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…

Half a Sixpence Or Wiggle Room Or Everything’s Small In America Or Discover The Power Of TV Advertising

When I first began writing about the Credit Crunch and its consequences  I said that the defining moment in this cycle will come when the decision is made to re-introduce aspects of the pre-Monetarist economic system to a greater or lesser extent.

 

I argued that the Credit Crunch was not a ‘natural’ crisis in the sense that it arose out of production and trade processes like previous crises in the last century. I described how the Credit Crunch was instead the consequence of the solution implemented to combat inflation and stagnation of the 1970’s. The Credit Crunch was the product of past medicine not contemporary illness.

 

Monetarism was created to cure the problem of inflation, specifically wage inflation, for once and for all. Effectively, it removed the possibility of workers being able to directly influence the economy through collective wage demands. From now on workers as a group would have to accept whatever was offered by the economy instead of visa versa.

 

This was achieved by a combination of suppressing trades unions, dismantling of work place legal rights and the introduction of truly large scale mass immigration. These had the effect of permanently altering the supply of labour available.

 

In tandem with supply side reforms to the labour market Monetarism advocated a move towards a mass credit economy and most crucially the introduction of democratised money through financialisation. This combination of measures in total produced a low-wage, low discretionary spend and low growth economy in the aftermath of the Credit Crunch.

 

To reiterate the point: In the sense that Monetarism was a planned attack on the post war political and economic settlement, the Credit Crunch that followed from it was entirely voluntary and entirely avoidable.

 

But if pundits are to be believed all this is to be overturned- or at least corrected to some extent in a kind of counter reformation to Monetarism. We are told that under Donald Trump America, (and Britain under the Brexit regime), will return to the old style ‘great again’ economy .

 

Inflation will arise from the dead and interest rates will lift in response. We are told that as part of this cycle of cause/effect, real wages will also begin seriously  rising after decades of stagnation.

 

I understand now that my initial analysis of the Credit Crunch was incorrect in that it did not take into account the significance of derivatives and the permanent effect they would have on the global economy. It was only after I began to write about the central bank response to the credit crunch in the form of  Quantitive Easing that I realised that derivatives were entirely novel in the effect they would have on structures within developed economies.

 

Derivatives are a new privately issued form of money. As such, they have colonised sections of global economic activity. As a consequence of this colonisation derivatives  permanently distort the total global economy to the extent that they are allowed to operate within it.

 

The mistake I initially made was not to realise that even if the old world was to some extent allowed to be re-introduced into the new world, it would not be on the same terms as previously. History is one way street. This brings us to the central theme of this piece which is the new shrunken environment into which Donald Trump will birth his new great America.

 

You will probably have heard  of ‘shrinkflation’ in which the packaging of a commodity remains more or less the same but the actual product within the package shrinks. For example look inside a bag of potato crisps and you find it will now be less than a third full- the bag is mostly air. A bar of Toblerone chocolate has famously shrunk to the size of the foothills of Wales instead of the mighty Alps it was supposed to represent.

 

In terms of commodities, the sound of the future seems to be a ‘capitalist rattle’ where shrunken products jiggle around in their oversized packaging. Something similar has happened in the world of politics producing ‘wiggle room’.

 

Wiggle room is the phenomena whereby it becomes increasingly difficult to attribute any given outcome to any particular cause. (See what I have written on the ‘Secret Economy’)

 

I have referred to sawing the lady in half on more than one occasion as a metaphor for the new politics and economics.The key to this trick is understanding that there is a lot more room in the box the lady goes into  than you might suppose. The wiggling fingers and the wiggling toes that you can see do not actually belong to the same person inside the box but instead to 2 separate people.

 

Something a lot like the sawn lady has recently been happening in the world of Anglo-Saxon politics and goes directly to the question of the nature of the new political movement that has given rise to both Brexit and the election of Donald Trump as president of the United States of America.

 

I have characterised this movement as Anglo Saxon nationalism as distinct from   those on the liberal left who regard it as a form of white nationalism with its concomitant implications of racism.

 

The standard Trumpist retort to accusations of racism has been to argue that the same public that elected Donald Trump is the same public that elected Barack Obama on two occasions previously. If these people were prepared to let Obama rule they can hardly be regarded as being racist –can they?

 

But this overlooks the fact that there is a large amount of ‘wiggle room’ within the American electorate. Only half the potential voters in America actually bother to turn out for elections generally and of that half, only half again actually voted for Donald Trump. Which means Trump was actually selected by a quarter of the electorate.

 

Following from this it is entirely possible that both Trump and Obama were actually elected by two more or less entirely separate and different constituencies that have enough spare room within the electorate to hardly overlap at all.

 

In other words it is entirely possible that the vast majority of those who voted for Trump would never in any circumstances vote for Obama or any other black man.  They are in large part an entirely different constituency from the liberals. If you look at the sawn lady’s wiggling fingers and then at her wiggling toes you might start to notice that they are a slightly different colour…

 

The same is equally true in the case of Brexit. Only around a quarter of the available population actually voted to leave the European Union. So the idea that the leave voters represent a disillusioned previously semi liberal strand of mainstream British society is at least questionable.

 

This ‘bagginess’, this loose fitting wiggle room system, is one that tends to lend itself to the performance of conjuring acts such as sawing the lady in half. Given that this is the case, it seems hardly remarkable, in fact entirely predictable, that such a system would attract a showman like Donald Trump.

 

I have described the electoral space that allows Trump and Brexit to rise to prominence. But underlying this there is an economic hollowing out that provides the basis of these political phenomena.

 

The creation of privately issued democratised money in the form of derivatives effectively gives us an economic version of two magician’s assistants within the same box. The wiggling toes and fingers that you see do not belong to the same body. That is why inflation and deflation, labour participation rates and unemployment, equity and bond prices all seem to be sending conflicting signals that we know simply can’t be possible in the real world.

 

If money can be described as an information signalling system then two forms of money privately issued and government issued, existing side-by-side and sending out coterminous signals can only result in increasing confusion.

 

Inflation signals or deflation signals, or growth signals or shrinkage signals are being sent out by either privately issued derivatives economy or the government issued general money economy. It is virtually impossible to say which is which. But the point is that this is not one information system but two systems existing side by side.

 

I have previously argued that the endpoint of this phase of democratised money will result in roughly half the worlds economy being colonised by derivatives. This is not a general guess, a number of pundits have previously indicated that the long term average interest is expected (required), to be 2 1/2 to 3 % .In consequence, Donald Trump’s claim to make America Great again can only really mean making half of America great again or America half great again.

 

In a world where half the economy is colonised by democratised money derivatives interest rates can only rise to half their potential maximum. By the same token real inflation can only rise to half its potential maximum. The state sponsored economy can only grow at half its potential rate at maximum. In other words, every and all  aspect of the system can only operate and exist at half the previous level if there is only half the economy  to operate within.

