Sunday, March 22nd, 2009
By J.W. Smith
Dear Dr. Smith, To me the work you are doing represents the highest expression of patriotism and compassion for humanity found on the planet today. After reading your work, one has to totally reset one’s mind. Let me know how I can be of assistance to your efforts to create a sustainable, socially just world for all. Respectfully, Peter Lorenz, Editor, Peter’s Picks.
If you cannot name an essential social service not fully funded under this economic/financial thesis, even as all taxes disappear, and if you notice that there is virtually nowhere the crafty can gain unearned wealth, you have just agreed this is right and both classical and neoclassical economics, with the exception of a very few aspects, are only justifications of a system of theft of what is properly your, my, and every citizen’s wealth.
Summary of my one-hour-presentation at the UN General Assembly Hall
- Visualize a fertile valley 10,000 years ago with fruits, nuts and vegetables growing wild along with lush thatch for building shelters. The new settlers have only to pick their food, build their thatch homes, and, once that home is built, relax most the day.
- A selfish, greedy, cunning cabal form and each lay claim to a part of the best land. They make a pact with toughies that they will share the spoils if they protect their unequal, and unjust, “property rights.” The meek, mild, and law abiding now have to share the food they pick with those “greedy owners,” have to build their houses, and provide any and all other services.
- The cunning go on to claim their unearned wealth on through history, and those are the property rights laws, as applied to nature’s resources and technologies, denying others their rightful share of what nature offers to all for free, that are still in place today.
- The primary cause of poverty in the middle of plenty has been uncovered. The Sheriff and the courts are today enforcing the very same unequal rights the cunning laid claim to 10,000 years ago.
- This exposes most current finance capital as both unearned and not very productive. In the thesis below, note how, even as taxes disappear and honest capitalism is fully retained, those rental values paid to ourselves (a redirection of the flow of money) will fully fund all the social services currently starved for money.
This economic thesis eliminates the unequal economic structure created by those many, many cabals over the centuries:
An Understandable Full and Equal Rights Economy That Takes Only 170 Words
A utopia can actually be this simple:
- By paying land (resource) rents to ourselves (socially collected), a citizenry is quintuply repaid through those continually circulating social-credits building roads, railroads, water systems, sewer systems, and electric grids (any natural monopoly), as well as funding governments, providing education, health care, and retirement.
- Infrastructure and populations, not capitalists, establish the use-value of land, of other natural resources while their rental values provide the social credits to fund all essential social services.
- Restructure to cooperative capitalism as described herein, and taxes disappear as employed working hours and consumed resources drops by half and all enjoy a quality, secure, life.
- This requires sharing the “productive” remaining jobs and equal pay for equally-productive labor.
- With socially-owned banks, each region of the world, each nation, each region of a nation, each state, each county, each community, and each entrepreneur has equal rights to their share of both created and saved finance capital (created money and savings). With those rights, entrepreneurs (private industry) will fill every niche within the production-distribution process. Virtually all unearned monopoly values disappear (170 words).
Between 1979 and 1984, in only four short years, under socially-owned banks and socially-collected resource rents, “the number of rural Chinese living in poverty declined from more than 200 million to 70 million” (Jean Dréze and Amartya Sen, Hunger and Public Action, Oxford: Clarendon, 1989, p. 216.). So this thesis of full and equal rights eliminating both poverty and war has already been proven.
All can visualize that honest economy in action providing them a quality life and each will know immediately if some group, or person, is claiming superior rights such as those cunning did thousands of years ago.
Banks are social technologies well understood for centuries, there is nothing there to own beyond a little brick, mortar, and furniture. Bank labor should be well paid but “profits” of socially-owned banks, along with resource rents and normal usage charges, will fund all essential social services.
There are no capitalized (monopoly) values in the above honest economic structure; there are only use values. (Capitalized monopoly values are only Marx’s surplus values claimed and capitalized.)
At this point, I normally ask: “You have never before heard anything I just said did you?” “No I didn’t.” “And you understood every word I said, didn’t you?” “Yes I did.” Could you see the flow of products and services one way and the money flowing the other way within that efficient economy?” “Yes I could.”
