V. Democracy and “Negative Production”: Universalism in Focus
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Democracy without reason is not human whereas human with reason is democracy.
Democracy in a monetary system means, that the money existed in an economy, is run by the government through bonds which are backed by nothing and afterwards in fiat money. Therefore the notion of democracy which is compatible with full transparency of the actions undertaken by its citizens is not part of this procedure. This means that the power is — even when scholars of political ideologies support big government or small government —in the core of its system untouched ¬—that is, money manager. Therefore, voters and institutions stand upon this system which is —as said in our previous analysis, a collapse in long term. This phenomenon stands in the core of every ideology. This is why our politicians do not succeed in their effort to manage the economy. Another reason that they do not succeed their goal —is that, they come from disciplines which stand under the umbrella of a monetary policy and have never tried to demonstrate a rational one. In addition, they are not product of pure monetarism but ideologically biased in their action and self-motivated.
However, as our case study will show — the established systems in our 20th century have applied until now two different economies: Centre planed economy (CPE) —from a communist-socialist perspective and free economy (FE) —from a capitalist perspective. The former known historically as anti-democratic because the ‘free will’ was replaced by a ‘normative economy’ and the latter known as democratic because the free will is at first place. But both systems are totally wrong: The former produces dictatorship; and the latter, on the one side produces chaos, social instabilities, class straggles, and over all irrational management of the commodities on our planet; and on the other side —free will, for the possessors of money —which is the main cause that produces instability and new bourgeoisies.
Let us therefore introduce at this point the capitalism which is compatible with democracy, in the sense of free will. In our previous analysis we discussed the impasse of a partnership which was the passage from different faces in its struggle to survive in an internationalised realm. We indicated three stages: (a) Stagnation; (b) unavoidable expansion; and (c) again stagnation which would result in collapse in long term. This phenomenon will be introduced in this essay in a more practical manner by posing a simple question: What is this phenomenological entrepreneur in the new world?
At the beginning of our second section of this subchapter we talked about the behaviour of western laws which are according to this essay phenomenon of impersonation; in the sense of adopting other values and attributes than the established. This happens because human mind behave in such a manner that it is natural phenomenon: By copying other attitudes; exactly as a child is doing in its first step. Therefore, the construction of knowledge in our societies under such circumstances is a matter of impersonation —in its full meaning. This knowledge as indicated in other discussions is two tired: Deceitful and controllable, manipulative and pre-filtered, destructive and shape-minded. Human mind in such a system becomes in its entire domain negative, impulsive, impetuous, and self-catastrophic.
This bode ill analysis may sound like a jungle in which our animals are eating each other. But in reality, it is worst: It is the main cause that does not leave anyone to behave madly and sickly in such a system. Maybe, Plato was right when he says in one of his analysis that human spirit is constructed by three main strata: The first one which is the lowest one is the desire, which deals with unfulfillness; the second one is anger, which deals with war; and the third one is reason which controls all the others. This trinomial conclusion by Plato will be applied therefore into this essay. Therefore, Reason according to Plato is the instrument that brings the desirable results in a family, community or society. But, in the free system described above is not any reason in the actions undertaken by its citizens; because free will means free desire, desire deals with insatiability and consequently with anger and anger with war. Despite the fact that the people who manage the money in an economy show their alleged will for their own self-interest to rationalise the system they are in the same position: Under insatiability and anger.
Additionally, the above Platonian perception can be explained from the following analysis: When a free desire (idea to profit) which is result of the past and present society wants to produce wealth through a partnership or company —will confront soon major problems in its operation. For instance, when an individual, want to create a farm-house, retail seller, shop or whatever in the free market and becomes suddenly successful —s/he will be soon object of impersonation from the co-habitants. In time, because of the successful progress of our free will you will have other competitors very soon in the same area. This competition which is result of pure impersonation between the co-habitants of our city will be pursued in real time with decline of the ‘real capital’ of the first initiative, which will result on the one hand a merger and on the other will eject the non merger. This phenomenon will create silent war or sabotage between the stakeholders of a city. But nonetheless the big cooperation will survive either in short time or in long time and will absorb all the others. The former becomes the powerful person of the city whereas the latter remains a pure worker. In this context will emerge the need for further regulation which will be introduced with pure exploitation. This social development can be seen as negative production. Because at this stage will emerge our second value of our spirit —that is, anger. This suppressed anger will produce class straggles in short time, because this is a historical anger. This phenomenon will last until the ultimate class-clash which will be introduced with a new era —which is called historically revolution. Apparently, this is the ideological consequences of this kind of capitalism by overcoming the free will (desire) into anger (war). Therefore, there is no reason in their actions.
But whoever is our merger in our context they are subject of our city or subject to our natural commodities. Commodities therefore in our city are common —whatever of what constitute commodity for a city. But commodities do not reflect consciously shared by our citizens; therefore they will be misused. At this point our society has reached at its ultimate peak —that is, self-catastrophic; and all this happens under the excuse of the free will, which is according to our present institutions democratic but not reasonable or pondered with pure reason. It should be noted here that we are looking common reason in the actions of our citizens, reason that would result in common good.
However, another issue that should be under our investigation —is the money that each of the free initiative will use: They will use bonds money. As said above, bonds money is backed by nothing in our fractional banking reserves; but in these circumstances they will find backing: The free market will partially back —all the already issued money. The way is through loans. Apparently, the role of a central bank is to create loans. The reason is to maintain a healthy economy. But this is not true! Because when an individual wants to start a business (don’t forget, business for your own profit!) s/he will go to our bank to ask for a loan. As it is well known, the loan will be issued either by having from the debtor a contract through a collateral agreement or a good salary or by compromising other property. But a government has the guiding force to manage the economy in free will. This means that, if a government decides to stop the investing strategy or issuing/injecting more money in the trade (under the justification of not being inflated) there would be soon exhaustion of money and unemployment. Further, this means that our debtor will lose her/his property or her/his job because companies will collapse. The property will go under the possession of the bank but in reality the property will go under the possession of the government. This is called in our time confiscation. Consider the case of Lehman Brother, Fannie Mae, Freddie Mac etc, in America last year (2008): Once they collapsed after that they came under the policy of protectionism of the state. Further, this property will be sold in the free market. This means in other words that a government is not there to protect the economy i.e. its citizens, but itself. Putting it otherwise: A government is a pure partnership on its own interest under such circumstances. But a government cannot do anything else: It is in a continuous trap.
So far, all this discussion has been done for one reason: To indicate the problems that governments will confront in their policies and with the monetary system they operate, unfortunately, is always a trap on front and on the back them.
If we take into consideration the reverse scenario i.e. that the government will not produce such unemployment because it wants a stable economy in the city; this is against its pre-election commitment, which is a growing economy. To give a definition of a growing economy we have first to determine its objectivity which according to Fotopoulos, is the system of economic organisation whose basic aim is the maximisation of economic growth, whether this aim is “objectively” determined as in the case of the capitalist market economy, whose dynamic inevitably leads to it or not, as in the case of the ex “actually existing socialism”, where the development of productive forces was an ideological aim . In addition, as has been already defined in our previous analysis, a growing economy is result of pure manipulation.
Therefore, as has been already explained, growing economy deals with collapse in long term, because the government will find its self into two slightly different traps: Bond inflation and money hyper-inflation. Both are in long term collapse. But nonetheless, in our scenario we have as protagonist the whole city, in which few of them survived i.e. continue to have a company; the rest collapsed. This means that some of them either will become pure worker in the already established companies or will start again a new business. But they have not any money; therefore they will go to the bank to borrow again. If some of them have collateral i.e. real property, then, they will receive the loan but the rest will be ejected. But the new-given loan is predetermined according to our analysis to collapse in long term. Lastly, according to this analysis this means that the banking reserves have to change its course: Once again, because they are producing negative economy and not positive; and this is to the detriment of the environment and of whole humanity. This is the main reason that this book has been worked for a long time.
On the other side, a government is confronted with a third illusion in its operation: The procedure made by a fractional banking reserve to destroy the money existed in the economy —arguably to keep the inflation stable is an illusion. Kutyn describes the process of fractional reserve banking regarding this subject in detail: “The borrower has increased the amount of money he has, while the money held by all other persons has remained the same. An economist must understand this before anything else, and failure to understand this will only lead to an illusion of reality. Next, an economist must understand how the creation of a loan affects the economy. When a loan is created, this allows the borrower to increase expenditure, (generally all loans are given to finance some sort of purchase) which will affect GDP (Gross Domestic Product), since expenditures make up GDP. Secondly, the creation of a loan also results in the borrower having to make payments of interest and principle. Loan payments of principle or interest reduce the disposable income of a person or firm (Here consider a person earning $1000 per month. If the person has no loan payments, then the whole $1000 is available to consume or invest. If the person has loan payments of $200 per month, then only $800 is available to consume or invest) which causes expenditures to be reduced, which again affects GDP. The payment of either principle or interest will reduce the amount of money held by the borrower, and since the amount of money held by all other people has not changed, this must reduce the amount of money. In addition, money is also created whenever a bank purchases an asset, or is destroyed whenever a bank sells an asset.
This last point, i.e. money is created whenever a bank purchases an asset, or is destroyed whenever a bank sells an asset in reality does not happen; because, suppose: Bank purchases an asset with government’s bonds, the sum of which is, say, $100 million. The purchased asset by the bank in our city is, say, $10 million. The possibility of the bank to purchase more assets is nine fold, i.e. can purchase nine more assets. If the bank purchases ten assets then the whole amount of the bond will be consumed. At this point a bank has to destroy the bond of the government to avoid bond inflation. But if the bank or the government destroys the bond, means that it will create deflation, because the amount of fiat money issued by the government is already in the market and counts as real money. In addition, as has been already explained: Whenever a government issues a bond for its purposes, this bond has to be backed somewhere, this somewhere is real property, i.e. real investment. If the bond will be destroyed by the government then the properties already purchased cannot be repurchased, because there is no anymore money in the market. Therefore, the above regulator does not work. This means that money/bond inflation is unavoidable.
Now, above we indicated that whenever a borrower makes a loan this will be translated with more expenditure by the consumers of our free market. This means that a government has to keep the labour’s wages high —hence to keep its GDP in continuous circulation. This development sounds good, but it is not so: If a government keeps wages high then the market will be flooded with more money than commodities. If the market has more money than commodities then this will be translated as money inflation and will increase the prices up. Consequently, what a government has to do at this point is to keep a balance between the money existed in the market and the commodities produced or imported from other countries. But a government in its program has as guidance the exportation of commodities to keep their currency strong in an international/intercity domain. The same as a partnership in its operation: If there is not exportation there is no capital. Or if there is not sale there is not capital. Therefore, each one has to sale commodities as much as they can. But why a currency stays strong whenever cities in their operation export commodities?
Because they produce more commodities than money. Producing more commodities means that the prices will go down and the currency will keep its value in a strong position. But something does not make sense at this point: How much they will produce or sale to each-other? As much as there will be enough for our consumers. But does a market work positively in such a position? Suppose: If a household with four members has to use for its operation one loaf of bread in a day based on its necessities then they will carry on with the same portion. But if they buy more than one loaf in a day because there is the uncertainty of sufficiency then the remain will be thrown away. This means that real commodities will be destroyed. In addition, if in our city operate 10 thousand families, then, we will have if not a loaf of bread thrown way half of it, which means evidently 5 thousand loafs of bread will be lost. If we include other commodities in the same basket then half of them will be destroyed. To void this phenomenon modern societies have introduced various upkeepers —such as fridges inside homes and pesticides, herbicides and insecticides into our agriculture. The consequences of which are dramatic: The ecological crisis has extended to a biological crisis and according to the latest report of the World Health Organisation, which resulted from numerous research programs, the death rate from diseases of the circulatory system represents nearly 50% of the deaths in the indus¬trial countries, 20% of neoplasias, 5% of respiratory dis¬eases, and 5% of traffic accidents...The World Health Organisation has based its findings on a significant statistical research which recorded facts from extensive research work on the main causes of mortality on the planet. According to this research, 55 million deaths occurred in 2002, 22% of which happened in the developed countries, for the following reasons:
• High blood pressure: 7.14 million deaths, with 3 mil¬lion occurring in the developed countries.
• Smoking: 4.9 million deaths, with 2.5 million in the developed countries.
• High cholesterol: 4.4 million deaths owing to the great consumption of meat, and obesity.
• Low body weight: 3.75 million deaths, 3.5 million of which in countries with high poverty rates.
• Sexually transmitted diseases: 2.9 million deaths. This rate increased with the outbreak of AIDS in Africa .
The causes of such a consequences is on the one hand of course the lack of accountability, objectivity and productivity based on pure scientifically procedures and on the other the established capitalism which operate under the incentive of making capital by destroying the ecosystem. But the crisis does not stop at this point: The crisis has extended on the rise of the global temperature which according to recent studies will increase until the end of this century at least 5 degree.
Now, the thing speaks for itself: On the one hand a government has no choice of doing something regarding its monetary system on the other it continuous to keep running the system. If until this point we have indicated the problems that a government will confront in its operation to govern a city then we have to pose a simple question: Can a government cover the whole modern state based on the present monetary system with positive results only by promulgating normative laws to regulate the economy of a grater area? Of course cannot. But how governments such as America’s, Russian’s, China’s etc, one can manage their economy? This can be achieved only by fighting —either by wars or by sabotage. Then the republic of Montesquieu is false:
