Unscrambled Egg 2: The Empire Of The Mind

 

Newly emerged Germanic Land Democracy was based on a modified relationship between citizen and nation; between people and land. The essence of this change was expressed most clearly in the requirement that only property owners be allowed a vote in the new system. If you didn’t own any land in the new Germanic nation state you were not allowed to vote. You were not a citizen, your legal status was  less than a slave. Effectively, the entirely new ‘class’ of  landless urban dwellers created by capitalism were completely shut out. At the same time  the ‘peasants’ who remained on the land were equally constrained by the same legal system as the newly created ‘workers’- they too were rendered powerless by the new property system.

 

An Empire Of The Mind

 

In each newly formed Germanic State territory, an emergent capitalist elite accrued virtual total political power. But it was clear that as a small minority of the overall population, they were unlikely to hang on to it for long unless they cold find a way to broaden support for the new regime. The central Germanic contradiction is a polity based on land ownership and an economic system based on the the denial of land ownership.

The solution that emerged was two fold:

 

First, to propagate the concept of ‘property ownership’ as a validation of democratic rights, primarily the right to vote. If a system is to have land ownership as a condition of participation and is to be as inclusive as possible, it follows that land ownership would have to be as widespread as possible. But the capitalist economic system requires precisely the opposite of that. So a dilute deformed symbolic form of land ownership has to be forged.

 

Secondly to increase the scope of the democratic franchise and correspondingly dilute its power. If a society is to have genuine people power and that power is based on total mass participation then there will be no one left to have control over!!

 

Underpinning this is the difficult truth that a democracy can only work if part of the population is not in it. A democracy only has a valid purpose if part of the population is not in it. It is a system of control. What would be it’s purpose if there was no-one to control?

 

So- called Germanic ‘Property rights’ are fundamentally different to genuine land ownership. As such they constitute one of the biggest frauds in the history of human society. A property owner is NOT a land owner by any means . A ‘property owner’ is one who pays state and private taxes for the privilege of being a citizen of a capitalist  nation. The property owning citizen pays private taxes in the form of mortgage or rent and state taxes in the form of local or national taxes. No citizen of a capitalist state actually owns the land on which his property resides outright, even if they manage to pay off a mortgage.

 

The land your property is built on provides no safety and no refuge. You cannot say what happens there. You cannot defend the sky above your property from pollution and you cannot defend the land below from mining. In fact you cannot defend it from anyone, even the lowliest representative of the Germanic state!!.  In the Germanic nation, the state is the landlord of last resort.

 

In truth the Germanic capitalist nation is a land dictatorship ; it’s citizens are land slaves. In order to hide this discomforting truth, grocers and factory owners hire  gangs of preachers and poets to sing a new song; of an Empire Of The Mind of lions rampant and unicorns, (in England) and of disembodied eyes floating atop stone pyramids (in America). Instead of water and sunlight, you have a passport. Instead of clean food and air,you have a flag. Instead of culture, family and identity , you are assigned a ‘class’. Modern Germanic nationalism is born. In creating an empire of the mind class end of land ownership. Cultural and regional difference is to be abolished. Ties to the land are to be abolished for the ordinary people. Claims on the land are to be abolished. From now on economics would  decide what you were allowed to want and when you were allowed to want it.

 

 

This new song of ‘economics’ led to the  second great modification; to increase the franchise and so to the creation of modern political parties. The modern  Germanic political party is formally based on geography, ( you elect specific representatives to ‘represent’ the people of a geographic area), but whose stated collective purpose is primarily economic. (The redistribution of the product of society generally understood as tax and spend)

 

This leads us directly to the concept of constituencies. A constituency is a group of people whose identity and interests are represented within an agreed forum.

 

A capitalist constituency such as ‘workers’ or the ‘middle class’ is a defined economic group whose economic interest is represented within national government by means of a Germanic party. A land democracy constituency is a geographic group of people represented within national government by means of a party..

 

I have briefly described the legal political  development of a Germanic capitalist polity, but there is also the economic and technical development of capitalism to take into account. Capitalism requires a large and mobile group of people who have no option other than working for wages and SPENDING WAGES to function. It seems fairly obvious that capitalism needs ‘workers’ who have no way of obtaining resources other than by selling their labour. But capitalism also needs those same workers to depend upon the market for everything, even down to a glass of clean water. In the end, everything must become a commodity. Everything. Food water, air, sunlight, then dignity, justice, privacy. Everything. And if you look around you that is what is happening before your eyes…This ever increasing dependency is called growth.