This thesis is so simple, logical, and efficient, people can follow those flows of money and commerce in their head after a 10 minute conversation. Efficient community social credits now build and operate those natural monopolies while private industry efficiently produces and distributes consumer products and provides all other services.
All there is to economics is food, fiber, shelter, recreation, and care when in need. If you understand economics as laid out here, very little within the parameters of classical Western economics applies. If you are mentally within the parameters of classical Western economics, very little within cooperative-capitalism economics applies.
Take note: When you buy land under cooperative capitalism economics, you have all rights except the right to pay rental values (interest on capitalized values) to a bank. You pay that money to yourself (the social fund). As all taxes will disappear, on balance, the rental value you do pay to yourself is slightly less than what was once paid in taxes.
The disappeared capitalized values, the beating heart of monopoly capitalism (theft capitalism), were (currently are) nothing more than unearned monopoly values. This honest economic structure converts those unearned values into your, my, and everybody’s earned use-values.
Both taxes and poverty disappear even as employed working hours drop by half and the pressures on resources and the environment are alleviated roughly to the same degree. That savings is the half of our labor and resources currently wasted within the superstructures operating those monopolies we are told do not exist. (The waste of labor is actually well over 50%.)
With seven billion people on this earth, each are entitled to 1/7billionth of both the rental values of nature’s wealth and the profits of banks. Paying both those monies into the social fund and expending them on infrastructure, education, health care, retirement, and the now very small governments, each citizen is receiving their proper share no matter where they travel within the societies so structured
With citizenry voting directly on—and emplacing full and equal rights in—their laws and constitutions; Cooperative Capitalism governments would have so little to do they would only meet occasionally. Being able to visualize the entire restructured efficient economy, the citizenry would be very close to governing themselves.
Everything needed to understand an honest efficient economy is in the above few words. We have tested it many times and, almost without fail, this simple thesis is understood and visualized by all. That just below is only saying the same thing with more supports.
We appreciate acknowledgment as to where this thesis came from. However, we encourage any and all to take this school of thought as far as you can. We think it stands alone but appreciate being alerted if it is out there somewhere else.
Since this has the potential of eliminating poverty, war, and taxes, would you please alert all your contacts, newsletters, list serves, media contacts, etc.
When rental values of nature’s wealth is paid to ourselves (society), it is our earned wealth paying all essential social costs which are currently starved for funds.
The current system of theft of your and my wealth by the powerful was established centuries ago; the privatization process. Exclusive title to nature’s wealth is the same system of theft as exclusive title to a slave. Those laws, as applied to nature’s resources and technologies, are aristocracies laws, the very culture we supposedly, but unsuccessfully, evolved from.
We are not talking about labor-created values which are properly exclusively owned. We are talking only about values created by nature which are properly only conditionally owned (this includes the natural processes of nature such as banking). Society should collect those rental values which, along with the profit of socially-owned banks, provide the social credits financing all essential services (those used by all).
Current unequal property rights laws cause most poverty and protecting the massive wealth accumulated under those unequal rights is the cause of most wars.
Unearned and unproductive capitalized monopoly values, which is 95% of all finance capital at the top of today’s bubble, are transposed into pure use-values which remain with you, me, and all other citizens by simply paying the rental values of nature’s wealth, the profits of social technologies (via a drop in consumer prices of 50 to 80%), and the profits of banking, to ourselves.
Fifty percent of our labors and half our resources are wasted within the superstructures operating those monopolies we are told do not exist. This includes conspicuous consumption, the massive military, and their wars protecting this massively inefficient, unjust, and unequal social and economic structure.
Conspicuous consumption totally disappears as soon as all are paid equally for equally productive labor. And the employed workweek drops by half, or more, as the remaining productive jobs are shared.
The elimination of monopolies other than land and banking, discussed below, do not add to the social fund. However, through the cost of consumer products and services dropping 50%, or more, as that inefficient structure is eliminated, that earned wealth remains with us. That savings is mirrored in the 50%, or greater, reduction in employed labor time which must happen so all will have a job to “earn” their living.
