One of great falsehoods of modern economics is that the profession has a strong way of measuring the economic benefits that the economy produces. The way they do it is by combining all economic transactions within a country in a calendar year, and call it the “Gross Domestic Product” (GDP). When a doctor performs an operation that goes bad and the patient gets sepsis and dies, and the bill comes to $130,000, that is marked down as a transaction and counted as part of GDP. Car accidents, legal fees, and purchases of luxury goods all count as part of GDP. Whether any of these transactions is of any benefit, or a good allocation of resources is irrelevant to modern economists. Like most people, economists are lazy, and they would greatly prefer to use an easy but flawed measurement, over something that would take more work. The entire profession requires an overhaul in how it measures, what it measures and a removal of the highly doctrinal pro-concentrated power orientation. A recently article in Global Research.ca brought this point up very well.
Many cite increased per capita GDP as evidence of the revolution’s benefits, but GDP is a poor measure of benefits. It merely measures the sum total of economic transactions in terms of the culture’s money, neglecting the effects of economic activity on the quality of human life. – http://www.globalresearch.ca/index.php?context=va&aid=19782
Implication
Most statistics sited by economists have either been doctored (such as unemployment or inflation), or are poorly related the health economy (such as GDP). The fact that the vast majority of economists continue the charade, by quoting these statistics without mentioning their inherent weaknesses tells a lot about the general integrity of the economics profession. Two sources who point this out are Dean Baker at the CERP, and Kevin Philips.
Who has the rights to the world’s oil? The major oil companies propose that most of the world’s oil belongs to them, and that the countries from which the oil is extracted deserve only a very small compensation for it. They also take ownership as soon as it is taken from the ground.
The Problem
I recently was listening to a radio show which described how BP had purchased or leased most of the charter vessels in the area and have the captains sitting on the docks doing nothing. This is so members of the media cannot hire the vessels to go and document the pollution in the gulf.
More evidence points to the fact that the Coast Guard, far from managing BP, is actually is being managed by and is instructing BP how to enforce the media blackout. BP has hired contractors to patrol the area and threaten to arrest members of the media who document the disaster, and the Coast Guard is threatening them with arrest if they do not comply. US military involvement is further decreasing the ability of the media to document the spill.
Why Does BP Own a Taxpayer Resource?
One should question what BP is using to buy all this influence and to pull all these strings. Its not very complicated. BP has no resources aside from the oil it pulls out of the ground. It uses this to pay for all of its drilling equipment, boats, oil rigs, petroleum searching equipment, government payoffs, etc. Sometimes this oil is in other countries, and sometimes it is in the US, as in the case of the Deepwater Horizon which was drilling off the coast of the US in the Gulf of Mexico. However, this is a resource that at some point belonged to the US government. The question I have, and one I think every taxpayer should ask, is why is BP in control of this resource. If the resource originated in the hands of the US government, why does the US government not simply hire firms to extract, refine and sell the oil but maintain ownership of the oil? What appears most likely is that the rights to the oil were sold to BP at a very low price. This means that the original owners of the oil, being the US government is essentially giving what is US taxpayer property to large multinational governments, who then, resell the oil back to us and keep immense amounts of money for themselves. This is must be what is meant by the term “private industry.” However, it really isn’t, because its based upon first stealing a public resource, and then claiming property rights to it. Now the Heritage Foundation, Fox News and the Hoover Institute would propose that without BP and Shell and Exxon, there would be no profit motive, and oil would not be brought to the US population. This however, is completely false. The US government can hire any oil company to extract, transport and sell the oil, and provide a fair value for these services, without actually transferring the ownership of the oil to these companies. The US could then decide the rate at which to sell this taxpayer resource to the taxpayers in a way consistent with its energy policy (selling the oil at simply the price of extraction, refining and transportation would encourage the overuse of the resource, and the enormous SUV’s that American’s currently drive would get even bigger.). However, the proceeds from the sale, and the difference between the sale price and the price necessary to pay firms like BP and Shell, should go into the the US Treasury.
Non Market Economy
The giving away of a public resource to private firms and allowing them to charge what they like is another example of how little the US economy resembles a market economy. In a true market economy which respected property rights, the owners of a resource (the US government) would control the asset (the oil), and simply use firms like BP as subcontractors. What BP is essentially doing is stealing the private property of US taxpayers and then booking the difference as “corporate revenues.” They does this by buying lobbyists who the buy politicians to sellout the public interest for private gain. In principle, none of these companies should take possession of the resource, because it is not theirs to take. What they are bringing to the party is the knowledge of exploration, refining and transportation. All of these things can be hired out. It makes little sense to allow oil or mining companies to buy natural resources at very low prices, so they can sell back what is US taxpayer property to the US taxpayers. The natural resources of a country are not the property of any private company, or at least should not be. The original mineral rights reside with the state. Thus, they are the property of the people who are citizens of that country. The US is like other countries where the oil companies take as much ownership of the oil that the country allows. In the case of some countries, less that 25%goes to the government of the country.