 

Capitalism  transforms the population into a large mobile and unstable workforce. In other words capitalism makes mass immigration and emigration inevitable.

Cultural Constituencies: Unscrambled Egg 1

 

The arrival of Germanic Protestantism, the modern nation state and capitalism transformed the social composition of  North Western Eurasian territories. By social composition I mean the relationship between the actual peoples who made up these territories and the legal and political personality of the territories themselves.

 

In the pre-Reformation period, societies in NW Eurasia were characterised by groups of ethnically and culturally homogenous people that were gathered in defined geographical areas. There were clear and identifiable differences between these groups of people in customs, variations of language and dialect, and even specific ethnic difference. The creation of the German nation state acted to distort and blur these differences as a consequences of the political, economic model it imposed. Notable elements of this new model included:

 

Germanic Land Democracy

A legal relationship of individuals directly to the State and not community

The end of supra national religion and morality.

 

‘The concept of modern Germanic national integrity is most commonly referred to as the Westphalian model. This model is based on the idea that nation states have clearly defined borders and that the inhabitants of those bordered areas have specific defined rights in relation to other nations and their defined geography. As described here:

 

‘In fact, the ‘Westphalian model’ of international legal order holds that the Peace of Westphalia in 1648, which ended the Thirty Years’ War in Europe, constituted a paradigm shift in the development of the present state system.The twin congresses held are deemed the forum where, for the first time in the history of international relations, distinct separate polities became sovereign. It is portrayed as a historical fact that Westphalia ‘represented a new diplomatic arrangement − an order created by states, for states − and replaced most of the legal vestiges of hierarchy, at the pinnacle of which were the Pope and the Holy Roman Emperor’. As Mark Janis unequivocally put it:

The Peace of Westphalia legitimated the right of sovereigns to govern their peoples free of outside interference, whether any such external claim to interfere was based on political, legal or religious principles. […] Sovereignty, as a concept, formed the cornerstone of the edifice of international relations that 1648 raised up. Sovereignty was the crucial element in the peace treaties of Westphalia, the international agreements that were intended to end a great war and to promote a coming peace. The treaties of Westphalia enthroned and sanctified sovereigns, gave them powers domestically and independence externally.*

In order for this to be workable, the basis for the polity must be that of land owned through legal entitlement and not commonality of identity or culture. A simple illustration of this can be shown with nomadic peoples who traditionally travel over extended geographical areas with no consideration for national boundaries. If a tribe spends the summer in territory ‘A’ and the winter in territory ‘B’ can they be said to be citizens of ‘A’ or of ‘B’ or of both? To obtain the protection and rights of territory ‘A’ or territory ‘B’ they must sacrifice their community identity and way of life or be designated as an enemy or inconvenience to both nation states. And we know what happens after that..

 

It follows from this that the legal rights and obligations of a newly designated citizen is to the STATE in the form of a fully or partial formal social contract (a constitution),  and not to local community. All forms of informal community rights and obligation are either immediately void or subject to authentication and enforcement by the state.

 

In NW Eurasia first and foremost of these informal rights and obligations were those owed to the Catholic Church which was to be superseded by national religion in the form of Protestantism. The authority and privilege of Protestant religion and its adherents is guaranteed by nation states and not supra national religious authorities such as the Catholic Church. In England the right of English people to appeal to the Pope over the heads of  national royalty was abolished in 1566 (I think). By this act Henry the Eighth made himself supreme monarch and head of religion. In this way not only were matters of identity, loyalty and culture resolved in favour of the Germanic Protestant nation state, but matters of MORALITY as well! This is a massively important point, the significance of which cannot be over emphasised. Germanic morality is absolutely and utterly  entwined with the political cultural and economic structure of the nation state. More on this later.

 

Once the nation state was established, the question of politics and specifically democracy, came to the fore. Democracy necessarily rests on the question of eligibility, that is who is eligible to take part in a particular democracy. In the Germanic form (NOT in the classic Greek form), eligibility is contingent upon land ownership and territory. It is for this reason that the form of modern democracy seen in North Western Eurasia and elsewhere is accurately described as GERMANIC LAND DEMOCRACY and not GREEK BODY DEMOCRACY.

 

It is not an accident of history that political systems of the modern German nation state are without exception based on the concept of GEOGRAPHIC CONSTITUENCY. This is a pyramid of ever larger geographical units. Usually the structure is:

 

Ward

District

Town or City

National Parliament

Head of State

 

And you are no doubt familiar with both theory and practice of how this pyramidal structure is supposed to transfer the requests of the people up to the elected elite and the subsequent orders of the elected elite back down to the people. But there was a problem… (Isn’t there always?)

