Envelopment
Alfred Marshall titled his main work "General Principals of Economics", which was a revolutionary title in those days, since economics was not really a science. The proper term was 'political economy', since it is the purpose of government to manage the value of money (Karl Polyani, "The Great Transformation"). However, Adam Smith did show a universal correlation between gold and grain, in the relatively constant proportion of the weight of gold required to purchase a given weight of grain. Still, John Maynard Keynes, the person who edited Marshall's book, also wrote a book outlining the problems with interest. He showed that interest does not find a natural or functional level in the marketplace, since lenders, if they can find anyone to lend money too, will have no problem charging more interest than the profit that can be made. So long as there is money in the economy, the interest rates will rise. As interest rates rise, inflation occurs and money becomes more scarce, effectively increasing the 'price' of money. As money gets more scarce, it commands a higher interest rate. The negative feedback cycle goes on and on like that untill a depression happens to correct it. Boom and bust economies are not favorable climates for capitalist ventures.
Keynes proposed that the government regulate the rate of interest in order to keep the rate just below the rate of profit, so money is more profitable to invest in physical capital rather than lend out. That control has been squandered away, and all that is left of it is a 'discount rate'. Banks today carry an astronomic amount of debt because there is a hopelessly naive population of credit card holders who do not comprehend that the interest on their credit cards represents a higher price and is the primary source of inflation (war spending is the other main source, and its current influence is in fact growing). Hence, the banks are more than willing to borrow money at the discount rate and collect 30% interest on it from the consumer/wage-labor base. The consumer/wage based labor, however must be maintained at a functional level or there is insufficient consumption to sustain capital. The short term fix is to import from lower wage countries, but without a functional wage base, the debt fix can only be short term as well. The correction to this interest based inflation can come from no other place than the profits of capital.
From the perspective that the boom and bust cycles of the 19th century economy were in fact entirely the result of monetary policy, it becomes suspect that Alfred Marshall and John Maynard Keynes were both involved in a program of sustaining this disfunctionality and not, as it seems, remedying it.
How do I get that?
First, Marshall declared political-economy to be in fact a science and independent of politics. That strategy disuades investigators from pursuing the political-economy angle any further. Keynes came along and instituted the sophistical solution of managing the interest rate, although, he well knew that monetary interests held a powerful sway over governmental policy. Hence the interest rate remained indirectly under the influence of the major banking families. We know Keynes was aware of the powerful interests because he was an influential economist in those days and was physically present in meetings with them.
The result is that the climate was set for the common people to be rendered ignorant of the functioning of government , especially due to the fact that this was the era of the populist revolt, and popular power had become rebellious, at least where the 'land store' owners were concerned. We find at this point in U.S. history a diminishing of the awareness of the works of Livy, Machivell, and Virgil, not to mention the founding fathers. And we also see economists such as Marx and Ricardo becoming demonized and marginalized. Notice today, there are works about founding fathers promoted everywhere, and they are in fact highly distorted, but little promotion of the actual works written by the founding fathers. A lament by James O'Connor in the journal "Capitalism Nature and Socialism", I forget which issue, but it was several years ago, complained about how many individual writers on Marx had never even read "Capital vol.I", 1867 (actually, the criticism is still valid if you read the comments at the Amazon link ). Of the five copies of John Adam's "Defence of the Constitutions of the Governments of the United States in Response to the Letter from Mr Turgot to Dr Price", in this State available to the public, the copies I took out of the library had not been read for over 20 years. This is the work set out for the Aristocracy to read, as it was basically the 'teachers guide' to the Federalist papers. It is the principals behind the functioning of the United States as a liberal republic.
This censorship was brought about by powerful interests in Washington who set about producing the textbooks for the American public to learn. All allusions to democratic power were removed from public consumption and the principals of liberty, republicanism and even capitalism were distorted into mirror images of what they really are over the past century.
The vast array of educational materials, entertaining novels with their smidgens of disconnected facts, educational television and even this internet, combined with a steady diet of distractions, have led the American people to the brink of a modern slave state. In a slave state there are only two classes and not three, land owners are essentially microcosms of governance and then there are the slaves or peasants who are the governed. There is no capitalist class necessary when commodities are commanded into being.
This would all add up to a pleasant read under the heading of 'conspiracy theories' if not for the fact that the end of fossil fuels is on the horizon and with it the need to coopt manual labor to replace it. Capitalism in its present state rose to predominance in the market economy with the emergence of fossil fuel power, as outlined by many, including Marx in "Capital volume I", although it was closer to the beginning of the 18th century with Thomas Newcomen and the invention of the heat engine, rather than at the end of the 18th century when James Watt invented the steam engine. The raw materials that fed the latter engines was produced on the backs of slaves, and the labor that worked the factories was no better situated.
