Tally Sticks Economy: A Transition Period from “Freedom” to “Slavery”
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The following essay will be concentrated into the analysis of the last kingdoms of freedom, of tradition and of particularity. This millennium is the transitional period from freedom to slavery which gave rise to a new conception of a “super state” — which had been experienced in the Roman Empire. For, this millennium has its implication in its journey and practiced one of the most practical ways of exchange — that is, the tally stick economies. But, even this millennium has its “historicism” that spelled out only the little stories of the kings or priests, who ruled the masses through their monetary system. Not with any consensus agreed a priory but with pure repression. Thus, this analysis — as the previous one, will concentrate its focal point to the manipulation of human being and obviously to measure its detriment. However, tallies were a good idea; because tally economies offered an important and stable invention. Its functionality was quite positive. It gave at least one wing to flight instead of two.
Thus, 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 . (Haas: 50)
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 wisdom or authoritative 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. This incompetence, in time, created the preconditions of introducing for the first time in human history the so called “brokers” of the economy. This phenomenon took place first in France, in 12th century. These brokers were incited by bankers. They started to regulate the agriculture debt of the region by issuing governments “securities”.
The word “security” is a generic term of debt or government’s bonds. In time, this kind of securities took the name of a “share”, in private and government exchanges. In 1602, the Dutch East India Company issued the first share on the Amsterdam’s Stock Exchange. It was the first company to issue stocks and bonds. However, caution must be taken here: There were brokers incited by bankers that took the role of a representative to regulate the debt of the people that were directly indebted to the government. Thus there was Not a democratical decision by the shareholders. The power was left on King’s duty. Therefore it was merely a regulation derived from the bankers or the King. The notion of the word “Government”, at the time was vague. But the most important point that we have to give major attention is that, the debt at the time was backed by real production. In contrast, today’s stockholders or shareholders are not backed by real commodity. For instance: The private stock market in order to raise the capital or the quantity of money has to issue shares or stocks backed by their company, in the first place. Attention, our company wants to raise money or capital through issuing shares not through real commodity. But in order to accomplish its goal it has to create the preconditions to persuade the inhabitants of the city or of the region or in today’s circumstances, of the whole world, as in cases of betting a company’s/government’s authenticity in an international level. These preconditions of persuading people have to be achieved by using the strategy of the so called “marketing”. Marketing is the starting point where businesses back their finances.
But this point has its implications: Let us suppose that a company has achieved its goal of selling its shares to “exterior” citizens. First consideration therefore, is that the shareholders do not know its real production or capability of managing the company with rationality. But they have been persuaded and bought the shares. First note to point out is: They just risk their money because they do not know in advance if a company will succeed in its operation. At this point we have to think that this procedure is backed by law i.e. a law that allows and suggests (through its lawyers) a company to raise money, in this way. This is because law-makers think in one direction — that is, further profit for the company in order to invest further in the trade. But law-makers do not think about rationality and power at this point. Either they think if a company will fail or default. They think merely about on how to raise money in order to extend the power of a company. Second point therefore to emphasize is that, a company for the reasons given above — that is, “its inability to convert each coin or money in real production”, would result in corruption and consequently in failure. This failure would be bail-out by the government “if” a priory a company has backed the people who are in power; which is obviously the common scenario. This linkage makes the system very dangerous and in time, as has been shown elsewhere, will collapse the whole society. Immediately we have to turn back to our starting point: Stocks were backed by real production at the time when they started to be traded; now this is not the case.
Therefore, government or company securities are not backed by any real production in the way they operate but by the so called marketization procedure, in other words: Pure propaganda. This kind of marketization is the basic conception of running an economy in the developed or developing countries. There are now stock markets in virtually every “developed!” country which trade their “guarantee” for their businesses or their countries. At this point is the today’s Greek crisis. (18 March 2010) They trade their stocks or their government’s bonds and they fail because no one buys their government’s bonds, because they are indebted everywhere towards international banks, speculators or themselves. In addition, Greek government, in order to over-come its crisis, is trying these days to trade its seven-year bonds in the internationalised domain. "We have shown that we can issue all sorts of maturities and at more logical rates than previously," says the Greek Finance Minister George Papaconstantinou . “Maturities”, in finance means, an insurance policy that has been previously made by a government to improve its fiscal policy and to allure multi-nationals companies to install their bonds in their country in order to stimulate the economy, which is actually, its consumption not its competence. On the other side, economists of the present schools support the idea of issuing debt with a floating charge. For instance, “investo-pedia” determines: The maturity date is the date in the future on which the investor's principal will be repaid. Maturities can range from as little as one day to as long as 30 years (though terms of 100 years have been issued) . But maturities of government’s bonds have to do with the balance of the real production and the money being in the trade. If a government defaults to provide such a balance then it will bankrupt the whole society. Then if we call the government’s bonds “securities” at this point of our analysis we would be wrong. Why? — Because a government, cannot provide security for its issuing debt. Or, putting it otherwise: If the issuer (government) borrow money to the lender (investor) and the investor’s strategy is to profit for his/her own interest — we added more money in the trade — then, this does not mean that his/her mental capacity is able to maintain the whole amount of money to be transformed into real production. Or the money existed in the trade cannot be “transformed” at any time with real production. For instance, let us suppose here that a government has issued debt through its bonds — which are called sometimes securities, the amount of $1000. For this money is in readiness for ten people. They will work to earn some money from this amount. If they work the same the will have $ 100 each, for their pocket. If they invest this amount then they will produce further production. If they chose not to invest this amount — as has shown our monetary history, in spite the fact that Keynes supported the idea that people who accumulate money will invest their profit — then, the government has to inflate the economy again with new money, called today easing quantity. This would result in inflation of prices. However, this point has been analysed with an extensive analysis in later discussions. Our point here is different — that is, the occurrence of incompetence or ignorance by issuing debt or stocks in the economy. Thus, once again: In the core of this system lies the incompetence of our institutions which is a system that can be manipulated each second of the real life. But the major incompetence lies on law-maker’s one. This is because they are brain-washed by the present system. No one can escape from this kind of system.