 

Along with all the Good Things that were supposed to come along with the Reformation Freedom, Enlightenment, and the return of Germanic supremacy, there was also the matter of Capitalism, which was the bill that the stout yeomen  would be required to pay for all the good things that Germanic Land Democracy would bring. And capitalism required two important things:

That people should be thrown off the land in ever increasing numbers and

That people should be herded together in cities to provide the labour that would power capitalism.

So here was the problem. The political system was based at every level on the ownership of land. The economic system required that most people should not be allowed to own any land!

 

 

 

*Australian Journal of Legal History

The Westphalian Model In Defining International Law: Challenging The Myth

Stéphane BEAULAC

Capitalism Doesn’t Add Up Or The Left Hand Doesn’t Know Or When you are Similieing

 

You should familiarise yourself with the law of conservation of matter and the law of conservation of energy.

 

Both of these scientific ‘laws’ express the same basic idea:

 

That the amount of inputs in any given reaction and the amount of outputs from that given reaction, must balance. In other words, every element of a given reaction or process must  be accounted for.

 

Although these ‘laws’ are often characterised as being ‘scientific’ in nature, in fact they come from a much older intellectual tradition; that of Christianity.

 

The entire concept of Christianity is based on two central core principles.

 

The first principle is that any particular incident can only ever occur once and is therefore unique.

 

The second principle is that every incident, process and event that has ever occurred is recorded down to the most infinitesimal detail and that the totality of calculation involving all this detail will be taken to be the final meaning/accounting of everything. Everything can and will be accounted for.

 

These are two foundational concepts that science directly stole from Christianity. (Although scientists would have you believe they ‘created’ them!). Together they make up the philosophy of rational accounting. This philosophy of rational accounting presents a  fundamental problem for the creators and propagandists of the Germanic cult of capitalism.

 

It means that matter or ‘wealth’ cannot be created or destroyed in the sense of being brought into, or taken out of, any given process or reaction. Everything on the left hand of the equation must be accounted for on the right hand of the equation. If it is missing it is because you failed to account for it.

 

This means that ‘wealth creation’ in the sense of creating something cannot rationally exist. If wealth is present on the right hand of an equation it must have been present on the left hand of the equation.  If wealth creation cannot exist, then ‘wealth creators’ cannot exist. So there cannot be any such thing as capitalism or any justification for capitalism.

 

By way of a simple example:

 

An iron smelting plant is in operation and claims to transform iron ore into usable steel and therefore ‘create wealth’. If we take into account the pollution and destruction of environment involved in the smelting process and we adequately account for this and other left hand costs, we find that in fact this melting plant has not created any wealth or any matter of any kind, but in fact simply transformed parts of the existing environment into something else. No wealth has been created.

 

The trick behind this, is to undervalue the preliminary imports – the land, the environment, the labour et cetera and to correspondingly overvalue the output: the ‘wealth’ that has been created. Turning healthy useful corn into ‘Cheetos’ counts as wealth production!!

 

The Whole World Similies With You

Let us look more closely at the value of inputs, for instance the value of iron ore. The value of any particular portion of iron ore can only be rationally valued in comparison with the total amount of all iron ore.

 

If you were to say that 1 pound of iron ore is as valuable as six eggs you are making a poetic comparison, expressing a SIMILIE not an accurate fact. There is no rational relationship between a lump of iron and an egg and there never can be any rational relationship between a lump of iron and an egg because there is no rational point of comparison.

 

(This is an indicator of the value problem which comprises the third part of my general theory of money. I will return  to this later).

 

There is no rational relationship between a lump of iron and an egg but there is a rational relationship between a lump of iron and the totality of all iron available. We can say that any one piece of iron represents a proportion of all total  iron.

 

If there were 100 tons of iron available on earth, then one ton of iron would represent 1% of all the available iron and this would be its true demonstrable, rational, proportionate value.

 

But this presents an immediate and obvious problem: we have no idea of how much iron is actually available and can only provide a an estimate. It follows that we can only present an estimate of the value of any given piece of iron. Since it is only an estimate, is open to a bit of ‘creative accounting’…

 

But although creative accounting can paper over some of the more obvious gaps in the capitalist fraud, the more intelligent Germans realised that this could not form the basis for a long term strategy.

