Best of the Week
Most Popular
1.Gold Price Trend Forecast, Where are the Gold Traders? - Bob_Loukas
2.Stocks Bear Market of 2017 Begins? Shorting the Dow At its Peak! - Nadeem_Walayat
3.Betting on President Trump Leaving Office Early, Presidency End Date - Betfair Market - Nadeem_Walayat
4.Why Stock Market Analysts Will be Wrong About 2017 - Clif_Droke
5.Is This The Best Way For Investors To Play The Electric Car Boom - OilPrice_Com
6.Silver Price 2017 Trend Forecast Update - Video - Nadeem_Walayat
7.Gold Price Set For Very Bullish 2017, Trend Forecast - Austin_Galt
8.10 Things I learned From Meetings With Trump’s Transition Team - - John_Mauldin
9.How Investors Can Profit From Trumps Military Ambitions - OilPrice_Com
10.Channel 4 War on 'Fake News', Forgets Own Alt Reality Propaganda Broadcasting - Nadeem_Walayat
Last 7 days
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts - 19th Feb 17
Gold’s Fundamentals Strengthen - 18th Feb 17
The Flynn Fiascom, the Trump Revolution Ends in a Whimper - 18th Feb 17
Not Nearly Enough Economic Growth To Keep Growing - 18th Feb 17
SPX Stocks Bull Market Continues to make New Highs - 18th Feb 17
China Disaster to Trigger Gold Run, Trump to Appoint 5 of 7 Fed Governors - 18th Feb 17
Gold Stock Volume Divergence - 17th Feb 17
Gold, Silver, US Dollar Cycles - 17th Feb 17
Inflation Spikes in 2017, Supporting Gold Prices Despite Increased Odds of March Rate Hike - 17th Feb 17
Roses Are Red... and So's Been EURUSD's Trend - 17th Feb 17
Gold Trade Note Sighted - 17th Feb 17
Gold Is Undervalued Say Leading Fund Managers - 17th Feb 17
NSA, CIA, FBI, Media Establishment 'Deep State' War Against Emerging 'Trump State' - 16th Feb 17
Silver, Gold Stocks and Remembering the Genius of Hunter S. Thompson - 16th Feb 17
Maps That Show The US’ Strategy In Asia-Pacific - 15th Feb 17
The Trump Stock Market Rally Is Just Getting Started! - 15th Feb 17
Tesco Crisis - Fake Prices, Brexit Inflation Tsunami to Send Food Prices Soaring 10% 2017 - 15th Feb 17
Stock Market Indexes Appear Ready to Roll Over - 15th Feb 17
Gold Bull Market? Or was 2016 Just a Gold Bug Mirage? - 15th Feb 17
Here’s How Germany Buys Time From China - 15th Feb 17
The Stock Trader’s Actionable Guide to Trump - 15th Feb 17
Trump A New Jacksonian Era? The Fourth Turning (2) - 14th Feb 17
Stock Market Yet Another Wall Street 'Witch's Brew' - 14th Feb 17
This Is Why You Don’t Own A Lot Of Stocks - 14th Feb 17
Proposed Tax Reforms Face Enormous Headwinds - 14th Feb 17
BBC Inside Out Tesco Rip off Offers - Determined to Lose Big Spend Customers! - 13th Feb 17
Is the UK An Economy Built on Debt? - 13th Feb 17
Stock Market VIX Cycles set to Explode in March/April 2017 – Part 2 - 13th Feb 17
Stocks At Record Highs - Will Uptrend Accelerate? - 13th Feb 17
US Dollar: 'Rumors of My Death are Greatly Exaggerated' - 13th Feb 17
Is This The Top Commodity Play For 2017? - 13th Feb 17
Trump a New Jacksonian Era? - 13th Feb 17
Stock Market at High Tide - 13th Feb 17
Channel 4 War on 'Fake News' Ends - The New News Age - 12th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

Western Civilization Lies Dying

Politics / Social Issues Sep 29, 2010 - 12:02 PM GMT

By: John_Kozy

Politics

Best Financial Markets Analysis ArticleThe Western commercial system exists to extract more from consumers than it supplies in products and services. Its goal is profit and has never been to improve the human condition but to exploit it. When governments institutionalize this system, they place their nations on suicidal paths, because as Jefferson recognized, "Merchants have no country." It is not terrorism that threatens the security of the Western World, it is the Western World's commercial system.


A man suffering from severe chest pains collapses. His wife calls 911. An ambulance arrives, the EMTs treat the patient, place him in the ambulance's bed, and start off to the hospital. Along the way, the engine stalls. The ambulance's staff begins arguing about how to get the motor restarted. One says more gasoline is needed, another says there's water in the tank, a third says the fuel filter is clogged. While they argue, the patient lies dying.

This situation is analogous to what's happening in America and parts of Europe. While economists and politicians argue, their nations are in the throes of death. These people are looking for the devil in the details, but he is not there. It's the system itself that’s diabolical.