 

So when I say that resolution of the credit crunch crisis is dependent upon how much of the old world the elite is prepared to allow to re-emerge, from the perspective of democratised money, the maximum amount that can be allowed to emerge is 50%, if that is indeed the level at which derivatives will be allowed to colonise the world economy.

 

From this perspective it is possible to make some  specific predictions as to the numbers behind Trump’s make America great again strategy.

 

The long-term average underlying interest rate in the developed economies is around 5%. I have for a long time predicted that the long-term normative interest rate post credit crunch will be 2 1/2 to 3%.

 

From what I have said it  should also follow that the long-term average normative inflation rate will settle at around 1 1/2– 2 % and that the growth in GDP rate and  growth in employment rate should also settle at around half their historical real average in the post Credit Crunch world.

 

But they won’t of course, for the very straightforward reason that they are made up figures…

 

However there are a number of real life indicators that we can say will be restricted to half their previous level of growth under the half and half economy.

 

Growth in  life expectancy will be cut to half its post war average rate in the developed world.

 

Growth in home ownership will also be cut to half.

 

The average fall in the rate of poverty will also fall to half its previous post war average.

 

So now we know that Donald Trump is going to end up being round about half as frightening as the liberals thought he was going to be..

 

Extra Information

Theresa May is set to announce revolutionary social reform policies – this could be the moment she silences her critics

She insists that the state has a significant role to play in alleviating the everyday injustices faced by people who do not qualify for benefits. Announcing shiny new policies is the temptingly easy part of governing. Much more difficult is delivering the same

http://www.independent.co.uk/voices/theresa-may-speech-social-reforms-revolution-thatcher-brexit-critics-a7516156.html

House Burning Down

 

It might be useful to consider further the relationship between the production of paper news and the production of paper money.

 

I observed that both paper money and paper news are forms of informational transaction. This might be more accurately described as  the transfer of meaning. In this sense ‘meaning’ is the value measurement of information; Meaning is the unit of value of information because meaning transforms data into information and makes it valuable. The construction of meaning is exactly the assigning of value to data.

 

Consider hyper inflation in the money supply . In the traditional monetarist model (the one that has more or less taken over all mainstream economics), this is caused by an oversupply of money into the market. In other words Monetarists argue that the problem of hyper inflation and inflation generally is one of quantity. Actually the problem is one of quality. We can show this with the following:

 

There is a direct relationship between publishing an edition of a newspaper and publishing an edition of money, which is effectively what is done each quarter when the interest rate is set. The interest rate is news about how things are going to be according to a central bank and money notes carry this news.

 

Money published at 0.5% base rate is a different edition of money from  that published at 1% base rate. Same ‘newspaper’, same publisher, but different news, different information, different headline.

 

Just as each particular edition  of a newspaper contains information specific to a particular time and place (as I mentioned last time), the paper money note also contains information. I will describe the nature of this information below but for now lets stick with newspapers.

 

In the example of a newspaper, let us say that the edition of January 6 has the headline: ‘War Is Declared!’. And the edition of January 7 has the headline that ‘Peace Is Declared!’. Taken in sequence the meaning of these events is clear.

 

First there is a state of war, then there is a state of peace and the present condition of affairs is that of peace.

 

Now imagine that the newspapers in question were not dated January 6 and January 7 so that there was no way of telling which was the first headline and which was the second. It could be the case that war is declared and then peace declared or it could be the case that peace is declared and then war is declared. So in the first instance we are now in a state of peace and in the second instance we are now in a state of war.

 

Now let us say that an unscrupulous news agent receives both editions of the undated newspaper from the publisher in correct order but chooses to release them to the local population in either one or the other order for his own personal advantage. If the local newsagent wants to promote the idea that we are at a state of war he will release the newspaper with a war headline second and if he wants to promote the idea that we are at peace he will release that newspaper second.

 

Just such an instance as this is described when  banker Nathan Rothschild famously withheld news of the British victory at Waterloo in order to take advantage of market uncertainty as to the outcome of the battle. By the time the markets received the news that Wellington had won,  Rothschild had bought equities at knock down prices  and made a killing on the rising market.

 

If the local population becomes aware of the possibility that news may be manipulated by a local newsagent for the purpose of controlling perceptions, they might hold on to one or more editions of a newspaper in order to compare headlines and get some idea of what the actual facts of the matter are in sequence.

 

 

Logically, in such a case the local population will have to conclude that NO particular edition of a newspaper is to be objectively trusted and that all editions are either wrong or lying. In other words the paper in its entirety is worthless rather than just this or that edition. This is the qualitive nature of the problem.

 

After all, how can two editions of the same newspaper with the same editor and the same journalists and with no differential date information be judged between? How can you know which is the truth NOW and which is not?  This is in effect what happens in the case of hyper inflation.

 

Think of a paper money note as a generalised abstracted unit of information. On a more sophisticated level we can think of a money note as a unit of evidence. We can say that one or more units of evidence goes up to make an argument and that therefore the more units of evidence you can muster in support of any particular argument the more likely you are to win that particular argument.

 

In a standard economic transaction the argument in question is that you should sell a car,(or any other commodity), to me for this number of paper notes. Or to put it another way, you should swap your car for this number of paper notes.

 

The more units of evidence that you can muster in support of this argument, i.e. the more paper notes that you offer in return for the car, the more likely you are to win that argument.

 

But there is an unfortunate corollary to this. If you win the ‘argument’; by offering more pieces of paper money evidence than the other guy, you also implicitly argue that each individual piece of paper money evidence is worth relatively less.

 

We can return to the practical consequences of this shortly but first, as I argued last time paper bank notes or units of evidence are introduced into the market at a particular time and particular place and at a particular price. So in this sense, they are first and foremost evidence in an argument on behalf of central government made to the general population.

 

The individual argument that paper money notes are evidence for is: ‘These pieces of paper are valuable to this or that extent not only in comparison with objects such as commodities, but those pieces of money paper that have gone before and those pieces of money paper that will come after’.

 

This is of crucial importance.

 

From this perspective the crisis point of hyper inflation occurs when too much information is presented at any one time which results in not a quantitive problem but a qualitive one.

 

Let us say that two purchasers are competing to buy a particular car. They both make the argument that you should swap the car for this number of pieces of paper money. The number of pieces of paper money is the totality of evidence that this or that exchange argument is true and valid.

 

Obviously they cannot offer the same number of pieces of paper as evidence/arguments or the seller will have no way of differentiating between the two. So let us say that Buyer A offers 100 money units and buyer B offers 110 money units. Buyer B wins the argument because he has offered more ‘evidence’ in support of his argument. So far so good.

 

But what if Buyer A offers 100 units as before but Buyer B offers 5000 units? What is the seller to make of that? These two arguments are wildly different, they containing wildly differing amounts of evidence in the form of money notes. (bear ‘fake news’ in mind at this point)

 

Well surely the answer is simple, the seller takes Buyer B’s offer.

 

Not so fast. Most sellers would want to know a little more about it before making a decision in these circumstances. The problem is the totality of evidence.

