Chapter 6. Capitalism’s Powerful Economic Engine: Henry George’s Smaller, Mightier, Engine

This is a chapter from the book, Money; A Mirror Image Of The Economy. Visit that link for more information about the book.

To build a base to understand the forthcoming struggles we will summarize our primary research, Economic Democracy: A Grand Strategy for World Peace and Prosperity, 2nd edition, the 1000 year history of plunder by trade. All wealth is produced from resources provided by nature. There are no natural resources in cities even though they are the heart of every society and every economy. For roughly 800 years the city states, also known as the walled cities of Europe, fought to control the resources of the countryside. Processing those resources into consumer products was the source of both their living and their wealth. Those city states became nations. The resources required for wealth and power still lay outside their borders. This produced more wars. Reaching for more wealth and power, seven nations of Europe rushed across the world to, with minor exceptions, claim every square mile of the world. Those early battles between city states and the countryside, and those between individual city states, were replayed by battles between empires.

The fundamental rule, never transfer technical knowledge to other nations, was broken when Kaiser Wilhelm of Germany bought technology wholesale from his grandmother, England’s Queen Victoria, and cousin, King George V.1 The result was German technology taking over the markets of British industries leading to WWI and WWII. China taking over world markets in this century is recognized by many as a replay of that early 20th century crisis.

But 50% of the world industrialized, armed with nuclear weapons, and battling over access to resources and markets in the 21st century is different than 15% of the world industrialized, armed with conventional weapons, and battling over access to resources and markets in the early 20th century. There are too many nuclear weapons pointed at too many huge cities. Any nation which chooses nuclear war over sharing technology and resources may also be destroyed. Short of destruction by imperial nations, they committing national suicide in the process, China, India, most of East Asia, and possibly countries such as South Africa will successfully industrialize, even under today’s inefficient monopoly systems.

Developing and eliminating their poverty were the goals of supposedly-free nations on the periphery of empires after WWII. Africa was planning on a United States of Africa.2 Think of the threat that continent as a unified nation would have been to those countries depending upon those resources to rebuild from that war. Knowing that is understanding the financial, economic, diplomatic, covert, and overt wars suppressing the colonial world’s post WWII breaks for freedom preventing the emergence of that super federation and, with the exception of Cuba and Asia, each an accident of history, preventing any nation gaining their economic freedom. .

As all these wars were waged under the flags of peace, freedom, justice, rights, and majority rule, not even the countries being destabilized realized what was happening. They knew America had broken free, believed those slogans and looked up to them as saviors and supporters of their freedom.

But now they know that America has joined forces with their European cousins to deny emerging nations their rights and freedom. The alliances forming and the surges for equality and freedom today are identical to the hopes and dreams of the developing world 40 to 60 years ago and they now understand the tricks of the trade. As there are at least six centers of capital, with three being in Asia, again each an accident of history, competition for resources will be fierce. This is the undeveloped world’s moment to demand freedom and equality and they know it. After all, industries are relatively cheap to build whereas resources, when priced at their true values, are expensive. Those costs will keep going up and one of the primary purposes of this book is to document that, once a regional labor force is trained and their own workers are used to process their resources and build and operate their industry, the finance capital cost of developing a federated region is not much more than the cost of printing money; all else is a region’s internal processing of resources into infrastructure, industries, and consumer products.

The entire region surrounding the three Asian centers of capital, with over half the world’s population, is rapidly industrializing. It is understood that an alliance of the developed world in a war against the fast-developing world also armed with nuclear weapons, is likely to destroy both. The quagmire in Iraq proves both covert and overt destabilizations to install puppet governments are no longer options. That act of empire has cost America the moral high ground and provided both the motivation and the opening for the world’s poorest regions to start allying together. South Americans are studying the European Union as a model for unifying that continent. Alliances between resource-wealthy developing regions and rising centers of capital increase the economic and political power of both. The massive resources inside the borders of those forming, alliances, combined with the world’s six centers of capital competing for resources, should give those periphery federated regions equal negotiating power.