We should not be surprised by BP’s imperial handling of the spill. Their entire business model is based upon theft. The only time they see the US taxpayer actually owning the oil that is their right, is when they have spilled it as pollution into the gulf.
The Implication of BP’s Twenty Billion Dollar Fund
Much has been made of the 20 billion dollar fund BP has setup to deal with consequences of the deepwater horizon spill. Firstly, its not $20 billion, it is various payments over time that end up combined as $20 billion, but are not in fact $20 billion in present value. Secondly, the negative externalities of the spill are much larger than $20 billion. So HP is still placing tremendous costs on society with its $20 billion fund. However, at another level, the shall we say $10 billion BP is setting up in this fund, never should have been on BP’s books in the first place. Their primary asset is oil, which was already owned by American taxpayers.
Corporations view the legal system as longterm chess match, which they exploit to enhance their rights vs. citizens. They see themselves as apart from society, and their goal is to attain extraordinary rights at the cost of individual rights. Their ultimate goal is to checkmate individual rights so that individuals and smaller corporations are slaves to them. Under the rare conditions that they don’t get their way, they have a particular derogatory term they like to trot out, the term is “activist judges.”
Loopholes
The issue with small loopholes of lawsuits that seem to impact only one area, is once the opening is made, the dam soon breaks. I have noticed this on three different areas which resulted in very bad outcomes for the general population vs. corporations.
The lawsuit brought by GE to patent an oil eating microbe
The loophole, originally created for executives which would allow them to have some of their income putaway tax free – called the 401k
The 14th Amendment, that was originally designed to help slaves become truly emancipated
As soon as these decision/lawsuits were decided, companies began actively enlarging the decision. With GE, the patent decision on the oil eating microbe, which was the first time a living thing was patented, meant the beginning of the patenting of everything living that was seen to have value. This included patenting portions of human, animal and plant DNA. It has resulted in Monsanto suing farmers for violating their “patent” when genetically modified soybeans are found on farmers fields. This allows Monsanto to demand that the farmers destroy all of their own seed, and only buy Monstanto seed, or be continually sued.
The loophole with respect to the 401k very quickly lead to the generalization of the 401k program to the majority of the population, and to the elimination of the defined pension benefit system, that was a far better system. The 401k was so beneficial to corporations that they switched plans as quickly as possible, and with no federal oversight. What had been a positive for people, the define benefit pension system, has been turned into a negative with employers only contributing 4% on average compared to 8% on average for pensions. Secondly, the return on 401ks has not been good for the general population. Returns are highly dependent upon income level.
Thus the 401k were a way of greatly reducing retirement benefits for the majority of the US population. Furthermore there is evidence that 401ks, by giving so much investment power to non-specialists help increase the size and severity of bubbles.
The 14th Amendment was originally designed to benefit slaves. However, it was quickly grasped upon by corporations to give their corporate forms the status of person-hood. Companies now claim 1st Amendment rights. Thus when they get caught lying and they are subject to lawsuit, they declare their speech is not commercial, but the speech of an individual. In fact a recent case against a financial advisement firm where internal memos showed that the company knew it was selling toxic investments to clients, used the 1st Amendment protection as a defense that they had the right to lie, and their right to lie was protected by the government. That is their speech could not be infringed, even if they knew it was false.
Conclusion
Corporations are permanently on the make. They are gifting, looking for any opportunity to leverage the law that was made in one area, and apply it more generally. I am not observing that courts are stopping this, its simply a slow ceding of power to corporations steadily increasing their rights, and decreasing the rights of individuals, and even smaller corporations. I have noticed a strong conservative / corrupt shift in many court cases, and the courts seem to be making little effort to consider the long term implications to their decisions. It is interesting to note that while Americans take great pride in the fact that the US gained independent from the British, and as pointed out by ReclaimDemocray.org, we not only declared independence from the government of Britain, but from its corporations. However, in effect, US corporations have taken the place of the British as exploiters of individuals, both in the US and overseas. Our corporations subjugate both our domestic population, and international populations as well.