 

They realised that they were playing a game of cat and mouse they were bound to lose in the end. The longer the game went on,  and the more information that became available, the more clearly people would begin to see that the estimates of value that were given to steel and wheat and air were clearly fraudulent.

 

The more clearly people began to get an idea of the TOTAL amount of any given thing, the more clearly they would realise that the present valuation of it was undervalued and just as importantly  the previous estimates were even more fraudulent!

 

This is the true meaning behind the battle between environmentalism and its opponents…

 

And then Germanic capitalists had a stroke of ‘genius’. Which actually means they simply reverted to their fundamental nature. They decided to turn everything back to front, inside out and upside down.

 

Why wait for the inevitable exposure and condemnation when the accounts became due? Why not instead START with the accounts and work backwards??!! And this is exactly and precisely how capitalism and capitalist democracy was brought into being.

 

A capitalist corporation first produces a final profit and then promises to work towards it. Of course, it usually fails and resolving the consequences  of this failure is called capitalist economics.

 

A capitalist political party first produces a set of intended results and then promises to work towards it. Of course it usually fails and resolving the consequences of this failure is called capitalist politics.

 

But the key advantage of this process, insane as it seems, is that there is no point where the capitalist corporation or the capitalist economic party is actually HELD TO ACCOUNT in the literal sense of the word.

 

Because they persuaded the investors and the voters to endorse the accounts they were given before the process even began. They made you just as culpable as they are.

 

Nine Hundred And Fifty Four, Nine Hundred And Fifty Bloody Five.. Or I Wonder If We Are Ever Gonna Change

 

Underpinning Einstein’s theory of relativity is the philosophical argument that it is both possible and desirable to view a particular event from a multiplicity of points of view to gain a comprehensive understanding of the processes embodied in that event.

 

If this is the case, then it might also be argued that it is both possible and desirable to view any particular historical and economic event from a multiplicity of points of view. This would be as revolutionary a development in economics as Einstein’s theory was in physics.

 

Both classic economics and the Marxist variant, promote a singular subjective perspective on structure and meaning of economic systems. Their purpose, openly stated or covertly implied, is to promote the political, moral and cultural system they are representative of.

 

The formal purpose of capitalist economics is to run the system at its most efficient , it’s covert aim to justify capitalism as the dominant system. The overt purpose of Marxism is to produce a critique of capitalism that will lead to its being abandoned as a consequence of its internal contradictions. Its covert aim is to justify historical attempts to create alternatives to capitalism.

 

In order to work, both capitalist economics and Marxism need a protagonist, an archetypal hero from whose singular perspective we can see the world and whose actions we can subjectively identify with. This is the real identity politics.

 

For capitalists the hero of the story is well ,.. The Capitalist  who daringly risks all to bring wealth up from the depths of the darkness -a variation on the Prometheus narrative. For Marxists the hero of the story is The Worker whose toil in the mines is the real producer of wealth.

 

Effectively, both socialism and capitalism are operatic arias in the Wagnerian mode, with two main characters competing for The Ring of Wealth, claim and counter-claim, war, deception and betrayal all part of the story…

 

In a small accommodation with reality there has been a recognition of this subjective limitation and  attempts to modify both classic and Marxist economics. Keynesianism explicitly criticised classic economy from the perspective that it had no macro economic analysis, that it was limited and partial. Marxism also criticised classical economics from the same perspective.

 

In turn, classical economics responded by broadening the fields of economic activity that it covered and even integrated elements of both Marxism and Keynesianism to produce the modern hybrid that passes for mainstream economics today. At the same time neo liberalism explicitly critiqued Marxist planned economy for offering a limited and distorted perspective on the real world. Only the market was capable of gathering and processing enough information to make the system work it claimed.

 

Classic economics and Marxism have historically attempted to compensate for narrowness of vision by reaching for an ever more comprehensive breadth of subject matter. Their final strategic purpose is to claim that the point of view they represent is capable of encompassing all of experience. In other words, both capitalism and socialism claim to be universal theories.

 

This strategy really amounts to nothing more than a form of semantic  trickery that exploits the confusion between taking something into account and adequately accounting for something. An analysis undertaken on this basis degenerates into nothing more than description in the form of an ever expanding list of complaints that classic economics makes about Marxist economics and Marxism makes about classic economics.

 

But neither capitalist economics or Marxism can overcome the fundamental problem that they are subjective in both analysis and purpose- they are in essence particular points  of view.

 

In the back and forth diatribe of mutual complaint each philosophy implicitly recognises the value and need for the other as each seeks new territory to colonise at the expense of the other. Both competing analyses move from old to new battlefields as they become available for domination,  seeking both to justify their own existence and to nullify the existence of their opponents.

 

This is the operation of a dialectic; the domination of thought through the application of a controlled conflict- a drama- a demi-urge.

 

The last major episode in this opera was the credit crunch. Marxist economics went on the offensive, seeking to gain advantage in this period of capitalism’s distress. In response neo- Classic economy sought to spin events in such a way as to justify itself. Perhaps unsurprisingly classic and Marxist have managed to fight each other to what is effectively a stalemate. Both boxers now winded and bloody, have retired to corners for a chest rub and a pep talk from their respective managers…

 

The central question now is: Do we wish to invite both protagonists back for a further round of conflict? Would there be any purpose, political or intellectual, in continuing a boxing bout that seems to have stalled in mutual exhaustion? If subjective political economy has nowhere left to go, what can emerge to take its place?

 

The economic model I propose does not rely on a representation of any particular group as the main protagonist in history and economy. I don’t seek to make The Capitalist the hero of history or The Worker either. On the contrary I am now arguing that there is no such thing as The Capitalist as a concrete economic agent. There is no such thing as The Worker either. They are both literary inventions of Germanic culture. This is where culture meets economics.

 

Nobody ever in the history of the world ever created capitalist wealth through undertaking risk. Nobody ever in the history of the world ever created capitalist wealth through undertaking labour. Both these ideas are literary fictions.

 

Instead I am arguing that the only way that capitalist wealth is created is that it is extracted and accrued through the operation of money forms, that is denuded versions of money. These money forms create and operate their own distribution networks within society and economy that allow the extraction of wealth.

 

Individual or group economic power and significance comes from the extent to which one has access to one or more money forms and is able to utilise them to extract wealth.

 

This analysis seeks to represent Germanic capitalism from a multiplicity of perspectives to show both action and reaction in any given transaction. We no longer need to be bound to this or that heroic perspective or this or that litany of complaint and counter-complaint.

 

But there is a price to be paid for this insight. Because in such a model the struggle for economic power becomes a zero sum game. Power is fixed in quantity and quality. If power accrues to one then it necessarily is taken from to another. Wealth cannot be created as in a Germanic literary fantasy.

 

Just as Einstein’s theory was able to capture the multiplicity of relative motion through the adoption of a constant the speed of light so this model of money requires a constant  – that of wealth. Wealth in this model is not created, that is the absolute barrier that cannot be broken through.

 

E=MC Too

 

 

The American health care system clearly needs to be rationalised. It is inefficient, with multiple competing bureaucracies, high costs and poor outcomes. many people cannot understand how it has continued to develop in what appears to be such a dysfunctional way.

 

But what if the size and shape of American health care is entirely rational if you understand the parameters that it operates within?

 

In my general theory of money I argue that the fundamental structure of capitalist economies is a broad alliance of competing money forms, (partial money), that act as a means of extracting wealth from society as a whole for their respective constituencies and through this process money forms divide up the economy.

 

Under this model INSURANCE is a money form, whose purpose is to allow its issuers and users (constituency) to extract wealth protected by its representatives among the elite: FACTIONINSURANCE.

 

You might imagine that because ‘healthcare’ is the subject of insurance that ‘health’ is somehow integral to this insurance business. It is not. ‘Health’ is no more integral to health insurance than birds are integral to ‘Dove’ shower creme.

 

To make it absolutely clear: ‘Insurance’ does not exist as a consequence of the social need for ‘Healthcare’ rather ‘Healthcare’ exists as a consequence of the economic need for ‘Insurance’. Who has an economic need for insurance? The faction that creates, buys, sells and uses it.

 

An easy way to understand it is to look back at the development of both rail and then car travel. First trains were invented and then the marketing department for the rail companies had to think of somewhere desirable to go on them. The same applies to the motor car. First the car was invented and then a desirable destination had to be invented. In this way first the ‘seaside’ and then the ‘countryside’ were invented…as well as the suburbs.

 

Insurance was invented as a money form. Then the insurers had to find something desirable to insure- enter healthcare.

 

I will build on this insight:

 

There are a number of competing money factions of which FACTIONINSURANCE is one and FACTIONDERIVATIVE is another; the latest edition to the elite power structure.

 

I have previously explained how QE was specifically an economic and political arrangement to protect and regularise emergent derivatives in the wake of the crash they caused.

 

If we accept that there are a number of money factions competing for economic and political primacy and we accept that derivatives have been inducted into the elite club, we can surmise that the derivative share of power must have been allocated at the expense of another competing money faction.