However, this strategy of incompetence or ignorance (in spite the fact that the people, who manage it, support the opposite) is adopted today by the International Monetary Fund (IMF); which imposes the same rules to the central national banks or governments — and this last foundation in turn has its negative results to the free initiative of the individuals. This is because its strategy is to create the per-conditions to indebt countries and to destroy the independence or sovereignty of each country — consequently of each individual. Thus, to give an emphasis on the IMF’s operation we will quote some details: The IMF was founded more than 60 years ago toward the end of World War II. The founders aimed to build a framework for economic cooperation that would avoid a repetition of the disastrous economic policies that had contributed to the Great Depression of the 1930s and the global conflict that followed . This global institution started its work with 29 members; and in June 2009, the former Yugoslav republic of Kosovo joined the IMF, becoming the institution's 186th member . The IMF's resources come mainly from the money that countries pay as their capital subscription when they become members . The IMF has established quotas for its members: The larger a country's economy in terms of output and the larger and more variable its trade, the larger its quota tends to be . The IMF also provides low-income countries with loans at a concessional interest rate through the Poverty Reduction and Growth Facility (PRGF) and the Exogenous Shocks Facility (ESF) .
One element should be stressed at this point: When countries become members — they have to pay for it, when they ask for a loan — they have to pay the interest of the loan. This is called double payment. The other element that should be in our contemplation is the dependence of other countries on the money borrowed by the IMF. The outcome of it in time and space will create the pre-conditions of transforming a society in “complex systems” — such as financing services.Or the IMF has traditionally sustained itself by lending money to governments and getting paid back the money plus interest . At this point the IMF operates exactly the same as a bank or the same as our King, Croesus. However, as they appear as if nothing has happened in the financial system they adopted the methodology of issuing government’s bonds which is called according to them, SDR’s. Allocations of SDRs, the IMF's unit of account, is used as an international reserve asset. A member's share of general SDR allocations is established in proportion to its quota. The most recent general allocation of SDRs took place in 2009 . (Emphasis added) we have to remember that the same methodology of issuing and allocating shares is adopted by our companies around the world. Companies allocate shares to its labours for two obvious reasons: First, to be considered the company by its labours as their own company, so that, labours would operate in full consciousness. And second, to amass some money from their proper work. Attention!: There is not any right for the labours for the decision-making of the company. However, these are shares or stocks that are not backed (as said above) by anything in the first place. But they introduced it as a mean that would help them to make money and to control the governments. A government through its policy controls the economy and the IMF through its policy controls the governments. Once again: If the power of a government cannot be controlled through its established institutions, how could one, today, control the IMF? Of course, no one can control this power. On the other side, whenever an individual fails in its operation to make a profit, the government is supposed to help him/her — to get up; and whenever a government fails to manage its economy, is supposed to be helped by the IMF. But in reality this does not happen in both cases. Why? Because this kind of capitalism is to provide cash to consumers, not to reconstruct a failed economy or a failed consumer. Because the present institutions are concerned mainly with making profit without measuring the power possessed by the people — without posing the question, of what rationality is in place when they who use power empower it? Then, if world carries on the same consensus of power or hierarchy, in the future, the IMF or institutions that cooperate with it, such as World Bank (WB) and World Trade Organization (WTO) (which is a weapon against democracy, because it concentrate the whole power on to companies and multi-national companies), therefore world will be transformed a global fiasco; because it tends to control all the economies of the world and to make money out of nothing. Once this is achieved in part, they will introduce the global currency as a necessity that obliges our global institution to use it.
As regards its political achievement according to its commitment, in international economies, it has gone forward too much: Historically, one method of control was violence, the mailed fist, and another was economic pressure, which in the recent period has been exercised through the IMF, the Treasury Department, and the World Bank . In 2007, a group of eminent world citizens was asked to make recommendations about the future, but they steered clear of issues like the IMF voting structure—which gives the United States almost 20 percent of the votes even though it is now no longer a net donor nation, but gives China, the country with the worlds larges reserves, less than 4 percent of the vote . As it is clear from the above indications, as regards the votes, Europe has been complicated too much: People vote once for their candidate or parliament, they vote another time for their euro-MP-s and they have to vote for their international institution. In addition, they have to feed with the rest members of the IMF, 2400 of the IMF’s staff and other international institutions that in reality do not offer anything profitable to our world.
In addition, our global institution in further passages states: The international community recognized that the IMF’s financial resources were as important as ever and were likely to be stretched thin before the crisis was over. With broad support from creditor countries, the Fund’s lending capacity was tripled to around $750 billion. To use those funds effectively, the IMF overhauled its lending policies, including by creating a flexible credit line for countries with strong economic fundamentals and a track record of successful policy implementation. Other reforms, including ones tailored to help low-income countries, enabled the IMF to disburse very large sums quickly, based on the needs of borrowing countries and not tightly constrained by quotas, as in the past . What does it mean when someone says outright that the lending capacity tripled to around $750 billion? Simple: They will be richer with the interest they will receive from their lending. And the story goes on. But remember, this lending is towards our government which paid to be a member of this institution and which has to be paid by us. These are therefore the most flimsy foundations ever seen in human history.
However, we will approach this issue later on with an extensive analysis. (See Democracy and Negative Production) We have not to confuse thus stocks with tally sticks; stocks are backed by nothing whereas sticks always are backed by real production and are very important to be considered here.