We are all concerned with poverty, hunger, inequality, and global warming (or nuclear war) making large parts of this earth uninhabitable. This simple thesis, understandable by all, that has been kept from us for centuries by power and wealth protecting their power and wealth, can be the awakening that destroys their power, restructures the world to efficient economies, and reclaims the stolen wealth which belongs to us all in relatively equal shares.
The ethereal world of high finance (massive sums of unearned money) and inefficient corporations are converted to efficient banks and corporations with all aspects of the economy locally, fully, and easily funded. As financial warfare is a major cause of poverty and underdevelopment, this requires a dual currency system–each economically viable region creating their own currency and a digital world currency (it cannot be counterfeited) protecting the value of those regional currencies as it funds world trade.
Assuming economically viable regions throughout the world establish the honest property rights laws and monetary structures addressed above, most social problems will be completely resolved. Funds are available for education, Universal Health care, retirement, infrastructure (roads, water and sewer systems, electric power), and funding the much smaller governments, all social needs currently starved for funds. As further explained below, poverty and famines disappear and free time for family interactions are doubled or even tripled.
Utilizing this legal structure, the developing world regains title to their resources, turns those finance streams to funding education infrastructure and industry, establish an efficient economy, and they too can eliminate poverty within two generations.
A further explanation of these yet unrealized full and equal rights
While riding a bus to my hotel in New York to my presentation at the UNIS-UN Conference, United Nations General Assembly Hall, a fellow passenger asked me to explain this further. I said, “See these huge skyscrapers we are going by? The value of the land they are on were put there by society through building roads, water systems, electric systems, gas lines, communication lines, etc. Except for some improvement in farm soils, which is far less than the values destroyed by corporate farming, not a dime of that value was put on there by the owners of that land.
Society need only convert those exclusive titles to land to conditional titles paying those rental values to ourselves (society). Then use that money flow to build and maintain the above described infrastructure (roads, water systems, etc.), run governments, pay for health care, education, fund retirements, etc.
Industry and consumers within this efficient economy, primarily local in nature, is funded by socially-owned local banks whose profits add to the social fund. Everything is local and visible and all need for the ethereal world of high finance, fully 95% that currently financing the primary and secondary monopolies and 100% of that in the derivatives-credit default swap markets and other totally non-productive endeavors, disappears.
The massive trillions of dollars extracted from the masses and other nations have to be reclaimed by each economically viable region issuing new currencies to build infrastructure and first industries. The value of those regional or national currencies are then protected by a newly-created digital world currency (no bills or coins and thus cannot be counterfeited) financing trade between those economically viable regions.
This is the exact opposite of current world monetary policy where currencies of impoverished nations, and occasionally currencies of powerful nations, are consciously and intentionally destroyed so as to steal their wealth. And this is only one aspect of how wealth is stolen through Plunder by Trade. See also The simplicity of eliminating poverty and war will stun you.
A careful analysis of the above 170 word economic thesis demonstrates that far the greater share of today’s finance capital is unearned. Society should have followed theft capitalism’s rules during this financial crash and let those financial institutions go bankrupt instead of bailing them out to the tune of trillions of dollars. A large share of that unearned wealth would have then been reclaimed through those unearned funds simply disappearing as debts were cancelled.
The simplicity of eliminating the monopoly structure that President Barack Obama and his economic recovery team are avoiding
Exposing monopolies we are told do not exist should alert trained theorists there are substantial shortcomings in what they are taught. Only the first paragraph below is duplicated above:
- The only labor-created values in banking is a little brick, mortar, and furniture. There is nothing else within that natural “social structure” to own except exclusive title licenses. Therefore, identical to land and other resource rents, the profits produced by that natural monopoly is properly paid into the social fund. Ellen Brown explains it clearly. This video of CommonGoodBank, a caricaturization of Robinson Crusoe, parallels this thesis.