This video by Matt Taibbi is absolutely amazing. Taibbi describes how AIG opened up a single thrift in Delaware, and designated itself a thrift and was then regulated not by a body specializing in insurance (which was AIG’s main business), but by a regulatory body (The OTS), which had only one insurance expert on its staff. AIG has over a hundred and fifty thousand employees.
A tiny unit in AIG made a $500 million dollar bet with money they did not have.
How Did This Happen?
Only one way, government regulators are completely on the take. The areas that blew up were so obvious that they would blow up that it is mind boggling. The fact that any of these companies even exist anymore, much less have their reputations in tack is simply mind boggling and is a testament to how accepting the American population is to corruption, and how completely unlike a republic the US actually is (the US cannot aspire to democracy, as it was never intended to be one, however, it cannot even meet the description of corrupt republic.)
Another fine example of deregulation. I am sure Reagan and Friedman are very proud right now.
Why Deregulation is Grand
Conservatives think deregulation is a great idea. In fact, I cannot remember a single conservative supporting regulation. After all, government needs to get off of people’s backs, especially the backs of wealthy political donors like BP. In fact there has been next to non off-shore regulation since the Bush Administration’s oil buddies took over the white house and the oil regulatory apparatus. The video below lays it out pretty well.
Who Me?
In typical fashion, the CEO does not think that BP is responsible for the spill, however. Of course, not. BP is only has rights, not responsibilities. As subjects of corporations, its important that all of us recognize it. When BP pulls oil out of the gulf its “private property,” when they spill it all over the gulf, its now a socialized responsibility.
After the rupture, BP placed 100% of the blame on TransOceanic, the company that operated the rig. (what BP failed to mention is that BP has several of its people on the rig to ensure quality). However, TransOceanic could make the case that they are not responsible either, because it is Haliburon that capped the well improperly. Haliburton certainly has someone else they could blame, possibly Cameron International, that supplied the failed blow out preventer. However, who is to blame also circles back to BP, not only because they are the ones paying for the drilling to be done, but also because they mislead their subcontractors as to the depth of the drilling taking place on the Deepwater Horizon.
How Deep Was BP Drilling?
Interesting comments from different articles on the disaster.
BP was drilling deeper than the 18,000 foot limit they were supposed to operate within.
BP failed to inform their subcontractor, Haliburton, of the true depth of the well. Haliburton poured enough concrete to cap an 18,000 foot well, but the increased pressure blew the cap.
BP initially claimed that the well was capped and there was no leakage. While they were lying it is estimated that 2.5 million gallons a day was and is continuing to shoot from the ocean floor.
The US Coast Guard repeated BP’s claim, therefore, government response was delayed until the truth “leaked” out.
BP was also responsible for spill containment for Prince William Sound, where the Exxon Valdez disaster occurred. BP was found to be negligent, having lied to the US government about the number of booms, cleanup vessels, and trained crews that it had on call in the area. In fact, to cut costs, BP had no booms and had fired all the trained crews and replaced them with untrained workers.
It is suspected that BP has done similar cost cutting in the Gulf. They did not have the required personnel on hand and stonewalled with claims of no leakage while they readied a token show of preparedness.
According to Robert Kennedy Jr., there is now conclusive evidence that BP was drilling to 25,000 feet, even though they only had a permit to drill to 18,000 feet. Of course the question should be “why?” the platform was not periodically reviewed and its records checked. Another question which should be raised is if no well has ever been capped at 5000 feet (the sea floor depth of the well, not the overall well depth), how did BP get a permit to drill there in the first place? Do we make a habit of providing permits for activities that if there is an accident, there is no proven method of stopping the damage? If so, why?
Why Was the “Top Kill” Procedure Delayed
Global Research bas pointed out that BP continued to control the disaster recovery, when they had serious conflicts of interests in how to approach stopping the leak. Continually Obama has pointed out that the government can’t do much, and that BP has the “expertise,” and the government doesn’t. However, did they have the motivation to stop the leak as soon as possible. BP appears to have focused on protecting its investment over plugging the leak as soon as possible. This was why the top kill procedure was postponed. Even in disaster, the government follows a deregulated model, with private industry making cost-benefit decisions trading off their profits vs. environmental destruction.
It brings up the interesting question of whether a private company should be allowed to have tactical command over a disaster that they caused.
Lying BP CEO
Strangely, the BP CEO stated that BP was responsible for cleaning up the spill. That is inconsistent, how can they be responsible for cleaning up the spill if they were not responsible for the spill? However, what the CEO failed to mention is that due to legislation passed during the Bush Administration, their liability is capped at $75 million. (although BP also says it will pay all legitimate costs,if true it brings up the question of why they lobbied so aggressively to cap their liabilities at $75 million). The CEO of BP, as any other CEO, lies a lot. His role is to maximize shareholder value, and thus telling the truth, if it reduced the stock price, would in effect subject him to damages by shareholder lawsuit. That fact appears to go unreported. The fact that a CEO has a “fiduciary duty” to lie and mislead is barely worth commenting on. So the CEO of BP lies to the public, and lies to the government about the severity of the spill. The lies are so extensive that I have create a separate blog posing just to keep track of BP’s lies.
The CEO lied when he was confronted by the fact the BP was making fishermen sign liability waivers and said that “he had just been alerted to it.” At the same time BP is offering liability waivers for $5000 to Alabamans.
The CEO went as far as to say that BP was making great strides in safety. That is also inconsistent since they have one of the worst safety records in the industry, and now have an enormous disaster on their hands. It brings up the question, if this is enormous strides, what would not be making the grade?
In short, BP does not have much credibility. That is what getting caught repeatedly lying does to one’s reputation. Before mainstream media outlets waste time interviewing executives from BP, it would be good to check their history of lying.
BP CEO Tony Hayward is a lie machine.
United Against Safety Standards
BP, Transocean and Haliburton are all responsible, because they all lobby against the environmental safeguards that lead to the disaster. The oil industry lobbied against acoustic valve which are required by Norway and Brazil, but which American oil lobbyists consider ineffective. In fact just last month BP lobbied against additional equipment and inspection was not needed.
State of US Energy
Under the Bush Administration, big energy got anything it wanted, including great reductions in environmental regulations. As such, we now have the most dangerous energy infrastructure ever in the modern era. Deepwater Horizon is only 0ne of many at risk rigs that are unregulated. What happens when other ones crack and we are faced with another disaster? How quickly can the Obama Administration move to rebuild the offshore oil regulation apparatus that Bush disintegrated?
In truth, culpability for the disaster can more accurately be laid at the Bush Administration’s doorstep. For eight years, George Bush’s presidency infected the oil industry’s oversight agency, the Minerals Management Service, with a septic culture of corruption from which it has yet to recover. Oil patch alumnae in the White House encouraged agency personnel to engineer weakened safeguards that directly contributed to the gulf catastrophe. – Huffington Post
This means that more mishaps are more, not less likely. In fact this is not Deepwater Horizon’s first incident. Deepwater Horizon has been a constant source of pollution since its relocation to its present location.
From 2000 to 2010, the Coast Guard issued six enforcement warning and handed down one civil penalty and a notice of violation to Deepwater Horizon. On 18 different occasions during that period, the Coast Guard cited the vessel for an “acknowledged pollution source.” - http://teakdoor.com/world-news/69948-deepwater-horizon-blowout-3.html
This begins to make sense. Deepwater Horizon has been polluting the ocean for some time now. Clearly, BP thought it could hide the spill, but with a spill so large, someone eventually noticed. After they were caught, they decided to admit there was a spill. However, if the spill were smaller, and it could have been covered up, we would have never heard about it.
Conclusion
The disaster with the Deepwater Horizon should never have occurred, however, this is what happens when deregulation is allowed. The plain fact is that companies do not value the environment as much as they value their own profit maximization. After the financial crisis, it is more than apparent that our corporations will continue to impose negative externalities upon society as long as the society allows them to. However, whenever deregulation is discussed, conservatives (who don’t seem to be able to conserve much), they bring up their tired notions of how deregulation will reduce business activity. When discussing this topic, industrial disasters are just one example of how under-regulated industry is. A child could figure this out, however, once one attains a PhD in economics, it appears as if a lot of very obvious things suddenly become “complicated.”
You really wonder who is going to start a charitable foundation next.
For years we heard from various sources how important charity was. However, after working for completely corrupt organizations like KPMG that also lauded charity and even had days where they would dedicate employee days to charitable events, we began to have our suspicions. Later in life we began to notice that almost all the charities seem to have been started by people with two primary characteristics; sleazy, and rich. Then Bill Gates began his charitable organization and the trend became apparent to us. In fact, if one looks around from Bill Frisk (he goes to Africa and donates his time) to Michael Milken (ex bond trader and convicted felon) it seems as if the primary purpose of setting up a charity is to deflect criticism and provide positive PR for that individual. This is why, if Darth Vader were a real person today, he would most likely create a charity in order to refurbish his image. He would coordinate with a public relations firm to get the most PR benefit from his charity, and as we have seen with Bill Gates, a number of articles would be written about what a fantastic person he is, even though the actual work his charity does is unexamined, and quite counterproductive by the way.
The Real Purpose of Charities
Charities seem to have several purposes. Here are a few of the major ones:
To wash clean the image of a person who cheated and was essentially evil as they accumulated their capital base
Serving as a front for a political agenda
To directly enrich the people running the charity
A way to swage any guilt. (we know several extremely lazy people who like to talk about how good they are because they have given approximately $3,500 to charity over their lifetimes)
The desire to show off to friends and increase one’s status
A place for the wealthy to hang out and network (charities provide a number of social venues)
To help a worthy cause
Unfortunately, while there are good charities, there are also a huge number of posers, and unless charities are better regulated, and many begin to lose their tax exempt status and charity status, they are going to, or already have inflected the reputation of the good charities with the bad. It should be understood that just because someone applies for a charity status and stays their organization is a charity, does not make it a charity.
These are some of the higher administration cost charities. Clearly these charities are primarily about benefiting the administrators.
The Benefits of Fake Charity
The reason that charities can be seen as so transparent is by looking at the people who start them. Mostly they are people who have stolen their money in one way or another. Many times they do this by simply underpaying employees and taking more of the money for themselves. Instead of having a “charity” on the side while stealing from people in your day job. Why not, if you are so charitable, simple behave ethically and in a more equitable fashion in your day job? The reason is that its generally more effective to act completely unethically, and then take a small percentage of what you have stolen and either begin your own charity or start the charity circuit. One of the great coups is to get yourself photographed with Bono. Bono may have good intensions but he will seem to align with any person, no matter what they previous transgressions, if he can get some money from them.
Did Bono take a bet on how many sleazes he could get himself photographed with. As you can see Bono is doing quite well. How many can you count in these pictures?
George Bush is in one of these pictures. Is there anything that Bush can do, any charity to make up for the colossal way he reduced the quality of life around the world for billions? I don’t think so.
If Vader were a real person could we expect this advertisement at some point?
The Problem with Bono
Bono is making a faustian bargain in order to get money. However, he is legitimizing sleazes who have caused great damage worldwide by being photographed with them. This feeds into the already strong concept that it is ok to behave terribly in one’s professional life, but give to charity and everything will be washed away.
Political Fronts
All of the following are straight up fronts and have little if anything to do with charity. A very large number of charities are created for no other reason that to take advantage of the charity’s tax exempt status. Its a more cost effective way to push your agenda, and because it is a “charity” fewer people see you coming. Here are some examples:
Milken Institute
Bill and Melinda Gates Foundation
Exxon Charitable Trust
Archer Daniels Midland Foundation
ARCO Foundation
Boeing-McDonnell Foundation
Chrysler Corporation Fund
Dean Witter Foundation
Exxon Educational Foundation
Ford Motor Company Fund
General Motors Foundation
J.P. Morgan Charitable Trust
Merrill Lynch & Company Foundation
Procter & Gamble Fund
Rockwell International Corporation Trust
Transamerica Foundation
The Milken Institute is primarily about promoting certain businesses that Milken has invested in and basically just creates investing reports. The Bill and Melinda Gates Foundation is a way to wash clean Bill’s image, and to bring destructive agricultural processes to poor countries and Bill is cooperating with seed and pesticide companies like Monstanto to do this. If there is anything that could seem more ridiculous than the name “Bill Gates” and “charity” in the same sentence it is the name “Monstanto” along with “charity.” The other companies on the list are all contributors to the Hoover Institute. However, the Hoover Institute is simply a political front for concentrated power and serve only a propaganda function. Its less expensive to run PR arms as non-taxable entities, so that is what they do.
Conclusion
Regulation is necessary for charities. A lot of charities are not in fact charities and are dirtying the name of charities generally. Secondly, with any charity the underlying reason for its existence needs to be carefully examined.
A real conservative would be prepared to beat this puppy. This is because conservatives have what it takes to “make the tough decisions.”
Why Supporting Puppy Beating is Necessary to Prove Oneself
Every so often I hear the values of conservatives and proponents of capitalism. I hear that its important to support the following things:
To support slave labor in overseas sweatshops, because its important to competition
That activists should stay away from meat processing facilities because companies can self regulate
That having restrictions on junk foods that kids are exposed to is socialism and kids should have the right to make their own food choices (and to get diabetes), and is anti-market
That unions are bad, anti-capitalist and that no worker should have representation against a company they work for
That suspected terrorists must be water-boarded to defend our freedom
That financial institutions cannot be regulated, no matter how heinous their behavior because we must have a free and dynamic financial industry
Using Terminology as an Excuse to Abuse
In fact the number of things that I hear defended by conservatives in order to defend capitalism, freedom and free trade makes me wonder if next I will be asked to support puppy beating in order to prevent myself from being considered a socialist and anti-American. What is also interesting is that these same conservatives who apparently are “un-parralleled” in their knowledge of economics repeatedly misquote Adam Smith and do not read him and not one of them seem to know that he did not hold a position of economics, but one of moral philosophy. That they seem to believe that capitalism originated with Ronald Reagan rather than being traceable back to the origins of humans, up through ancient Mesopotamia and Venice and up to the present day. As progressives I we must tolerate the condescension of faux the simple minded and utterly propagandized. (in a group that counts the pompous windbag WIlliam F Buckley and William Kristol as intellectuals, the standards must be low indeed.), who do not know their material, because a big part of being a conservative is being both poorly read and effusively confident all at once. I often get hostile comments from conservatives on this site, who seem to have not completed their basic education. Recently on individuals commented that both GE and Microsoft were democratic because they had shareholders. Conservatives can support slavery, question global warming, propose creationism, and being perpetually wrong just never bothers them or personally brings them any sense of shame.
What is Capitalism?
I have written several times that capitalism does not have the definition that conservatives present it to have. It is only the descriptor of a system of economics where production is in private hands vs. state hands. Capitalism as a word says nothing about the level of regulation in a society, labor standards, the existence of unions or even a stock market. Why do conservatives continue to project their own primitive desires onto a word that is in fact relatively neutral?
Why is Abuse Necessary?
Why is it that in order to prove my credentials in economics I have to side with an abusive system of economics that punishes the many to the benefit of the few? Why can’t capitalism be what the population wants it to be rather than what a small group of anti-social ultra-wealthy want it to be? There is certainly nothing in its definition preventing it from being so. Why does globalization have to mean sweatshops and a reduction in labor and environmental standards? Why can’t globalization be put into effect in a way that benefits workers rather than the power elite? At a most basic level, I suppose my question is why cruelty such a big part of the conservative mindset, and why under their doctrine must so many people feel pain, in order for just a few to fell pleasure.
“Sammy the Slave” is the new image of the American Conservative Institute. This shows how “traditional” conservative values really are.
New Image With a Great Tradition!
Some can say that it can be difficult to represent an entire philosophy or school of thought with just one image.
However, with conservatism, I don’t think that is true. We can derive an image when you think of what conservatives stand for:
For enhancing the security apparatus to increase the monitoring of Americans by the CIA and NSA
For water-boarding and torture generally (American conservatives have a long history of water-boarding. Before we water-boarded “terrorists” we water-boarded Mennonites and Quakers who were imprisoned for opposing WWI and refusing to serve.)
Prosecuting individuals who speak out against war under various sedition acts.
For the mistreatment of animals (Conservatives are the first to defend factory farming and firms like Cargill and IBP against stiffer regulations which results in the mistreatment of animals and the reduction in food safety)
For the creation of slave labor farms (Conservatives are against “imposing our values on other cultures” by demanding labor standards in third world factories that produce for the US market).
For stealing natural resources from other countries (US oil companies now receive 75% of every dollar of crude oil that is pulled from the “newly democratic” Iraq). For some reason imposing one’s beliefs on another country is ok if they have natural resources to steal.
Anti-environment (Conservatives just recently even admitted to global warming)
Anti-woman (Conservatives use “family” language as a cover to mean women on the bottom and men on top. Its all for strengthening families you see.)
Real Conservative Values
One hears a lot about conservative values. However, when you check conservative history, and when you break it down to the bare essentials, conservatives are really just for bondage. That is for total subordination of people by corporations and by power interests. All the talk about protecting private property and fiscal conservatism is really just window dressing for the main event, which is a large number of people and animals globally in chains. For all of these reasons, the most appropriate symbol for conservatives is a slave kneeling for mercy. This slave is representative of the 99% of the world that are not the slave holding classes.
Reference
Conservative thought is based around slavery and they are habitually searching for new people to enslave be they illegal aliens, non-union labor or workers in third world nations to work in sweatshops. Thanks to conservatives slavery is alive and well.
The Warning by Frontline covers some of the obvious illicit activities that lead the financial crisis, and demonstrates that if even a bit of common sense had been used we could have avoided the meltdown.
