Together, Unequal Property Rights Law & the End of Plunder by Trade will Collapse the Monopoly System We are Told Does Not Exist
Posted 3 years, 6 months ago (Saturday, May 15th, 2010 at 12:20 pm) by jwsmith
Michael Hudson, Matt Taibbi, William K Black, and others, offer stunning insights into the ethereal world of high finance. A few months ago, W Black and M Hudson alerted us that 40 years ago the financial sector earned 2% of US corporate profits, while today they earn 40%.
Assuming the financial sector was 100% productive 40 years ago, which it assuredly was not, and assuming finance capital needs per unit of fully productive industry remained the same, and surely industrial efficiency gains has reduced finance capital needs, this means the financial sector today is 20 times bigger than necessary, and over 95% of it is unearned money.
Our research writings keep pointing out that our monopoly structure, which we are told does not exist, extracts so much unearned money from the economy each year that they not only cannot spend it all, no matter how hard they try; they cannot even find safe places to invest it all locally.
The “export of capital,” for a while, provides that safe place to invest a part of those massive sums of unearned money. However, profits on overseas investments are far larger than local investment profits. Money earned with unearned money is also unearned money (you cannot rob a bank, invest it, get caught 10 years later, and keep the profits), and the massive sums of unearned money just grow larger and larger.
These ‘investors,” unaware they are totally unproductive, cannot find enough places to invest anywhere; so they start betting between themselves (derivative bets, and credit default swaps [which are bets on derivative bets]). This is the derivatives market which now may be approaching, or even surpassing $1 quadrillion in notional value. Those notional values became real values when the markets started to crash in 2008, froze up the markets, and turned the economy towards another Great Depression.
I thank W Black and M Hudson for quantifying the current level of these massive sums of unearned, and unproductively invested, finance capital (95%). However, they, and other analysts, are not calling these massive sums “unearned,” “extracted,” or “stolen,” within a framework that oulines that theft of what is properly your, my, and every other citizens, wealth. Everybody assumes it is “earned wealth,” even when it is obvious that it is not, the $1 quadrillion notional derivatives market for example.
What is not addressed, pointedly and specifically, are these massive sums of unearned wealth getting larger and larger, and claiming all the efficiency gains of technology, plus a part of what once went to labor. Nor is it mentioned that those huge unearned sums are loaned back to those from whom it should never have been taken from in the first place.
Those debt payments on what is properly the borrowers money in the first place, get larger and larger. In the final stages of a 50-year Kondratieff cycle, the earnings of those forced into debt peonage go down, buying power collapses, and another great financial collapse, such as is happening as we speak, is upon us.
I keep pointing to these massive “unearned,” “unproductive” sums and keep stating they continually get larger and larger. I thank W Black and M Hudson for quantifying that increase of unearned, unproductive finance capital the past 40 years; fully 95% is both unearned and unproductive. They are the “earnings,” really thefts, of a monopoly structure we are told does not exist.
That massive waste of unearned wealth contrasts with the efficiency of a full and equal rights, efficient, capitalist economy. The current inefficient monopoly capital structure wastes over half our labors and resources. An efficient capitalist structure, such as this “full and equal rights economic thesis, reduces the employed workweek over 50%, even as the quality of life rises, due to the elimination of those wasted labors and resources.
More and more the adjectives “unearned” and “extracted” are used, but there is no explanation that they are the false earnings of monopolies. A couple times I have seen “property rights” as the problem. Which it is, but no where do I yet find explanations behind those alerting statements.
Would this audience please advance this article and links to others so they can take this apart further and explain it to the world? I am awed by the brilliance of M Hudson, W Black, M Taibbi, Ellen Brown, and many many others. I would be helpless without their in depth views. They, and others, have the talents, and frames of reference, to thoroughly explain the errors in our property rights laws.
I am fully aware that the problem is that we are all locked within the permitted parameters of debate, primarily by classical economics who have never broken past the permitted parameters of debate protecting wealth and power. It is no different today than 500 years ago when theorists would lose their head if they dared put out too much truth too clearly.
If we are to retain the efficiencies of capitalism, we must advance to honest capitalist economic theory which is still outside those permitted parameters of debate. The world must be alerted to the current monopoly structure wasting over half our labors and resources. If we do not, and just as happened throughout Europe during the Great Depression of the 1930s, an even more corrupt fascist social structure may emerge.
My most recent writings were triggered five years ago as the emerging world was becoming aware their wealth was being claimed by the imperial centers of capital through “Plunder by Trade.” With the “resource powers” now aware, the theft of their wealth through inequalities in trade will end; the loss of those massive sums is what will finally crash the markets of the imperial centers no matter how many trillions of dollars are thrown at them. When that loss hits, and it has not yet, the economies of the imperial centers will crash.
I was not predicting a crash due to the 50-year Kondratieff cycle. I was making that prediction on the basis of the massive wealth stolen from the periphery of empire coming to an end. Those who think these economies are going to recover better start preparing for that surprise.
This Kondratieff cycle has been short circuited by the many trillions of dollars thrown at the owners of those massive sums of “unearned,” “extracted,” wealth. However, economies cannot possibly regain their previous level of production/consumption so long as those massive sums of unearned wealth are still intact and continually claiming an ever larger share of what is properly others’ wealth.
That is the very structure that caused the crash in the first place, it was self correcting, that correction has only been temporarily halted, and the economy cannot recover until the correction is complete.
The best that can happen is monopoly capitalism will rebalance at a lower quality of life for the average citizen. About that time, the loss of the massive sums stolen from the periphery of empire through plunder by trade will start disappearing, and the financial balance will again be disrupted.
No amount of money created by the old imperial centers thrown anywhere will replace the losses to the old centers of capital of new centers of capital losing control of world trade. Without an efficient production base behind it producing real values for people, and distributing those real values to the them, their money will have no value.
Money spent from a bank robbery is full value money. But when caught one earns no more money. That is very relative here. Massive sums were stolen from the periphery of empire ever since WWII. Those resource powers now understand the system of theft and they will be guarding all doors.
.The only way Europe can produce real values is if they trade technology and training for access to the resources of the resource powers. That is a totally different philosophy than the one they designed a few hundred years ago, and they will have no problem finding regions with which to sign those trade agreements. But don’t count on that philosophical change.
America has resources but does not have an economic philosophy to compete in honest world trade, and she is not about to change either. If America and Europe are to compete, instead of control, its philosophical technology is going to have to catch up with its industrial technologies. The key aspects to study are:
2) Property Rights Law, as applied to nature’s resources and technologies, denying others their rightful share of what nature offers to all for free.
3) There is no such thing as honest capitalized value. An honest economy will only have use values (addressed in the property rights law link).
4) Over 95% of current finance capital is the capitalized values of that unearned wealth, which properly belongs to all us citizens in roughly equal shares (addressed in the property rights law link).
5) And the steady expansion of that unearned wealth finally lowering buying power to where the economy collapses (addressed in the property rights law link). That imbalance causing collapses is discussed all the time; however, 95% of finance capital being unearned wealth, or it being properly your, my, and every other citizens wealth, is not discussed anywhere. Gordon Arnaut discusses some of the same aspects of our economy.
Please look these links over, put your own property rights/trade philosophy together, and give Western civilization the opportunity to lead the world towards peace and prosperity for all.
Conservationists and global warming activists: The citizenry living under that honest economy will have a quality life while consuming less than half the labor and resources as under the current monopolized economies.