 

In other words someone must have been made to move over to make room for derivatives at the money table. Which brings us to the following intriguing anomaly:

 

In both Britain and America the newly elected post credit crunch administrations undertook ambitious and far ranging ‘reforms’ of their respective health care systems, despite the fact that many observers noted that the administrations had far more pressing concerns that they appeared reluctant to confront.

 

It does seem odd that a Conservative a government in Britain and a Democrat government in America should go out of their way to look for trouble when they had so much of it already.

 

But what if, in line with my model, they had to rejig the position of FACTIONINSURANCE within the system as a whole to accommodate FACTIONDERIVATIVE?

 

To put it another way, to get the support of FACTIONINSURANCE they had to get something in return for what they were losing to FACTIONDERIVATIVE

 

Then the actions of both Anglo Saxon elites would entirely make sense.’ Healthcare reform’ can now be seen for what it is- a central ECONOMIC part of the QE programme.

 

If my model of how the system operates is correct- how would that be reflected in what we actually observe? We would expect to see an increase in health insurance without a corresponding increase in health. Sound familiar?

 

All of which brings me to my E=MC2 moment. This is a simple formulation which is the basis for explaining all economic and political history over the past hundred years. It supersedes and clarifies all other economic theory. (Is that all, Andy ?)

 

Among other startling things my theory makes it possible to calculate to 2 decimal places the Socialism of any individual in comparison to any other individual on the planet.

 

The Credit Crunch and subsequent QE heralded the formal acceptance of derivatives into the elite money pantheon.

 

I explained how FACTIONINSURANCE got paid off to allow this to go ahead. But what about FACTIONEQUITY, FACTIONBOND etc?

 

Well they all got paid off too. In fact everybody seems to have got paid off, except one faction, and you know who that is don’t you?

 

Yup,

 

FACTIONCASH got shafted on all sides.

 

And what happened as FACTIONCASH had its political and economic power stripped away?

 

Why, Socialism evaporated into the air as though it had never existed!!

 

Surely this is the time above all others when people would have turned to Socialism. But they can’t turn to socialism because it doesn’t exist as a real separate political force.

 

Which leads me to my central formulation:

 

CASH=SOCIALISM

SOCIALISM=CASH

 

Want to know exactly to two decimal places how socialist any particular person is?

 

Find out what percentage of their wealth is held in cash and how much cash  they carry around..

 

I have prepared the following graphic for you to approximate just how Socialist you and your friends and colleagues are…

 

If you doubt my analysis ask yourself:

 

What would the world be like if there was only one money form and it was cash?

Socialism, no?

 

Why were elites all over the Saxon Axis so desperate to get welfare recipients onto digital payments?

 

Because it is bad enough if some members of society are socialist, but it really would be too much if the poor were as well…

Crackernomics General Theory Of Money Part 1

I have been working towards finishing Crackernomics 2: The Structure Of Money for a couple of years.

 

When I first began writing about the credit crunch in 2010 I described the form of the crisis and recovery process the same way one might describe the appearance of a conjurors illusion without actually understanding how the trick works. I had the form of what was happening but not the underlying content.

 

After further observation I began to realise the significance of the specific case of derivatives- that they were in fact a form of money and that QE had the overall purpose of regulating and guaranteeing them as such.

 

Over the next year or so I extended this understanding of money issuance with my analysis of Bitcoin and other crypto currencies.

 

However, it turned out to be another six years or so before I understood the general rule and I could produce a comprehensive general analysis and monetary theory…There are two parts to the general theory.

 

Here are the bones of the first half of that General Money Theory.

 

Under the cult of Capitalism the state has an effective political monopoly on the creation of money.

This leads people to erroneously presume that since there is only one state operating within each nation state territory that each individual state only allows the production of one kind of money.

 

In fact capitalist states directly and indirectly sponsor various types of privately issued money including bonds, equities and some forms of insurance. State sponsorship of these other forms of money takes the form of guarantees and regulation. These sponsored other forms of money allow the extraction of wealth from and the regulation of, the capitalist economy.

 

In the nineties one faction within the American state began to sponsor and promote a new form of privately issued money. This form became generally known as derivatives. Because of the scale and novelty of this form of money issuance it inevitably led to destabilisation and a crisis that is referred to as the Credit Crunch.

 

The broad idea is the same as the CIA, Kennedy and the Bay of Pigs. The CIA started a crisis by invading Cuba and then tried to force Kennedy to back them up. Kennedy refused and you know what happened as a consequence.

