The Economy of Abundance #6
The Second Missing Economic Law:
The Only Effective Way to Shut Down a Market is to Eliminate the Buyers
[Example: The "War on Drugs" always fails because the government invests only in closing one seller at a time, which never changes the market that continues to have buyers ready to buy and immediate replacements for any of the sellers who are removed from the market. Buyers with money can sustain any subversive economy indefinitely.]
Copyright 2012, John Manimas Medeiros
As has been noted by many economists, politicians, and even clergy, funding the "War on Drugs" is a waste of money and effort so long as the program focuses on eliminating one seller at a time, who is immediately replaced in order to service the wealthy American buyers who are always ready to buy. The persistent American buying of drugs funds terrorism in Mexico, Colombia and other countries in Latin America and Asia as well as in the United States itself. We Americans, therefore, are guilty of the same class of behavior for which we have invaded and occupied Afghanistan, that is, people outside of Afghanistan have sent money to help support Al Qaeda and the Taliban. We designate Al Qaeda and the Taliban "terrorists" and we send our armed forces to engage in a warfare level of combat. But we do not want to see the close similarity between Americans' investment in imported illegal drugs to the funding of terrorists in the Islamic world. However, the process and effect is practically the same. Because the drug cartels are performing a service for us, we send billions of dollars to them through an underground or subculture economy. The effect is that upper and middle class America is funding terrorism in Latin America and Asia.
The solution to subversive drug economics:
We have to first face the reality that crime is an economic opportunity. To reduce the participation in this type of subversive economy, we have to increase the competitive strength of legal job opportunities, and we have to devise effective means to diminish the rewards of illegal employment in the commerce of addictive drugs. First, we should always work toward the broadest inclusion of everyone having access to the legal employment opportunities in the primary, legal economy. Second, we must give serious consideration to creating an environment in the primary, legal economy where addictive drugs can be obtained from legal sellers and their use supervised by legal medical practitioners. The new idea that I propose here is to create a new category of behavior in the world of social control and law enforcement: "Illegal self-destructive behavior."
Illegal self-destructive behavior - a new legal definition (ISD):
ISD would be defined as behavior that is against the law, because any individual decision to use a potentially addictive, controlled substance, is a step toward diminishing one's brain function. The path to drug addiction does not lead to a strictly personal loss in the life of the individual, but leads to a costly, discouraging and tragic loss for the community. The individual who becomes drug addicted diminishes their productivity in whatever work they perform. They usually experience weaknesses in recording memories, learning capacity, creativity and ability to focus on the task at hand. In advanced stages of addiction, the individual becomes disconnected from reality and lives in a world of imagined successes and unreachable dreams, while their true accomplishments dwindle to approximately zero. They wreck their personal social relationships as well as their workplace relationships. At the advanced stages of addiction the individual has suffered such brain and personality damage they can never fully recover and can never relive the windows of growth and development that were lost to the prior pattern of addictive behavior. The addict becomes, eventually, not only less productive, but a burden to society as well as to themselves. That is why a person who is participating in alcohol or drug treatment and is currently not using is said to be "in remission," and no professionals would support the concept that the substance addict is now "cured" or "recovered." It is common knowledge among all treatment professionals that alcohol and drug addicts are never "recovered" as finished and in the past tense, but can only attribute their ongoing resistance to using to an endless stage of remission or recovering, meaning continuing and without an end until death.
Illegal self-destructive behavior would have consequences different from the plain black and white distinction in the traditional world where behavior is either a crime or not a crime. Because drug addiction is a unique act of self-direction that also causes a loss to society over time, it should be treated as an offense against the public order and public health, and an offense against the economy, but we know from abundant experience that neither harsh social consequences or criminal convictions or incarceration diminishes or reverses the personal and societal losses caused by drug addiction. Therefore, a new system must include an element of legalization combined with ongoing programs that offer the addicted individual meaningful choices that entail rejection of drug dependency replaced with healthy forms of self-fulfillment. The main choices that should be available to the individual that chooses healthy living are: A) Treat alcohol/drug addiction primarily as a medical problem; and B) Treat alcohol/drug addiction primarily as a personal choice to harm oneself and a social offense, a crime that is not punished by means of incarceration but that can result in probation and other forms of intensive supervision to assist the offender in the ongoing process of remission and recovering. The differences between A and B -- medical addiction verses criminal addiction -- may seem too subtle, but the choice is likely to be profoundly meaningful to the individual addict and would tend to create two models of treatment that are each effective according to the needs of each individual addict, as well as the needs of society. A likely difference between A and B is that in the medical model (A) the individual and treatment would be allowed a high level of confidentiality, to the extent such secrecy could be maintained. In the criminal model (B) the individual might be required, as part of the method of treatment, to acknowledge their offending behavior to those who "need to know," which would include family, some friends, employer and some workmates. These distinctions between a medical model and a criminal model are recognized in the world of treatment professionals, and although there are some sharp philosophical conflicts, each model is capable of helping an individual addict if the patient, or offender, accepts the premises of the treatment model. We should pursue both models and give the individual the power to choose the one that feels justified to them.