 

Instead of 210 units in total chasing the car,(both bids), which might be seen as reasonable there are 5100 units chasing the car which is not seen as reasonable given what the seller knows or thinks he knows. Something else is going on…

 

What if a third buyer comes along ten minutes later and offers 10,000 units for the same car? Now the seller will be pretty sure something is seriously going wrong. And the inevitable effect is that he will be forced to distrust all money notes in whatever amount because they are all the same.

 

If ten information money notes are worthless then 10,00 money notes are equally worthless, this is both the strength and weakness of the informational money system. The implication is that the seller  will be forced to distrust the overall message he is getting from the government. But it is a qualitive and not quantitive problem because it does not rely on amounts.

 

So what was that central bank/government message I referred to above? It is that ‘We are in charge and everything is all right’. That is the basic unit of money news implicit in every money note.

 

The second piece of money news is the interest rate, which is the price at which private banks buy money from the central bank. This can be understood as that particular headline for the quarter. But this piece of money news is intimately tied up with the distribution mechanism of the paper notes themselves.

 

A newspaper printing and distribution operation will have a central printing press, regional distribution warehouses and sub warehouses which distribute to newsagents and even paper sellers on the street.

 

Each element of the distribution chain decides how many papers to take and to move on down the chain of distribution according to how profitable they predict this process will be. This depends to a large extent on the nature of the headline. ‘Queen Dies!’ or ‘War Is Declared!’ will tend to sell more copies than ‘Water Supply Goes Off In Addis Ababa’ or whatever. (perhaps not in Ethiopia though..) So the headline affects and ultimately controls the distribution process.

 

The same is true with interest rates. Depending on what the Central Bank decides the interest rate will be, each element of the distribution chain, from the large commercial banks downwards decides how much of this edition of money they will take and distribute according to how profitable they calculate it to be.

 

But what is of the utmost importance to understand is that in the case of money news everyone in the chain acts like the unscrupulous news agent I described above. Everybody is encouraged to withhold editions of the news  and to release them onto the market only when it is in their individual best interests!

 

When you receive any particular edition of money, you either release it into the public by means of spending it or you withhold it by means of saving it. You manipulate the information contained in the note for your own best interests. That is what you are supposed to do- to lie, to spread disinformation.

 

Of course everybody is therefore equally dishonest and so no-one can point the finger at anyone else. The system is based upon everybody spreading corruption and lies. Wouldn’t such a system be inherently unstable and prone to periodic collapse?

 

You betcha!

 

Wouldn’t someone try to contain this corruption and tendency to collapse? Wouldn’t they try to devise a system to mitigate the problem?

 

Yes they would. They would take the logical step of trying to date and order the headlines on each edition so they could be read and understood in sequence. How would they do that?

 

By means of a code that can be read and understood by themselves but importantly, not by you. If you doubt this, take out a currency note and find the identifying  code printed on it, usually referred to as the serial number. Do you know what this code means? If you do not, why don’t you? After all it is supposed to be money issued by a democratically elected government in your name and for your benefit!

 

The purpose of this code is for the people who issued the notes to understand each ‘headline’ and the order it was issued in, but not for you, or anyone like you, to be able to.

 

The system is built on a small minority being able to fully understand the meaning of the money news and the vast majority below them taking part in a game of charades where they lie to each other and manipulate the news supply to each other for the purpose of individual advantage.

 

As a simple illustration of this suppose you had 500 units of currency  and you found out that this denomination of money would be abolished or worthless the next day. What would you do? You would try to go out and buy something with it wouldn’t you? You would try to use the information advantage that you had to pass the problem onto someone else. This is the key to inflation and hyperinflation.

 

We are building up a picture of a central money news/information agency that is issuing news on a regular basis. That news/information is then taken up by the various parts of a supply chain and manipulated and distorted in order to obtain the best possible individual outcome but with inevitable damage to the system as a whole. Assuming that he purpose of the system is to transmit information that is.

 

With this news information model in mind we can now go back to look at hyper inflation. The trouble with hyper inflation is that the seller has no way of knowing which is the most valued up to date piece of information on which to base his decision.

 

This problem presents itself as there being too many pieces of money information in circulation. Discrepancies between the amounts of money evidence offered in any particular argument (trade), force the seller  to increasingly regard all pieces of paper money as being equally invalid- hence the hyper inflation.

 

But the root of the problem here is not validity of any particular trade argument and the money evidence presented in support of it  but the equality between each and all pieces of evidence. Because of this money is actually only credible and valid within a relatively narrow and stable bank of circulation. The sameness of each piece of money information  requires sameness of prediction and sameness of outcome to work.

 

No matter how many paper notes are issued in any financial period they are all  of equal validity to  paper notes  issued  in another given quarter. In other words any episode of  inflationary money printing activity is absorbed into the whole of the financial system and is only ameliorated by later activity.

 

Just as any incorrect news report is absorbed into news production and distribution system as a whole. The system relies on its credibility to absorb the effects of any mistakes and keep people believing in the system even as they curse and dispute virtually all of the specific outcomes the system produces!

 

Since individual savers and consumers effectively act as newsagents, storing the information and only releasing it when it suits the particular interest of the moment, it is inevitable that conflicts of meaning and value will happen.

 

Hyper inflation is an insane babble of arguments that taken collectively can only mean that each individual argument is more or less worthless  since in the last analysis it is all the same argument, that we are in control and everything is alright.

 

Periodically the logic of worthlessness produced by exchanging paper money arguments is expressed by and through a significant number of news agents  going from one door to another  desperately seeking a way out as they sense the impending doom.

 

As the doors are increasingly closed to news hawkers selling bogus information  brands the volume of money seeking any  way out increases exponentially until an overwhelming tsunami of money at any and every exit guarantees it cannot escape. Think of it as a house besieged by fifty street newspaper sellers shouting:

 

‘Extra! Extra! Your House Is Burning Down!’

 

while the house owner cowers within.

 

Disaster.

 

In conclusion I will ask: Is there anything we could do to rectify this state of affairs?

 

And surprisingly perhaps, there is a very simple and very straightforward solution. To date and value stamp money. So that instead of being interchangeable all money is clearly given a value – a ‘sell by date’ at which time it becomes valueless.

 

The closer this expiry date comes, the less the exchange value of the money note. This would solve all the problems now associated with inflation hyper inflation and Monetarism then we could…

 

Oh wait a minute.

 

This form of money already exists. It is called a bond. It is what the banks themselves use when they are dealing with central banks.

 

LISTEN UP

LISTEN UP

LISTEN UP

LISTEN UP

LISTEN UP

LISTEN UP

LISTEN UP

LISTEN UP

LISTEN UP

 

If there is only one thing you take away from all this it should be:

 

THERE IS MORE THAN ONE FORM OF MONEY, THERE ALWAYS HAS BEEN. EACH MONEY FORM SERVES THE NEEDS OF ITS CREATORS. ANYONE CAN CREATE MONEY BECAUSE MONEY IS A COMMONS. MONEY IS A COMMONS BECAUSE IT IS NOT ANY PARTICULAR THING IT IS A FUNCTION- SOMETHING THAT AN OBJECT CAN BE MADE TO DO.

 

GOVERNMENTS MAKE MONEY FORMS TO CONTROL THEIR POPULATION. BANKS AND CORPORATIONS MAKE MONEY FORMS TO CONTROL THE PUBLIC. BITCOIN IS A METHOD OF CONTROLLING ANY SUCKER WHO BUYS INTO IT.

 

PRIVATELY ISSUED DEMOCRATISED MONEY IN THE FORM OF DERIVATIVES IS THE MOST COMPREHENSIVE ATTEMPT EVER DEVISED IN HISTORY TO CONTROL THE WORLD POPULATION DIRECTLY THROUGH THE PRODUCTION AND DISTRIBUTION OF A NEW MONEY FORM.

 

 

 

 

 

 

 

 

 

 

 

 

BLINK: Apr 12 2016

 

eye

Nose on your face..

 

In this piece Mr Edelman says:

 

‘Remarkably, today the derivatives positions held by the large banks approach 10 times those of 2007-2008. In four banks alone, they exceed the GDP of the entire world. This is the interesting consequence when unchecked risk management rests in bankers’ hands.’

 

Is this a co-incidence? If it is not a co-incidence, then it must be intentional musn’t it? What could be the intention behind creating ten times as many derivatives as there were in 2008?

 

It seems that central banks and politicians must want lots of derivatives what else could this mean? Why would they want lots of derivatives? What is it about derivatives that central bankers and politicians like? If you visit USE regularly I think you already know…

I’m the real-life Gordon Gekko and I support Bernie Sanders
Asher Edelman

The potential for a depression looms on the horizon. The Vermont senator is the only candidate who can stop banks from spiraling out of control again

 

http://www.theguardian.com/commentisfree/2016/apr/12/real-life-gordon-gekko-supports-bernie-sanders-wall-street-banks-regulation

 

Things Fall Apart..

 

This diagram shows in a very clear and succinct manner the point I have been making in Vector History about capitalism and financialisation DISINTEGRATING society..

 

@ian bremner

 

The best explanation so far

 

 

Head-Brick Wall

 

American Trotskyists can’t seem to understand why information like this doesn’t provoke a move towards ‘class’ politics but instead provokes a move towards what they call ‘identity’ politics. Until they address the arrival of CULTURAL CONSTITUENCIES, they are going to have to continue stumbling around in the dark..

Life expectancy gap between US rich and poor widens
By Jerry White
12 April 2016
http://www.wsws.org/en/articles/2016/04/12/life-a12.html

 

Roll over
Reuters coverage of the Syrian theatre of war just seems to get more ridiculously lopsided by the day..

Syria’s Assad shows no willingness to compromise
CAIRO | By Samia Nakhoul

 

http://uk.reuters.com/article/us-mideast-crisis-syria-insight-idUKKCN0X50O0

 

Cake or Ha’penny
 

You can have millions of pretend jobs or you can have productivity growth but you can’t have both at the same time…

Britain suffers biggest downturn in productivity since the financial crisis
Figures a bitter blow to hopes the UK is finally escaping the stagnation that has bogged down the country since the banks crisis

 

http://www.independent.co.uk/news/business/news/britain-suffers-biggest-downturn-in-productivity-since-the-financial-crisis-a6974011.html

 

Uppity
 

This black gentleman might not quite be on the ball about everything, but he is having a go at thinking about Eurasia etc., so good for him. He seems to me like a reasonably nice, relatively harmless type.  But oh dear, check out the response..

 

Imagine a world without whiteness

Professor Calls For “Whiteness” to be “Abolished”
 “We need to….demolish the whole concept”

Paul Joseph Watson
Prison Planet.com
April 6, 2016

Professor Calls For “Whiteness” to be “Abolished”

 

Living History

 

This is what ancient Greek democracy actually looked and sounded like. It wasn’t Lawrence Olivier and Marlon Brando walking about in bedsheets making speeches over Gina Lollobrigida, it was this: Rape, torture, cruelty and murder. All over Athens, all over Sparta, all over. Next time someone tries to give you the spiel about how noble and great democracy was/is, show them this….

 

‘House of horrors’: Police find apparent sex slave chained to stripper’s pole in Detroit home

 

By Peter Holley April 6 Follow @peterjholley

 

When police searched the run-down, two-story house on Tuller Street in Detroit, they found something that took even longtime cops by surprise: a woman chained to a stripper’s pole, with a padlock around her neck.

 

https://www.washingtonpost.com/news/morning-mix/wp/2016/04/06/house-of-horrors-police-find-apparent-sex-slave-chained-to-strippers-pole-in-detroit-home/

 

 

 

Animal Crackers In My Soup

 

tomato soup

Andy Warhol is famous for predicting that in the future everyone will be well….famous for 15 minutes. This should rightly be considered as the pre-eminent definition of the Democratisation Of Celebrity.

Even more perceptive, (although lesser-known), is another Warhol dictum: ‘Art is what you can get away with’.

In the United States of Everywhere money, like art, is also what you can get away with. So in a sense, art is money. That is to say, there is a clear parallel between the way that both art and money are produced, and a correspondence between what art and money can do- their functionality.

This brings us to Andy Warhols famous Campbells soup tin paintings.

On the surface, it appears that Warhols soup tins are something of a satirical comment on mid 20th century capitalism and consumerism. But if we look deeper and within the context of Warhols background in media, design and advertising we see that these images are something much more profound than mere satire;   an exploration and meditation on the production of authority and persuasion.

Authority is a fundamental component of persuasion. This seems to be counter intuitive. Authority is associated with force. Persuasion is generally regarded as the counterpoint to force; force is resorted to when persuasion fails. But persuasion and force are two points on the same spectrum.

Persuasion rests upon the authority of the persuader. Authority is the expression of the validity of power. In effect, you are persuaded by the force of an argument, or you are compelled by the force of an individual or organisation if the argument fails.

The nexus between Authority and Persuasion is the form of a proclamation. The proclaimer makes a statement which is then tested by subsequent events. In this sense we can think of a proclamation as a kind of contract between the proclaimed and the future, or the proclaimed and reality.

A proclamation is a statement to the effect that: ‘Things should be this way’.

Should the proclamation turn out to be in accordance with the future or with reality, the authority of the proclaimed is enhanced. Should the proclamation turn out to be at variance with the future or with reality then the authority of the proclaimed is diminished.

This all might seem a little abstract, so let’s return to the practical example of the soup tin paintings

The Naked Lunch

naked soup

Warhols soup tin paintings begin with an actual tin of Campbells soup. No soup-no paintings. More specifically, no Campbells soup, no paintings.

A tin of Campbells soup is made up of two separate components: the tin of soup itself and the label on the tin which describes what it is. After differentiating between can and label we can understand that Warhol was primarily interested in soup tin labels as opposed to tins of soup. If Warhol was actually interested in tins of soup as opposed to labels, he would probably have embarked upon a career as a chef as opposed to that of an artist….

Having isolated the Campbells soup tin label as the point of interest we can examine it in more detail. It is composed of a number of graphic elements. It is important to understand that each of these elements fulfils a specific purpose.

The first of these elements is the Campbells logo. This logo is exactly the same on every tin of soup. There is a reason for this. Consistency of this element represents consistency of intention, or more precisely consistency of contract. The meaning conveyed by a brand is: You know what you are getting; this is your guarantee.

The second of these elements is the name of the specific soup- the contents. This tells you what is actually inside the tin and varies from can to can of soup. This is also a form of contract. The fact that you can rely on Campbells soup company to produce consistently the same quality of soup that differs only in type is the substance of the contract that you have with the Campbells company.

Imagine that you purchased a tin of ‘chicken noodle’ soup only to find inside the actual tin was ‘black bean’ soup. In other words, imagine what the effect would be if the contractual elements on the outside of the tin can differed from the contents on the inside of the tin.

It Does Exactly What It Says On The Tin

In the event the soup you thought you were getting did not live up to either the quality or the description on the label then the Campbells brand would be diminished. In other words it’s value would fall.

Both the Campbells brand name and the soup type description are in fact proclamations. They are contractual proclamations made on the basis of the brand authority that Campbell soup company has. They are proclamations tested at the point of future consumption.

If you doubt this argument is correct, imagine buying unlabelled tins of ..whatever from a discount store. Could you sue the manufacturer for breach of contract if it was the ‘wrong’ flavour? Could you sue manufacturer for breach of contract if it were below desired levels of quality?

No, you couldn’t- no contract exists to be breached because the manufacturer has not specified the terms of any contract in the form of a label. Effectively the contents of the tin would have no value.

The Proof Of The Pudding

The test of the Campbell soup company proclamation comes in the opening of the tin and the eating of the contents. Either the contents live up to the label or they do not.

A money currency note fulfils essentially the same function as a Campbells soup tin label. In the same way that a soup tin label has a brand name so currency note has a brand-name; that of the issuing central bank.

And in the same way that a soup tin label has a specific flavour, so currency notes have a corresponding specific interest rate.

The brand is what all Campbells tins of soup have in common; the flavour is what they have in difference. The central bank is what all currency notes have in common, the interest rate is what they have in difference.

A bank note issued at 25 basis points is a different flavour from one issued at 50 basis points! They have the same brand label, but they are NOT the same soup !!

You test the soup proclamation by opening the tin and eating the soup. You test the central bank proclamation by bearing the money and using it to turn a profit.

If the soup tin company product turns out to be rubbish you look for an alternative, which forces the company to change its recipe. If the currency notes issued in any particular quarter at any particular interest rate prove incapable of producing a profit you also look for an alternative forcing the central bank to vary the interest rate.

The Plot Thickens….

So far so good.

Then along comes Andy Warhol who leveraged the meaning of the Campbell soup tin label and the authority of Campbells. (Remember here that the meaning of the Campbell soup tin label is a contract). By means of his soup tin paintings Andy Warhol produced what was effectively a derivative of the Campbell soup tin label.

This is one of the hardest things to understand about derivatives: the relationship between a derivative and the nominal subject of the derivative:

There is no direct relationship between a derivative and the subject of activity of that derivative. The derivative, as its name makes clear is one step removedderived from its subject.

For instance, there is no direct link between the infamous Mortgage Backed Securities and the housing which they purport to represent (as everyone found out to their cost in the Credit Crunch).

This lack of a direct link is precisely the basis on which derivatives can be said to be money and money can be said to be equivalent to derivatives.

WHEN YOU CAN’T SPECIFY (LEGALLY RESOLVE), WHAT THE RELATIONSHIP BETWEEN A CONTRACT AND THE SUBJECT OF THAT CONTRACT IS, THAT CONTRACT IS A FORM OF MONEY.

THIS MEANS MONEY IS INTRACTABLE.

Everyone is aware that there is no longer a link between silver and gold and the five pound note in your pocket. But most people still fail to understand that there is no direct link between the 5 pound note in your pocket and the wealth of the British economy. You cannot take a 5 pound note into the bank of England and claim a portion of ‘Britain’ on the basis of the contractual ‘promise’ made on a 5 pound note.

This absence of direct relationship is the basis for a currency notes which are a generalised contract being money.

Does this mean then that there is no relationship at all between activity based on a derivative and the subject of that derivative? In fact, the subject of a derivative is used as a trigger to activate a particular clause in a derivative contract in the same way that a horse race is used to trigger a particular clause in the betting contract between a punter and a bookie.

The bookie leverages the authority/power of the winning horse to run a book on the race. This is the essence of a proclamation.

The race itself can be regarded as a commons. A horse race is an open, common event. Everyone has equal access to it.   Bets are money/derivatives based on that event.

The economy/society is an open series of events. Money/Derivatives are generalised contracts like betting slips, based on this series of events.

Andy Warhol leverages the power of the Campbells brand which can also be regarded as a commons. The Campbells brand necessarily works on the basis that a large number of people recognise it and its significance, whether they actually buy Campbells soup or not.

They recognise the significance of the label and the contract that the label represents. This is related to, though separate from the soup itself. The Campbells commons is separate from the soup- nothing to do with the physical soup. It is to do with the label, the contract and the meaning. The brand value; paid for by advertising and found on supermarket shelves.

The soup is private, the label is a commons.

The Campbells label contract is ubiquitous. Ubiquity is always a characteristic of a commons. As I explain on previous occasions the appropriation of all or part of a commons is the fundamental process of democratisation. Democratisation- the process of creating a Democracy, works by stealing a commons from the people. That is what democratisation is and always has been.

The reason that the soup paintings have ‘cultural power’ is the ubiquity of the Campbells brand. Andy Warhols soup tin can paintings based on the soup tin originals are a private appropriation of cultural commons.

Who is appropriating this commons?

Andy Warhol and the wealthy patrons of Andy Warhols art. Andy Warhol is issuing a proclamation based on the Campbells Soup Tin Contract (the ‘Andy Warhol proclamation’), and his art dealers and patrons are trading on that proclamation. Andy Warhols reputation and value as an artist (like an issuing bank) is derived from the reputation and value of the Campbells Soup Co.

The use that this derivative will be put to is considerably different from the use that the original label contract was put to And the effect of this is that an Andy Warhol painting of a tin of soup it’s worth a hell of a lot more than the tin of soup that it derives its value from.

Still, there is nothing here that is fundamentally unstable. The problem arises when the paintings of the soup cans no longer actively correspond with the with the reality of the soup cans they are based on. So for instance, if Andy Warhol produces a painting of ‘mosquito wing and belly button lint’ flavoured soup, this clearly does not correspond to any soup that exists in the real world.