 

In the immediate aftermath of the credit crunch Bush and Obama accepted the fait accompli offered to them by the derivatives faction and used the state to back up the new form of privately issued money.

 

Under the cult of capitalism Germanic elites established an effective political monopoly over the production of money BUT actually produce more than one kind of money through the sponsorship of bonds, equities, forms of insurance and unmentioned till now; BANK CREDIT which leads to the following central idea:

 

The history of money production under Capitalism follows this pattern:

 

A particular political/economic faction in a given society petitions to join the elite and create its own form of money.

 

It begins to manufacture and use this form of money.

 

The production of this novel form of money creates a social and economic crisis.

 

The existing elite either agrees to accept the new form of money and collectively guarantee and regulate it or it does not.

 

This is how paper cash came to be a form of money- crisis and then acceptance

This is how insurance came to be a form of money- crisis and then acceptance.

This is how bonds came to be accepted crisis and then acceptance

This is how equities came to be accepted -crisis and then acceptance

This is how bank credit came to be accepted crisis and then acceptance

 

THIS IS HOW DERIVATIVES ARE COMING TO BE ACCEPTED -CRISIS AND THEN ACCEPTANCE.

What do we call this process of collective acceptance of derivatives; their regulation and guarantee by the elite?

 

We call it QE.

 

Sometimes this process fails. The Dutch tulip bubble is a good example. The tulip faction failed to get bulbs accepted as a form of currency!!

 

Here is a fundamental insight:

When a faction bid to create a new form of currency fails it is referred to pejoratively as a bubble. The wealth accrued to that new form of currency is redistributed among its competitor currencies.

 

The Significance of Gold

 

The creation of the Federal Reserve was the crisis and acceptance of bank credit as a sponsored money form.

The Wall Street Crash and its resolution was crisis and acceptance of equities as a sponsored money form but;

 

But the withdrawal of the gold standard was EXACTLY THIS PROCESS IN REVERSE. The original and founding member faction- the GOLD MONEY FACTION was blackballed and EXCOMMUNICATED from the Germanic money elite like the founding CEO of a company being turfed out by other board members!!

 

This is the significance of going off the gold standard. The original founding faction reduced to penury and obscurity, the plaything of the very factions that it originally allowed into the gang!!

 

There are money factions operating within Germanic societies which sometimes successfully petition and join the elite. But the end of the gold standard was historically unique in the history of capitalism since it was the first time a money faction was DE-LISTED and DELEGITIMISED.

 

Next we can identify the money factions. The basic money factions at present are

 

FactionInsurance

FactionBond

Faction Credit

FactionEquity

FactionDerivative

and last but not least ,(not yet anyway),

Factioncash (which is supposed to be the pre-eminent faction but we all know about the war on cash).

 

After some consideration I believe there is only room for a LIMITED NUMBER OF FACTIONS at the top table.

 

Here is my prediction:

 

It is very possible that FactionInsurance or FactionBond will be delegitimised and expelled by Trump in this administration just like Nixon did to Factiongold!! (Actually on further consideration I think it might very well be Factioncash that is for the high jump..)

 

Notes On Factioncrypto

 

Presenters of The Keiser Report Max Keiser and Stacy Herbert are good exemplars of Factioncrypto. They are Pro gold-Anti derivatives- Pro Bitcoin because:

 

They want the  FactionGold to be re-admitted to the monetary elite but this is not going to happen. (I suspect they know this and their support for Factiongold is only rhetorical.)

 

They want to prevent the legal and political legitimisation of derivatives and Factionderivative, which is why they always refer to derivatives as ‘fraud’. But derivatives are more or less entirely legitimised. Only a major overturn can prevent the successful finalisation of this process.

 

Factioncrypto want Bitcoin to be accepted as part of the Germanic money elite. But to do this they have to do what every petitioning faction has done before them- they have to use MONETARY TERRORISM tactics- just as they rightly accuse the derivatives faction of doing.. to provoke a crisis, then bargain for acceptance and regulation.

 

How this general theory of money can explain Real political parties

 

I have argued that the actual history of politics and economy is not a duopoly/dichotomy of left or right or working class or capitalist or nationalist and globalist but rather a number of competing factions that use money forms to extract wealth and regulate and divide up the economy. This is the true underlying form of politics under capitalism.

 

But we can take this further and argue that each faction has its supporters in wider society and that this is the actual way we can understand how society is divided up and operates. Each faction has a broader money constituency within society that supports it. This constituency uses their specific money form to extract wealth from the general economy.