Another form of subversive economic activity:
Just as the world of illegal addictive drugs is a subversive economy, financial crimes committed by investors, bankers, industrialists and corporate managers are also subversive economic crimes. The subversion of the economy by means of unethical accounting and managing private capital as though the owners of private capital have no obligation whatsoever to society, and whose only legal obligation is to make a profit, supports a standard of behavior that is destroying American civilization. As I have said in other essays, the idea that the inventor, entrepreneur and industrialist is and should be motivated strictly by a desire for monetary profit is a seriously destructive anti-social view of how a healthy economy and society works. It is only investors whose motive is to make a profit from the loan of their money. The inventor, entrepreneur and industrialists and production managers should all be motivated, if they are healthy and pro-social, by the desire to produce something better for society, or to improve a product or service that society needs. Such goals as no accidental injuries, the best product, a nearly perfect control of the quality of all products that reach the retail market, making a good product more available at a lower cost, are all the honest and healthy goals for those who provide a product or services to the general public. These are the legitimate goals of any business corporation: to meet a human need.
The most serious financial or corporate crimes being committed include selling and dissolving corporations and manipulating corporate ownership in order to escape responsibility for environmental damage, and the destruction of employees lives by sudden layoffs in the hundreds or thousands, and raiding or destroying retirement plans when employees near retirement age. These are seriously anti-social acts that should be re-defined as subversive economic activities. Currently, these types of subversive economic activities go entirely unpunished. In fact, corporate executives are often highly rewarded for playing such financial games and winning profits for investors while destroying thousands of lives of older employees who lose not only their jobs but sometimes lose their retirement income and even their homes. This is not the original promise of a free market economy. Corporations usually loudly proclaim their support for a free market and having the government "let be" whatever happens to businesses in an unregulated free enterprise economic system. However, the corporations demand and get a tremendous amount of protection from federal and state laws and government programs, especially tax laws that protect corporations from responsibility for their destruction of the environment and the lives of their employees. What the American corporation has really wanted all along, and has received from the American Congress, is the protection of profits, a guarantee that business owners and administrators will not be held accountable for their mistakes, acts of greed and anti-social thievery that are never tolerated when committed by individuals. The true goal of corporate investors is contrary to a free enterprise system; what they want, and get, is a guarantee that once they get rich in the game of industry, they will never be poor again. They do not want to compete in a free market; they want to be guaranteed a profit. If we accepted the same kind of expectation from ordinary laborers, they would be guaranteed a steady income, no matter what current market conditions may be.
We should view subversive economic activities as being similar to the illegal drug cartels. Their goals and methods are similar. The only real difference is that drug organizations will kill a person with a bullet, where the legal corporations usually kill thousands of people with the manipulation of money and financial relationships. The long, painful and torturous economic crimes committed by Wall Street should not be tolerated by a society that stands for justice, and certainly not by a society that stands for equality and freedom. The argument that financial crimes are "victimless" crimes just because there is no dead body or no physically injured body is a lame defense for such evil and pervasively harmful behavior. Lives are destroyed by individuals and families being dismissed from the economy, and by individuals having their physical health destroyed by poisoning of the natural life-supporting environment. The corporate behaviors that are tolerated are far more destructive, over time, then the acts of individuals who rob stores, and commit muggings and burglaries, arson and murder. The physically violent criminal injures or kills one person; the economic criminal destroys the lives of thousands, even millions, and causes elected legislators and executives to be diverted from productive government achievement to continuous struggle with corruption and the manipulation of government by self-serving and destructive corporate interests. Legislators have been rendered impotent to address the social and economic needs of society because they are forced to spend all of their time and energy coping with the subversive economic activities of industrial and financial corporations. This is why subversive economic activities needs to be designated as a special category of criminal behavior that results in the most serious consequences, including permanent loss of the privilege to engage in business activities of any kind, and the death penalty. I see economic criminals as being more worthy of the death penalty than a disturbed individual who kills people they don't even know due to some kind of brain disorder. We need to be more clear, and more rational, about what it means to have the privilege of education and access to opportunities for profit. We need to adopt the principle that access to great monetary profit is accompanied by great economic and social responsibility. Failure to meet that great responsibility should result in significant and appropriate consequences, not just a verbal reprimand or bad press followed by secret bank accounts and luxury vacations. If we do not save our economic system from this pattern of corporate corruption, our nation and its economic power will decay until we meet with the worst possible form of political and social disaster.