The Western commercial system is extractive. It exists to extract more from consumers than it supplies in products and services. Its goal is profit, and profit literally means to make more (pro-ficere). Its goal has never been to improve the human condition but to exploit it. It works like this:

Consider two water tanks, initially each partially full, one above the other. One gallon of water is dumped from the upper tank into the lower one for each two gallons extracted from the lower tank and pumped into the upper tank. Over time, the lower tank ends up empty and the upper tank ends up full. The circulation of water between the tanks ends.

Essentially, this scenario describes all commercial systems based on profit. It is why the top 20 percent of Americans has 93 percent of the nation's financial wealth and the bottom 80 percent has a mere seven percent. It is why the bottom 40 percent of all income earners in the United States now collectively own less than one percent of the nation’s wealth. It is why the nation's poverty rate is now14.3 percent, about 43.6 million people or one in seven. It is also why the Wall Street Journal has reported that 70 percent of people in North America live paycheck to paycheck. It is also why, despite numerous pledges over decades, no progress has been made in reducing world-wide poverty. The system is a thief.

The economy has collapsed not because of misfeasance, deregulation, or political bungling (although all may have been proximate causes), it has collapsed because the pockets of the vast majority of Americans have been picked. The housing bubble didn't burst because home prices had risen, it burst because the pockets of consumers had been picked so clean they could no longer service their mortgages.

What the wealthiest 20 percent of Americans don't realize is that some in this group will begin to target the others in order to keep the extractive process working. In fact, it's already happening. "The brute force of the recession earlier this year turned back the clock on Americans' personal wealth to 2004 and wiped out a staggering $1.3 trillion as home values shrank and investments withered." Little of this loss from investments was suffered by the lower 80 percent of Americans. There is, after all, no goodwill within greed, and the market can be and often is manipulated.

The "system" has impoverished the people, the circulation between the two tanks has been reduced to a trickle, and our economists have convinced the government that the only way to get things flowing again is to pour more water into the upper tank, hoping that the spillover will settle in the lower tank. Better to pray for rain!

This impoverishment has numerous mathematically certain implications; two major ones follow.

First, the system can't be fixed by tinkering with the details. At best, tinkering with the details can merely slow down the depletion of consumer wealth. As long as the system is based on profit, more must be taken than is given. The rate of depletion can be changed, but the depletion cannot be stopped. This conclusion is as mathematically certain as subtraction. Why the geniuses in the American economics community, all who whom taut economics for its use of mathematical models, cannot understand this is a conundrum. They can tinker as much as they like. Some tinkering will produce apparent benefits, some won't. But one thing is certain—the system, unless it is fundamentally and essentially changed—will break down over and over again just as it has at fairly regularly intervals in the past. As long as maintaining the system is more important that the welfare of people, the people have no escape. They are eventually impoverished—both when the system works and when it doesn't! Two thousand years of history has produced not a single counterexample to this conclusion. Prosperity never results from exploitation.

Another implication that few seem to recognize concerns the national debt.

We are told that the burden of paying off the debt will be borne by our progeny, our children, and their children. But unless the Western commercial system undergoes fundamental changes, the children and grand children of most Americans will never have to bear this burden. Why? Not even governments can pick empty pockets. So if the debt is to be paid by raising taxes, the children and grandchildren of that 20 percent of Americans who hold 93 percent of the nation's financial wealth will have to pay them. Most, if not all, of these people are also investors. Given the acrimonious debate about letting the Bush tax cuts for the wealthy expire, the chances of that ever happening are slim to none.

Will the debt then be paid by devaluing the dollar, by printing money? Many believe that the government will eventually take this alternative. Let's say it does. Then all the dollars held by anyone anywhere will be devalued equally, including the dollars held by that same 20 percent of Americans. Again the wealthy 20 percent of Americans, having the most, lose the most. The devalued dollars they collect on their investments are merely added to their other devalued dollars, and the more the dollar must be devalued to repay the debt, the more the wealthy lose.

And finally, will the government default? Most seem to believe this to be unlikely. Perhaps, but isn't it the best alternative? Investors will simply not be paid, but the rest of their money will retain its value unless other economic consequences reduce it. Even Morgan Stanley recognizes that "the sovereign debt crisis won't end till deeply indebted rich country governments give holders of their bonds a good soaking."

So relax, Americans, your children will never bear the burden of paying off the national debt. Just sit back and enjoy watching the wealthy squirm.

Some say that if the nation defaults, the government will be unable to borrow. But other governments have defaulted without losing their ability to borrow. Russia, Argentina, and Zimbabwe are but recent examples. Of course, there are severe economic consequences to defaulting, but there are severe consequences to each of these alternatives too. How much harder can life be for the 80 percent of Americans holding a mere seven percent of the nation's wealth? There are, after all, no degrees of broke; no broke, broker, and brokest.

Will investors refuse to lend? Doubtful. A wealthy person can do four things with money: give it away, spend it, stuff it under the mattress, or invest it. Those are the only alternatives, and it is unlikely that much of it can be spent or that many will have the inclination to give it away or save it. So the wealthy really lack a great deal of choice.