It seems that the powerfully ignorant have decided to ignore sustainable energy options in favor of a return to the days of slavery and drudgery. Capital's last and best chance to win this old game is to invest wisely and heavily in renewable energy technologies. Remember, everyone passes the buck, but one should be smart enough not to pass a buck up.
VOTE: U. S. CAPITALIST PARTY
Keynes proposed that the government regulate the rate of interest in order to keep the rate just below the rate of profit, so money is more profitable to invest in physical capital rather than lend out. That control has been squandered away, and all that is left of it is a 'discount rate'. Banks today carry an astronomic amount of debt because there is a hopelessly naive population of credit card holders who do not comprehend that the interest on their credit cards represents a higher price and is the primary source of inflation (war spending is the other main source, and its current influence is in fact growing). Hence, the banks are more than willing to borrow money at the discount rate and collect 30% interest on it from the consumer/wage-labor base. The consumer/wage based labor, however must be maintained at a functional level or there is insufficient consumption to sustain capital. The short term fix is to import from lower wage countries, but without a functional wage base, the debt fix can only be short term as well. The correction to this interest based inflation can come from no other place than the profits of capital.
From the perspective that the boom and bust cycles of the 19th century economy were in fact entirely the result of monetary policy, it becomes suspect that Alfred Marshall and John Maynard Keynes were both involved in a program of sustaining this disfunctionality and not, as it seems, remedying it.
How do I get that?
First, Marshall declared political-economy to be in fact a science and independent of politics. That strategy disuades investigators from pursuing the political-economy angle any further. Keynes came along and instituted the sophistical solution of managing the interest rate, although, he well knew that monetary interests held a powerful sway over governmental policy. Hence the interest rate remained indirectly under the influence of the major banking families. We know Keynes was aware of the powerful interests because he was an influential economist in those days and was physically present in meetings with them.
The result is that the climate was set for the common people to be rendered ignorant of the functioning of government , especially due to the fact that this was the era of the populist revolt, and popular power had become rebellious, at least where the 'land store' owners were concerned. We find at this point in U.S. history a diminishing of the awareness of the works of Livy, Machivell, and Virgil, not to mention the founding fathers. And we also see economists such as Marx and Ricardo becoming demonized and marginalized. Notice today, there are works about founding fathers promoted everywhere, and they are in fact highly distorted, but little promotion of the actual works written by the founding fathers. A lament by James O'Connor in the journal "Capitalism Nature and Socialism", I forget which issue, but it was several years ago, complained about how many individual writers on Marx had never even read "Capital vol.I", 1867 (actually, the criticism is still valid if you read the comments at the Amazon link ). Of the five copies of John Adam's "Defence of the Constitutions of the Governments of the United States in Response to the Letter from Mr Turgot to Dr Price", in this State available to the public, the copies I took out of the library had not been read for over 20 years. This is the work set out for the Aristocracy to read, as it was basically the 'teachers guide' to the Federalist papers. It is the principals behind the functioning of the United States as a liberal republic.
This censorship was brought about by powerful interests in Washington who set about producing the textbooks for the American public to learn. All allusions to democratic power were removed from public consumption and the principals of liberty, republicanism and even capitalism were distorted into mirror images of what they really are over the past century.
The vast array of educational materials, entertaining novels with their smidgens of disconnected facts, educational television and even this internet, combined with a steady diet of distractions, have led the American people to the brink of a modern slave state. In a slave state there are only two classes and not three, land owners are essentially microcosms of governance and then there are the slaves or peasants who are the governed. There is no capitalist class necessary when commodities are commanded into being.
This would all add up to a pleasant read under the heading of 'conspiracy theories' if not for the fact that the end of fossil fuels is on the horizon and with it the need to coopt manual labor to replace it. Capitalism in its present state rose to predominance in the market economy with the emergence of fossil fuel power, as outlined by many, including Marx in "Capital volume I", although it was closer to the beginning of the 18th century with Thomas Newcomen and the invention of the heat engine, rather than at the end of the 18th century when James Watt invented the steam engine. The raw materials that fed the latter engines was produced on the backs of slaves, and the labor that worked the factories was no better situated.
It seems that the powerfully ignorant have decided to ignore sustainable energy options in favor of a return to the days of slavery and drudgery. Capital's last and best chance to win this old game is to invest wisely and heavily in renewable energy technologies. Remember, everyone passes the buck, but one should be smart enough not to pass a buck up.
VOTE: U. S. CAPITALIST PARTY
posted by lou_srewlect | 9:18 PM
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