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There are two fruitcake religions infecting the USA right now: Kristianity and Ferengiism. By Ferengiism I mean the belief
that you must do whatever makes you the most money no matter what the short or long
term consequences to yourself or others. It is the state corporate religion.
~ Roedy(born: 1948-02-04 age: 66)
If you knew, as I do, the power of giving, you would not let a single meal pass without
sharing some of it.
~ Gautama Buddha(born: 563 BC died: 483 BC at age: 80)
The basic philosophy of capitalism is sound — give
people what they want rather than what someone else thinks they should want. Capitalism
has been a resounding success. It has brought us an immense bounty of material goods and
services. It has an almost magical ability to allocate resources to organise the flow of
goods and services. This success has lead us to believe it is a perfect system, and must
not be modified in any way. It has almost become a religion with its fanatical Fatwa
I wish to argue that capitalism still has some problems. I am not advocating
abandoning it. Clearly it is the best approach mankind has developed so far. I merely
want to point out that it needs some fine tuning to deal with certain classes of
The Problems with Capitalism
The modern conservative is engaged in one of man’s oldest exercises in moral
philosophy; that is, the search for a superior moral justification for selfishness.
~ John Kenneth Galbraith(born: 1908-10-15 died: 2006-04-29 at age: 97)
The biggest problem with capitalism is
that its solutions are based purely on short term economics, how to provide a given
service most cheaply to the consumer. Only producer and consumer are involved.
However, in the process of providing that service, many others may be adversely
affected, especially in the long term. They have no input into the decision making
process. Examples would include such things as cars that pollute, boom boxes that can
be heard for blocks, snowmobiles designed to harass wildlife, harsh chemicals that
kill fish when improperly disposed of, or in an extreme case, atomic weapons.
Capitalism fails to consider the big picture. It is sort of like looking at the world
through gold-coloured glasses. It has no way of considering non-economic factors in
The producer always acts to maximise his
profit. This sometimes leads him to do things that are wasteful or irritating to the
consumer, e.g. nylons than deliberately run, razor blades that deliberately go dull
quickly, or light bulbs that burn out quickly. He may kill millions of dolphins in
order to catch tuna for one cent less a can.
There are costs that are hard to
allocate, e.g. the costs of recycling an automobile. Since the original producer does
not pay these costs, he has no incentive to make his automobiles easy to recycle.
Market Leader Advantage
The market leader has a huge
advantage over his competitors. He has capital to buy them up. He can use
Microsoftian strategies to lock customers into his products. He can use huge
advertising budgets to persuade customers to pay more for inferior products. He can
buy off politicians to rig the laws in his favour.
The Bad Pushes Out the Good
In Thailand, a toy company makes
dolls for companies like Mattel and Tyco, toys like Simpsons characters, Barbies, and
There was a big fire and most of the workers died because they were locked in the
building. The few that did survive jumped out of third story buildings, and the
survivors were the ones who were cushioned by falling on their coworkers below.
Capitalism made the owner of that building lock the workers in. If he did not do
that, a rival company would and that other company would be marginally more
profitable, and would put a company that had proper ways of dealing with fire out of
business. The bad and unscrupulous push out the good and ethical. Any decent people
are put out of business by unscrupulous ones.
In a similar way, seeking maximum profit compels companies to cut wages, reduce
benefits, ignore worker safety, pollute and cheat. It is not enough for a company to
be profitable. It must be the most profitable to survive.
This building was in Thailand where there are no government regulations to protect
workers. In such circumstances, capitalism forces the employer to spend nothing on
fire protection, and to lock workers into prevent theft or taking breaks. Were it not
for government regulation curbing the capitalist drive for maximum profit, we would
see similar tragedies in Canada and the USA.
Capitalism has a short term outlook. It
difficult to attract money for example to develop a new antibiotic that may not be
needed for another decade, but which will take seven years to create. We may even
know that such an antibiotic will be desperately needed in a decade.
There are too many other projects competing for capital with a faster payback. We
will run out of fossil fuels in a mere 30 to 60 years, yet
capitalism is incapable of getting on with the long range preparation needed. It
tends to only look ahead about a year. Most of what goes on in the stock market is
speculation (that is gambling) based on hours or days. It has nothing whatsoever to
do with investing in new businesses that will produce new products. A society that
has no long-term values is a jungle. It is not a civilisation any more.
Capitalism turns productive
citizens into drones who do no useful work. All they do is buy and sell stocks and
live off the interest. An entrepreneur who creates a business does useful work.
Someone who investigates businesses to see which deserve capital invested in them
does useful work. However, the person who just sits back and earns a living off
interest, or plays all day buying and selling stocks is not producing anything
useful. He is just engaging in respectable form of gambling. These people are little
better than welfare bums in terms of the way they are investing their
time. America has abandoned productive manufacturing and moved to
profitable, but utterly non-productive, money management service industries. They do
this because can make hundreds of times more money than through legitimate
investment. It is economic masturbation.
Profit becomes the only motive for
business decisions. This leads us as a species to do some very odd things. For
example, we as a species have now developed the technology to totally wipe out the
AIDS (Acquired Immuno-Deficiency Syndrome) plague. However, we refuse
to use it, because our capitalist mentality insists that every person taking a
medication must pay equally for it. It does not matter that the cost would be trivial
to produce the medication to wipe out the plague now that the difficult work of
developing the drugs has been done. Further, we don’t wipe out
AIDS because that would be unprofitable. Maximum profit
demands keeping the virus around infecting new customers. And finally we don’t
wipe out AIDS because we don’t have a way of allocating costs
of projects that benefit every world citizen. We have spent about 4 billion on
researching new AIDS treatments but only 0.1 billion on finding a vaccine
to prevent new infections.
Capitalism is overheated. It aims for
constant growth. It ignores the biological imperatives that all systems must be
closed and self-sustaining. In biology, constant growth is called cancer. We can’t keep expanding the economy on a
finite planet. You can expand quality of life, but you can’t
(and I mean can’t not shouldn’t) do it by ever
expanding consumption of natural resources. This problem is a side effect of
capitalism’s narrow focus rather than considering the big picture. Capitalists
pushed the Newfoundland cod stock right to the point of extinction before they would
pay attention to what nature was telling them. Even then, the capitalist fishermen
rioted demanding the right to kill off the last few fish. The glamour of capitalism
makes people ignore the harsh biological realities of life on planet earth. They
foolishly imagine the laws of economics trump the laws of physics and biology.
Liberals feel unworthy of their possessions. Conservatives feel they deserve
everything they’ve stolen.
With capitalism as religion/life philosophy, those whose consumption is
most conspicuous, have the highest status. Waste as a positive value conflicts with
the biological practicalities of a sustainable human population on the planet. With 6
billion people to house and feed, we can no longer afford to waste resources.
Sometimes the vested economic interests
work in favour of the society. For example, it is to the insurance companies’
benefit if people have fewer accidents. So you find them lobbying for safer cars,
fire safety inspection etc. On the other hand, sometimes the vested interest works
against society. Drug companies have a vested interest in seeing their customers stay
sick and continue buying their drugs. Food companies have a vested interest in
obesity by encouraging their customers to exercise less and eat more so they buy more
Gravity of Money
Consider the problem of the gravity of
money. Money tends to flow toward those who already have a surplus of money. The rich
get richer and the poor get poorer. The top 10% now make
82 times what the bottom 10% make
in Canada. The gap widens ever year. Why is this? Because of interest, those with
more money tend to get more money and those without tend to get even less, everything
else being equal. The human mind gets into greed spirals where no amount is enough.
To feel good, not only must you have more than everyone else, you must also push
everyone else down as far as possible. The more money you get, the more powerful you
get. The more powerful you get, the more you can bully or exploit others into handing
over their money to you, and into persuading the government to do this for you. This
creates a greed-power-money spiral. Unless there are checks, this will concentrate
nearly all the wealth and power in fewer and fewer hands. In Canada one man, Conrad
Black, controls nearly all the newspapers, TV and radio stations, and dictates their
conservative editorial view. No politician dare challenge him. A TV station toppled a
socialist government by showing police arriving at the premier’s back door,
over and over and over for months even though there were never any charges.
Capitalism, by itself, tends to concentrate wealth and power in fewer and fewer
hands. This same gravity of money principle works between countries as well. Rich
countries tend to get richer and poor countries poorer. The elite control the
education system and convince the masses that the gravity of money is a Good
Thing™, and should be encouraged, not compensated for.
In a stable system, the relative numbers
of people at each income level remains constant. Individual people, of course, become
richer or poorer, but the distribution of incomes does not change. In the early days
of man, pretty well the only factor in production was labour and all labour was
supremely valuable. However, in our modern society, labour is much less important.
Technology, capital and knowledge overshadow labour. Unskilled labour is increasingly
less valuable. Further, computers take over a greater proportion of skilled labour
every year. This leads to an instability, since labourers no longer have the clout
they once had. The rich get richer and the poor get poorer.
We can have a democratic society or we can have the concentration of wealth in the
hands of the few. We cannot have both.
~ Louis Brandeis(born: 1856-11-13 died: 1941-10-05 at age: 84), Supreme Court Justice from 1916— 1939
Ain’t We Got Fun
Bill collectors gather 'round and rather haunt the cottage next door,
Men the grocer and butcher sent,
Men who call for the rent.
But within, a happy chappy, and his bride of only a year,
Seem to be so cheerful,
Here’s an ear full of the chatter you hear:
Ain’t we got fun?
Not much money,
Oh but honey,
Ain’t We Got Fun?
The rent’s unpaid dear,
We haven’t a bus.
In the winter, in the summer,
Don’t we have fun?
Times are bum and getting bummer,
Still we have fun.
There’s nothing surer:
The rich get rich and the poor get poorer
In the meantime,
In between time,
Ain’t we got fun?
Just to make their trouble nearly double,
Something happen’d last night.
To their chimney a gray bird came,
Mr. Stork is his name.
And I’ll bet two pins
A pair of twins just happen’d in with the bird.
Still they’re very gay and merry,
Just at dawning I heard:
Don’t we got fun?
Twins and cares dear, come in pairs, dear,
Don’t we have fun?
We’ve only started,
As mommer and pop,
Are we downhearted,
I’ll say that we’re not!
Landlords mad and getting madder,
Ain’t we got fun?
Times are bad and getting badder,
Still we have fun!
There’s nothing surer,
The rich get rich and the poor get laid off
In the meantime,
In between time,
Ain’t we got fun?
When the man who sold ’em carpets told ’em,
He would take them away,
They said "Wonderful! here’s our chance!
Take them up, and we’ll dance!"
And when burglars came and robb’d them
Taking all their silver, they say.
Hubby yell’d "We’re famous,
For they’ll name us in the papers today!"
Night or daytime,
It’s all playtime,
Ain’t we got fun?
Hot or cold days,
Any old days,
Ain’t we got fun?
If wifie wishes,
To go to a play,
Don’t wash the dishes,
Just throw them away!
Street car seats are awful narrow,
Ain’t we got fun?
They won’t smash up our Pierce Arrow,
They’ve cut my wages,
But my income tax will be so much smaller,
When I’m paid off,
I’ll be laid off.
~ Words by Gus Kahn and Raymond B. Egan
Ain’t We Got Fun 1921
Music by Richard Whiting
Capitalism falls apart when a monopoly forms.
One theorist, Axelrod, said you need 26 independent competing companies to avoid
monopoly or collusion. This is often hard to achieve in practice. We have a
schizophrenic attitude to collusion. If companies collude to fix the price of
gasoline or bank interest rates, there is much screaming and gnashing of teeth.
However, if they formally merge first, or if the leader buys out all its competitors,
there is not so much as a peep of indignation.
The science of cooperation. How cooperation develops among the selfish and even between warring parties. The key is long term association with the same group. Not all cooperation is good. Oligopolies form by the same mechanism. It explains why strict tit for tat is a sound strategy. It is about the mathematics/strategies that generate revenge spirals and spirals of co-operation. Somebody must have read this book when Britain decided to stop taking two eyes for every eye in Northern Ireland, which eventually lead to bringing terrorism under control. Using computer modeling Axelrod discovers the power of a simple tit for tat strategy in dealing with others. He also discovers the mathematical conditions under which people co-operate, collude, compete, aid each other or refuse to offer reasonable assistance. He also explains the mathematics of why corporations tend toward price-fixing and other co-operative behaviour with their competitors.
Online bookstores carrying The Evolution of Cooperation
Greyed out stores probably do not have the item in stock. Try looking for it with a bookfinder.
Capitalism works spectacularly well and
handling the needs of individual consumers. Go to your supermarket and marvel at how
many types and colours of toothbrushes there are. On the other hand, it has no
mechanism for funding global projects, like eradicating malaria or dealing with the
effects of global warming. Even though a nation like the USA could raise 100 billion
dollars in six weeks to deal with terrorism, it was able to pledge (then fail to
deliver) only 200 million (1/50 as much) to deal with AIDS
in Africa. The only problems that get tackled with any
enthusiasm are the ones that directly affect the rich.
All Economic Activity Is Good
Economics seems to value all
economic activity equally. The Exxon Valdez was great for the
GNP (Gross National Product). Funerals count
toward the GNP. Intensive care for lung cancer helps the
Sinking Below the Event Horizon
If a person in the third
world sinks below a certain level of poverty, it is impossible to get back way out.
He needs capital, even if just
investment you can get billions in return. Just go look at websites that track
campaign contributions. Even foreign governments, e.g. Israel and China can play.
Israel’s investment in American politicians nets it
per Israeli citizen in foreign aid.
God destroyed the city of Sodom, not for anal sex,
but for sodomy, which the bible clearly defines as:
Behold, this was the iniquity of thy sister Sodom, pride, fullness of bread, and abundance of idleness was in her and in her daughters, neither did she strengthen the hand of the poor and needy.
~ Ezekiel 16:49
Money is a co-operative game we humans play to reward each player proportionately
to the efforts they expend on behalf of others. Those with fabulous wealth have
discovered ways to cheat both the letter and the spirit of the game. They
contribute little and take the lion’s share of the pie. They imagine they
earned exclusive right to their wealth when in actuality they
~ Roedy(born: 1948-02-04 age: 66)
The Bastard Effect
There is constant pressure on a
company to be more profitable than the competition. This leads them naturally to
underpay workers, spend less on working conditions, dispose of pollutants
irresponsibly, treat animals poorly, lay off workers, etc. Companies get no brownie
points for responsible behaviour. Investors look only at the profitability. In a
similar way, countries compete. The countries with the laxest labour laws, the laxest
pollution laws, the lowest minimum wages etc. attract the new factories.
In the USA, CEO (Chief Executive Officer) ’s of corporations are required by law
to act like bastards. They are not permitted to consider the interests of the
stakeholders, e.g. the employees, the customers, or the people living where the
company does business. They are only permitted to consider the bottom line interest
of the stockholders. The corporation by law acts like a psychotic person, someone
without a conscience.
Book referral for Corporation: The Pathological Pursuit of Profit and Power
recommend book⇒Corporation: The Pathological Pursuit of Profit and Power
Based on the Documentary The Corporation available on DVD. It talks about how corporations behave like psychotic humans without concern for morality or the welfare of others. They are single mindedly devoted to profit, and the governments give them free reign. Also talks about corporations such as Interface (a carpet maker) who are notable exceptions to the rule.
Online bookstores carrying Corporation: The Pathological Pursuit of Profit and Power
Greyed out stores probably do not have the item in stock. Try looking for it with a bookfinder.
is the fourth richest man in the world. He
got that way by buying up newspapers, TV stations and radio stations, then using the
profits from those to buy still more, creating effective monopolies in country after
country. He was then in a position to coerce the planet’s politicians to pass
laws favourable to his business interests. If they did not do what he wanted, his
giant media machine would smear them. He imposed his own warped extreme right wing
views on this media empire and in turn on the whole world. Through it, for example,
through FOX, he was able to mislead the majority of Americans that Saddam Hussein was
responsible for 9/11. with endorsements from all his
newspapers, he was able to get a village idiot elected to the presidency of a country
of which he was not even a citizen. The problem is the gravity of money gives far too
much power to a single individual. Murdoch has millions of times more power than an
ordinary citizen. This is dangerous. Power corrupts; absolute power corrupts
Americans in particular seem to
approach capitalism not as just a way of organising a financial system, but as a
fundamentalist religion. They know nothing of alternatives other than they are all
evil. They are deliberately blind to the shortcomings of
their own extreme form of capitalism. They become busybodies meddling in other
country’s financial affairs that don’t in the least concern them. They
are willing to go to war with people who prefer a different system.
What do I care about the law? Ain’t I got the power?
~ Cornelius Vanderbilt(born: 1794-05-27 died: 1877-01-04 at age: 82)
When people get rich enough, they have the power to buy off politicians
and law enforcement to let them do whatever they please. That power inevitably
Poverty is nature’s way of excreting unhealthy, imbecile, slow, vacillating
and faithless members of society.
~ Herbert Spencer(born: 1820-04-27 died: 1903-12-08 at age: 83)
To the capitalist, the poor are expendable. The poor are defined as the
people with the bottom fifth in wealth. Yet even if everyone on earth were
millionaires, toiling 16 hours a day, there would still be a bottom fifth in wealth,
whose interests did not matter. Capitalism’s mad desire to torment the poor, is
as silly as torturing people because they were not sufficiently tall, or did not
consume enough food. For sustainable world, we need to moderate consumption. This mad
race for maximal conspicuous consumption takes us in the exact opposite direction.
It is obviously much harder to come up with solutions to
these problems than it is to point them out. What has been proposed?
Communism per Karl Marx
This is just too idealistic. People
won’t work with out incentives.
Communism per Lenin
A centrally planned economy is just too
ponderous. It might work better today with modern computers. It leads naturally to
totalitarianism and corruption with too much centralisation of power. Chinese
Communism has the same problems. Because it is essentially a seniority-based
bureaucracy, the leaders are always much older than the rest of the population, hence
overly conservative and without a proper appreciation of the needs of the young.
The problem here is the government keeps
expanding into areas where there is no need for it to do so, gradually increasing
taxes, and giving the public what the bureaucrats think is good for it, rather than
what it wants. For example they will subsidise opera and art work created out of dung
or raw meat. The advantage is that the decision makers on things like hydro electric
projects are responsible to the people as a whole. They have to consider not only
economics but political considerations.
There are some successes. For example the Canadian federal government formed an
oil company called Petrocan to provide some competition to the small number of large
oil producers. That competition kept them more honest than they were in the USA. The
important thing is the mix of private and public enterprise. Pure public without
private competition becomes complacent, just like any monopoly. Unfortunately, the
current government is corrupt and is getting rid of Petrocan at the request of the
private oil companies, even though Petrocan is a great money maker for the
Star Trek Next Generation
The assumption here is
technology will eventually make this clamoring for more goods superfluous. There will
be no merit in conspicuous consumption. There won’t even be a need for money
since goods and energy will be so cheap. Yet Star Trek’s political system is a
militaristic hierarchy, not even as good as a distributed capitalist system for
decision making. There is also the minor problem this the wantum mechanics that makes
it all possible is not quite here yet.
Companies or charities that compete in the
same arena as ordinary for profit companies. They attempt to make their decisions
based on ethics and global optimisation as well as economic realities. They put the
spot light on the unethical activities of their competitors in their struggle for
customer and employee loyalty. The problem is, when you play poker and the other
players cheat it is very hard to stay in the game if you
Capitalists will do whatever you
want them to, if that thing is the most profitable. We need to create taxes for
polluting, taxes for creating unrecyclable goods, etc. that reflect the true costs of
these activities to the planet as a whole. Unfortunately, big companies have the
politicians in their pockets and block all such measures, not realising such taxes
are actually in their long term best interest too.
Incentives for Ethical Capitalism
a scheme producing goods or services that entails spending money to earn money
that does not damage the earth or cheat the customers with overpriced, poor quality
or mislabelled products.
The ethical behaviour of a corporation is nearly always worse than the lowest
common denominator of its leaders and shareholders. It works solely to maximise
profit. It is therefore necessary for the government to offer incentives for ethical
behaviour and disincentives for unethical behaviour to guide corporations back onto
the track of normal morality. To persuade companies to behave well, we must set up
the economic conditions so that they behave well naturally. You can do this with law
or with financial/tax incentives. It does not really matter all that much what the
rules are to a company really, no matter how much they scream. The costs are passed
on to consumers, and all companies pay the same taxes.
When you pay your taxes, if you
want, you can direct some proportion of your taxes to specific areas. You could say
for example that you wanted 10% to go for defense,
30% to funding new energy sources, 0% to drug enforcement, 50% to incentives to
companies to make their products recyclable, and 10% to
fund the development of new antibiotics. This gives the people a direct hand in
budgeting, attempting to bypass the corporation-bribed politicians. Gradually over
the years, the proportion you were allowed to allocate could be upped as the public
became more sophisticated in its choices — more aware of the consequences of
Ralf Nader convinced Detroit to build safer
cars, even though it was against their short term best interest. In retrospect, the
change has been exceedingly profitable for them. With the Internet, anyone can become
a miniature Ralf Nader, exposing the not-so-optimal decisions that various
corporations are making. Google is very democratic. If people like your site and what
you have to say they build links to it. Google then rates your site higher in the
searches. With sufficient pressure, it then becomes economic for corporations to
behave better. Then they start bragging about their new improved behaviour. Then that
behaviour becomes a new competitive battleground and the pressure is no longer
A federation of countries, if it
worked as well as the federation of the Canadian provinces, the federation of the
United States or the European Union, would save a great deal of money in defense.
That money could be redirected to globally useful projects like eradicating
AIDS and malaria, and bringing all water supplies up to an
international standard. Unfortunately, globalisation has come to mean serving the
interests of multinational corporations like Nestlé at the expense of everyone
With the current system, the true rulers of the world are the multinational
corporations, not the governments. They want to keep things that way.
The cells in your body co-operate with the
understanding that every organ in the body has to function properly for the body as a
whole to survive. In tough times, e.g. hypothermia, the body shuts down blood to all
but the core systems with the goal of making the body as a whole survive. Similarly,
if a political party is able to keep backstabbing to a minimum and have its member
co-operate, it has a better chance of prevailing over other political parties.
Similarly for workers in a company or citizens of a country. To compete effectively
at a higher level, you must co-operate effectively at a lower level. Americans
encourage cut-throat competition and exploitation within their
country. Little wonder America’s ability to compete internationally is waning.
Similarly, to compete against global problems like peak oil and environmental
degradation, countries need to co-operate. They don’t understand this yet.
To compensate for the natural flow of
money from poor to rich countries, in 1969 the western
countries met and agreed to donate back 0.7% of their GNP
to the third
world. According to Stephen Lewis, UN (United Nations)
Special Envoy for HIV/AIDS,
had the countries kept their promises there would have been enough to fund the end of
malaria, tuberculosis, stop the AIDS
epidemic and contribute substantially to ending world
hunger. However, they reneged. Here is what they actually donated in 2003:
% of GNP in 2003
Below 0.7 goal
was 0.48 in 1993. It has dropeed to 0.25 in 2012
It is ironic that Americans think of themselves as the most generous nation
on earth when in reality, they are the stingiest, coming in second last place in the
west. I’m sure that if Americans generally were aware of this poor showing,
they would insist on moving into first place. Up until 1985, Canada was giving at the 0.49% level, and claims it will
gradually get back there over the next ten years.
Americans can take pride though, that because they are the third largest country
in the world, and because they have largest GNP,
though they are the stingiest as a percentage of GNP,
in first place in terms of total contribution to global foreign aid. Unfortunately,
national pride makes Americans dwell on this fact and ignore their last place
standing by the generosity measure. On the other hand, American foreign aid is often
not worthy of the name. It sometimes take the form of weapons. It comes with strings
attached, so it could sometimes better be considered bribery. It sometimes does more
harm than good e.g. Monsanto seed with terminator genes. And the lion’s share
($6.2 billion of the $14.9 billion the USA provides in
foreign aid), goes to Israel, hardly what most would consider a third world needy
With only 1/27th of the planet’s population, America takes from the world
1/3 of its natural resources and gives back 1/1000th of its
GNP in foreign
aid, and, like some Biblical hypocrite, trumpets the deed as astoundingly generous.
Other industrialised nations are not that much better.
It would take only about $1 billion a year to bring
tuberculosis under control, yet somehow, even with trillion dollar budgets, it
can’t be found in the combined budgets of the western world. To put this is
perspective, this is about 1/4 the amount America spends on lipstick each year.
The international economic system is strongly weighted in favour of the rich
nations. The World Bank and IMF (International Monetary Fund)
sporadically bail out third world countries, but what is needed is a formal,
sustained, reliable flow of money back to the poor countries to level the playing
Somehow the conventional wisdom of 200 million sullen South Americans sweating away
in the hot sun for the next decade to earn the interest on their debt so Citicorp
can raise its dividend twice a year does not square with political reality.
~ Barton Biggs ,
Managing Director Morgan Stanley
Negative Income Tax
Accept that the entire economic
system is rigged in favour of the wealthy, and that it tends to create a flow from
poor to rich. Instead of trying to stop that flow, simply create a counter flow to
precisely balance it. This would create a truly level playing field that the
capitalists are so fond of. This could be implemented as a negative income tax. The
problem with most current systems to redistribute wealth to the poor is that the
instant the poor make any income at all, all assistance disappears, effectively
taxing their income at over 100%. Hardly the incentive any capitalist worth his salt
would strive for.
Professor Milton Friedman’s negative income tax proposes getting rid of all
welfare bureaucracies and simply leveling income at tax time. Those with very low
income get money back — money to live on for the next year, that might be paid
out in installments to help budgeting. Ronald Reagan liked the idea but never
implemented it. Negative income tax is similar to a guaranteed
livable income. With it, everyone, rich and poor, gets a monthly cheque
sufficient for subsistence. At tax time accounts are squared, and the rich
effectively give the money back, and the poor do not. There is no means test and no
bureaucracy to decide who is worthy of help. Everyone, rich and poor, housed and
homeless is. People have freedom to spend that money anyway they please. You would
need a bureaucracy to care for mentally deficient people and drug addicts who could
not survive without supervision, but not for people who had no problem other than
When someone becomes superwealthy, they
become above the law. They can buy politicians and judges. Their very wealth
intimidates, turning ordinary folk into slavering sycophants. Consider
CNN (Cable News Network) ’s Lou
Dobbs interviewing Bill Gates. He did a perfect impersonation of Ned Beatty in
The Toy. The super rich become almost like black holes, sucking all
money and companies that come within their purview into themselves, crushing them.
For the same reason that we no longer permit dictators or kings with absolute power,
we should limit just how much economic power a person is permitted to accrue. In a
similar way we should block mergers and force large corporations to break up to
ensure competition prevails. Consider how corrupt the oil industry has become with so
few players. It has even subverted the US federal government. Almost every cabinet
member is an ex-oil person. They are running the country
purely for the short-term benefit of the oil corporations.
I see in the near future a crisis approaching that unnerves me and causes me to
tremble for the safety of my country; corporations have been enthroned, an era of
corruption in High Places will follow, and the Money Power of the Country will
endeavor to prolong its reign by working upon the prejudices of the People, until
the wealth is aggregated in a few hands, and the Republic is destroyed.
~ Abraham Lincoln(born: 1809-02-12 died: 1865-04-15 at age: 56)
Taxation on corporations should discourage bloated monopolies and
conglomerates, and encourage small and medium-sized businesses. Corporate taxation
should be progressive, just like personal tax. The rate should be based on the total
income of the conglomerate. Excess profits, aka gouging, should be taxed to
discourage companies from schemes to screw the public.
Where gargantuan size is truly needed, market forces will create size.
The purpose of corporations is to provide goods and services. The means is via
raising money for stockholders. You want a tax system than continually reminds
corporations of that. Americans particularly are prone to enslaving themselves to
corporations. Corporations should be subservient to the public interest.
The original purpose of gambling was wealth
redistribution. With casinos taking over the function, it is now mainly a tax on the
Money is like manure, it’s no good unless you spread it around.
~ Thornton Wilder(born: 1897-04-17 died: 1975-12-07 at age: 78)
and Jerry Herman(born: 1931-07-10 age: 83), Horace Vandergelder in
Folk wisdom says everyone prospers if everyone has money to buy the
necessities of life. If some don’t, then not only they suffer, but those they
would buy from also fail to prosper. In Canada, the family allowance benefits and the
GST (Goods and Services Tax) rebates that are the same for
rich and poor alike, have this function. Unfortunately, they don’t help those
who need it most, the homeless. However, I oppose any sort of program that encourages
having more kids.
In contrast, Reagonomics, aka Voodoo
economics, aka trickle down economics holds that
concentrating the wealth in the hands of the most wealthy and powerful is the best
approach because clearly these people are the movers and shakers and know how to make
things happen with money. Everyone will prosper as a result of the increased economic
activity. The government will more than make up for its largesse to the wealthy by
increased tax revenue from the stimulated economy. Three presidents have tested this
theory. What were the results?
President Reagan: a deficit larger than all previous administrations in history
combined. The gap between rich and poor widened.
President Bush Sr.: a deficit larger than even Reagan’s. The gap between
rich and poor widened.
President George W. Bush: turned a healthy surplus into a deficit topping even
his Bush 41’s, The first trillion dollar experiment failed, so he tried a
second. The gap between rich and poor widened.
The definition of insanity is doing the same thing over and over and expecting a
~ Rita Mae Brown(born: 1944-11-28 age: 70)
in Sudden Death often misattributed to Benjamin Franklin.
Persistence is great, but you must persist with something that
By Rita Mae Brown’s definition, George Bush Jr, is insane.
Why don’t Reagonomics work?
The wealthy are smart cookies and invest the largesse overseas in more booming
economies. The money does not sit around long enough to generate an economic
activity at home.
The wealthy have no need of more necessities. They spend it on luxuries and
frivolities, which don’t do anything for the practical prosperity of the
country. Reaganomics distorts the economy away from producing useful goods to
frivolous ones — toys and services for the idle rich.
The poor have less money to spend on necessities.
Perhaps, just as an experiment, we could also test the manure theory of
economics. Let’s see what happens when you spread the wealth around,
unconcentrate the wealth, narrow the gap between
rich and poor. But wait, the experiment has already been tried, numerous times, with
great success! The most notable experimenter was Franklin Delano Roosevelt with his
New Deal that pulled America out of the deepest recession in history.
To the wealthy, the word enough is meaningless.
~ Matt Fair
Politicians know full well the manure theory of economics works and that
Reagonomics does not. Why would they persist in the folly of Reagonomics? Why do they
disparage the workable manure theory of economic with even less palatable epithets
such as communism? I suggest their motives have nothing to do with
stimulating the economy. They are simply giving kickbacks for campaign contributions
received from the wealthy both over and under the table. Campaign contributions have
an astounding ROI (Return On Investment).
Guaranteed Annual Income
As jobs become scarcer, and
computers and outsourcing devours jobs, are we going to let the general population
starve? For the first time in history there is a surplus of labour. We have to get
used to the idea that people have a right to life even if they don’t have a
job. This can implemented with a guaranteed minimum annual income, perhaps to top
people up, or a flat amount given to everyone. That flies in the face of human
thinking ever since the invention of agriculture. If you don’t work, you
don’t eat. Yet now there simply is not that much work that has to be done. We
could ease into this new reality with a gradually shrinking work week to help share
the gradually shrinking pool of jobs. Instead, people are working longer hours and
taking on multiple jobs just to earn food and rent. The labour glut is forcing wages
down and down. People in the third world are hit hardest. They toil in Kathy Lee
Gifford’s purse factories in China for
No Public Companies
Consider how socially responsible The
Body Shop and Ben & Jerry’s ice cream were before they went public. Once
they went public, they started behaving like any other unscrupulous company. The
problem is the publicly traded corporation that acts without conscience. They are
required by law to act that way, acting purely to maximise profit. Perhaps we should
only allow privately held companies and make the owners legally liable for what their
companies do. In Germany, designated employees are legally liable for what their
corporations do. The problem with this approach is raising sufficient capital for big
projects. Ethical capitalism almost never happens in a
publicly traded company. Famous examples of ethical sole proprietorships included
Josiah Wedgewood, Henry John Heinz and Milton S. Hershey. You usually see it in a
co-op where the owners are the customers, e.g. Mountain Equipment Co-op. You also see
it to some extent where the union of workers owns the company, e.g. WestJet. You can
see the pattern. The closer the owners are to the customers, the more ethical a
company will be. Historically, absentee landlords are the most notorious for
mistreating their tenants. Publicly traded companies are the industrial equivalent of
When a burglar breaks into your house, you
know you have been ripped off. However, corporations and governments rip you off for much
more, and you never know they did it. The entire system is rigged in favour of the
corporations and the wealthy. Here are some examples:
Inflation. Inflation makes money effectively disappear from the everyone’s
bank accounts and from those on fixed incomes. I wonder who gets it?
Devaluation. In 2003, the American dollar lost
20% of it purchasing power abroad due to the collapse of the
value of the American dollar. This happened because of Bush’s record deficits and
the huge trade deficit with the rest of the world.
Electric companies charge higher and higher rates for electricity even though it
costs them less and less to produce it.
Software companies sell you software that does not work, then claim an extra cost
upgrade will make it work properly.
Sales taxes are sometimes explicit and sometimes hidden. By not doing them in a
consistent way people lose track of just how much they are.
Banks lend out your money five to twelve times over, charging interest, and charge
you for the privilege.
Near monopolies such as Altria/Kraft/Philip Morris hide that
fact by selling under hundreds of different formerly legitimate brand names, e.g.
Altria is really Philip Morris Tobacco, Kraft, General Foods, Sanka, Starbucks,
Country-Time Lemonade, Oscar Mayer, DiGiorno, Calumet, Shake n Bake, Jell-O, Oreo,
Post, Nabisco, Planters, Toblerone, Cadbury’s…
Companies go bankrupt leaving the shareholders with nothing. Where did all that
Fledgling investors lose their shirts time and time again. Where did all that money
go? Why did they always lose? They might have done better playing three card
A bum who steals a loaf of bread will likely get more jail time than a stock broker
who steals ten million from pension fund. When a broker is fined for fraud, the fine is
less than 1% of the amount stolen, hardly a
Private banks are permitted to lend money that they don’t really have, to the
government at interest. In other words, the taxpayers pay the banks for a service they
don’t really provide.
Laissez faire capitalists seized on Darwin’s notion of
natural selection to justify ruthless capitalism. Darwin and the evolutionists never used
the phrase survival of the fittest. They talk of
differential reproductive success — some individuals
have slightly better reproductive success — more offspring living to reproduce.
18th century industrialists deliberately misinterpreted Darwin to morally justify
exploiting their workers and destroying the environment with dark
Satanic mills. Survival of the fittest justified every dirty tactic in the book.
However, natural selection works on many levels, the gene, the cell, the individual, the
nation and the species. Natural selection patiently weeds out anything that does not
work. A society that adopts philosophies that destroy the natural environment and
impoverish the bulk of the population will go extinct before ones that do not.
Capitalism makes us do many things that will almost certainly make our species go
extinct including: creating nuclear weapons, creating artificial plagues, eroding soils,
polluting groundwater, wiping out other species at a rate of four a hour — the same
rate as the biggest extinction event in earth’s history, burning fossil fuels
causing greenhouse gases, widening the gap between rich and poor to the point of
fomenting war and terrorism. From Darwin’s point of view, anything that makes your
species go extinct in a definite no no.
Desire For Wealth
If you crave wealth, basically you want a slice of
the world pie disproportionate to the effort you are willing to contribute to the benefit
of others. You are in essence a cheat. When you read up on get rich quick (or even
slowly) schemes, you are effectively researching ways at how to scarf more than your fair
share of the food at the world banquet while paying less than your fair share.
Here are the main ways you can trick others into giving you money without giving them
something of value in return:
Capitalism. You trick people into giving you money simply because you have money
Crime. You embezzle, steal, counterfeit, pull church cons, take bribes etc.
Fame. If you are sufficiently famous, people will assign you high status, and hence
pay a huge premium for your services, including entertainment.
The only legitimate way to create large wealth is to massively benefit others. You
might do this by writing a book, creating a computer program, inventing something,
devising a new drug…
The irony is, those most successful in subverting the money system to deflect a huge
flow of undeserved wealth to themselves, are the ones who scream loudest about even
modest taxes and about how others steal money from them in
the form of taxes. They are like bank robbers bitching about being forced the give back
10% of their ill-gotten loot.
It is coming clearer every day that corporations were a bad idea. It was quite
think that an entity that cared for nothing but profit could possibly behave in a
responsible way. Corporations are raping the planet, poisoning people, enslaving workers
(especially in the third world), corrupting governments and breaking financial promises,
all in a mad pursuit of profit at any cost. It feels dangerous to criticise corporations,
but this is just because the corporations have kept up a steady drumbeat of pro-corporate
propaganda that suggests anyone who had qualms about what corporations do must be some
sort of crazed communist traitor. It is all very well to criticise the corporations, but
what could replace them?
Proprietorships, partnerships and family-owned businesses. Personal reputation a
strong motivator. However, these are necessarily small and cannot take on the big jobs
that corporations handle.
Co-ops, where the workers or the customers own the company. These are currently
rare, but they tend to bend over backwards to keep the customers happy.
Crown corporations where there is a natural monopoly, such as an electric utility,
land-line phone company or cable company. Here the people have some control over how
they behave by voting out the politicians who control corporations. These tend to be
overly bureaucratic since they don’t have the spur of competition to keep them
Attempt to reign in the corporations. The people in corporations who commit crimes
on behalf of the corporation should be punished just as if they committed the crimes on
their own. When corporations pollute, we must force them both to clean it up, and pay a
fine equivalent to twice the cost of the cleanup. Ditto for stealing. They must pay it
back, and pay a fine double that. Enough of these slap on wrists that corporations just
treat as a cost of business. Corporations can use their wealth to hire lawyers to
endlessly delay actions against them. Somehow that advantage has to be weakened.
Corporations have become so powerful they have corrupted the Supreme Court in the USA
to give them permission to buy the next generation of politicians with overwhelming
amounts of money. They are so powerful they can bribe/pressure/threaten governments to
enact laws that nearly all the people do not like. If we don’t stop them, they will
destroy the earth with greenhouse gas emissions, leaked genes, pollution, resource
exhaustion… We will feel such chumps if we did not even try to stop them.
Some of these problems have been obvious for hundreds
of years. I think the best solution so far is democratic government that alternates
between capitalist and socialist, each acting as a check to the other’s excesses.
The great thing about the Internet, is that if someone comes up with an obviously good
new solution, it will take a lot less time for everyone to know about it. Yet it may be
harder than ever though to change the institutions that are now so firmly based in a
purely capitalist philosophy.
No matter how much effort we collectively expend, there will always be precisely 50%
of the population below average. In Dickens day, we punished such people with indentured
servitude and debtors’ prisons (where they had no hope of earning money to pay off
the debt or even paying for their food). Today we punish the people of the third world
with grinding poverty, pressing our economic advantage to the fullest. Perhaps in some
enlightened future time, we will look back on our times as barbaric, when we deliberately
tormented the economically disadvantaged.
The key thing to understand is that the elites of the world like things the way they
are. They want the poor to be as grindingly poor as possible. It makes them feel better
by comparison. The elites are in control of the corporations, the governments and the
media. We see only their point of view day after day. Even the poor and middle class are
seduced into voting Republican, voting against their own best interest. The only hope I
see for cracking this hold on the popular imagination is the Internet, which may
gradually supplant TV and newspapers as a more open forum.
I sit on man’s back choking him and making him carry me, and yet I assure myself
and others that I am very sorry for him and wish to ease his lot by all possible means,
except getting off his back.
~ Leo Tolstoy(born: 1828-09-09 died: 1910-11-07 at age: 82)
Book referral for Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)
recommend book⇒Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)
How the American taxation system takes money from the poor to enrich the rich. It is about the fundamental crookedness and unfairness. He names names, how each of the famous rich Americans cheated to get their wealth.
Online bookstores carrying Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)
This book is simple and somewhat repetitive. It argues five main points.
A vigorous middle class is essential for democracy.
Throughout history, the elites have done battle to eliminate the middle class and scoop all the wealth for themselves.
Starting with Reagan, the lower and middle classes in the USA have become poorer while the elite’s wealth has exploded into the stratosphere.
The elites tell all manner of lies to trick the middle class into giving up their power and wealth to the elites.
You have a choice:
government can run things, via representatives responsible to the people.
corporate CEOs can run things, responsible only to their shareholders.
When you consider the alternative, big government managing society does not look so bad.
Hartmann argues that historically the wealthy elite have always worked to eliminate the middle class, and hence stomp out democracy. They can then run things for their own ultimate financial benefit. We are going through a period now where the middle class is collapsing as a result of the corporatocracy and wealth of the tiny elite at the top is exploding. Since they control the media, they spread all manner of myths that make people vote against their own self interest in favour of those of the elites.
The book also discusses how the war business hijacks government to provide it with endless streams of money for perpetual unnecessary war.
Online bookstores carrying Screwed: The Undeclared War Against the Middle Class — And What We Can Do about It
Greyed out stores probably do not have the item in stock. Try looking for it with a bookfinder.
If you ignorantly believe there’s not enough life support available on planet
Earth for all humanity, then survival only of the fittest seems self-flattering to
warrant magna-selfishness. However, it is due only to human’s born state of
ignorance and the 99.99 percent invisibility of technological capabilities that they do
not recognize the vast abundance of resources available to support all humanity at an
omni-high standard of living.
~ Richard Buckminster (Bucky) Fuller(born: 1895-07-12 died: 1983-07-01 at age: 87)
Grunch of Giants
Robert Reich was minister of labour under Bill Clinton. He explains how competition between companies for favourable legislation has lead to a sort of lobbying arms race. He explains the consequences, cheaper consumer prices, but also lower wages, and less job security. He points out that corporations have no interest whatsoever in community values. It is pointless to expect them to care about global warming, job security, health care etc. They are purely market-driven. He believes this is as it should be. (I strongly disagree. Corporations should be just as responsible as individuals, and all individuals should be personally responsible for their actions they perform on behalf of the corporation.) However, he calls for citizen involvement in government to ensure issues that affect entire communities are properly addressed.
Online bookstores carrying Supercapitalism: The Transformation of Business, Democracy, and Everyday Life
Michael Winterbottom [Director], Mat Whitecross[Director]
1961-03-29 age: 53
Documents with grisly footage certain themes in US foreign policy ranging from Chile, Argentina, Brazil, Russia, Afghanistan to Iraq including:
Imposing Milton Friedman’s shock economics on other countries
Use of torture techniques pioneered by Dr. Ian Cameron, terrorising the elderly, women and children too.
Impoverishing the masses and incrementing the incomes of the elite 100 fold.
Starting wars to distract from economic woes.
Supporting military dictators
After viewing this movie you will likely have a strong urge to do some unspeakable harm to Cameron, Reagan, Friedman, Pinochet, Rumsfeld, Thatcher and Bush after seeing what they did and hearing about it from their own mouths. There is a book of the same name by Naomi Klein. She appears several times in this DVD.