Finally, a hidden principle underlies this extractive system—It is okay for some to enrich themselves by making others poor. Even though this is exactly what thieves do, no one, to my knowledge, has ever pointed out that this principle is immoral. It appears to be accepted universally as economically acceptable. But consider these two similar principles: (1) It is okay for some to improve their health by making others unhealthy, and (2) It okay for some to avoid the consequences of their criminal acts by making others bear them. No one would consider the last of these right, yet all three are logically and materially identical.

Some may claim that without profit, no commercial system can function effectively. If true, the implications for humanity are horrific. It implies that mankind was made in Satin's image, that the Commandments, especially the tenth, are fraudulent, that all the philosophy and literature that defines Western Civilization are nugatory, that no essential distinction exists between so-called civilized and barbaric nations, that all governments are illegitimate, that words like justice and fairness are meaningless, that the law is lawless, that society disintegrates into nociety, and that nothing really matters. The economy is Bedlam, the Earth is the Universe's Insane Asylum, and the craziest are in charge. What kind of human mind would ever attempt to defend this abomination?

This Western commercial system exists merely to enrich vendors by exploiting consumers. When governments institutionalize this system, they place their nations on suicidal paths. Astute observers of history have long recognized what Thomas Jefferson made explicit—"Merchants have no country." Oh, yes! These merchants will object vehemently. Pay no attention. Just watch what they do.

They expect favorable treatment and services from governments but do everything possible to keep from paying for them in taxes and exhibit no concern whenever their native lands face bankruptcy. When their native lands face stress, as in times of war, the people are called upon to sacrifice while the merchants are allowed to profiteer. When John F. Kennedy said, "Ask not what your country can do for you, but ask what you can do for your country," he was not speaking to corporate America. Does any reader of this piece really believe that the makers of Humvees, drones, and F16s would ever consider supplying them to our military at cost? Yet how great is the cost of the sacrifice parents are asked to make by sending their children off to fight hideous wars?

People, a merchant unwilling to sacrifice for his country has no country, he will support no country, defend no country, and if such people are given control of a nation, they will suck its blood dry and sell off the body parts to the highest bidder. Not even a recognizable corpse will remain. It is not terrorism that threatens the security of the Western World, it is the Western World's commercial system.

John Kozy is a retired professor of philosophy and logic who blogs on social, political, and economic issues. After serving in the U.S. Army during the Korean War, he spent 20 years as a university professor and another 20 years working as a writer. He has published a textbook in formal logic commercially, in academic journals and a small number of commercial magazines, and has written a number of guest editorials for newspapers. His on-line pieces can be found on http://www.jkozy.com/ and he can be emailed from that site's homepage.

Global Research Articles by John Kozy

© Copyright John Kozy , Global Research, 2010

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Len
29 Sep 10, 18:46
housing bubble

“The housing bubble didn't burst because home prices had risen, it burst because the pockets of consumers had been picked so clean they could no longer service their mortgages.”

The housing bubble burst NOT because consumers pockets had been picked clean, it was because housing had risen faster than in inflation due to speculation. Paying 5X or 10X for a house was considered smart and prudent, in spite of the fact that 3X was the old time maximum amount a person could buy without risking foreclosure. Millions bought into the argument ‘housing only goes up’ and now have learned the hard way that what goes up must come down. Millions thought their Mcmansion would be worth a fortune when they were ready to retire, unfortunately for them, housing has gone down and will go down until houses are affordable again.

“Will the debt then be paid by devaluing the dollar, by printing money? Many believe that the government will eventually take this alternative. Let's say it does. “

It already IS being done, this is the reason for inflation, this is the reason that a pack of gum was twenty five cents back in 1970 and why the same gum sells for a dollar or more today.

“This Western commercial system exists merely to enrich vendors by exploiting consumers.”

No one is holding a gun to the consumers heads forcing them to buy, consumers still have the right to save their money and not buy.

“Some may claim that without profit, no commercial system can function effectively. If true, the implications for humanity are horrific. It implies that mankind was made in Satin's image, that the Commandments, especially the tenth, are fraudulent, that all the philosophy and literature that defines Western Civilization are nugatory, that no essential distinction exists between so-called civilized and barbaric nations, that all governments are illegitimate, that words like justice and fairness are meaningless, that the law is lawless, that society disintegrates into nociety, and that nothing really matters. The economy is Bedlam, the Earth is the Universe's Insane Asylum, and the craziest are in charge. What kind of human mind would ever attempt to defend this abomination?”

As to how you have come to this conclusion is beyond all reason.

Capitalism means a shopkeeper buys something for one price and then sells it for a slightly higher price, with the extra money set aside to buy more goods to sell or to cover future expenses for a rainy day. Capitalism means a craftsman buys raw materials for one price and sells the finished item for a slightly higher price for the finished item so he can buy more raw materials and make more items to sell, or save the extra for a rainy day.

You have presented no evidence whatsoever that a commercial system can operate without making a profit, even if it is a profit of one cent profit per year. If you are suggesting socialism is the alternative, you should be reminded that socialism is the equal distribution of poverty. Under socialism, where people are paid the same whether they work hard, easy or not at all, why would anyone want to work hard? Destroy the initiative to get ahead, you destroy the initiative to produce.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife