”The monetary and financial system of an economy are part of the socio-politico-economic control mechanism used by every state to connect the economy with the polity and society. This neural network provides the administrative means to collect taxes, direct investment, provide public goods, trade. The money measures provide a crude but serviceable basis for the accounting system which in turn, along with the codification of commercial law and financial regulation are the basis for economic evaluation and the measurement of trust and fiduciary responsibility among the economic agents. A central feature of a control mechanism is that it is designed to influence process. Dynamics is its natural domain. Equilibrium is not the prime concern, the ability to control the direction of motion is what counts.
Money and financial institutions provide the command and control system of a modern society. The study of the mechanism, how they are formed, how they are controlled and manipulated and how their influence is measured in terms of social, political, and economic purpose pose questions, not in pure economics, not even in a narrow political economy, but in the broad compass of a political economy set in the context of society. ”
Martin Shubik
A Savage Sorting of Winners and Losers:
Contemporary Versions of Primitive Accumulation
This also holds for such a radically different instance as the sub-prime mortgage crisis, a largely global
North dynamic. I see the sub-prime mortgage as extending the domain for high finance but in
a way that delinks the financial circuit from the actual material entity that is the house, and
hence from the neighborhood, and from the people who got the mortgage. All of these materialities are excluded from this type of articulation with high-finance—which means that the
devastated neighborhoods are expelled from what are, strictly speaking, also traditional circuits
of capital. It is akin to wanting only the horns of the rhino, and throwing away the rest of the
animal, devaluing it, no matter its multiple utilities. Or using the human body to harvest
some organs, and seeing no value in all the other organs, let alone the full human being—it
can all be discarded. But unlike the clear realignments we see in vast stretches of the global
South, it is not clear how these devastated urban spaces in the global North will be incorporated
into the circuits of advanced capitalism.
https://take.quiz-maker.com/QYMG3AR
”Thus, clearly, money and goods are not the same thing but are, on the contrary, exactly opposite things. Most confusion in economic thinking arises from failure to recognize this fact. Goods are wealth which you have, while money is a claim on wealth which you do not have. Thus goods are an asset; money is a debt. If goods are wealth;money is not wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion.”
International Banking
They include Raring, Lazard, Erlanger, Warburg, Schroder, Seligman, the Speyers, Mirabaud, Mallet, Fould, and above all Rothschild and Morgan. Even after these banking families became fully involved in domestic industry by the emergence of financial capitalism, they remained different from ordinary bankers in distinctive ways:
(1). they were cosmopolitan and international;
(2). they were close to governments and were particularly concerned with questions of government debts, including foreign government debts, even in areas which seemed, at first glance, poor risks, like Egypt, Persia, Ottoman Turkey, Imperial China, and Latin America;
(3) their interests were almost exclusively in bonds and very rarely in goods, since they admired “liquidity” and regarded commitments in commodities or even real estate as the first step toward bankruptcy;
(4) they were, accordingly, fanatical devotees of deflation (which they called “sound” money from its close associations with high interest rates and a high value of money) and of the gold standard, which, in their eyes, symbolized and ensured these values; and……
Money Power Is More Concerned With Money Than Goods
The obsession of the Money Power with deflation was partly a result of their concern with money rather than with goods, but was also founded on other factors, one of which was paradoxical. The paradox arose from the fact that the basic economic conditions of the nineteenth century were deflationary, with a money system based on gold and an industrial system pouring out increasing supplies of goods, but in spite of falling prices (with its increasing value of money) the interest rate tended to fall rather than to rise. This occurred because the relative limiting of the supply of money in business was not reflected in the world of finance where excess profits of finance made excess funds available for lending.
Bankers Obsessed With Maintaining Value of Money
The redistribution of wealth by changing prices is equally important but attracts much less attention. Rising prices benefit debtors and injure creditors, while falling prices do the opposite. A debtor called upon to pay a debt at a time when prices are higher than when he contracted the debt must yield up less goods and services than he obtained at the earlier date, on a lower price level when he borrowed the money. A creditor, such as a bank, which has lent money—equivalent to a certain quantity of goods and services—on one price level, gets back the same amount of money—but a smaller quantity of goods and services—when repayment comes at a higher price level, because the money repaid is then less valuable. This is why bankers, as creditors in money terms, have been obsessed with maintaining the value of money, although the reason they have traditionally given for this obsession—that “sound money” maintains “business confidence”—has been propagandist rather than accurate.
The Operations of Banking and Finance Were Concealed So
They Appeared Difficult to Master In sum, specialization of economic activities, by breaking up the economic process,had made it possible for people to concentrate on one portion of the process and, by maximizing that portion, to jeopardize the rest. The process was not only broken up into producers, exchangers, and consumers but there were also two kinds of exchangers (one concerned with goods, the other with money), with almost antithetical, short-term, aims.The problems which inevitably arose could be solved and the system reformed only by reference to the system as a whole. Unfortunately, however, three parts of the system,concerned with the production, transfer, and consumption of goods, were concrete and clearly visible so that almost anyone could grasp them simply by examining them, while the operations of banking and finance were concealed, scattered, and abstract so that they appeared to many to be difficult. To add to this, bankers themselves did everything they could to make their activities more secret and more esoteric. Their activities were reflected in mysterious marks in ledgers which were never opened to the curious outsider.
The New Bankers Were Eager for High Interest Rates
In this process the attitudes and interests of these new bankers became totally opposed to those of the merchants (although few of either recognized the situation). Where the merchant had been eager for high prices and was increasingly eager for low interest rates, the banker was eager for a high value of money (that is, low prices) and high interest rates. Each was concerned to maintain or to increase the value of the half of the transaction (goods for money) with which he was directly concerned, with relative neglect of the transaction itself (which was of course the concern of the producers and the consumers).
The principles of tax policy
Written evidence submitted by the Systemic Fiscal Reform Group
The medium of taxation
- Over the course of history, the medium of taxation has changed several times. Under the earliest systems, taxation was paid in cattle, later moving to grain – generally rice or wheat (tithe systems) or labour (corvée systems). Whenever payments moved to metal tokens issued by the rulers, a money system was born. These tokens were usually made out of scarce and distinctive metals to prevent counterfeiting – silver, sometimes gold. The tokens would move through the economy through economic exchange, but would be demanded back by the rulers as the means of collecting taxes. Wooden tally sticks were the most successful English tax medium. The public demand of tokens to pay taxation ensures a sustained demand and maintains their exchange value across the economy.
- Modern taxation systems are still based around the creation, distribution and collection of tokens, but the tokens now take electronic rather than physical form. These tokens are bookkeeping entries in the banking system. The structure of the taxation system and the economy it controls is determined by the rules under which these electronic bookkeeping tokens are created, distributed and collected. Coins and notes are still issued in small quantity, but are subsidiary to to the banking system’s bookkeeping entries.
- The economic power of the tax system is determined both by how and where in the economy the medium of taxation is created and where and how the medium is collected.
- Contemporary governments grant the exclusive power to issue the medium of taxation to a state sanctioned banking cartel. The banking cartel comprises a central bank and private member banks. The central bank is responsible for price fixing, information sharing, promoting member interests and preventing member defaults. Serving the public interest is not a primary goal of a central bank. The cartel holds the exclusive power to set the price of and issue the medium of taxation. Governments generally prohibit the issue of alternative media for exchange and mandate payments of taxes only in the cartel-issued medium.
- The collection of the medium of taxation is under direct government control. Most tax is collected whenever economic production takes place. This places a burden on producers, who must acquire the medium of taxation directly or indirectly from the private banking cartel. The economic effect of taxation is dependent on the rules for calculating the amount of tax which is paid, regardless of who the tax is collected from. Usually, the person from whom the tax is collected can pass the burden of acquiring the medium on to others, generally by paying less for economic inputs, but sometimes by charging more for economic outputs.
- The spending power derived from taxation is shared between the government and the private banking cartel. This spending power is transmitted through the economy by banking cartel to their favoured associates, and by the government and their favoured associates. The system is effectively one of dual sovereignty since the sovereign powers of tax collecting and the corresponding issue of money is shared between the government and the banking cartel. This is the most distorting aspect of tax policy.
Introduce free markets, abandon production penalties
24. Principle : Taxation should not interfere with free markets in labour, goods and services
25. The following taxes depend on economic production and therefore act as production penalties: Income Tax, National Insurance, VAT, Corporation Tax, CGT, Stamp Duties
26. By design, they impair the free exchange of labour, goods and/or services. They conflict with the above principle. They have no role in any sound tax system, and constitute major distortions in the economy. Harmful and unnecessary, they should be phased out.
Charging the beneficiary
27. Businesses generally charge each customer a market price for the supply of goods or services which benefit that customer. The market price balances the overall forces of supply and demand. The government should use the same principle for taxation. Understanding the nature of “the customer” is a central issue.
28. The legitimate “customers” of government activity are the owners of houses and land in the area governed. The owners of houses benefit from nearby roads, schools, hospitals, parks, police, flood defences. The owners are the ultimate beneficiary whether or not the house is owner-occupied or let to tenants. People renting property may receive these amenities, but pay for their value in their rent. Renters should not pay tax towards these amenities in addition to paying rent for them as at present.
29. Principle : Taxation should only be levied on the ultimate beneficiaries of government, in particular, owners of land and houses.
30. An alternative principle is sometimes advocated, that of “ability to pay”. Superficially attractive, this concept is entirely without merit. The ultimate burden of tax is transmitted through the economy so the suppliers of economic inputs whereupon the ability to pay cannot be measured for taxation. Whenever tax exceeds the ability to pay production is lost or transfers to the black market.
31. Where the government confers a benefit exceeding the tax paid for the benefit, an implicit subsidy exists. Implicit and explicit private subsidies tend to undermine the public interest goals of tax policy and should to be avoided.
32. Principle : Taxation should be levied for the full market value of the benefit conferred by government, so avoid implicit subsidies
https://drive.google.com/file/d/1nRaqQarbl_E_0h5iGMIg-ta-xlcLcMZK/view?usp=sharing
Interest as a Means of Redistribution
Credit costs interest. Interest burdens end-consumers and entrepreneurs who have to borrow money in order to satisfy their consumer and investment needs. Consequently interest takes away money from end-consumers and entrepreneurs, even when they do not have
enough of it and gives it to investors who already have more money than they need.
Dieter Suhr *
The effects of changes in interest rates on the rent per square metre are shown in fig-
ure 50, similar to the calculations in Chapter 8, Box H.
Figure 50
Given the circumstances we have, we cannot avoid the existing high share of interest
in rents because if one can no longer reckon with a cost-covering rent realization, the
house will not be built – not even by a cooperative or unionised housing company,
unless, of course, the state somehow reduces the cost by servicing the capital. The
Interest as the lending price of money is without doubt a charge for a specific period
of time. Money that came into existence as a means of exchange, has, as a result to a
degree a second dimension. For the moneylender, it becomes a time-related effortless
income factor, for the borrower, it becomes a time-related cost factor, which he can
pay for only with an additional effort and with it an additional expense of time. With
interest, time is turned into money. The proverb “time is money” brings out this fact
in the fewest words.
In earlier days, time was a gift to mankind. Today that applies only to the interest-
profiteers. All the others – and that is the large majority- must work for these profit-
eers ‘during that time’. Michael Ende has made this stress-triggering change in the
life of people, in an alienating fairy tale like, yet obvious manner the message of his
book “Momo”.
Because time is money, i.e. interest money, people must nowadays be always up and
about. As for machines, it is best if they worked round the clock. If possible they
should run with fewer workers, better still,with none at all. With every laid off mem-
ber of the workforce, the entrepreneur saves costs, but by shutting down a machine
the costs remain, at least those that serve the interests of capital. If he replaces a per-
son with a self-financed machine, he gains additional secure interest revenue.
Quiggly shewed the tragedy, little hope it seemed,
blind faith in capitalisms harlot. That Babylonian whore.
At first a mere money trick for ragged trousered philanthropy. With usury, take away what’s not even yet been paid. Ruskin would see wealth as that which is valuable in the hands of the valiant. Real goods sustain and wealth succours. Usurious money is but an unmade claim and worse. No banker has earned that newly minted note that hangs discordant in the air, as apt to rob as to pay.
How obscure this obscurant cult of mammon.
What smoke screened hall of mirrors.
How obese and gluttonous the leviathan of usury.
Austerity for the likes of you and I.
More banqueting and evacuated vomit spews from the sceptred top table. Corrupt in patronage and jealousy of power. Overstuffed with greed and thirsty for more.
How mean the jealousy of greed grows.
As more wants more and demands all.
The truly poor are those who desire much,
oppressive wealth no longer is, it only has.
Usury consumes the usurer, no self just an exponential nothing. Growing ever more grotesque in a shadow of what never was and never could be.
A doom-laden ring of the Nibelungs, slained by Teutonic nobles and routed by heroic Norsemen.
The paper money shrouds the rock of Prometheus and
still, he forgets in whose promises the usurers truck.
Manufacturing Consent and All of that Media Stuff.
Ode to The 2016 Presidential Brawl.
The final Stretch to Curtain Call
A chance to vote near one and all
Calls to Mark patriotic expression
excepting Jim Crows voter suppresion.
Small Voices query the marked ill Temper
Between a wicked Witch and Orange emperor
as pungent odours assault every Nose
our inner child sees both have no clothes.
Where shall we? some truth to seek,
Citizen Journalists or Wiki Leak
whilst storied anchors salivate
A Chorus of Media Angels agitate.
Shrill Alto´s harmonise & Yield to Plaintiff tones.
The Soloists Look on, awaiting feared unknowns
Allegations, accusations & swinging blows
‘Until The Fat Lady Sings´´ no-one Knows’.
Roger G Lewis 2016
The Story of the 11th Round
Submitted by blietaer on September 8, 2010 – 4:41 pmNo Comment
The story of the 11th round illustrates how the introduction of interest in a monetary system forces artificial competition amongst its users beyond what would naturally occur.
Once upon a time, there was a small village where people knew nothing about money or interest. Each market day, people would bring their chickens, eggs, hams, and breads to the marketplace and enter into the time-honored ritual of negotiations and exchange for what they needed. At harvests, or whenever someone’s barn needed repairs after a storm, the villagers simply exercised another age-old tradition of helping one another, knowing that if they themselves had a problem one day, others would surely come to their aid in turn.
One market day, a stranger with shiny black shoes and an elegant white hat came by and observed the whole process with a knowing smile. When one farmer who wanted a big ham ran around to corral the six chickens needed in exchange, the stranger could not refrain from laughing. “Poor people,” he said. “So primitive.” Overhearing this, the farmer’s wife challenged him: “Do you think you can do a better job handling chickens?” The stranger responded: “Chickens, no. But I have a much better way to eliminate all the hassles. Bring me one large cowhide and gather the families. I will then explain this better way.”
As requested, the families gathered, and the stranger took the cowhide, cut perfect leather rounds in it and put an elaborate stamp on each round.
He then gave ten rounds to each family, stating that each round represented the value of one chicken. “Now you can trade and bargain with the rounds instead of those unwieldy chickens,” He said. It seemed to make sense and everybody was quite impressed with the stranger.
“One more thing,” the stranger added. “In one year’s time, I will return and I want each of you to bring me back an extra round, an eleventh round. That eleventh round is a token of appreciation for the improvement I made possible in your lives.”
“But where will that round come from?” asked the wife.
“You’ll see,” replied the stranger, with a knowing look.
Assuming that the population and its annual production remained exactly the same during that year, what do you think happened? Remember, that eleventh round was never created; it was never cut from the cowhide.
As the stranger had suggested, it was far more convenient to exchange rounds instead of chickens on market days. But this convenience had a hidden cost: the demanded eleventh round generated a systemic undertow of competition among all the participants. One out of every 11 families would have to lose the equivalent of all its rounds, even if everybody managed their affairs well, in order to provide the eleventh round to the stranger.
The following year, when a storm threatened some of the farmers, there was an atypical reluctance to assist neighbors. Families were now wrestling one another over that eleventh round. The introduction of interest-bearing money actively discouraged the long-standing village tradition of spontaneous cooperation.
The Eleventh Round is a simplified illustration for non-economists. The impact of interest was isolated from other variables by making the assumption of a zero-growth society: no population increase and no production or increases in the money supply. In practice, of course, all three variables (population, output and money supplies) grow over time, further obscuring the impact of interest.
The point of the Eleventh Round is that, all other things being equal, the artificial competition to obtain the money necessary to pay the interest is structurally embedded into the current system.
So how does a loan, whose interest is never created, get repaid? In a static or declining system, it requires someone else’s principal being used. In other words, not creating the money to pay interest is the device used to generate the scarcity necessary for a bank-debt monetary system to function. It forces people to compete with each other for money that was never created, and penalizes them with bankruptcy should they not succeed. When the bank checks creditworthiness, it is really verifying their customers’ ability to compete successfully in the market place– that is to say, to obtain the money that is required to reimburse the principal and interest. Ultimately, someone must always lose.
In the current national currency paradigm, one reason why so much attention is paid to central bank decisions is that increased interest rates necessitate more bankruptcies in the future. The economic pie must grow that much faster just to break even. The monetary system obliges us to incur debt and compete with others in order to perform exchanges and pay the resulting interest to the banks or lenders. No wonder “it is a tough world out there,” and that those who live within a competitive monetary system so readily accept Darwin’s supposed “survival of the fittest.” Excerpt from Of Human Wealth (Forthcoming).
This distinction is predicated on a Materialist determinist philosophy and the seismic shift in the pecking order engendered necessarily offends all of the social structures which the Pigou Dalton principle advises against offending.
the Housing Crisis ( Affordability Crisis) can not be analysed without a wider context of the function of Debt outside of the Specific secured lending instruments for things such as Property. Property has become a Luxury Good where it is mortgaged and also a rental income flow for the Technocratic and Bourgeoise “Elites” The Housing Price bubble performs a kompromat / Anxiety Stick and carrot nexus whereby the Administrative court around the Oligarchical Fat cat/oligarch/Aristocrat class remain in fear of House prices falling, or Mortgage payments going up if interest rates rise. Similarly, Commercial Banks are totally invested in the ELite Housing bubble.
It occurred to me this morning that Redemption is the reward for paying off a mortgage, I had been aware of the religiosity in the linguistics of the Death Pledge covenant, but still “REDEMPTION” shouted out at me this morning, Why?
I have a wider model of how the Social control mechanism works it is also I think highly relevant that Student debt, etc has ballooned in proportion to the lack of home-ownership prospects for younger people.
Will (Matt Damon):
“Of course that’s your contention. You’re a first-year grad student. You just got finished readin’ some Marxian historian — Pete Garrison probably. You’re gonna be convinced of that ’til next month when you get to James Lemon, and then you’re gonna be talkin’ about how the economies of Virginia and Pennsylvania were entrepreneurial and capitalist way back in 1740. That’s gonna last until next year — you’re gonna be in here regurgitating Gordon Wood, talkin’ about, you know, the Pre-Revolutionary utopia and the capital-forming effects of military mobilization… Wood drastically — Wood drastically underestimates the impact of social distinctions predicated upon wealth, especially inherited wealth.’ got that from Vickers, ‘Work in Essex County,’ page 98, right? Yeah,
The explanation of the rise and fall of the world system’s leading powers in terms of uneven economic development tends to overlook the role of the creation and management of public credit and national debts. Prior to 1815, the Netherlands and Great Britain owed a significant proportion of their respective victories over the larger and wealthier states of Spain and France to the development of competitive financial capabilities. Winning, however, leads to higher absolute debt burdens which, prior to 1945, encouraged postwar reductions in governmental expenditures. In this fashion, world leaders have contributed to the erosion of their preponderant capability positions before the emergence of international rivals. These ideas are elaborated within the context of George Modelski’s long cycle of world leadership theory and through a brief review of war-related financial problems between 1500 and 1815 and the consequent development of national debts. The longitudinal analysis of British and American public debt data provides collaborating empirical support.
War and Systemic Capability Reconcentration
William R. Thompson and Karen A. Rasler
http://libgen.rs/book/index.php?md5=139AFD53278BBD5B4AC07930C2279C19
Economic Coercion and Power
Redistribution during Wartime
Rosella Cappella Zielinski, PhD*
War is an opportunity to revise the distribution of power among states
in a short amount of time. While most attention is placed on the
changes in the relative power of the loser in a hegemonic war, arguably some of the most important changes happen within victorious
alliances. Power redistribution does not take the form of the destruction of an ally’s
military forces but through economic coercion. The primary mechanism by which an
ally can engage in this coercion is via exploiting its role as a creditor.
Creditor allies are increasingly present during wartime. The author finds that,
since 1950, external sources of war finance have far exceeded domestic sources.1
Before 1950, 52 percent of belligerents engaged in foreign debt, whereas 72 percent have
in the post-World War II era. The figures are more dramatic when one considers all
forms of foreign war finance. Before 1950, 25 percent of states used resources from
abroad to cover 25 percent or more of the costs of war; after 1950, 80 percent of states
relied on resources from abroad to cover 25 percent or more of the costs of war. As
credit becomes central to war-fighting ability, states with poor credit are more likely
to form alliances with states that maintain favorable access to international capital
markets.2
Given this increasing potential for economic coercion, under what conditions
can a state use economic coercion against an ally? The various literatures on sovereign
debt, economic statecraft, and alliances overlook economic coercion during wartime.
Works that examine lending emphasize debt repayment ability. The literature does
not account for the prerogative of lending states and the desire to extract concessions
beyond repayment with interest. The economic statecraft literature, emphasizing
peacetime conditions or wartime denial, does consider how states can exploit their
allied relationships for gain beyond advancing the war effort. The alliance literature
overlooks power redistribution amongst allies, focusing on power redistribution between alliances or the effect of power shifts on alliance formation and cohesion.
THE GOING DIRECT PARADIGM 
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