- Even as their doctors are better paid, England provides better health care to all her citizens for 43% the per capita cost as America where possibly 40 million essentially have no health care under “exclusive titles” to all aspects of medicine and care. Germany provides equal quality health care cheaper through a Taylorist efficiency study eliminating the wasted labor and unearned profits we describe. (http://www.casttv.com/video/pndmvy/sugar-the-bitter-truth-video and http://www.youtube.com/watch?v=dBnniua6-oM alerts us that the lifespan of Americans would jump 10 years if both transfats and corn syrup were eliminated from our diet through a total reform of the food industry and the Food and Drug Administration. Example, 44,000 died from Vioxx before an FDA employee could take it no longer, blew the whistle, and he said “five other drugs were highly suspect.”) The full story is an ongoing crime scene. Heart attacks dropping 24% and the more severe attacks dropping 62%, over the past decade as transfats are being phased out points the way.
- Pay inventors well, place their inventions (technology, drug patents in the above example) in the public domain, and 85% of the gambling casino’s called stock markets, where those exclusive title (unearned) patent profits are collected, disappear, and the costs of consumer products and services drop 50-to-80%. Staying with the above example, this is all evident when one realizes that prescriptions which cost hundreds, or even thousands, of dollars are produced for $1 to $10.
- Most insurance beyond life insurance is necessary and should be a social or human right. Establish a centralized office to automatically handle insurances and all those individual insurance offices and their unnecessary labors, wasted resources, and unearned profits, as well as their overcharges, disappear.
- Where the rental value of land, resources, and banking profits are properly paid into the social fund, the wealth currently extracted from society by patent, medical, insurance, legal monopolies, and others are returned to society through much lower prices for products and services
- Elimination of all monopolies establishes full and equal economic rights for everybody, automatically eliminates law monopolies, all welfare disappears except for the totally disabled, most courtrooms and prisons would not be needed, etc.
- On about one-third of a page, the complete monopolization story is again told. I trust trained theorists will notice how easily every citizen is fully cared for when each have full and equal rights. They should quickly realize something, actually almost everything, is very wrong with current economic theory.
The Unearned, Unproductive, and Ever Expanding, Ethereal World of High Finance
Thank you William K Black for Quantifying that massive, ever expanding, unearned, and unproductive finance capital:“Forty years ago, our real economy grew better with a financial sector that received one-twentieth as large a percentage of total profits (2%) than does the current financial sector (40%).”
Michael Hudson came up with close to the same figures. Those statistics tell us that only 5% of current finance capital is actually running the economy and the remaining 95% should be returned to the citizenry from which it was extracted (stolen). If we had honest and efficient property rights laws, as applied to nature’s resources and technologies, that massive wealth would have gone straight to all citizens in roughly equal shares.
That ethereal world of high finance, all finance capital above that needed to run an efficient economy, is not only totally non-productive, they extract $7 from the economy for every $1 of wealth they create. Andre Damon explains that, over a period of five years, the income of the wealthiest increased by a multiple of five while others’ income remained flat. Matt Taibbi describes the outright scams for extracting even more wealth from the rest of us once so much unearned money has been piled up no place can be found to invest it.
That massive, ever expanding, unearned, and unproductive finance capital, and the poverty of those whose rightful wealth has been appropriated, is specifically due to the inequality of property rights laws, as applied to nature’s resources and technologies, denying others their rightful share of what nature offers to all for free.
Nomi Prins explains to us the simplicity and low costs of plain vanilla loans within our banking system and the enormous costs of the totally non-productive wealth extraction process within the ethereal world of high finance that banks have expanded into.
From a novel and mind bending direction, Matt Bivens explains that same wealth extraction process.
From a third perception point Sarah Anderson and Sam Pizzigati explain the ongoing theft of our wealth.
Les Leopold explains how, through control of the totally non-productive ethereal world of high finance, the top 1% gained wealth during this financial collapse while the producers of that wealth became impoverished. David Degraw also explains how the banksters are extracting an ever increasing amount of wealth from middle class Americans and the poor.
Robert Fisk’s explanation of how the unearned massive accumulations of the wealth, belonging to us all in roughly equal shares, addressed by the authors just above, and now collapsing the entire capitalist system, is spreading across the blogosphere like wildfire.