In other words if the Andy Warhol painting is judged to be inauthentic then its value or the value of the proclamation it makes will be reduced, possibly to nothing.

And this, believe it or not, was the basis for the credit crunch that destroyed so much of the western economies since 2008.

Before financialisation managed to establish a death-grip on the worlds developed economies, the production of currency proceeded more or less more or less along the lines that the Campbell soup can company produces soup.

Every three months or so central banks produced soup at a proclaimed interest rate, (equivalent to a flavour), and people decided whether to buy that soup or not.

Then along came Andy Warhol (derivatives creators and traders) and Andy Warhol chose Campbells soup to be the subject of his painting practice. Note that there is no direct relationship between soup production and painting production, there is only an indirect derived relationship.

Financial institutions decided that housing would be a good area to base their derivative production on. Just like Andy Warhol, it was simply a matter of choice..

After a while, as they became more confident, financial institutions began to imagine all kinds of strange flavours of soup in the images they produced. They could do this because no one dealing in these images was actually going to eat any soup or have to taste it. Unlike the Campbells soup company there no   constraint on the about what flavour of soup got the financial institutions could produce.

And this went on until 2008 when those who dealt with and owned this new form of art became increasingly worried about the validity of their purchases. This can and does regularly happen in the art world of course. Some art appreciates in value and some doesn’t.

Now imagine that Andy Warhol found that his ‘mosquito wing’ flavour soup tin paintings weren’t being well received by the critics or selling so well. So he contacts the Campells soup company and tells them that they need to actually start producing mosquito wing soup so that he can point to the real tins on a supermarket shelf and prove that his vision is valid.

‘Why In Gods Name would we want to do that?’ asks the soup company

‘Because I am a very famous artist’ says Andy Warhol

‘The people who buy and trade my art are very rich and very important. If they lose money on my paintings and go bankrupt this will bring the entire economy down. In other words, I am Too Big to Fail’

And that is more or less what actually happened in Quantitive Easing!

For the past seven years, like Oliver Twist and the foundlings in the workhouse, savers have been put on an enforced diet of Campbells Very Thin Gruel. Meanwhile, the sick and the old have been treated to Campbells Good Old Fashioned Poverty Broth.

Developing economies have enjoyed Campbells Hyper Liquidity Hot Money (a spicy concoction that burns going in and burns even more at the other end)… And for the upper echelons of the market it is Campbells Extra Thick Full Fat Cream Flavour.

And the reason that the shelves are full of this stuff and are going to remain so for the foreseeable future, is so that the derivative soup tin paintings look authentic and the proclamations they made are valid…

Bon appetite.

 

 

Pyramid Schemes Or Vector History Or I’m Ready for My Close Up Or There is no such thing as a Disintegrated Society Or Is There?

The structure of pre-capitalist societies is often depicted as a Hierarchical pyramidal structure with the mass of people forming the widest part of the pyramid at the bottom and then progressively smaller echelons forming each tier as it moves towards the top. We can call this a Standard Hierarchy Model and make a simple diagram of it something like this:

shm

 

In this model wealth and power moves upwards from the bottom of the pyramid to the top and wealth and power in the form of patronage is redistributed down from the top to the bottom. In establishment rhetoric this is portrayed as the ‘classic’ ‘oppressive’ state structure.

 

Establishment history argues that this oppressive state structure belongs both to our pre-capitalist past and contemporary non capitalist societies such as North Korea, (which in Establishment ideology are essentially the same thing). But Establishment history argues that in contrast to all other types of societies, present and past, the pyramid structure is modified within capitalist societies.

 

The crudest Establishment description of hierarchy modification is in the Inverted Hierarchy Model. This model shows the mass of people benefiting from capitalism relatively and absolutely more than any other echelon in the pyramid. The argument is that the lower down you are in the oppressive pyramid model the more you benefit from the Inverted Hierarchy Model. We can show it like this:

ihm

In this model it is argued that power ‘democratically’ flows away from elites, up to the mass of people. Then patronage is redistributed down from the mass of people to the elite through the democratic process. As proof of this redistribute process the Inverted Hierarchy Model argues that the mass of people receive invisible, intangible social goods. These include the right to be an individual, the right to express opinions in free speech, sexual freedom etc, As an added bonus these riches get progressively larger and more encompassing with every passing year!

 

This Inverted Hierarchy Model is obviously overtly ideological and tends to be used mostly in Anglo Saxon societies and in particular the USA. But that doesn’t mean that is has no basis in history and culture. The objective is to try to understand what basis it actually has..

 

A more subtle Establishment argument is to agree that we live in a base heavy pyramidal structured society but to argue that who is at the top of the pyramid and who is at the bottom regularly changes over time. In other words the structure remains constant but the composition of the pyramid is open to change. This model accepts the implied need for the state to guarantee some kind of equality to mitigate the nature of the pyramid but characterises this as the need for equality of opportunity.

 

In contrast, anti Establishment arguments emphasise the fact that the structure of the pyramid remains constant irrespective of the composition of any particular echelon. Any movement of elements within the pyramid is limited and inconsequential. It follows that if the pyramid is incapable of internal change, change must come from outside.

So the basic mainstream Establishment position is:

The Capitalist form of society is a pyramid but it differs from previous social pyramids in that its composition changes and will continue to change over time.

The anti Establishment position is:

The pyramid is essentially the same as previous pyramids, has not changed and will not change until political force (usually from below), makes it change.

 

On these two essential positions the matter rests and has rested for some time. But it is possible to conceive of social structure in a different, dynamic way. This dynamic understanding can illuminate the observation people understand the pyramid structure not in abstract or random ways, but in ways that are exactly the inevitable outcome of the relationship between elite and the rest of society and the way this relationship has developed and been subjectively experienced.

 

Instead of the Establishment series of ongoing pyramid ‘snapshots’ or the opposition ‘oil painting’ of a single static pyramid, we can imagine the pyramid form instead as a dynamic vector on a graph representing a flow of wealth and power from the base of the hierarchy to the top and then back down again. This model integrates movement into the basic model itself. It is the difference between the dissection of a cadaver and studying the flow of blood through a living body.

 

Lets go back and look at the classic ‘oppressive’ pyramid structure from the perspective of this Hierarchical flow model. It looks like this:

hsm

Wealth and power moves upwards from the ‘peasants’ at the bottom to the ‘King’ at the top and is then redistributed by the King back down through the lords and barons and so on until a residue of wealth reaches the bottom again. In this model the elite is the mechanism of redistribution and the ‘King’ is the personification of the elite. We are taught that this is how medieval European society or contemporary non capitalist society such as North Korea is structured.

 

The fundamental Capitalist critique of an oppressive state structure like this is that the ‘King’ collects wealth and power from the people and then redistributes it to the power structure that protects him and the echelons below him from the people he collects wealth from in the first place. In other words the process of redistribution reinforces the redistributive structure in place and makes it impervious to change. This can be called a Force System.

 

The people pay to the King and the King pays the bodyguards and so on downwards thought society. Redistribution and force are intertwined. Wealth is redistributed throughout society through the Force System.

 

This process is characterised as a ‘crony system’ by Capitalists. It is also often misrepresented as a Forced System as opposed to a Force System. Capitalists argue that because redistribution is done through the force system it is ‘forced’ – it cannot be to any extent voluntary. They argue that this is morally unfair and/or economically and politically inefficient. They argue that it must inevitably collapse, and if it doesn’t decent people should work to bring about that collapse anyway and by any means necessary.

 

You should note that Germanic capitalist ideology viscerally detests Force System   because it does not reward the personal character traits that German culture and personality  admires and promotes.

 

The Fate of Kings

 

In a fully ‘feudal’ society everybody is effectively employed by government. Your economic boss is very often literally the general who leads you to war. And this political/economic model is reproduced right up to the very top. The commercial and the political is entirely integrated and entirely consistent , (which is to say that the logic of society is reproduced throughout society to the same extent). All of society is integrated and consistent.

 

The king is the guarantor of the system and the network. Consider the fate of Gaddafi in Libya and Ceausescu in Romania. Consider also what is in store for al Assad if his enemies get their way. This fate of kings is not random or happenstance. The fate of the King is absolutely entwined with the fate of the redistributive system.

 

Rather than a feudal society It would be more accurate to call this an integrated society because economics and politics are fused and every echelon is fused to the one above and below it by means of the redistributive system.

 

The popular capitalist ideological critique is that systems like this are static. Everybody is in a place within the system. Nobody can be outside the system and nobody can move within the system. Of course if they see any evidence to the contrary of their assertions they simply ignore it.

 

This criticism fits within the capitalist list of accusations which run from popular to true in descending order:
It is static

It rewards ‘bad character’

It is dangerous for ‘the people’ (which really means it is dangerous for people like us!)

 

If the capitalist system was the opposite of an integrated society it would be a disintegrated society wouldn’t it ? Could there be such a thing as a disintegrated society? A society like this would be a society that is defined by the belief that: ‘There is no such thing as society’. Could such a society exist? If so how could it exist?

 

With the advent of Capitalism instead of one income and dispersal system there are now two systems within society. Where there was only the integrated feudal political system there is now also a separate capitalist ‘economic’ system that mirrors the feudal political system. This can be called a Split Stream Model because there are two separate streams of income and redistribution. It can be shown like this.

ssm

Wealth and power rises and falls on a ‘commercial’ stream (blue) and a parallel political stream (red). Both streams are integrationist which is to say they concentrate wealth upwards towards the elite and then redistribute it.

 

Notice that this model does not differentiate between a ‘feudal’ and ‘capitalist’ elite. There is no need to try to manufacture a fundamental political or cultural conflict between the feudal and the capitalist elite in this model. They have separate income streams and dispersal networks but they are not fundamentally different.

 

This is in stark contrast to capitalist establishment history, (and Establishment anti-Capitalist theory!), for which it is very important to claim that capitalist elite are different from the feudal elite, because they have been transformed by an intangible, magical process called ‘Enlightenment’

 

I’m Ready For My Close Up

 

This Split Stream Model can be regarded as the basis for the idea of a ‘Golden Age of Capitalism’. In as far as Capitalism can be said to be progressive, the justification for it lies in this model.

 

The capitalist commercial blue vector shows Capitalism concentrating power upwards through the capitalist production process and then redistributing wealth and power back down through the very same capitalist production process. It should be very clear that unlike a feudal system wealth and power are NOT redistributed back to the people they had been extracted from. And wealth and power are NOT redistributed to everyone throughout society. But they are redistributed comprehensively nevertheless.

 

Imagine yourself standing on any point on the blue vector in other words, imagine yourself as part of the commercial vector. As part of the process, from your point of view Capitalism really does redistribute wealth and power; you can see it happening, it is happening to you. You are part of an alternative to the feudal redistribution system.

 

This is the form of society that traditional (sometimes ‘libertarian’ and even Neo Conservative) Anglo Saxon history focuses on. This is the basis and justification for Neo Conservative ‘trickle down’ rhetoric and at the same time the reason for its ‘Libertarian’ opposition returning again and again to the period of the American Constitution, and even sometimes the French Revolution.

 

We can look again at the Inverted Pyramid Model from this perspective. For someone at the apex of the blue vector the pyramid is indeed inverted.. power and wealth comes to you and you redistribute it. And that is why this model forms the basis for all pro-market, particularly Saxon rhetoric. Think of it as a snapshot of Germanic capitalism in early adulthood; fresh-faced and looking at her very best. It’s the same snapshot that Capitalism still uses on her Facebook page, although it’s a long time since she looked anything like that….

 

There are two systems co existing, but one of them has a clear future where the other does not. A new Divergent Split Stream Model begins to assert itself where economic wealth and power is no longer distributed back down through the lower echelons. The feudal vector system comprehensively redistributes wealth. The capitalist vector no longer does.

What this means is that in effect the capitalist vector is getting its government for free….It can abandon its obligations outside of the state. That model looks like this:

dssm

As a consequence of capitalists abandoning any social obligations they may have felt they had, the feudal system progressively impoverishes itself in comparison with the capitalists. This is effectively the moment of overt capitalist revolutions, the moment when ‘feudalists’ and ‘capitalists’ understand the true meaning of what is happening and what its inevitable consequences will be. Then comes a decisive political battle. Ironically it is when capitalism stops actually being progressive and revolutionary that an actual capitalist revolution becomes necessary!

 

And now things get really interesting.

The post revolutionary redistribution system bypasses the elite entirely. This is the Split Stream Welfare Model and it looks like this:

sswm

The top echelon elite have taken themselves out of the redistribution process altogether but they are still protected by it. The elite are effectively disintegrated from the system. The difference between an old fashioned ‘oppressive’ pyramid and a modern system is that the people used to pay wealth and power to the King to distribute to his bodyguards. Now they pay to the bodyguards directly. This is called democracy. The system is streamlined.

 

And if the red vector looks familiar from the models above. It should because it is the same one.

Now the Split Stream Welfare Model reproduces the feudal distribution system, but outside of the elite. That is what ‘welfare’ redistribution actually is; a reproduction of the classic feudal non capitalist redistribution system but at a lower level of society. If redistribution is really feudalism, is the left really ‘feudal’?

You betcha!

So what is a ‘progressive’ then?

‘Back To The Future’ Next time….

The Opposition vs. the oppositions

Imagine a constitutional democracy with two political parties and a permanent electoral majority in favour of one of those two parties. Since only one of the parties could ever be elected to power can this country can still claim to be a democracy?

 

In this hypothetical situation the permanent opposition still has a role to play in questioning and challenging the assumptions, ideas and policies of the majority party. If they do this in a coherent way that represents the interests and opinions of the minority, systematic opposition can force the majority party to make ‘better’ decisions and the majority in society to be aware of the ideas and opinions of the minority.

