A Summary of Plunder-By-Trade That All Can Understand

Our primary work, Economic Democracy: The Political Struggle of the Twenty-First Century can be summarized as follows:

Chapter One of Economic Democracy

Consider this:

You are in America producing one widget an hour and are paid $10 an hour.
I am in Indonesia producing one widget an hour and am paid $1 an hour.
We are equally productive but we have a 10 times pay differential.
We ignore monopoly patent costs which only increase the discrepancy and price theses widgets at the labor cost of production. (Capital is but stored labor so all justified costs are labor costs.)
I must work 10 hours to buy one of your widgets. In that same 10 hours you earn $100 and can buy 100 of my widgets.

The difference in retained wealth is not mathematical it is exponential (high pay divided by the low pay squared).

When you do this math remember the key is the buying power gained in the same working timespan by equally-productive labor producing products for trades between countries.

If the well-paid nation is paid twice that of the low-paid nation, in direct trades between them the well-paid nation accumulates 4 units of wealth and the low-paid accumulates 1 unit of wealth.
At 4 times the pay differential for equally productive labor the high-paid nation retains $25 and the low-paid nation retains $1.
At a 20 times pay differential the high-paid nation retains $400 while the low-paid nation retains $1.

This sixth grade math is the first of the three fundamentals of plunder-by-trade.

Chapter Two: The origin of plunder-by-trade

All wealth is processed from resources.

There were no resources inside the Walled Cities (Free Cities) of Europe 800 years ago.
All resources (timber, wool, ore) were in the countryside.
When the serfs came to town and saw the looms, fulling vats, leather making tools, forges, etc. (primitive industrial capital) they said, "We can do that." And back to their villages they went to produce their own industrial tools.

What happens now to the city?

This is their living and down the tube they go.
Right out of the classics on the Middle Ages (Heckscher, Pirenne, Polanyi) we learn that "For 700 to 800 years the cities sent out raiding parties to destroy the primitive industrial capital of the countryside and force them to sell their resources to the city."
Those city states became countries;
- those countries became empires;
- and the military of the imperial centers of capital today are for the same purpose as those raiding parties 800 years ago; control resources and control the wealth-producing-process.

Where are Japan's resources? Where are Hong Kong's resources? Where are Taiwan's resources? Where are South Korea's resources? And where are Europe's resources (they consume 14 times the natural resources as lie within their borders)? Those resources are primarily in the impoverished world being purchased for a fraction of their true value. This simple economic history citing classics is the 2nd fundamental of plunder by trade.

Chapter Three: Not a country in the world ever developed under Adam Smith free trade.

All successfully developed countries did so under the principles of Friedrich List's 1841 classic The National System of Political Economy.

In the introduction of that book List explains how Britain's William Pitt imposed Adam Smith free trade upon the world.
Structural adjustments imposed upon weak nations being the very opposite of the policies in which successful nations developed prove the imperial nations are carrying on William Pitt's plan for control of world trade through Adam Smith free trade (really controlled trade);
"So long as the impoverished world can be made to believe this they hand their wealth to the imperial centers of their own free will and it does not require an army."
Of course the military is there to force all who would opt out back inside that mold.

America's founding fathers are our primary sources for this 3rd fundamental of plunder by trade (p. 39).

They are the ones who ignored William Pitt's efforts to impose Adam Smith free trade on America.
It is they who protected America's tender industries and markets and it is through those common sense policies that America became wealthy.

Because we built this foundation on this hidden, unspoken, and ignored economic history we can now make statements that others cannot.

They do not have the base to speak from.
Today's world economy is built upon plunder by trade.
It is at this point the (20 to 30 minutes of conversation) our reader/listener clearly understands the causes of wars and poverty and they instinctively understand how to correct it.

But our books provide more foundations.

Once those monopolies-protected by financial warfare, economic warfare, covert warfare and overt open war-are abandoned individuality, competition, and personal rights are not only protected they are strengthened and economic efficiency increases equal to the invention of money, the printing press, and electricity.
The average standard of living per hour of labor in the wealthy imperial centers would double and the GNP would drop by half.
That 50% drop in GNP measures the previously wasted labor and capital as the money flowed through those monopolies into the coffers of those who do not produce.

By proving the waste of wars, the waste of monopolies, and the waste of capital destroying capital (the greatest waste of all), we demonstrate there is plenty on this earth for all.

All the imperial nations have to do is be who they say they are and do what they say they do and this world will quickly go peaceful, poverty will be eliminated in 10 years, and the world would be developed to a sustainable level for a quality life for all in 50 years.

The above is the heart of the story.

But chapter 6, explaining how a free nation with free speech and a free press is propagandized (protecting this system of plunder-by-trade), also stands alone.
We feel Chapter 26, the history of money and how simple it would be to restructure to honest money also stands alone and is easily understood.

As an example of how simple these explanations are we will summarize chapter 13, Agriculture:

Where would America be if a powerful nation subsidized their farmers (as the U.S. does) and undersold their wheat, corn, soybean, cotton, dairy, and beef farmers?
Why the farmers would go broke, the machinery companies would go broke, entire communities would collapse, and this would collapse many or even all other industries.
This is what happens when we undersell other farmers or give our grain to those countries.
The same holds true for other consumer products.
The multiplier factor is the health of any economy and the multiplier factor goes into reverse whenever a country's farmers or industries are undersold by another nation's highly subsidized producers.

Fourteen years ago this author (J.W. Smith, with a Ph.D in Political Economics and has presented these concepts at conferences in 6 countries) mathed out how quick the world could be capitalized to a sustainable level and poverty eliminated and that math holds yet today. Poverty can be eliminated in 10 years and the world can be developed to a sustainable level for a quality life for all in 50 years.

It is not a matter of not knowing what to do. We know exactly what to do. The problem is the world's arteries of trade are tied to that centuries-old system of plunder by trade, and the powerbrokers (which are good people just as you and I) cannot see a way out. This book shows the way out and, being as the majority of those leaders too are good people, once it becomes common knowledge many of those powerbrokers will take that stand.

We have proven over and over (through conversation or reading this summary) that the fundamentals can be understood in 30 minutes (this Summary).

These books are for both academics and lay intellectuals.
If the people stand up and show the way the leaders will follow.

Though already in use in world conflict and poverty classes we are asking for support and guidance on getting this to the world.

For more information

Why not look at

The Institute for Economic Democracy (IED)