished. Constructive debate on all issues of philosophy, sociology, science, etc., would be encouraged everywhere. These debates would drive society forward, in all fields.

And this is just a taster of what this system entails. It's called Participatory Society and Resource-Based Economics, and it is probably the best socio-economic system we can implement right now. It is, essentially, an update of Communism for the opportunities, technologies, and values of the modern era. And, when a better system is developed, this system will freely become the next. This is most unlike capitalism, which will require a struggle to replace.

All suffer under capitalism. From the neuroses it imparts on the richest Richelius, the poorest paupers, and everyone in between, to the false chains of labor it requires everyone to bind themselves with; from the wars it starts, to the lives it finishes, Capitalism is a parasite on every man, woman, and child of the world.

This isn't utopia, or idealism. This is what we could be doing right now, but aren't.

Let's get to it.