 

By means of constant and aggressive opposition the majority can be exposed when it has failed in the conception and execution of policy. The population at large can be made to realise when the majority party is incompetent and/or corrupt and encouraged to respond accordingly.

 

Under this ‘adversarial’ model the claim can be made that democracy is possible even if electoral maths do not support a regular change of government. But this system only works to the extent that the opposition is capable of, and committed to, systematic opposition to the majority. In other words it is only possible if the opposition is sufficiently organisationally and even ideologically, separate and opposed to the majority*.

 

But that is clearly not what we have got now in developed capitalist societies. What we do have is often understood as a Controlled Opposition model -a term usually associated with Conspiracy Theory. Head down this road and before long you are in the company of the Illuminati and Worldwide Zionism etc.

 

But conjectures as to the causes of failure of opposition such as these are really simply the expression of not knowing what has changed and how it has changed over the past four decades.

 

A serious discussion of the possibility of controlled opposition leads to two closely related questions:

To what extent is opposition ‘controlled’? and

How is opposition ‘controlled’?

 

The key to answering these two questions lies in understanding the dovetailing of the subjective experience of opposition and the objective needs of the system.

 

The objective needs of the system and the subjective experience of opposition have clearly changed. The way that political parties relate to the public and the way this relationship services the overall polity are clearly not the same as they were in the last century. So the central questions are refined to: What is the nature of the difference between now and then and: What drives it?

 

The Objective Needs Of The System.

 

The 1970’s crisis led to the merging of state and capital in the form of Monetarism and the beginnings of Financialisation. The victory of Monetarist/Marxist theory made permanent political control of the economy through control of the money supply the central plank of economics. The Anglo-Saxon world put all its eggs in the state managed capitalism basket.

 

This approach had an obvious problem though. Since total power over the economy was now vested in the state, if a genuine democratic opposition*(see above) did manage to get control of government it would potentially control everything. It could do incalculable damage to the interests of the elite.

 

This point is well Illustrated by the saga of Quantitive Easing and the ‘printing of money’ to support post 2008 collapsing financial system. Once the politically motivated mass production of money (as advocated by Monetarism), is accepted as a valid economic strategy it is only a matter of time before some bright spark advocates a ‘Peoples QE’ to benefit ordinary people instead of the banks.

 

A people’s QE of course, would mean the effective end of the system… it follows that such a movement can never be allowed to come to power. So in as far as a highly centralised system such as state managed capitalism is vulnerable to democratic political takeover a solution has to be found.

 

The solution to this centralisation problem was the Democratisation of Money and the creation of the Permanent Credit Economy. The Democratisation of Money would take care of the international element of the new system and the Permanent Credit Economy would take care of the national element.

 

The Democratisation of Money is the creation of an international economic alternative monetary system to the nation state system. It is stateless money. No matter what happens to any, or indeed every, state issued currency, the use of Democratised Money in the form of derivatives and other financial instruments means there is a safe haven for international finance.

 

At the same time The Permanent Credit economy creates a decentralised planning system; this is planning through bank credits to control national economies. (This model of decentralised planning through banks is subscribed to by economist Michael Hudson)

 

Now a new decentralised system is nearly in place and successfully stabilised, which means all the eggs are no longer in just one basket. Now there is some room for flexibility. This means that objectively for the first time in four decades some form of opposition is possible.

 

This describes the objective reality of opposition: The amount of opposition in any society at any given time is the amount of opposition that can be afforded by that society. The presence of internal opposition is an expression of power and stability. When a society is fundamentally threatened, as at time of war, it will allow no internal opposition.

 

But the restructured system we have now necessarily means that the nature of re-emerging opposition is fundamentally changed. How is opposition changed?

 

In the transition period after traditional opposition was discarded in the 1970’s and before Democratised Money and the Permanent Credit Economy were bedded down, it was not objectively possible to have any kind of opposition. It was just too dangerous. The economy and society were effectively on a war footing.

 

Beginning with Reagan and Thatcher, through Clinton and Blair and so on, traditional adversarial opposition has been effectively ended. But it is vitally important that you understand that not just ‘left wing’ opposition was done away with –  ALL opposition was done away with.

 

Under Blair and Clinton, ‘right wing’ opposition was decimated and traumatised just as violently as the ‘left wing’ had been under Thatcher and Reagan. Look back to the rise of Newt Gingrich and the emergence of the Tea Party in the USA, look back to the Conservatives in Britain under Hague and Howard, and you will realise that ‘right wing’ parties on both sides of the Atlantic basically had an extended nervous breakdown.

 

Traditional adversarial opposition of the kind I describe at the beginning of this piece requires a legal framework, an open media and society. But after the 1970’s the media became overtly partisan and concepts of legality were revised (e.g. Glass-Steagall repeal and liberal military intervention) so as to be unrecognisable. This affected ‘left’ and ‘right’ in opposition equally.

 

The Subjective Experience Of Opposition

 

Which brings us to the Subjective Experience Of Opposition and the rise of cultural constituencies. There is no societal support mechanism for one unified, critical opposition of the kind I described   any more. This means that existence as adversarial opposition is no longer a viable strategy for mainstream political parties in the Anglo-Saxon world. It means that a party has to get elected at any cost.

 

With media and broader society no longer willing to support traditional opposition the cost of failure is too high. From this perspective you can understand the subjective experience and motivation of Clinton and Blair…The great move towards the ‘centre ground’ started when politicians like Clinton and Blair became conscious of the new reality; institutionalised adversarial opposition was over. You could no longer justify your party’s continuing existence on that basis. Opposition was now to be redefined as meaning solely understudy to government; to be a government in waiting.

 

So how does Jeremy Corbyn and Bernie Sanders and Alexis Tsipiras and of course Donald Trump, fit into this description of the world ?

 

First of all they all clearly operate in stark contrast to the ‘understudy to government’ team. Compare Corbyn to his rivals in the Labour Party leadership race; compare Bernie Sanders to Hilary Clinton or   Trump to his republican rivals.

 

Trump, Sanders and Corbyn all represent Cultural Constituencies as opposed to mainstream understudy politicians. Mainstream politicians are seen as shifting, empty and vacuous, in thrall to corporations, whereas cultural constituency representatives are seen as the opposite of this; vital and authentic. This is because Cultural constituency representatives espouse real, absolute moral positions as opposed to the governmental compromises of understudy politicians.

 

This works because it is not as if the compromises required for national government are even seen as being that practical by the mass of people anymore. Most people understand that international finance and trade have comprehensively restricted the ability of national politician to act freely in pursuit of their goals, whatever the nature of those goals might be.

 

From this point of view, the approach of Jeremy Corbyn is not only morally superior, but has at least as good a chance of actually achieving something as the compromises of a Tony Blair.

 

There is much more to say about all this but for now the main message to take away is that since the elite have successfully created a decentralised financial/political system we will have many decentralised oppositions.

 

And the nature of these oppositions is that they will subjectively be cultural constituencies.

 

Because that is what the new world order can objectively support.