William K Black again explains it clearly. Our research tells us that most this finance capital (misnamed profits) is unearned. This unearned wealth is far more than the wealthy can ever spend or find a safe place to invest. So those sums just get larger and larger and are “invested” in the totally non-productive gambling games, derivatives etc, addressed by the authors just above.
Matt Taibbi, best of all blogs on the subject, explains how the big boys of the naked short sellers had consumed all the small companies, started consuming each other (Bear Stearns, Lehman Brothers, Merrill Lynch disappeared). He explains the takeover of the Fed, the Treasury, and the government by lackeys of the remaining two (Morgan Stanley, Goldman Sachs) to pour newly created money at themselves to stave off their own collapse. My view is these thieves all know this economy is going down and their massive salaries and bonuses are going into safe havens such as gold so they come out on top when it totally collapses.
The Mandelman Matters blog explains how a win at the Supreme Court level could slow this wealth theft machine down.
With a 99% success rate, Mondragon cooperatives are rapidly restructuring world business/production models. If most industries turn to that model as the world economy collapses, then they must share their jobs. If they do not, a new monopoly system will have replaced the current one.
Aetius Romulous has a similar property rights thesis.
We need your help in connecting the dots between “unequal property rights laws, as applied to nature’s resources and technologies, denying others their rightful share of what nature offers to all for free” and today’s unproductive, unearned wealth masquerading as earned wealth. Instead, almost all theorists and writers still write as if this stolen wealth was earned wealth and this error denies themselves and their readers seeing how easy it could be for us all to live a quality life while employed less than half today’s normal working hours.
That this unearned (extracted) capital is unproductive is now, as per the authors just above, written about all over the place. But they and others have not yet made the connection between this massive unearned, unproductive, wealth and “The property rights laws, as applied to nature’s resources and technologies, denying others their rightful share of what nature offers to all for free.” As soon as they do, their already high quality writings will be explaining this theft of our wealth in far more depth.
Before they can do this, these theorists and authors must realize the theft of our wealth goes far beyond land. The monopolies described above, banking, insurance, pharmaceuticals, medical, and patents (technology), plus the natural monopolies–railroads, electric and water systems, communication systems, etc–collectively and unproductively extract far more money from the economy than do land monopolies.
This is because there is only a small amount of wasted labor and resources within land monopolization while the waste of labor and resources within the other monopolies addressed just above is well over 50%. It is their elimination which would reduce our necessary working hours by 50 to 60%, even more counting the elimination of conspicuous consumption which we will now discuss.
As soon as society has equal pay for equally productive labor and they share those productive jobs, conspicuous consumption will disappear. No one will pay $3 million for a daughters wedding, travel the world in their personal airliner, tour the ocean floor for six weeks in their own submarine with picture windows, buy a $100,000 or even a $50,000 automobile, or build a 25,000 square foot or even a 5,000 square foot house, because their income would not cover it. Seven hundred dollar shoes and all those false identities will also disappear. The current elite can expend such money because it is they who are extracting wealth from you and me while producing little or nothing of value, certainly not creating even a small fraction of what they are consuming.
Not only would one’s income not cover, no one would expend such money and leave themselves short on money for clothes, food, socializing, etc, all far more important than big cars, big houses, and big weddings.
Conspicuous consumption goes far beyond those false identities. One conspicuous consumer was wearing cowboy jeans he paid $100 for. His friend said, “I paid $15 at the thrift store for a great suit.” “And what do you think of yourself” said the cowboy wannabe. A large share of this nation’s shoes, clothes, where one eats, etc, are priced for conspicuous consumption and most that will disappear as soon as labor is equally paid for equally productive labor.
The savings of an efficient society with full and equal rights will be massive. With most of their days free to do as they want, their most enjoyable structuring of time will likely be the most productive. Permaculture community gardens will spring up within communities to provide highly nutritious fruits and vegetables for little more than helping the master gardener and personally harvesting the food just before eating it. Carpenters overseeing construction, along with modest labor charges or trading labor by others would build homes, garages, etc. For a very modest price. Seamstresses would sew beautiful and unique clothes at low costs. Currently beautiful-but unsaleable-paintings, wood carvings, pottery, etc would decorate many homes at modest cost or for only the cost of traded labors. Most mechanical repairs would be done within the community and only those which required expensive tools would require downtown shops.
