The Capitalist Conundrum

Capitalism is relatively new and still evolving on the human timeline – going back no further than the Medici of Florence and then modernizing in the Netherlands of the 18th century before reaching full early bloom in London and then in the 19th and 20th centuries in New York – the mantra of capitalism has … Continue reading “The Capitalist Conundrum”

Capitalism is relatively new and still evolving on the human timeline – going back no further than the Medici of Florence and then modernizing in the Netherlands of the 18th century before reaching full early bloom in London and then in the 19th and 20th centuries in New York – the mantra of capitalism has always been a combination of higher productivity + lower material and labor costs + increased demand = greater profits. It’s no coincidence that material and labor go together. Our work is lumped in with the raw materials because human labor is a raw material. You (or me) are of value to the capitalist in one of three ways – a raw material, a consumer, or a lender. The third may come as a surprise, but the debt that we incur is actually an asset to the lender. Let’s assume that robots suddenly provide all the labor including extraction, manufacture, delivery, and retrieval (trash collection, recycling, etc). Artificial intelligence is also handing marketing, merchandising, stocking, and quality control. The robot/AI work also includes making robots and new A.I. – Okay, so all of us are out of a job. Does that stop capitalism? No way. We are still consumers and at this point, in order to consume the productt produced by the AI/Robot factories – we will need to be borrowers (consumers of loans) and lenders (purchasers of debt to companies and nations through stocks which are loans to corporations and bonds which are loans to governments. Since we will be bored – we will probably be consuming more – just like when you sit in front of your computer for too long, you sometimes end up buying something – usually on credit. So, in the robot/AI society the capitalist gets higher productivity + lower material and labor costs + increased demand which as I mentioned before lead to higher profits which are doled out to the corporate shareholders who buy more shares and presumably diversify their investments with holdings in government bonds which allow the government to dole out to welfare programs which would seem likely to be the largest consumer (as a sort of collective patron of the needy), meanwhile the corporations are consolidated into larger corporations which eventually are all owned by the largest banks which leads to the conundrum which I can’t get my head around – I need help with this. At some point, there starts to exist a closed feedback loop between the banks and the government. The government buys from the banks with money the banks have lent to the government and the government pays the banks with money borrowed from the citizens, the citizens borrow from the banks to purchase the products the banks produce, the banks would seem to eventually swallow the government and the citizen so that we have corporate citizen banks which determine who eats and who starves, who lives in peace and who suffers war, and as we’ve seen in the philosophy and writings of others – at some point – the majority of citizen consumers are no longer a valuable resource but instead become a drain on the scaled up economy – at that point – it would seem – the banks are left with the option of 1) transforming into an altruistic welfare state or 2) genocide machine – It seems to me that a perfect capitalist machine looks a lot like genocide in its final days. As I look at our society undergoing rapid transformation – I can’t help but think that genocide on a global scale is not very far away.

Schools are not safe in the USA – Nowhere in the USA is, actually

Another child murdered in a school today in the USA. 8 years old – doing nothing but going to school. I keep thinking of someone telling me it is irresponsible to travel overseas with my child – too dangerous – yes, but not as dangerous as staying home and sending my child to school. I blame this on capitalism – pure and simple. Guns are a business, government is a business, education is a business, crime is a business – people are the raw materials. Capitalism has turned us into resources- anyone ever asked you what you are worth? How do you answer? In cash. We sell our time, we sell our energy, we sell our health, we sell our safety – and the buyers are the masters of capital. We could have a society where people are safe, taken care of, fulfilled – but instead we have a society where some people own other people and we are measured (like it or not) by how much credit we have. Shylock’s Good Man wasn’t good in deed, but good for a debt – and that is how we are judged. It’s no wonder that people lose track of their intrinsic self worth and the intrinsic self worth of others. It’s no wonder that madmen are stealing guns from stores called Armageddon and sending manifestos of revolution to billionaire presidents. How long before someone lights themselves on fire in a way that starts the fire that burns this society down? Not sustainable. Capitalism is not sustainable.

What I’m Reading: Number 44 – The Mysterious Stranger by Mark Twain

Number 44: The Mysterious Stranger by Mark Twain Ah, yes. Finally a bit of light reading – Mark Twain…warning, there be spoilers directly ahead…stop now or don’t blame me.

I picked this book up because this winter has been particularly gloomy and grey and rainy and wet and moldy here on the Oregon Coast and I thought maybe a little bit of Twain’s wit and humor would lighten things up. I probably should have read a review first…essentially, this is a story of Satan coming to a 17th century Austrian printshop and making friends with an apprentice and then teaching him about the futility of life and existence and the awfulness of humanity. Twain wrote this at the end of his life and it is essentially his version of Being and Nothingness – not an uplifting or funny story, but more of a rainy gray day book that you read just before you take out your shotgun and pull a Hemingway. Of course, if you are a Satanist or a fan of hating all of humanity, this tale might make you giddy.

A couple of things stand out – first of all the name Twain gives Satan which sounds more like a computer program or android name than that of the devil – are you ready for it: No. 44, New Series 864962 – the 44 part is partially understandable since Twain is partially exploring the idea of twofold or threefold selves Twain being two double twain would be 44 – so Twain is himself the devil revealing the ills of mankind – but the rest of it…no explanation was ever given. Twain wrote the book between 1890 and 1908 but never completed it nor published it. The other thing was Twain’s idea of there being a waking self, a dream self, and a soul self.

Here’s a trippy video about the name that I couldn’t manage to watch all the way through…

I think I’m going to go back to reading about economics and language…fiction has kind of bummed me out. Or maybe I’ll wait until there is sunshine. I started reading House of Sand and Fog and felt even more bummed out.

The Joy of an Ebay Auction

I’m watching an auction right now….it’s something I want, but don’t need yet, but will need eventually, so I’ve been watching a few auctions. Most of them have gone for way too much – this one though – the price is right – at the moment, but there are 27 minutes left, so that can change in a bit. I’ve learned that bidding too soon is a mistake and only drives the price higher, but so has everyone else. The price just went up by $10…. 16 minutes left. We are all only waiting for the last five minutes and ideally the last minute…if it hasn’t gone past my limit by the last minute, I’ll punch in my highest price and hope that no one else goes higher…but they might…that’s the risk I take, but then, I know what the most I want to pay is, and I only give myself time for one bid – if the pre-last-minute-bids exceed my maximum, than I will watch another auction. And wait…and of course, the rule of whatever that is…oh, Murphy’s Law…says that just before I punch in my last minute winning bid, the internet will cut out, there will be a household emergency, or the power will go off…it happens all the time, or at least we notice when it happens and when it doesn’t we don’t notice but this time, we will all be aware of it – you and me that is….down to 11 minutes now…me and the six people waiting for the last minute are on the edge of our seats for 10 minutes – this is really living – and it’s not like a live auction where a last minute bidder can steal it from you – ebay runs on time, not energy – so we have all learned that if you wait until the end – you might get a bargain but if you bid early, you are screwed and only screwing yourself further…it’s gone up $30 since I started this post…oh, the agony of waiting but the orgasmic thrill of actually being alive every moment as the seconds tick down…this is life (as we know it) this is living (as we know it) this is the thrill of the hunt (as we know it). It’s hard to contain myself, to keep myself for premature ebidulation, I am so excited, oh my goodness….the last time I did this, I got distracted and punched in my final bid two seconds too late and missed the deal of the century…(is my tongue too firmly in my cheek as I write this) but wait, here we are at five minutes and I still have a chance…should I bid now, no wait, wait. Hold back man….these are either real professional masters of self control or maybe I’m the only one watching in this heightened state of excitement….how can they not be bidding? How can I? It’s at the point where I need to just go watch the clock now…you will have to wonder if I won or not…(but the price went up by 300% in the last minute!)

Using Missiles to Deflect Corruption

Here we go – stories about the Russian influence on the US Presidential Election and over the US President and his administration have grown in credibility and have recently reached the point where it is hard for even the administration’s supporters to continue to deny. What’s a billionaire-populist under attack to do when attacks on former Presidents and former presidential candidates aren’t working any longer? When even the power of a crazy sounding tweet is not drowning out the real sounding stories of a government sold to the highest bidder? What can possibly save a president with the lowest approval ratings ever, a buffoon who is even being called an idiot by the terrorists? When the sexy picture of his former model wife gets less attention than the former first lady with her hair in a headband, what to do? Oh, yeah, start a war. Attack a sovereign nation. Attack a sovereign nation where US troops are currently advising a ground war and where two of our most formidable adversaries are allied and have troops deployed…yeah, that should do the trick. Launch 50 cruise missiles…start a war. Watch how quick the networks build colorful breaking news banners and stop reporting on corruption, collusion with Russia, and the overall ineffectiveness of this administration…

What I’m Reading: Money by D.H. Robertson Cambridge Economic Handbooks

I’ve always had an intellectual fascination with money and when I saw an old book on a shelf called “Money by D.H. Robertson“, my hope was that it would be a book about the origins and social dynamics of money through the ages – I have not yet found such a book and this looked like a possible candidate – but once again I was disappointed. Disappointed in not finding what I was looking for but delighted with what I found.

This incredibly readable and interesting little book edited by the famous economist John Maynard Keynes (arguably one of the the most influential economic policy makers of the 20th century – father of Keynesian Economics!) and written by D.H. Robertson is a textbook on (essentially) world banking practices written just prior to the stockmarket crash which led to the worldwide Great Depression and during the hieght of the recovery from what Robertson calls The Great Muddle – which was the confusion of banking practices and economic chaos that led to and followed up upon World War I. This little book was written prior to chaotic events of the Depression and World War II.

The chapters of this seemingly dull book about banking practices are each led off with a quote from Lewis Carrol’s Alice in Wonderland and Through the Looking-glass – which pretty well convinced me that what was to follow would be trip down the rabbit hole. I was not disappointed. The opening chapters were as close as I was to get to my desired study of the origins of money in that we are given a definition “anything which is accepted inthe payment of goods or in the discharge of other kinds of business obligations” – Robertson makes a good argument that the best argument for money is that it allows manufacturers the ability to acquire raw materials without having to trade their finished product for the materials – which the raw material producers may not need or have a use for. So, essentially, it simplifies things. He argues that for the consumer, it allows a freedom of choice and eliminates a large degree of waste which would follow from payment in kind. Finally, (and this is where this becomes more of a text about banking) the existence of money makes it possible for there to be loans and debts.

Later in the chapter, Robertson talks about how a downturn affects the businessman – how demand dries, then prices drop, then they drop below the level of profitability and then, and this is interesting how businessmen at different levels deal with a recession:

If he is old and wily and has made his pile he retires from business for a season and goes for a sea voyage or into the House of Commons or Congress. If he is young and ambitious or idealistic he keeps the ball rolling and the flag flying as best he can. If he is an average sort of manufacturerhe explains that while he adheres to his previous opinion that the finances of his business is no concern of the working classes, yet just so much financial knowledge as to see the absurdity of the existing trade-union rate is a thing which any workman should possess. In any case, early or late, he bows to his fate .. and restricts in greater or less degree the output of his product and two things happen…the world adopts a lower standard of comfort cutting off its nose, as it were, to spite its face. And men trained and willing to work find no work to do, and tramp about the streets with the parrot-cries of journalists about increased output ringing in their ears and growing rancor in their hearts.

“Thus money, which is a source of so many blessings to mankind, becomes also, unless we can control it, a source of peril and confusion.”

And with that the book dives into monetary policy, most of which has not been applicable since the gold and silver standards were abandoned and most of the world’s currency became fiat, that is money based on debt but without any actual source of backing. This is interesting reading, written in a lyrical style that is sometimes hard to correlate with economic policy. The chapter about economic policy during “The Great Muddle” is fascinating – looking at the root economic causes of the first world war from an economic rather than a political perspective is enlightening. The following chapter which delves into economic cycles is equally compelling as it most likely is the root of the entire Keynesian school of economic thought – before the events of the depression and World War II had solidified the theories.

Overall, an enjoyable journey down a dry and abandoned rabbit hole which expanded my understanding of economic policy and banking without boring me to tears.