Think on the various monopolies in chapters one through five exposed by applying Henry George’s inclusive property rights laws. Each are laying claim to massive amounts of unearned wealth; those annually appropriated values are capitalized by 10 to 30 times; and those “earnings” (thefts) are invested in treasury, water, sewer, other bonds, etc. Those from whom that wealth was appropriated now pay both the monopoly overcharges and payments on those bonds; and this goes on and on, into perpetuity, until it gets so out of balance the economy collapses. Considering fully 60% of America’s huge blocs of accumulated capital is appropriated wealth, and that half the production potential is wasted, the monopoly capitalist system is a value harvesting, value wasting, machine, not an efficient producer of wealth.

Each of the six times the American economy was poised to collapse over the past 25 years, due to too much wealth in the hands of a few and too little in the hands of the many, money was created and poured into the markets (search for Plunge Protection Team). So the finance monopolists have learned how to prevent a crash due to internal imbalances, just create money, pour it at those markets or ratchet up some part of the economy, the 2002-06 housing bubble for example, and those higher values prop up the markets which then rise to a higher imbalance which is threatening to collapse again as we write.

Today this value-harvesting, resource-wasting, labor-wasting, machine is sucking up the world’s wealth. But suppressed and oppressed nations understand how the imperial nations are laying claim to their wealth and distributing it amongst the citizenry of the wealthy world as their earned wealth. Those dispossessed can calculate that, like a Ponzi scheme producing nothing, in the end there is little left for them. Like all pyramid schemes, money is appropriated from the masses, great promises are made, but when it ends, as all do, the first few into the game have all the money.

Finance capital which powers capitalism’s mighty engine depends on continuously appropriating the wealth of true producers. Continually invested principal and interest from those invested appropriated funds are being paid for over and over by those from whom it was first appropriated on into perpetuity. Those huge profits reach out to buy up other societies’ wealth, in economic terms, exporting capital, and this expansion continues until so much wealth is in so few hands, and so little buying power is in the hands of the citizenry, that monopoly capitalism goes into one of its periodic collapses.

In contrast, the super-efficient, much-smaller, economic engine of Henry-George-capitalism—money created within a socially-owned banking system funding the real economy—eliminates the ethereal world of high finance, maximizes the utilization of increasingly-efficient technologies, shares full and equal rights world wide, eliminates war, expands across the earth with productive capacity and buying power in balance, has the power to eliminate poverty in 10 years and can provide a quality life for all world citizens in under 50 years.

That potential is not realized because the large increases in techno-logical efficiencies are eulogized while the even greater potentials are unrealized. To restructure to such an efficient economy within any country would be revolutionary. There is no middle ground, so we have chosen to address it within the framework of a velvet revolution. These final pages establish the framework and a theoretical time-line for those peaceful revolutionary changes.

Endnotes

  1. Kurt Rudolph Mirow, Harry Maurer, Webs of Power (Boston: Houghton Mifflin Co., 1982), p. 16. Back to text
  2. Crucial documentary on a U.S. of Africa: Wind of Change, order at Films for Humanity & Sciences 800.257.5126, item # BVL30750; Organizations formed to further African unity are: AU (African Union); NEPAD (New Partnership for Africa’s Development) OAU (Organization of African Unity); OAAU (Organization for African American Unity (founded by Frantz Fanon); OCAM (Organization Commune Africaine et Malagache); OERS (Organization of States Bordering the Senegal River); UDEAC (Customs Union of Central African States); OERM (Economic Organization of North Africa); EACM (East African Community and Common Market); CEAO (West African Economic Community); CEDEAO (The Economic Community of West African States). Follow Democracy Now, Free Speech TV, Link TV, .informationclearinghouse.info, commondreams.org, globalnet news, globalresearch.ca/, and europac.net/ to stay up with world developments. Back to text
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This is a chapter from the book, Money; A Mirror Image Of The Economy. Visit that link for more information about the book.