Community barbecues and dinners with neighbors will replace going out to fine restaurants and be far more enjoyable. Community projects for renewable energy would retrofit homes with solar panels, wind farms, etc. As our research demonstrates, almost all education can be done at home over the Internet (the practice is spreading fast and picking up speed). All school bus drivers, 98% of the teachers and professors, as well as school support staff will be working less than half their current hours as they share the remaining productive jobs.
Most automobile use is to and from work. Most that expenditure of time, money, and fuel disappears. All this savings means less paid employment, and yet a higher quality life for every citizen of this earth. If the entire world had been developed through sharing technology as per this thesis, there would have been no poverty, few wars, and all the world’s citizens would have had a quality life 50 years ago.
Counting elimination of wars protecting the current monopoly structure and the automatic elimination of conspicuous consumption through sharing those remaining productive jobs and equal pay for equally productive labor, resource use lowers enough to protect against global warming even as each citizen of this world has a quality life.
Dear browser, Please study this thesis carefully and point out to us any social need that is not automatically provided within this full and equal economic rights structure. We think they are all covered.
We are all in this together. Everyone of you are sincerely looking for those answers. If you recognize how easily a society can be cared for within this full and equal rights structure, I would appreciate your support getting this to the world. Alert your contacts, put an alert on list-serves, alert any media you feel might be interested, and link from your websites.
- In Principles of Political Economy (Great Mind Series, Prometheus Books, 2004), John Stuart Mill (1806-73) addresses the early beginnings of today’s monopolies. A study of the 16 pages detailing the subjects within the book page by page turns up many examples. But nowhere does one see nouns branding this process of extraction and accumulation of unearned wealth for what it is, the theft of wealth produced by nature properly belonging to all in roughly equal shares. Nor does one find quantifications of that wasted effort and unearned wealth.
- Henry George (1839-1897) is the recognized authority on land monopolization but, except for an occasional phrase and a foray into world trade, he did not go beyond land.
- The language usage of Pierre-Joseph Proudhon (1809-65) and myself, describing this phenomenon are essentially identical.
- Obviously influenced by Proudhon, throughout the first half the 20th century Thorstein Veblen, Stuart Chase, and Ralph Borsodi quantified some of those wasted labor and resources.
- A few industry specific researchers quantified wasted labor and resources within insurance, health care, law, etc during the 2nd half the 20th century. In this 21st century, a few are quantifying the waste in banking and pharmaceuticals.
- The movie, The Corporation, addresses the privatization problem deeply in the same language we use. Ten minutes laying out this 170 word thesis as addressed on the first page would be a great fit.
- Nicholas Georgescue-Roegen, Hazel Henderson and others also proved that economics, as currently taught, has, except for creating wars, poverty, and misery, little connection to reality.
- Hundreds of deep exposure books are being published today, occasionally they and a few economic classics give a nod to Henry George principles, but none address the inequality of property right s law throughout a capitalist economy, as applied to nature’s resources and technologies, which causes inequality, poverty and war. Thus, when theft capitalism comes out of this financial collapse, just as in all previous collapses, unless the world wakes up, the same unequal property rights laws that caused it all will still be in place.
The forthcoming book from which all the above was taken, Cooperative Capitalism: No Poverty No War No taxes, will be out sometime in the summer or fall of 2011.
- Our presentation (and slides) at the United Nations
- Webcast of our presentation (70 minutes into the video)
Please help spread the word
Please help us spread this simple thesis for elimination of poverty and hunger across the world. We expect to learn from others as they comment. Please comment yourself.
Put this thesis into your own arguments and develop your skills for quickly reaching people on subjects dear to your heart.
With the exception of insanity, all problems will be at least partially alleviated and the world’s gravest problems are fully taken care of.
We appreciate acknowledgment but we are placing this short thesis in the public domain for all to use. This thesis stands alone. The good minds and broad frames of reference of others can flesh this out into a fully developed school of thought.
Thank you. Respectfully, J.W. Smith and the IED team