Beyond an Autonomic Democracy: Economics vs. Phronesis
‘The rationality of the economy and the problems caused by its irrational expansion’.
By Ylli Përmeti
Abstract
This is a second paper after the analysis of Phenomenology of Democracy: Demos vs. Cracy and its equilibrium; which deliberates about the persistent problems of our economy. Its object is globalism and its risks. Point of departure are the steady crisis all over the world. It treats concisely the manipulation of monetarism and proposes new ways on how to apply it in various ways or on how to get rid of money. Therefore as will be shown, the framework of money and of the economy is directly related with the commercial laws; and as such, this paper canvasses about the established commercial laws and proposes a new formula on how to alter these laws based on phronesis. The purpose is to reverse the extremely bad development of climate and to insert the notion of rationalism in commercial and economic laws. Major attention is of course contextualism and ethics regarding the economy. Also, it ponders the rationalism of capitalism and criticizes heavily academics, governments, states etc., who try to solve the problems of our economy with a new global institution of finance. Further, defines socialism in the real realm by approaching two kinds of capital: Private capital and common capital —with the latter, more sustainable. To achieve both these conceptions the methodology applied is the notion of demos and its particularity.
Key words: Economy; Tally Economies; Fractional Banks; Marxist Theory of Money; Monetarism; Manipulation; Inflation; Deflation; Depression; Global Banks; Global Finance; Rationalism; Mercantilism; Neo-corporatism; Infranationalism; Neoliberalism; Capitalism, Globalism, Socialism; Demotism; Autonomy; Slavery; Freedom; Politics; Knowledge; Epistemology; Phenomenology; Universalism; Context; Risks; Crisis; Wars; Management; Commercial Laws and Phronesis.
Chapter two
The Phenomenology of Democracy: Demos vs. Universalism
‘Democracy does not rule the world: what rule the world are the natural laws with its demoi’; this is the highest spiritual level of a globe.
Introduction
The World Tangle in a Glimpse
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World in Collapse
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While the global crisis is getting worst, in France revolutionary movement lays ahead [1]. The end of capitalism and the ultra-lefts they declare must come: the Nouveau Parti Anti-Capitaliste (NPA) is already part of the storm that has captured the world. The Trotskyist ‘entryism’ is their ‘trick’. Evidently, our mind goes backwards and thinks the years of the French Revolution (1789-1799). Therefore, having prelude this period and accustomed by these radical changes in Europe, French Youths, looks that are the ring leaders again.
Meanwhile, the “inventor” of the European Economy -- Britain, is trying to sort out the economy disaster by praying to God for help: Tony Blaire the new ‘Pope’ has declared his love for God and is trying to ease the situation, by giving speeches around the world to persuade people that the solution is out there…inaugurating Obama’s fatal by saying: ‘that faith should be restored to its rightful place, as the guide to our world and its future’ [2]. On the other hand, Blair wants to be the President of the EU without having first regulated the economy of Britain — regardless that he inserted the notion of democratic socialism or radical liberalism in his political “revolution”. Despite the fact that the established critic of New York Times Paul Krugman is sounding the alarm bell, that we are getting in a deflationary trap and the American economy is on the edge of catastrophe [3] -- no one can predict the disaster.
This almost ‘outright deflation’ is heavily criticised these days by the most influential conservative commentator Rush Limbaugh: The mindset that Obama is using is bipartisan he says among other things [4]. Being in this light, the Secretary of Defence of U.S. Robert Gates regarding Iran says that ‘the military option’ must be kept on the table [5]. These allusions ‘smacks of’ all the time in our media. On the other hand, to strike no one can today: Lord Mandelson the Business Secretary tells unemployed strikers in Britain to go to Europe to find job [6].
Personal bankruptcies are another hot potato, raising the number of labours up to 50%, and the public money in Britain is rescuing the banks [7]. In other words: ‘socialising the loss and privatising the profit’. ‘Contactless money’ is another trick of the superclass: Japan since 2007 is using electronic money [8] confusing and getting the economy (that is false anyway) into the abyss. Apparently, the alleged antagonism among leaders in Europe and elsewhere is evident: Sarkozy criticizes his homologous Brown for wrong policies and the relationship between the two countries is nose-diving [9]. This antagonism is of course part of the game. Without it —would not be elite gossip in the media!
After this inauspicious forecast based on our media —alas, global banks have not anymore money to borrow to lenders. This is why NATO’s wars do not stop fighting. This is why the New World Order cannot stop its demarche. This is why the Obama’s political view is to support the neo-corporatism. This why the pre-orchestrated crisis will get worst. But why? Is it all what it looks or is there something else that concerns the scholars of the New Global Government? This will be therefore our main question to attack in this chapter. Additionally, this text will defend the demise of social democracies, resource wars, rainforest destruction, species extinction, global warming, and of course the cul-de sac of our global economy.
Analysing the world tangle
Introduction of the world tangle and what will be studied in this chapter...
First, from the above we have to take into consideration the movement that is taking place in France. As we know from an empirical and historical view to be anti-capitalist today —is being anti-democratic. Democracy and capitalism are inextricably linked and this linkage makes us confused about what we see today as radical movement. The question therefore is what kind of capitalism would someone claim in the today’s world? Contrary to the mainstream concepts this paper will introduce later on two kinds of capitals: Private capital and common capital; with the latter known traditionally as socialism but applied historically centripetally and universally. Therefore according to my view, common capital in contrast with private capital is more sustainable only when applied demoticaly. Demos knows how to rationalise its actions and therefore we will examine the advantages and the disadvantages of the two systems: The first proposed and materialised in part in today’s societies with the lack of introducing rationality into the actions undertaken by laws, governments, communities or individuals; and as such, has never been approached in human history in the science of economics.
Claim therefore, in this paper, is to apply rational actions —because, as will be explained later on —we blame that private capital is the problem that causes social instability; and as long as there will be private capital there will be all the time manipulation of the system, that leads us to the conclusion —of changing the system upside down. Being in this light, globalism has two major different components that I shall consider in the following analysis; and being so, I aim to sensibiliser every new movement, parties, governments, states, communities and every new commercial law.
The first one is the endless appearance and expression of a global bourgeois in human history. These bourgeoisies have not changed from the ancient years; and apparently, their tactic is: Destroying and making capital out of nothing. Apparently this is the dynamic force that creates new bourgeoisies; and this is expressed in the same way along all human history. Furthermore, these allegedly bourgeois sometimes they’re called noble elites operate under the manipulation of human mind in the entire domain of social life. Moreover, it is expressed through power to gain more power. In addition, it is expressed always in the same way, i.e. of being centralised as capitalist and the same time being omnipresent all over the world. In other words, big entrepreneur that tries to undertake the regulation and deregulation of commercial laws by expanding their power in every corner of the ‘new world’ —having as ‘centre coffer’ their country. Obviously, their goal is to gather more opulence from other countries, because when a state, government, partnership or company is first-created —is created under the manipulation of the system and of personal profit.
In fact, I shall analyse later on two major problems of our economy: The continuously manipulation of monetary policy by the longstanding governments and the unstopped flourishing of the world corporations that serve as bulwark of the time-to-time governments; and which operate under the excuse of the free market. Ironically, all this happens under the justification that there is no other way to escape from this form of market. Therefore, ‘free trade’ as will be explained later on equalises itself with negative production and not positive. Moreover, negative production coincides with the hierarchical central banking system that control both industry and governments. On top of it, stands the utopian global government as a new world game. In this world-game, are the major powers of the trans-national elite: U.S, Britain, Japan, Canada, Germany, France and Italy. In the same game of power we see as well other actors that try to transcend the others that lead the world of today, for instance: Brazil, India, China and Russia.
Not being surprised, we can see even in regional politics the same craving for power. These powers, justify their actions under the excuse that they try to help other countries to lend money or creating jobs to develop their economy. Thus, their trick is as stated above ‘creating capital by destroying’ the ecosystem. As this conviction becomes basic component by the elites —both, by small countries and big countries, we will see in the future more tangled masses and more distraction in the economy —therefore on the planet resources. We will see also, more famine and more war in the sense of getting power more than the others in the inter-nationalised domain. All these actions are justified and known by the western lawmakers and have been baptised as ‘“democracy” of infranationalism that works by using the governance of neo-corporatism’. Therefore, this is not simply a ‘zero-sum game’ but instead, this is a multidimensional-loss game.
Thus, the second and the most interesting component that the new movements or humanity have to reflect on —either we like it or not, is that human being on earth in whatever system they choose to develop, has to consider his actions, the same time rationally and universally. This conception was first defined by Plato, with the only difference that at the time was impossible to empower this conception i.e. ‘the injunction that to avoid relativism our thinking must be rationally and universally grounded’ [10]. This conception has been achieved partially in ancient societies but nowadays is impossible to be empowered.
This point will be explained later on in detail with economic examples. Our actions as stated above must be therefore grounded rationally and universally because as we know, we are inter-dependent from each other, as individual, communities, countries and continents, and the same time we share our own values within our community and the rest of the world. In other words, we share simultaneously the same home: Earth. Thus, we have to find ways on how to organise and to integrate our planet population into the new era of our global interest. We have to call it interest because it is in our interest to keep earth clean and healthy. Therefore it is on our hands to keep it healthy. The means that help us to keep earth healthy is our technology. Technology is that science that will solve our problems for ever. Earth is every day smaller and smaller because of our technology. We live in a society based on technology and not at all based on religion or politics. Politics is the art of the polis and have never to be confused with the art of how to spread throughout our lust for abundance. Politics that sees, itself, as a global phenomenon is an unsuccessful attempt —is what we call relativism. This lesson must be learned by the superclass —otherwise, earth is going to collapse.
Therefore, globalization must be seen as ‘economic actions’ that emphasize first our context-values with regard the cohesion of our society and strengthening thus the notion of democracy fulfilling the rudiment of meritocracy, where always this rudiment being first rationalised and second universalised. Therefore, next section will introduce our global finance capitalism. The reason is to be able to identify the propensity of our economy.
Global Finance Capitalism: the Tangle of the Economy
Identifying the symptoms of universalism against demos accompanied with harsh criticism.
Let us have a glimpse then on what our economists around the world believe. We have to stress at this point that our economists around the world operates under the illusion of rational governments, under the leadership of meritocracy, under the well-functioning of democracy, under the understanding of anarchy, timochracy or isocracy (q.v. see chapter three). These human components are unknown to the academics or architects of the present economy; are not part of their vocabulary; they do not ponder under rational thinking but instead, under the paradox and human slavery. All these, because as Foucault stressed: ‘social sciences operates under irrational power’. This is not because they are not rational but they try to rationalize a system that cannot be rationalized in the way that it is formed. Then, time to witness some of them.
One of the most prominent in the American economy last decades is Hyman Minsky. According to Whalen’s paper Minsky’s theory is based on an ex ante presumption, and the main thing that Minsky accepts, is that, there is a persistent problem: [N]obody ‘up there’ understands American capitalism. Economy is a complex time-dependent system. Society is an ‘evolutionary beast’ changing in response to endogenous factors, not an equilibrium-seeking and sustaining system [11]. Evidently, Minsky knows very well the functionality of the finance, on how it works or it operates by accepting that the present capitalism is ex genesis unsustainable. What he does not know is that money cannot be universal; cannot expand in the entire world; cannot be managed universally; and as such, money creates knowledge only demoticaly; and knowledge creates power only demoticaly, because more the power less the rationality and less power more the rationality. Power then must be changed in order to be more rational (real democracy) and also economy, as every other knowledge, act or science, is as Flyvbjerg pointed out following Aristotle, context-dependent (the same as is housekeeping or art i.e. can be done in one way or in another or not done at all), and because of that he insist: [t]hat production precedes exchange —and that finance precedes production. Thus, credit and finance are at the centre of capitalist development.
Therefore, all he knows is the results of credit in our economies and as such, our societies do not depend on exogenous factors. But this is not true! Yet, we can see in Davos what happened these days (28.01-02.02.2009): All the superclass agreed to light the motors of protectionism; measures that the world leadership have taken in the past as well. The only difference with now is that the past period was not so interdependent in the economy. Past economy has kind of autonomy in its operation; now, no economy has this autonomy —consequently, once a bank/company loses/breakdown its rational thinking or its rational management — all the world gets in trouble. Thus, the next paragraph and the graphic shows a clear mirror of the past four hundred and two years:
[T]he US economic experience has shown since 1933, discretionary policy interventions and institutional containing mechanisms can both be utilized to promote economic stability. Counter-cyclical fiscal policy (achieved by what Minsky called ‘big government’) and lender-of-last-resort central-bank initiatives have been among the most potent stabilizers employed in the past half century. Stages can be identified --and we might now be on the verge of creating a sixth. The five stages can be labelled as follows:
Merchant capitalism (1607-1813)
Industrial capitalism (1813-1890)
Banker capitalism (1890-1933)
Managerial capitalism (1933-1982)
Money-manager-capitalism (1982-present)
Stages of capitalist development
Graphic Missing...
Hyman Mynsky’s theory of Capitalist Development
Clearly, we can see explicitly from the graphic above that power is possessed in a few hands a long its history, at least for the last four hundred years. The only period that power is dispersed according to Mynsky’s chart (if not in probabilistic potential events) is the period of Merchant and Bankers (1607-1813). All this is because social structures have been inherited from the antiquity to enslave the masses. This point will be explained later on in detail. Therefore, we cannot say that we live in a democratic or equal society, but instead we lived, live (and will live) in a society of total obscurantism therefore psychological, political repression and at this point I would like to share the words that President Kennedy declared before publishers and associations in 1961:
…[T]he very word "secrecy" is repugnant in a free and open society; and we are as a people inherently and historically opposed to secret societies, to secret oaths and to secret proceedings…Its preparations are concealed, not published. Its mistakes are buried, not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumour is printed, no secret is revealed. It conducts the Cold War; in short, with a war-time discipline no democracy would ever hope or wish to match.
How sad, to read, to hear, to watch to hearken and never know the truth. What to say and whom to blame? Maybe religion, maybe states, maybe governments or maybe ourselves —that do not open our minds. But as indicated in first analysis (The Phenomenology of Democracy: Demos vs. Cracy) I blamed explicitly male mind which is demonstrated through abstract thinking and not concrete; that is why, we have to stop it now or never. After his attack on the American system president Kennedy was assassinated. Therefore the system that President Kennedy was trying to fight has now captured the entire world and the future of the world is unpredictable. As we indicated above, Minsky’s theory of U.S’s capitalist development began with the suggestion that a ‘sixth economic stage’ might be now emerging: so to say, a new era of coordinated policies and institutions that might be called ‘global finance capitalism’. Unsurprisingly, Kenneth Rogoff chief economist of the International Monetary Fund (IMF), so to say, another scholar of the conquest said these days on BBC (10.02.2009), ‘that we need an international regulation, entirely new agency, i.e. global regulation’. These aliments in their mind derive from the dim-sightedness of their brain. They cannot see that their science will blow up all humanity if this pseudo-science goes to complete its realisation. Moreover, their science will produce an unsustainable and bloody society and will exterminate one forever the most sustainable institution of human being, that is: Family. Therefore, the reasons of the social instability that will be provoked by their decision will be explained in the coming sections in detail.
And the conquest continue
In the same track of universalism, is another conspicuous economist; this time, with a new hegemonic theory: Charles Kindleberger, whose analysis of the 1929 depression is widely accepted as the precursor of the theory, states that…‘[f]or an international system of trade and finance to function smoothly there must be a hegemon. This is so because there is a collective action problem in that regulation and institutionalization of trade and finance is a public good, that is, it benefits the community. To solve the collective action problem, a hegemon takes the lead and is motivated to do so because of the benefit it gains; for example, the United States benefited greatly as the reserve currency under the Bretton Woods system…’[12].
If that is not a conquest or slavery then what is it —I am just asking? We know very well from our small governments (compare with the big government that these gentlemen propose to us) that it is not possible to control their power; what to say then for a global power? It is useless then to continue and to analyze these gentlemen, for one reason: Big government equal zero rationality; this is the equation that comes naturally and spontaneously in our mind. Unfortunately, all media around the world believes that this is the final solution of our economy. Therefore, what media believes -- believes the population. This new indoctrinistic propaganda will not survive today, because, there are two kinds of media: internet against conventional media; the first therefore -- will win, despite the fact that there are efforts to censure the new dictatorship that is coming up. Also, there is another reason: Freedom is the ultimate value of human being; and being so, slavery cannot survive upon freedom.
What to say then when a society develops its own independent economy: Does the big government offer any solution to their problems? Take, say, the island Samsø in Denmark that has invented and evolved its own technology with zero emission carbon dioxide and is totally independent from centre governments. Further, consider my own village Përmeti in Albania or other countries around the world; we have invented our way to develop technologies, values and tradition that has nothing to do with governments and global finance capitalism or hegemon that is assumed to be U.S or the G7. Hegemony is already obsolete and cannot anymore claim normative rationality in a global scale.
The rationality of capitalism is determined by its own nature that is, independent; and achieved only in an autonomic society. Global rules are out of our human nature and being so, they are a failed effort. Apparently, in the same track of global institutions is the Hague judiciary. As will be analysed in the third chapter, judicial and global rules are not and could not be part of our actions. [T]he juridical system is utterly incongruous with the new methods of power, says Foucault, methods that are employed on all levels and in forms that go beyond the state and its apparatus…Our historical gradient carries us further and further away from a reign of laws [13]. (Emphasis added)
Thus, irrational laws and international “exuberance” or strata that create always social tensions are not and could not be part of our nature. For two main reasons: If Aristotle with his conception of the particular and universal meant a city, today the whole world have misinterpreted his conception and have permeated it as a globalism —meaning that, as long as there is a possibility of running an economy for the entire city, why therefore, not for the entire globe? And second reason is the Platonic conception: That is, to avoid relativism one should act the same time rationally and universally. Therefore, if we accept this story as it is laid down by mediocre economists or scholars of universalism then ‘hedge borrower’, ‘speculative borrower’ and ‘Ponzi borrower’ will be our last home…
To understand therefore the ‘Ponzi borrower’ and its nature in the next section will be introduced the origin of money: The reason is to apprehend in deep time its functionality; and if we don’t change now the system we will get in serious trouble in the future.
The Origin of Money
Croesus as Point of Departure of Money Manipulation.
Methodology applied:
i)Ontology (the character of money)
ii)Phenomenology (as subject of nature)
iii)Dialecticism (harsh criticism)
iv)Phronesis (practical wisdom)
v)Morality (the nature of money)
vi)Psychoanalysis (money as shape of the psych)
Indications and criticism
After having a short glimpse of the world capitalism and its consequences let us consider at this point another hidden story of the monetary policy: Its manipulation. In fact, all social institutions are created to manipulate human mind. Manipulation is the art of controlling people behavior without realizing it, and this is achieved by the today’s governments by using as an instrument the most hidden science of human history, and that is, money. Surprisingly, most politicians, economists or philosophers have hitherto not dictated (implicitly consented […]) that money manipulation has been created by the ancient fathers of social institutions to control and to govern the population; and the most important —to profit by their proper work. Furthermore, to be on power endlessly.
But how our system manipulates us and the most important, to the detriment of whom? These two questions therefore will be elaborated in detail from the ancient years to today’s societies.
Let us introduce then on how money has been created in time and space. This retrospective will be for one reason: Money was and continue to be the expediency (in the sense of opportunism) of the long-standing powers, from the ancient emperors to the today’s states. For an understanding therefore of our global monetary policy we have to investigate its dark and obscure functions. Of course, out there, are voices that are trying to shout out and to mobilize the masses but it looks until now if not impossible —difficult to understand the detriment that the today’s governments are causing to our planet or to themselves.
Money thus plays a primordial genesis and subsistence of the economy that presupposes the well-functioning of capitalism. But in theoretical economics the genesis of money and the people who mint it are often surprisingly relegated to a secondary role. Therefore the genesis and the power of money will be well explained in the following sections.
To achieve it, modern literature has plenty of information of the origin of money. So, as Haas indicated in his dissertation, [a]ncient societies in the Middle East such as Mesopotamia and Egypt started their exchange with clay tablets. In other words, taxes, debts, and price lists existed for thousands of years, with clay tablets circulating before anyone had the bright idea of reducing transactions costs by creating money through stamping precious metals to coins and modern notes. Tax payments [of farmers] became standardised in terms of quantities of wheat or barley grain. Similar to the ancient economy of clay tablets, in medieval Europe for many centuries the principal instrument of commerce was the tally or tally stick which were preserved in temples which are known to have served as banks [14].(Emphasis added)
Therefore, from a society dependent on occultism, having as central institution the God Temples that served as a tax regulator, we live today exactly the same imprint: The Occultism of Fractional Banks which serves as an institution that controls all the others occults of the modern society. Apparently, this is the central concept of our society and this is as Castoriadis indicated, the new global occult of the constitution of reality. ‘[A] reality that constitutes the institution of society. Only the institution of society, proceeding form the social imaginary, can limit the radical imagination of the psyche and bring into being for it a reality by bringing into being a society. Only the institution of society can bring the psyche out of its originary monadic madness and what could well exist — and, at times, actually does — as a madness of two, three, or more. And this implies the ‘hereditary’ fabrication of individuals as social individuals who are able and who want to continue the fabrication of social individuals’ [15]. (Emphasis added)
This fabrication, as expressed in ancient Egypt, has been accomplished at that time, by using gold, and, which was first used as commodity money, as described under Marxist theory of commodity money: “[T]he Egyptians were the first to mine and utilize gold on large scale. Between 4000 and 2000 BC, the Egyptians may have produced as much as 750 tonnes of gold. Most of this vast treasure became the property of the Pharaohs, and a great part of it was used for the elaborate decoration of royal tombs. ...About 4500 years ago Egyptian and Mesopotamian received their wages in gold. ...The first banks were established in Babylonia which traded Babylonian gold and will become later net debtor of the Persia’s King. As Babylon’s banks were charging interest payable in gold and Persia’s total liabilities – payable in gold - were exploding due to the exponential function of interest, the king of Persia became indebted. As Babylon had the gold, Persia’s king desperately needed, Persia went to war against her creditor and conquered Babylon in 536 BC confiscating Babylon’s gold [16]. (Emphasis added)
Therefore, as indicated above, this was the first foundation of the world psyche that established the enslavement of the individual, psyche that serves the today’s societies to be the pillar of the infinite war against wages and against mind fabrication. This was, also, the first step of creating a hierarchical society, an infinite predicative enslavement that paved the path of the greatest empire of the ancient world that was Persia.
Thus, [i]n the further course of history, Persia lent gold to Sparta in international trade and then Sparta became a net gold debtor to Persia. After Sparta’s conquest of Athens, Sparta’s growing gold liabilities were transferred and debited on the account of Athens. As interests were compounding the new king of Macedonia and Greece, Alexander the Great, was faced with indebtedness. Therefore, Alexander invaded Persia and confiscated Persia’s gold. With the new Persian gold, the Grecian empire began to flourish [17]. (Emphasis added)
Only in this way would a society flourish and only in this way an invader will constitute later on the hero of an entire modern state and will be so, the cause of the quarrel between two modern states (Greece vs. Macedonian) by claiming their identity —and, being so, the plunderers of the modern mind. Exactly at this age would flourish the madness of the first enslavement by a King who innovated and established the foundation of a modern society.
Thus, [K]ing Croesus in Lydia from 560 to 546 BC coined the minting of coins. Before the minting of coins gold, silver, and other scarce metals were accepted as legal tender for tax liabilities in Lydia. As Croesus invented the minting of electrum coins - electrum was an allow of gold and silver - Croesus created a pure bimetallic system at this time by minting coins of pure gold and pure silver in a specific ratio of one to ten weight units. By minting new unique coins of a new allow, Croesus actually increased the pressure on his debtors, the pressure which originates from the charging of the “unservable” interests, to a new historic maximum. As Croesus’ banking system lent out new unique coins, it is obvious that the interests payable in electrum coins are unredeemable respectively “unpayable” by their nature. Interest banking in self-made coins is similar to a pyramid scheme. The earlier the debtor becomes indebted and insolvent, the earlier the covenants of the credit contracts become effective increase the creditor’s wealth....With this new invention of coinage, Croesus managed to amass unimaginable wealth within few years of his reign. After the invasion of Persia Croesus was killed in 546 BC, but in German language Croesus is still present in the saying “rich as Croesus”. The advantage of the creditor was the disadvantage of the debtor who helped ideas of usury [18] to spread. Croesus' monetary innovation was important, and it spread quickly over the Mediterranean world and throughout the Middle East [19]. (Emphasis added)
As indicated above, this carcinogenesis has its roots in the heart of the sick mind of the ‘male society’ who established the foundations of starvation, of madness, of competition, of fighting, of insaneness and finally established the principle of war. This carcinogenetic foundation created in the further course of humanity the principle of an emperor who ruled the ancient world for more than one thousand years. Rome thus, will become the first exemplified concrete “science” and will create the preconditions of the Homo Erectus unconscious in human history. These preconditions of social manipulation were created, at first, in small cities and paved later on the way for an entire region of the world: Rome Empire, which will be later, the foundation and the sources of the western laws and the dream for a «global government» —will employ in the heard of its agora a system of decoinaging ...But Byzantine Empire did not employ this system: “...[B]yzantine’s monetary stability – i.e. zero decoinage - originates from the high mark-up of gold Caesar put on gold in relation to silver be creating a bimetallic standard. As soon as the bimetallic standard is lifted by minting pure or decoinaged monometallic gold and silver coins, the immediate effect of decoinaging becomes more profitable for a mint. Decoinaging monometallic coins are much more profitable for the emperor’s mint than decoinaging bimetallic coins. Bimetallic coins contain in relation to the mark-up of one metal against the other one relatively overvalued and one relatively undervalued precious metal tied in one coin together. By decoinaging, the mark-up of the relatively overvalued metal is partially offsetting the effects of decoinaging”[20].
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In sum: Croesus gave the idea of minting coins: Gold vs. Silver which will be later on the basic component of running a universal decoinaged economy of the Roman Empire. Therefore, the power that guided into these results the ancient economy was simply the lust for unlimited power, the unavoidable expansion of the coins, the growing population, and the need for more debtors and the uncontrolled desire of exploiting the usurped consciousness. This usurpation of consciousness will take place in the Middle Age glorifying thus the pseudo-society.
As indicated above two different periods should be noted:
1)Prior to Croesean Manipulation with the Egyptian, Babylonian, Persians and Greeks confiscating each other’s gold with the means of war and
2)After Croesean Manipulation which will be later on the basic science of bimetallism i.e. Gold vs. Silver.
The Gradual Imperialism of “Croesean Manipulation” from Roman Empire to XXI Century.
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Indications and Criticism
Without any doubt, western laws and its governments share their basic principles with exogenetic foundations. Foundations that even now, are nothing more than principles of impersonation. This impersonation of human behaviour interweaved, for the first time in human history, the pseudo-right, the pseudo-equality, the pseudo-justice, the pseudo-constitution and, eventually the pseudo-psyche of human mind. Thus, human mind is nothing else than the picture of an emperor, of a superior, of the one —who can manipulate and transform societies into a pseudo-being. Nothing else than money would never be created by human mind to keep human mind in perpetual dependence. Sickness that create perpetual sickness. Therefore, exactly, with the same nuances of sickness has been expressed the free trade of Italy of the Middle Age.
Thus, [I]taly became in the course of international trade a net gold debtor to Greek banks, indebted Rome conquered Greece confiscating most of the gold of the Greek empire. As Rome adapted the practice of banking (in gold) and charging interests payable in gold, pressure of compounding interest began to built up in a flourishing Roman empire and turned it into an aggressive imperialist Empire conquering neighbouring countries and confiscating their gold [21].
Croesus therefore in the course of history becomes the basic foundation of Roman Empire —ruling eternally by using money manipulation. Exactly the same period, Rome adopted the second manipulation of human mind; and that was the second invisible homo universalis, which expanded quickly in the entire world; and which will be known by the fathers of the ancient world, as ecumenism. This doctrine established for the first time in human history the ‘global government’; and initiated the first monetary experiment in greater area with unforeseeable results. But the doctrine of ecumenism to be achieved has to apply its rule; and this rule is the so called Divide ut Regnes which means ‘divide and rule’ —with “excellent” results until nowadays. This doctrine has been analysed in the next chapters with detail.
Thus, [i]n Rome, the market price ratio between silver and gold was about 6½:1, but the Romans priced gold at 12:1. They took a mark-up on their gold currency of about 100%. This kept the Roman system operating for the astonishing period of 1200 years. It was possible only as a result of a carefully enforced monopoly of gold production and the inherent waiver of decoinage [22].
Thus, monopoly of gold production came into vogue: As everything in human nature, once discovered by ancestors, afterwards becomes into vogue. Vogue is nothing else than the science of mind manipulation which appeared at the time to be the basic habit of social structures. This mind manipulation transcends from one generation to the other, from one emperor to the other, emperor in the sense of impero, which means to commend —and so, becomes the future structure of laws and governments —and this, could be called merciless in a logic jargon: ‘the ultimate usurpation of human mind’. As we shall see in due course, this usurpation of human mind has become into vogue nowadays with the accomplishment of a ‘global cinematography’, which serves to the social structures the stereotype of human behaviour; controlling thus the world of emotions. This emotional mind controlled has its negative results into our global family by frustrating our morals into ‘global brothel’.
Roman Empire therefore, sophisticated the science of mind manipulation and thus, paved the way for future generations of the city of Siena in Italy: So, ‘[i]n the year 1298, Siena’s banking boom came suddenly to an end, with the failure of its greatest bank, the Gran Tavola of the Buonsignori. This was a world bank, with agents throughout Europe and the Mediterranean basin. Among its borrowers were great merchants, cities, nobles, kings and even Pope himself. Increasing numbers of loans went sour. In the year 1298, a banking panic began in Siena. ... The bank of the Peruzzi, for example, had fifteen branches throughout the world, and was bigger than the Medici Bank would ever become. The big Florentine banks made foreign loans to the kings of England and Naples. This was dangerous business. Once it had begun, the loans grew inexorably larger. The banks could not call them in, for fear of default or confiscation. Early in the fourteenth century, Florentine banks began to fail. The Mozzi went under in 1302, the Franzesi in 1307, the Pulci and Rimbertini in 1309, the Frescobaldi in 1312, and the Scali in 1326. Six houses failed in 1342. Then, in 1343 and 1346, the three great houses of the Peruzzi, Acciaiuoli and Bardi all collapsed with a great crash. Not for many years would banking enterprise recover ...’[23].
As indicated above different banks collapsed; for two main reasons: On the one side stands the hyper-expansion of the banks and on the other side reappeared the Athenian unforgettable project of the autonomy of the city. In fact, as Fotopoulos indicated, ‘[t]he autonomy project reappeared in the twelfth century AD, in medieval free cities of Europe, but soon came into conflict with the new statist forms of heteronomy which, in the end, destroyed the attempts at local self-government and federalism’ [24]. It couldn’t be a different situation: Only a universalistic ecumenism accompanied with money manipulation would last for such a long time. However, the importance of the period described above by Haas, is the increasing number of loans, which lead to the great crash of the Roman Empire.
[F]or instance, in 46 BC, Julius Caesar set the Roman monetary system on a 12:1 silver-to gold basis. As the West Roman empire employed continuous decoinage of the gold and silver contents of their coins in order to overcome the shortages of indebted public households, inflation of nominal face values of coins relative to their precious metal contents was running for more than four hundred years until the eventual total decay of the West Roman Empire. Rome’s Eastern Byzantine successors kept their currency stable without employing decoinage. Byzantine managed to keep the price of silver in terms of gold constant for more than 1250 years and survived as economic and political unit until the sacking of Constantinople in 1204 AD[25].
Under such circumstances the tally stick economies emerged: [F]rom Mesopotamia and Egypt as an advanced civilization to medieval Europe the tally stick economy i.e. money without coins took place. Thus, [K]ing Henry the First of England reintroduced the tally stick for taxation and commerce in Europe around 1100 AD [26]. Regarding its functionality ‘tallies sticks are like clay tablets records for the documentation of debt/credit contracts and tax liabilities’ [27].
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In sum: Rome adopted the doctrine of Divide ut Regnes. Additionally, Rome conquered Greece confiscating its gold. Greece becomes net debtor to Rome. Rome priced its gold 6½:1 and immediately manipulated the system to 12:1. Meanwhile, Rome employed decoinage whereas Rome’ Eastern Byzantine did not. The results were that the part of Byzantine lasted more without any economical crises. After the fall of West Roman Empire followed with dark ages —in different cities of Italy re-emerged the desire of the Free Cities i.e. autonomy. Italy begun to flourish and afterwards collapsed. The reason is obvious: Loans were inexorable.
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Tally sticks: as subject of exchange
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A further analysis is needed at this point regarding the tally stick economies: The reason is that tally economies was an important and stable invention. Its functionality was quite positive: So, according to Haas [o]ne piece of the tally is called “stock” (from which our terms capital and corporate stock and stockholder derive) and issued to the creditor. The other piece is called “stub” (a term still used as in ‘ticket stub’) or “counterstock” and kept by the debtor. The King kept the stock. The taxed debtor kept the stub, because both halves were a complete record of the credit and debt and the debtor is protected by his stub from the fraudulent imitation of tampering with his tally. The King could buy with paying his “stocks” to sellers of goods and services [28].
As it is obvious from the above description, the king was transformed the basic foundation of the ancient society replacing thus the priest of the ancient world who was so the regulator and the deregulator of the economy, without having special knowledge or wisdom or special knowledge of the economy: The only knowledge he possessed was the minting of coins with a continuous and unavoidable devaluation of the currency. The devaluation of the currency becomes unavoidable in such a system because more minted coins is needed in the market — coins which acquire value from the existent coins in the market; and because of the continuous expansion of the economy, more capital is needed. Thus, more capital in the market —richer becomes the priest, the king or the bankers; because each coin possesses its interest. Power therefore was possessed by incompetent people and the investing strategy was derivative of this incompetence. However, this strategy of incompetence is adopted today by the International Monetary Fund (IMF) which imposes the same rules to the central national banks and this last foundation in turn has its negative results to the free initiative of the individuals. This last point will be elaborated later on.
Thus, ‘[i]nherent acceptance and marketability of tally sticks was maximum high - comparable with today’s treasury bonds - because tally sticks were required i.e. exclusively accepted by the king as the only legal tender for payment of taxes. In case the king did not want to wait until tax date, he could sell the tallies against discount via his exchequer and the merchant banks. Therefore, tallies worked like today’s (zero) bonds issued by public entities. By the middle of the 12th century, a functional market in government debt existed centred in London. Besides the original issuance by the government, tallies were also commonly used for credit contracts between private parties. When the debtor retired his debt, the two pieces of the tally would be matched to verify the amount of the debt. Tallies were transferable, negotiable debt instruments’ [29].
Remarkably, tallies have almost nothing to criticize regarding the requirement of its falsification: its nature does not allow such a Popperian criterion who says among other things that ‘what cannot be falsified shall be taken as right’. Except one thing: the King was the centre of the monetary game. However, [t]allies spread quickly over the European continent; commerce in Europe was for many centuries carried on entirely with tallies. By their means all purchases of goods, all loans were made, and all debts cleared. For more than 700 hundred years the tally (Latin talea, French taille, German Kerbholz) worked as the principal instrument of commerce [30]. (Emphasis in original)
But let us have a closer look at the relation between government and debtors. As Mitchel according to Haas observed: “... [J]ust like any private individual, the government pays by giving acknowledgments of indebtedness ... in medieval England, where the regular method used by the government for paying a creditor was by “raising a tally “on the Customs or on some other revenue- getting department, that is to say by giving to the creditor as an acknowledgment of indebtedness a wooden tally. ...But a government produces nothing for sale, and owns little or no property; of what value, then, are these tallies to the creditors of the government? They acquire their value in this way. The government by law obliges certain selected persons to become its debtors. It declares that so-and-so, who imports goods from abroad, shall owe the government so much on all that her imports, or that so-and-so, who owns land, shall owe to the government so much per acre. This procedure is called levying a tax, and the persons thus forced into the position of debtors to the government must in theory seek out the holders of the tallies or other instrument acknowledging a debt due by the government, and acquire from them the tallies by selling to them some commodity or in doing them some service, in exchange for which they may be induced to part with their tallies. When these are returned to the government treasury, the taxes are paid.”[31]
Therefore, government “obliges” its citizens for whatever action or trade is undertaken by the individuals of the state. Today with the banking reserves, respectively the central banks, this oblique consensus with the citizens of the state is enforced twice: One through the bank — which is the interest payment of the loan; and, one through the government —which is the levy of the commodities that the individual has chosen to trade in a free market. But, as indicated above, government obliges its citizens to do something, and do not seek consensus or direct participation in the decision-making that each citizen is subject and object of the affairs of the city. However, this fore-decision has two major implications: The first one is that the decision-rationality is avoided and the second one is that human consciousness does not integrate its self into the cohesion of the society. It should be noted here that a human consciousness is more aware of its own when it takes part directly in the decision-making of the city. By comparison, when someone does not take place in the decision-making of the affairs of the city then s/he has erased involuntarily its self from the active and productiveness of the pure consciousness.
Nevertheless, our investigation (as has been shown already above) will show in following sections —that along its history human being struggled in the wrong direction: To coerce the pure consciousness and the wisdom-rationality of the population. The results today are dramatic: the takeover of the land and of the richness of the ground has been reduced dramatically —with wars being omnipresent all over the world.
It is upon this period that reforms were in readiness and emerged the desire of inventing another Croecean system: Thus, the anonymous author of the Compendious regarding the bimetallic system ‘insists that, all the money actually current should cease to be so after a certain date, since the ‘forcing up’ of its nominal value has long since vitiated its functions of measurement; all coinage already minted should then be accepted only in accordance with the amount of metal it is estimated to contain; as for new money, that will be its own weight as its nominal value, so that henceforward only the new and the old money will be current, each in accordance with one and the same value, weight and denomination, so that all money will be re-established at its former rate and regain its former goodness [32]. ...Compendious was published before 1581, but was certainly in existence and circulating in manuscript for thirty years beforehand and inspired England’s monetary policy under Elisabeth [33]. (Emphasis in Original).
We have to keep in mind that the above author gave the idea to England’s policy-making to perpetuate further the manipulation of the existing monetary system. At that time, the Kingdom of England under Elisabeth was in its greatest day.
In the whole period of tally sticks which first appeared at beginning of 11th century and lasted until the beginning of 19th century Europe experienced according to Haas three inflationary respectively deflationary waves: First, Europe experienced the Renaissance in the 12th century which led to a booming period of the population and trade. It was the same period where the autonomy project as stressed above reappeared. Also, it is upon this period where the society of the middle age re-introduced the complexity of Roman Empire or Byzantine Empire. It should be noted here that a society becomes complex because of the monetary system they chose. And when a society fells in such a system behave immaturely. It creates endlessly problems in its operation. A society i.e. a city becomes complex because the possessed knowledge is concentrated around its monetary system and as long as there is not genuine or true monetary system or study the knowledge generated under such a system would be false, manipulative or not true. The result is that each infant which would be born in such a system would be immediately from the ‘first step to death’ a creature and result of a pseudo-science.
Thus, under such a boom as said above, the coming result was an interregional banking boom. ‘A wave of great inflation in medieval Europe set slowly in the middle of the 13th century, accelerated all over Europe and peaked with big bank failures of Italian (gold and silver) banks in the first decades of the 14th century’ [34]. This boom led to an increasing fertility and the growing population in Europe became complex-problem solving. The ‘growing population triggered rising prices for grain and the inflation of the late 13th century: “Rising prices led to a need for larger stocks of silver and gold, which drove prices higher still. Great kingdoms and small city-states teetered on the edge of bankruptcy. They struggled to survive by borrowing heavily at ruinous rates of interest and by debasement their money”’ [35].
This crisis will contract with the coming floods: The floods of 1315 and 1316 and a universal failure of crops ended the boom phase. In the second half of the 14th century the plague, the Black Death, sharply reduced population, and economic activity reflected in a many decades persisting deflationary depression [36].
Thus, as indicated above the growing population in city-states caused the rising of prices for grain and consequently for stock of gold and pushed therefore the prices higher. This phenomenon after all, was not the first in the history of money manipulation; that is why, the city-states became net debtor to neighbour city-states in high interest rates. The same force of market is practised nowadays by the neo-states. However, ‘in the 15th century economic activity, agricultural output, trade and commerce, slowly picked up again. Strong nation and city-states emerged in the later decades of the 15th century. Venice re-emerged as gold banking centre. ...In the second half of the 16th century, an inflationary wave built up again’ [37].
Therefore, if someone wants to identify from the above period why the growth picked up again, it is obvious: Because of the agriculture output. This is after all the only science that can cause huge problems in a society. Its insufficiencies can result in riots. Its impact can result in collapse of states. Hence the strong city-states emerged in the 15th century.
Thus, whenever a city concentrate or organise its self in agriculture, after that, will produce more products to trade and thus becomes healthier. The problem that arises in such an event is that the citizens will turn up in other activities such as financial service —forgetting therefore the real income in their life. Because richer the citizens of the city more money is accumulated in the aggregates of the economy and because more money is accumulated on the hands of the citizens then banks will emerge. The question therefore at this point is: What kind of wealth has or will accumulate our city: Money such as gold or commodity such as grain? If there is neither gold nor money in the possession of a city or individuals: How can they solve their problems of the famine? Of course by cultivating grain or other commodities. However, as will be explained later on this is a crucial point that has its implications and should be in the bull’s eye of a system.
Therefore, as it is obvious according to our analysis, inflation occurs whenever in a sector of the economy we add more money. In the same way, the existing money falls in value. For instance: If we buy today a loaf of bread 1 euro and we add more minted coins in the trade as a condition of the expansion of the population or of the sectors —then, we will have more money and probably (if not for sure) the same production in the economy. This means that the money existed in the trade have lost value because we will buy now a loaf of bread more than 1 euro. This happens because there are more money in readiness than real production. This is called money inflation. And this causes big problems even in a monetary system. In the period described above, what happened is: The growing population was accompanied with money inflation, hence the need for banks and for regulations. It is crucial to understand this period, because, whenever in an economy occurs such a “boom” —because of money inflation— there will occur the opposite of it: Population will turn on producing financial services such as lawyers, judges, politicians, media and so on. The reason is obvious: As long as there exist money in the bank, in the mind of the individuals or communities will grind the desire for other knowledge and further profit. This in short term sounds good but in long terms is self-catastrophic. Because, if we compare the existing population with the population of the period described above there is a big difference: The former knows to survive or at most to cultivate commodities the latter knows almost nothing about the balances with our nature. Furthermore, living with financial services and with the money already existed in the banks and with the free initiatives of the free market means that, the knowledge produced is by its nature negative i.e. not pondered by rational thinking in the first place. However, as will be explained later on this negative production and development will produce a disaster if we cannot call the present situation a disaster!
This explains the collapse of the grain and prices in the middle of the 17th century. Attention: From 15th century to 16th century we had in Europe a significant growth in population and wealth. In the 17th century we collapsed again. But, by the end of 17th century, growth picked up again with the same methods of money. But in 1694, the Bank of England by its formation attacked the tally stick system. Therefore, it may be no coincidence that the tally stick, which is exhibited by the Bank of England, falls due respectively expires in the year 1694. Issuing debt was an issue, which was outside the power of money changing merchant banks in the tally stick system. The use of hazelwood tallies continued in England until 1826. ...During the last four decades of the 18th century a new inflationary wave set in starting slowly with rising grain prices [38]. It is upon this period where the analysis of wealth about complex reflections and practices occurred throughout the seventeenth century. For instance, Scipion de Grammont to Nicolas Barbon were vested with the term, mercantilist. But this period does not change anything in the trade: It was concerned the same before with the measurement of money. During almost the same period in Britain took place the massive production of iron and gunpowder which led to the Victorian revolution. The gunpowder according to Haas made it possible for the first time for big banks in nation states to successfully challenge the financial system of tally sticks and replace it by a (fractional) banking system i.e. fiat money. After Gresham's law, bad money drives out good money, new paper and new bills issued by goldsmiths and banks drove out tallies.
These reforms were accompanied by the King’s endorsement. The significance of this period from 11th to 18th century is that tally sticks offered a stable invention. The basic characteristic of the tally sticks is that it is accompanied with an affair i.e. social service. For instance: If A has produced grain and wants to pay his debts he would go to the official to pay with his grain and will exchange the pieces of tallies. This means that the debtor is not bound by means of the official i.e. government —but by means of the tax. Therefore, the government would not have rights to his property. In contrast with the fiat money, a government or a bank acquires rights once you get involved in such a system i.e. using money. The former is called freedom and production the latter is called slavery and production.
Let us suppose at this point that our citizen do not have the possibility under the tally stick economy to pay his debt to the government because of not having produced anything during the year: What would happen? Simply the government will use up his physical energy either by using him in an action which might be a day or more in a construction, teaching or whatsoever or will double the tax for the next year. But under fiat money the government by law can confiscate the property despite the fact that it is unlawful and anti-human. Both systems i.e. tally stick and bimetalic have not the requirement of truthfulness. This is after all the dynamic force that guides the western civilisation of today and which is called Croecian Manipulation.
In sum: Priest replaced the king on managing the economy in 12th century and functional market in government debt started to be established in London. Tally stick economy reduced the power of government on its citizens. Tally offered stability and gradual growth. Tally operated under bimetallic system which caused three main inflation respectively deflation. The reason is the turn up of the economy in a complex system which is the financial services by producing lawyers, politicians, media and mythical knowledge. This contradiction has its negative results to the nature, consciousness or reason of human being. The consequences today are the multi-dimensional crisis: Economical, ecological, political, biological, freedom and so on.
Fractional Banking Reserves: The Perfect Manipulation
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Monetarsim: the “Extinction” of History & its "Laws"
We live a world of banking reserves being omnipresent everywhere in our cities but we don’t know its detriment; and even the fathers of these institutions have no idea of what they are producing. We live in a world where these institutions produce more pain than relief, more inaccuracy than concrete science, more injustice than justice, more irrationalism than rationalism. However, if we ask someone in the city; of what for, is standing the banking reserve in the centre of a city, it is hard to receive an accurate answer. Let us then investigate its dark and pervert functionality. We will start therefore from the following question: What would be the world today without banks or monetary policy?
But without having a glimpse of the monetary policy that has been applied in the past it is worthless to assess a society without banks and money. Thus, the meaning of the word “money” in the oxford dictionary has been described as ...‘what you earn by working or selling things, and use to buy things’ whereas the meaning of the word “monetarism” has been described as ...‘the policy of controlling the amount of money available in a country as a way of keeping the economy strong. The former statement is partially accurate, whereas the latter is not: First, money has got a universal value and as such, has to be recognised by the established power —and second, monetarism does not reflect a strong economy —on the contrary; it reflects a continually regressive economy; and this is because of the reasons described above; and also, because of its nature —that is, falsifiable. As has been said already, Croecean monetarism is proper manipulation. On the other side, money as a means of easiness does not reflect a problem solving in the social domain. On the contrary, it produces more crimes than anything else. But let us find out its laws.
The primordial role of a government is to create fiat money and to apply fiscal policy. But how money can be created? History reveals falsely that money was at first backed by gold and silver. And this method has been introduced ...[f]rom the practices of goldsmiths who established Europe’s first banks. Goldsmiths offered depository services for gold coins and issued receipts in 'bearer' form for any deposit. These receipts stated the face value in gold from the goldsmith deliverable on demand. As soon as these receipts became liquid, highly accepted, negotiable, and tradable bills, they formed Europe’s first form of paper money. In this way, the bank note originated. Thus, the bank note is logically securitized gold. The depositor obtained receipts for definite sums of gold, with which in course of time citizens became familiar. The receipts respectively bank notes circulated as money as easily as and more conveniently than the gold itself. At this stage, there was the gold behind the note. It was a promise of the banker to pay the holder of the receipt or note the sum of gold specified on demand in exchange for the note. The historic approach reveals that a bank note is a derivative of gold [39].
First law therefore is that money is not backed by gold even in its starting point, because if that would occur then there would not be government in the first place. After all, the reason of changing the existing regime of money from the fathers of this period was twofold: One, to profit more from the existing wealth; and the other— to block further any excessive freedom of the citizens. This phenomenon will introduce for the first time in human history the total enslavement of consciousness; consciousness that will be enslaved once forever in the monetary system. We are talking here for the whole system. No one can escape from this system once you get involved. The trouble therefore with this system is that the knowledge produced in such a system is not historical but it is anti-historical.
This is why, Francis Fucuyama called it —the end history. With the same title in his essay, Fucuyama was well-accepted in the late years of 1989, whose analysis were concentrated between two camps: Capitalist vs. Communism, and concentrated his power on ideologies, by concluding: The end of history will be a very sad time. The struggle for recognition, the willingness to risk one's life for a purely abstract goal, the worldwide ideological struggle that called forth daring, courage, imagination, and idealism, will be replaced by economic calculation, the endless solving of technical problems, environmental concerns, and the satisfaction of sophisticated consumer demands. In the post historical period there will be neither art nor philosophy, just the perpetual care taking of museum of human history. After all, Francis’s perception was against the so called neo-liberalism and the lack of ideologies in a globe becoming more and more dependent. In contrast, this essay, as has been shown in previous essays, is not against the neo-liberalism; but against the whole system: Putting it bluntly —against monetarism which has been defined as the system that is in core of every ideology.
Therefore, exactly at this age came the end of history; and this is because, money has a universal impact to the world population. It transcends the whole world from one part to the other. It produces and reproduces the whole consciousness. Imagine for a moment —for the sake of the argument, that until this age —city-states produced their own history, without any exogenetic impact of other cities. In contrast, today history is pre-fabricated. This prefabrication is made by our own invention that is called —money. But the argument goes further: On the one side money brings the end of history; and on the other —it is for the sake of easiness. Expanding our goal, means that: If the world carries on this system, then, in one thousand years would not be any history of human being. But instead, would be One history. Because history is prefabricated by the World Bank or by the money that governments have in their possession.
Therefore, there would be one invention, one history, one knowledge, one goal, one catastrophe, one science, one human, one race, one end. There would be no person that would describe neighbours live. There would be no friction in any society. There would be no person that would describe or “compete” their honour. There would be no dignity, no languages, no cultures, no traditions, no varieties, no diversity, nor even human race. Human race would be replaced by the so called holonomic conception; by a non being.
However, as the argument goes on, we have to return to our goal —that is, our monetary system; and to analyse it in deeper darkness, bringing it into light. So, as history reveals to us, from the first attempt since has been introduced our fiat money, in England, respectively in 1694 until 1833 the Bank of England changed its tactic: [N]otes were made legal tender for all sums above £5 in England and Wales. Since 1855, notes were not individually signed anymore, but merely printed and the name of the payee was abandoned. The same time, the Bank of England was awarded and assigned with new functions: It could mint gold into gold coins and lend them out against charging interest. Croesus’ principle drives up the price of coins relative to gold and other precious metals, because the debtor required additional coins for serving his interest liabilities payable in the mint’s gold coins [which] are non-existent. Thereby, Croesus’ wealth effect works for Bank of England, which amasses within a short time span wealth in coins, gold and other precious metals. As the scarcity of precious metals and especially coins in trade and commerce rises due to the compounding effect of interest, private credit contracts will be subsequently switched to contracts with coins as denominator [40].
One element should be noticed at this point: The myth between commodities and the coins that existed in the trade as a measure that balances the two heaps —falls. Another element is the zero-sum-game: On the one side is the bank that amasses huge wealth from its debtor and on the other, are standing the citizens who pay out their sweat in the form of interest. Therefore, second law that derive from the above discussion is that —commerce in coins is always a zero-sum-game.
But how came to our vocabulary the word fractional banking reserves? The following paragraph gives us a mirror of the word and of its manipulation. Thus, [a]s all outstanding bearer certificates were usually not turned in for physical delivery at the same time, “goldsmith banks” could issue more certificates than actual gold in deposit, charging also interest payable in gold for the additional “unbacked” paper certificates. The gold coins kept in reserve, as a proportion of the amount of receipts outstanding, became known as the “reserve ratio”. Obviously, as soon as the reserve ratio is below 100 percent, banking becomes extremely profitable, as interest payable in gold is charged for a kind of “fictitious” certificates printed cheaply in the back office. The lower the reserve ratio is, the higher the bank’s profit. The term fractional of fractional reserve banking derives from the reserve ratio [41].
Third law therefore from the above discussion is that a fractional banking reserve does not apply any democratic or transparent rule through its citizens. And this happens because of its goal: Its goal is to profit not to run the economy. If banks were there only to run the economy there would be no problem; but banks are there for their own profit. Therefore, there is not contestation at this point. In addition, if bank is private —then the profit would go to the owner of the bank; and, if bank is central or governmental —then the profit would go to the government. The question therefore stands on where would go this profit: To positive knowledge or to negative. Further, there is the lack of applying the rule of logon didonai in the domains of a society. Also, the profit is not meritocratic but manipulative. The barter principal therefore falls in its dark functions.
Proceeding from this point of view, one should ask: How to change this institution? We will have plenty of time to melt down this fragile science. Thus, without having diagnosed its weak points —we will not go further in our case studies accompanied with propositions. Therefore, as stated above, banks were legal minter of the gold coins and gradually became the proprietor of the whole gold in a country or at least, of the gold that was declared by its citizens. By accumulating thus the whole gold bank would have the possibility to manage its monetary policy. The more a bank accumulates gold the more it becomes powerful. The question therefore, is what exactly is doing a bank at this stage? At this stage the bank will turn on doing charity. Therefore a question arises: Charity with whom wealth? With the wealth that already exists in its reserves, accumulated by its citizens, healthy families, big organizations or companies. Because their wealth is already in the possession of a bank. Bank becomes therefore the gamble of the economy. As soon as this process becomes established in an area bank expands its branches. And this process goes on.
In the course of its gamble, bank has to be certain of their bank notes: The more there are the less is the possibility to be liquidated. Default therefore was at first place as a snare. In order to minimise this credit risk, it became common for bankers to ask for collateral and fix a specific set of covenants in the credit contracts. From the banker’s perspective, collateral acts as a cushion in the event of the debtor's default [42]. But another issue arises at this point: How much gold would be in the possession of the citizens? This question arises because there is always demand for more gold from the transactions of the citizens. This can be explained under two reasons: a) More the investing strategy (capital) more gold is needed; and b) The growing population made it possible to introduce fiat money because gold was not enough. Fiat money therefore backed with what? To avoid this problem governments introduced to issue bonds as an instrument to back the money already existed in the economy. What therefore presupposes a government bond? To represent the golden policy that already existed from the banks. Therefore, the more bonds there are the more money there are; the more money there are less is the value of a currency.
This is called devaluation of the currency. But bonds are backed by nothing in a monetary policy. This means that the whole economy stands upon thin air; the same, as the money has been already created. The bullion gold that supposedly exists in the reserves of a bank cannot respond the amount of money that exists in an economy. Therefore, this cannot be applied as a monetary policy. This phenomenon is called the “trap” of the monetary policy.
Let us then take an example of this phenomenon: The first country that is running its economy under such circumstances is America. After 1933, Federal Reserve Notes and deposits were no longer redeemable in gold coins to Americans; and after 1971, the dollar was no longer redeemable in gold bullion to foreign governments and central banks. The gold of Americans was confiscated and exchanged for Federal Reserve Notes, which became legal tender; and Americans were struck in a regime of fiat paper issued by the government and the Federal Reserve. Over the years, all early restraints on Fed activities or its issuing of credit have been lifted; indeed, since 1980, the Federal Reserve has enjoyed the absolute power to do literally anything it wants: to buy not only U.S. government securities but any asset whatever, and to buy as many assets and to inflate credit as much as it pleases. There are no restraints left on the Federal Reserve. The Fed is the master of all it surveys [43].
Therefore, even if a country carries on gold standards its policy there is always the demand for more capital; capital that is in the form of money, not in the form of commodities. Bonds therefore, which represent the real economy are a real trap, both for a government and for an economy, because are not backed by real production. Meanwhile, Marx’s theory which was applied under bimetallic standards cannot be applied, because of the reasons explained above. Tally stick as pre-Marxian phenomenon cannot be applied as well because of its falsification. What therefore can be done under these circumstances? Nothing, just waiting the collapse or changing guidance.
This is why the American economy suffers today more than ever. Even Obama’s policy has no idea of what they are creating. Even European Union has no idea of what they are doing. Because the policy adopted by them is just falsifiable, a real trap and manipulative. An economy that is backed by bonds (which are backed by nothing) is not a real economy but a false economy. If therefore there is a country ready to collapse that is America and England and afterwards the whole Europe. Because these countries have more than three decades that their economy is ran under such circumstances. Therefore, the economy of the whole world is not a real economy but a false economy. Except countries that have adopted a policy that does not support a developing economy. But, even these countries suffer their monetary application.
On the other side, we have to examine the relationship between money created out of nothing and its debtor. Since the money existed in the trade is fiat money, therefore not backed by anything (bullion gold), these money have to be underpinned somewhere; and this is done by the monetary policy by underpinning its bonds onto real assets, hence the policy of real assets. This means that a government once has issued a bond, say; 10 million for loans through the central bank, will acquire automatically property rights to someone who wants to borrow from the bank. Further, once a government has issued the above bond means that with the present circumstances can buy real assets. In short term, this means that a government has financed its citizens with the purpose to help them; but, in reality its citizens are already debited —which in long term means that, they risk of being outside of their property, because they will have not the possibility to pay out their property. In other words, as a matter of policy, the government will devaluate its currency by injecting more money in the commerce until the economy has been shaken seriously. This means that, if the economy slows down, its debtor will contract, therefore will be not able to pay their loan. If they do not pay their loan they will lose their property under the established law which says that —‘what cannot be paid can be confiscated’. On the one side, confiscation will take place by the bank with a court order and on the other —the policy applied by the government provoked such a circumstance. This means in economic terms, that more confiscation in the trade the more property into the possession of a government. In short term, a government will acquire property out of nothing and afterwards will sell all these properties. Even if a government sells the above properties in low prices it is in an advantage position.
Because a government created money out of nothing and with its policy has already acquired property. In long term a government can buy the whole country just by circulating money, money that has no any value at this point. Therefore, what is next? Now we reached our goal: A government issued bonds to create money and gradually bought its country by creating loans and through a series of shaking the economy it is in a second trap —that is, the hyper-inflation of its bonds. At this point is the American economy or the Great Britain’s economy. They have no power to buy anything else because their currency is devaluated already. This phenomenon can force up a country to expand its monetary policy. Because, at this point, the currency has to be measured with real commodity and if there is no commodity as in the case of countries that sustain their policy in financing services their currency will contract. The American dollar for instance, has reached this point much earlier. This is the reason that the Federal Reserve has devaluated its currency. They have to start up again. But with what? They are in a real trap. This happens when ever an economy adopts the growing of capital based on money and not on real commodity. Forth law therefore is that monetarism is pure manipulation. However, this is unavoidable in such a system, for, this is the reason of our purpose here —to change it. Because as has been said already, a government that promises growth will manipulate the system. There is no way of promising growth except by manipulating it. Fifth law therefore is that whenever a government promises growth it is subject of the pure manipulation, which means in political terms that it is unlawful and a zero-sum-game.On the other side, a government has in its program the growing of the economy as a promise to its elector by having investments in their country by big corporations. This is called in legal terms as the policy of infranationalism. Infranationalism is the policy of “producing” wealth in other countries.
Let us introduce at this point that a company which is centred in a country and because of its stagnation in its capital wants to invest in another country: First issue therefore to point out, is that, a company in such a position is unemployed, meaning that —has no more or little capital in its coffer. But has the knowledge and want to rise its capital, otherwise will collapse or there would be no other reason except for more profit. At this point our company will expand its activities —if it reaches any agreement in developing countries. But the starting point is that, our company has little capital to invest but wants to raise the capital. Therefore the investing power is weak. However, our company reaches its goal: Can invest in a country with its knowledge not with its [little] money. This phenomenon will appear as a “win-win” in international affairs —both, by the government which will receive an endorsement by its elector using pure propaganda and by the company which will receive more capital in short terms. But in long terms the company have to find other ways to invest elsewhere to avoid the unavoidable stagnation.
Therefore, in long term our company will force up its ability to invest elsewhere and becomes so, an international multi-branches company. But, even at this point, if [...] our company will resist the devaluations of a currency in a country or even if it will resist the irrational management of the already multi-national company will reach at a peak point, which is again stagnation. This means, in other words, collapse in the whole world. Because, at this point, a company has become irrational —because it is far way of its ability to manage a multi-national company. At this point are all the automobiles, banks, plastic foods, oil etc, companies. This is why the American’s imperialism will die very soon. Sixth law therefore is, expansion means collapse. Even in physic’s terms it is again collapse. Because the centre power which can infuse the management with rational thinking will become in time weak.
But can a company raise its capital without expansion? Of course yes, but the board of our company has two major concerns at this point: One of the stagnation, therefore fear of losing the existing capital and the other [which is not concern at this point but lust for power, the so called unfulfilled desire]—greed for more capital. This phenomenon will become uncontrollable in time and will collapse the whole world. This is the bad scenario. On the other hand there might be thinker that supports the opposite —that is, development. But as the analysis shows there is not development but war to survive in a profitable system. This is why in the introduction of this chapter we emphasised the maxim of ‘making capital by destroying or out of nothing’ in the framework of a government. This why we do not analyse in this chapter ideologies such as democracy in the sense of deceitfulness; citizenship, in the sense of heterogeneity; liberalism, in the sense hallucination; conservatism, in the sense fearfulness; etc, because each ideology stands upon monetary policy which is irrational. Our seventh law therefore is that each ideology seeks rationalism in the first place by using irrational monetary system.
But since there is no rational monetary system; how can our ideologies succeed? Of course cannot. This is another reason that we have all these bubbles in our monetary system which Greenspan’s or Minsky’s theories do not respond. This is why China’s or North Korean’s communism suffers more than ever, because they do not have a system that can promise rationalism. They are based on an ideology of western countries which is the abundance of scarcisty. They do not therefore ponder under rational thinking but instead, under the need of cyclical consumption. Both systems use the same policy and the same monetarism. Eighth law therefore is the so called unavoidable cyclical consumption by distorting the ecosystem.
However, let us sum up our monetary laws:
1) Money is not backed by gold even in its starting point;
2) Commerce in coins is always a zero-sum-game;
3) Fractional banking reserves does not apply any democratic or transparent rule through its citizens —in contrast, private companies do have some kind of transparency;
4) Monetarism is pure manipulation which means in long term collapse;
5) Whenever a government promises growth based on the present monetarism, it is subject of the pure manipulation, which means in political terms that it is unlawful and a zero-sum-game;
6) Expansion in long term means collapse;
7) Each ideology seeks rationalism in the first place by using ‘irrational’ monetary system;
8) There is always the need for cyclical consumption which means in long term destroying the ecosystem and making pseudo-capital out of nothing.
It was simple and painful to analyse such a system, because we live, in an anti-historical and manipulative system. Following this chapter means that we reached our goal which were the weak points of the monetary system which will be followed by our propositions.
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