Background
There is a very interesting segment on a Frontline episode called The Warning which is on the precursors to the financial meltdown. Fed Chairman Alan Greenspan is discussed admonishing the Chairman of the Over the Commodities Futures Trading Commission, that he was against the the criminalization of fraud. His statement was something to the effect..
Brooksley, we are never going to agree on fraud, you probably think their should be rules against it, I think the market will figure it out. – Alan Greenspan
Brooksley Born, Chairman of the CFTC was pressured and unethically intimidated by Robert Rubin, Alan Greenspan and Larry Summers not to regulate the derivatives market. Greenspan, Rubin and Summers proposed the cockamamie idea that the CFTC had no authority to regulate derivatives, which is strange because that is exactly its charter. In fact they have the exclusive authority. Amazingly Rubin is still a power broker and Larry Summers is a very senior advisor to Obama.
Alan Greenspan was in the pocket of the industry he was supposed to have regulated. Imagine if Ivan Boesky or Gordon Gekko were head of the Fed, and you have a good approximation for the moral character of Alan Greenspan. He was also a follower of Ayn Rand, a faux philosopher who believed that the only morality was self interest, and consequentially is the patron saint of egotistical and greedy types and half of Wall Street (the half that can read). I have a write up of Ayn Rand here…
Alan Greenspan’s Argument: Let the Market Work it Out
Conservatives have a very strong tendency to rely upon the market for all things in life….except they don’t. So conservatives enjoy the protections of the government when it suits them and is in their interests, such as when they want no-bid contracts from the government, or if they want government subsidies. In these cases they remove the word “market” and use words like strategic, competitive, building a future. However, when the less powerful ask not for preferential treatment, but simply justice, very quickly the work market comes out. Another word which is very popular and often used with the word market is the word shareholder. Shareholders would be in favor of this and that, and the company can not be concerned with society in general because they must listen to their shareholders. Often what is missed in this is the structure of a corporation itself, and the fact that it has shareholders at all is a legal creation, which is of course based upon the legal authority of the state. The state could very quickly eliminate all of these circular discussions on shareholders by removing stock ownership from the corporate form. Now we could begin speaking about how the corporation can be directed in ways than benefit society rather than the shareholders. This would have the positive effect of reducing the incidence of sweatshops globally, as well as reduce the pollution of the environment. Degrading the environment is certainly in the interests of shareholders, but not in the interests of society.
Applying Conservative Ideology to Rape
Conservatives have sort of a flexible view on rape, which matches their flexible standards on everything. So most conservatives during slavery were in favor of the rights of masters to rape their slaves. However, they were less in favor of whites being raped, although their protests varied depending upon the wealth level of the white in question. They were strenuously opposed to a wealthy woman being raped by someone from the lower class. If we apply Alan Greenspan’s approach to fraud to rape we come to an interesting model. Alan Greenspan’s philosophy, which is not actually his but borrowed from conservative thought, is that things like fraud can be worked out in the marketplace. The logic goes something like this; if someone begins defrauding people, that eventually the market will figure it out and people will no longer do business with that person. Applied to a rape, this would mean that police should not prosecute or even investigate charges of rape, because once the rapist began raping enough people, eventually enough women would find out, tell their women friends, and nobody would go on dates with this rapist any longer. Case closed.
Conclusion
Like most of conservative thought the idea of the market working it out is completely ridiculous. It should go without saying that legal protections are necessary to prevent individuals from exploiting other individuals. This is why there are police, why there are regulators and why there are officials at sports games. This is because the law of the jungle is not just and leads to exploitation and suffering. Let us not allow conservatives to talk us out of the fact that we all deserve protection against the exploitation of others. This is as true of violent crime as it is of while collar crime.
Capitalism is often discussed as if it is a recent invention. Even in Wikipedia, which I typically find a very reliable source of information, they state that capitalism has its roots in the activities of 9th to 12th century Arab traders. In Europe capitalism is generally thought to have arisen in the middle ages. Some of this has to do with the types of private property rights that were enabled (vs. property rights of the state.) However, Sparta, Ancient Egypt, Carthage and almost every other major civilization had a merchant class, collected taxes and had some form of private enterprise. Thus, it is difficult to see how these civilizations were not capitalist.
What Is The Definition of Capitalism?
Some of the problem is definitional. That is if an economic system is not capitalism then what is it? Typically the different economies are defined as capitalist, socialist, or command (aka centrally planned). Although it is a very loaded word, capitalism in fact has a humble definition.
An economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. – Apple Dictionary
This would only eliminate civilizations that did not have private owners, but which everything is state controlled and owned. The vast majority of economies through history were certainly not centrally planned and they were not socialist in that they had a small or no safety net when compared to socialist economies that we define as socialist today. Thus, its hard not to come to the conclusion that the majority of economies presently, and through human history have been capitalist.
A little known fact to most Americans is that centrally planned command economies like the one implemented by the Soviet Union are quite rare in economic history. People seem to generally enjoy denouncing communism, but firstly, the Soviet Union was not actually communist, and secondly, centrally planned economies are an aberration historically. It seems historically incoherent to rail against something that was a really just a historical anomaly.
Missing Scholarship
Another problem is that of scholarship. From my literature review I did not find many books that dealt with capitalism past the last few hundred years.
Fernand Braudel’s The Wheels of Commerce is considered one of the most comprehensive historical account of capitalism, but it only covers back to the 15th century.
Therefore its important to consider that economics history is not a significant topic in the study of history generally. History has a much stronger emphasis on art, politics and warfare. Notice the number of books on these topics vs. the history of economics. In all of my exposure to economics only one person, Michael Hudson, has brought up much about the history of economics. He actually pointed out that the Mesopotamians had in a way a better understanding of banking than we do today, because they understood that debt grows in a constant linear fashion, while the economy grows in an S pattern. The result being that interest payments eventually outstrip many borrower’s ability to repay this debt. The answer was that after a new king came to power, the debt was forgiven and the slate was wiped clean. It is unlikely that Goldman Sacks would like most people today to be aware of what the Mesopotamians understood thousands of years ago.
The study of economics is incredibly restricted in its historical analysis. Providing examples from the 1920s is about as far back as most economists go. In fact this is a tremendous blind spot of the profession because its sampling of the human experience is just so small, and it makes the recent history seem more important than it actually is. While political historians think nothing of going back to ancient Egypt to discuss the system at the time vs. more modern systems, economists almost never do this.
Much more seems to be known about Renaissance painting than the Renaissance economic system. However, this painting my Michelangelo was paid for by the Catholic Church, which was in fact a capitalist enterprise and was apart from the state. Secondly, books in history are filled with discussions of merchants, seafaring traders and marketplaces. These are all hallmarks of capitalism.
Missing Importance of Oil
Most people who write on economics and business tend to lack historical economics training or understanding, and almost always have a low exposure level to science. Deprived of this exposure, they tend not to know what is and is not possible in science. However, the problem is that understanding economics requires understanding science at at least a basic level. Because they largely do not, this causes writers to overemphasize economic systems vis-a-vis technological changes. This much is certainly true:
Current economic patterns would cease to exist without cheap a power source.
World population and economic growth correlate much more strongly with the discovery of and exploitation of petrochemicals rather than with capitalism.
Why Oil Made Such a Difference
It is important to consider how energy dense oil is. Oil contains as much energy in one gallon as a man can produce work in one entire year. This gallon can be purchased for $2 in the US. It also is comparatively easy to transport, store and handle. However, if this amazingly cheap and concentrated energy source is clearly such a boon for human civilization, why is it rarely discussed by economists? Why do most the discussions regarding the phenomenal economic growth over the past 100 years always tend to focus on the economic system? Why is capitalism seen as something novel when it goes back at least 6000 years to ancient Egypt?
Conclusions and the Misinterpreting History
The problem of misinterpretation of history is a serious one. If we are lead to believe that it is economic systems that were responsible for the change in standards of living over the past century, then we will focus on our economic system. However, what if that interpretation is wrong. What if capitalism has been there all along, but it was the discovery of an unlimited (in the medium term) and cheap fuel source that has been responsible for the growth. How does this change things? And also how does this change our interpretation of the future when this fuel source runs out, which it is about to. Furthermore, how does it interpret out projections for the future if we come to learn that there is no substitute source of energy that can match what oil offered us in terms of power density, transportability and ease of access?
This chart roughly estimates the decline of the world population after oil is no longer as abundant.
Its an important question, because there is no substitute for oil, which means that when peak oil comes, we will find out very quickly if our standard of living is based upon capitalism (something we created) or an inexpensive power source (something that was essentially given to use by the planet). I think it is entirely possible that we fixated on capitalism to explain the improvements in the standard of living for a reason. It makes us feel as if we are in more control of our destiny, and makes it feel as if the improvements over the past 100 years have more to do with us, and less to do with luck.
Welcome to one of the few blogs to focus on undermining and questioning the official story in economics and finance reporting.
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