 

 

Factioncash has a corresponding cash constituency. Factioncash is the REAL PARTY of Cash constituency.

 

Factioncredit has a corresponding credit constituency  Factioncredit is the REAL PARTY of Credit constituency.

 

Factionbond has a corresponding bond constituency  Factionbond is the REAL PARTY of bond constituency.

 

Factionequity has a corresponding equity constituency Factionequity is the REAL PARTY of equity constituency.

 

FactionInsurance has a corresponding insurance constituency  FactionInsurance is the REAL PARTY of insurance constituency.

 

Factionderivative has a corresponding derivative constituency Factionderivative is the REAL PARTY of derivative constituency.

 

Factiongold has a corresponding gold constituency  .Factiongold is the REAL PARTY of gold constituency.

 

Factioncrypto has a corresponding crypto constituency  Factioncrypto is the REAL PARTY of crypto constituency.

Actual political identity; that which determines what any individual or group within capitalism will do is determined by the form of money each faction uses.

 

From this we can observe that some factions have a greater or lesser constituency than others to the extent that some constituencies have little or no faction representing them in the elite and some factions have little or no constituency on the ground.

 

This exactly and specifically determines how each faction/constituency will act politically. It means we can begin to predict with an unprecedented  degree of precision what each grouping will do.

 

These degrees of constituency can be arranged and compared in a PERIODIC TABLE OF MONETARY FORMS.

 

We can draw an analogy with the model of an atom. Factions represent the nucleus and constituencies represent the electron configuration outside the nucleus. CONSTITUENCIES therefore influence the relatively trivial domain- the physics and chemistry of the economy and factions influence the profound- the atomic power of the economy.

 

While the specific balance of components varies from nation state to nation state the basic relationship can be described thus

 

From top to bottom these are the money forms with the largest real parties (constituencies)

 

(Largest constituency):

 

FactionInsurance

Faction Credit

Factioncash

FactionEquity

FactionBond

FactionDerivative

FactionCrypto

 

(Smallest constituency)

 

I will apply my model to two well known historical anomalies to illustrate how effective it is:

 

The mystery collapse of ‘left wing’ working class politics and

 

The mystery of Quantitive Easing:

 

1:The mystery collapse of ‘left wing’ ‘working class’ politics

 

Each monetary faction has a constituency. This is the real nature of societal division. In Britain up until the 1980’s the vast majority of what is called the ‘working class’ were represented by Factioncash and were therefore members of Cashconstitiuency. They were paid in cash. They purchased in cash. They lent and borrowed in cash. They relied on cash as the means to extract their share of society’s wealth.

 

But as you know in from the 1980’s through massive economic reprogramming the majority of ‘working class’ was forcibly transferred from Factioncash to Factioncredit. They were relocated in Creditconstituency. And so their priorities and allegiances accordingly changed.They were paid in credit. They purchased on credit. They lent and borrowed in credit. They relied on credit as the means to extract their share of society’s wealth.

 

It is this which explains the collapse of ‘working class’ left wing politics. In essence it was the forcible transfer of political allegiance of the ‘working class’ from Factioncash to Factioncredit.

 

The mystery of Quantitive Easing

 

We are familiar with the immediate aftermath of the initial credit crunch. There were a number of meetings between Obama and the bankers. The story goes that the bankers issued Obama with an ultimatum: back us and back derivatives or we will bring the system down. Why did the administration go along with this demand? Was it because they are all Wall Street stooges etc?

 

Consider the reality of the situation from a faction perspective.

 

Derivativeconstiuency (DerC) was effectively bankrupt. That ‘s what the Credit Crunch crisis was effectively all about; are derivatives to be accepted and protected or are they to be refused protection are therefore be deemed to be worthless – a bubble?

 

Factionderivative (FacD) the political representatives of DerC went to bat in a do or die situation. But this was not something new it had been the same for every successful faction since capitalism began.

 

And FacD had an ace in the hole. The administration was Monetarist and as you probably know Monetarists ABSOLUTELY HATE cash more than anything else on the planet. So the FacD play was simple: Let’s use this opportunity to get together to f*ck cash for once and for all. That was the true nature of the play. And it has worked. Derivatives were preserved at the expense of cash.

 

Authors note:

I know this is all a bit scrappy and in semi-note form but it is covering a lot of territory and I want to get as much of it as possible down as quickly as possible. I will return to the themes and ideas I have outlined here at a later date.

By the way I am in the faction of the one in whose image I am created