The guidance and understanding needed to repair and replace our current system of corporate control of government is found in primitive economic facts and a few wise principles of socialism and communism, or communalism, which have effectively been discredited by corporations in the United States. The discrediting of socialism is one of the greatest tragedies in American history. Many of the ideas of Karl Marx have proven valid, and extremely important, but the validity of Marx's economic insights is rarely acknowledged in America. Marx did not derive his economic insights from periods of political chaos in Europe, but rather from the sweatshops and labor slavery he observed in New York during the 1830's and 1840's. One of Marx's most fundamental principles of human economic systems was that the private capitalist system that had evolved in the United States and Europe meant we no longer had a noble class that simply inherited the land and property, but through a process of financial practices the new noble class, or newly rich, "appropriated" the means of production. This general observation, which sounds like some form of philosophy, is actually Marx's choice of words to explain that the rich take legal possession of the land, buildings and machines that are necessary to engage in industrial production, and by doing so they gain control of the economic system that we all depend upon to live. The dominance of agriculture during the colonial period, which enabled a high level of individual autonomy and freedom, was replaced by the domination of mechanical industry, which removed individual freedom and replaced it with corporate control (goods and service industries and financial industries) of the economy. At first the system appeared to be natural, driven by impersonal economic forces, but soon those in possession of the private capital acted as though they owned the economy itself, and have a right to exercise control over it. And, having the common flaws of human individuals, they use their economic power selfishly. They protect their own narrow interests at the expense of the society. This is not a new view on human nature, but a new view of why the promise of science and industry appeared to be leading to wage slavery instead of a better life for everyone.
The people and Congress of the United States of America should seriously consider expanding the legal definition of treason to include the most egregious financial crimes. The kind of financial crimes involving the manipulation of home mortgages and the invention of "derivatives" as a way intended to create false wealth out of nothing did in fact amount to an act of sabotage of our economy. The manipulation of the rules governing investments that caused the depression that started in 2007 was in effect a rebellion against the laws of the United States. The subversion of the economy that lead to politicians and commentators stating that certain banks were "too big to fail," was essentially the startling observation that those investment corporations had effectively gained control of the economy and had subverted it. They had not directly overthrown the legitimate, elected government, but they did in fact overthrow the economic system that both the people and the government depend upon. The subversive plans, decisions carried out by banks and investment corporations in 2006 and 2007 were just as much an act of insurrection as the firing of cannons at Fort Sumter on April 12th 1861. The individuals responsible for this type of political subversion should be identified as traitors to the United States of American, tried and convicted of treason, followed by an appropriate sentence of life imprisonment or execution. Their acts of subversion have injured thousands of lives, not any different in effect to an arsonist who might have set thousands of homes on fire at night with the occupants sleeping inside.
Creating these two new additions to the judicial and criminal justice system: illegal self-destructive behavior and subversive economic activities, would enable the people and the Congress to effectively address the subversive drug economy and the subversive financial markets economy. Neither is effectively addressed by our current system of strict laws prohibiting physical violence, but little or no effective prohibition of economic subversion.
The problems created by capitalism:
Here is the problem created by modern industrial capitalism, as viewed by Marx, in a nutshell. Imagine you live in a hunter gatherer society, the males hunt with spears, arrows, cords and with torches at night. The women do much of the other work, which includes harvesting plant foods when ripe. An important manufacture for this clan or tribe is arrowheads. They have access to an outcrop of flint stone that they mine for chunks of flint to make into sharp points for their spears and arrows and to make knife blades for the women, who use them to process hides and all forms of crafts. Here is the question of capitalism: Who owns the flint mine? In our hunter gatherer society, there is no ownership of land in any form. One owns only the clothing on one's back and a few tools, and a tent or hut would be respected as one's home but even that not necessarily privately owned. The flint mine is not anyone's property, but it would be treated as everyone's property. The tribe might defend it as their property if another tribe came to use it, but in fact they would not defend it as their property but would defend their right to mine it. They might also be willing to let a friendly neighboring tribe mine it also. It is available, provided by Nature or God, for the use of humankind.
Now let's make this primitive hunting society into a modern capitalist society. Two men who have been removing chunks of flint from the mine announce to their people that they own the flint mine because they have been doing the hard work of removing large pieces of flint. The tribe agrees and these two, Alpha and Beta, now own the flint mine. After a time, their sons and a friend get involved in mining the flint, and they begin to charge other tribe members for each piece of flint, either money or items in trade. They see that they have control of a very important commodity. All of the men need flint to make blades and points for arrows and spears. The price for the flint begins to increase, and the flint owners begin to accumulate "capital," meaning all the goods they obtain in trade for the flint they are "selling." They are becoming richer than their neighbors, and they are becoming more powerful than their neighbors. They exercise influence over others because it is understood by all that if anyone displeases the Old Cave and Flint Corporation they might be charged extra for the flint, or might even be told there is a shortage and they will have to wait.
So we see here a primitive example of what Marx called "appropriating the means of production." Once an important commodity is privately owned, the owners have a new status in the society. They are in charge of something that everyone needs: food, clothing, tools or the materials needed to build a shelter. Taking this primitive example into the conditions of modern industrial society yields the same results, though it seems more complex, and natural, on the surface. We have a money system, and those with money can use it to buy land, land that is to be used for farming or mining. Those who happen to get the most valuable land, either by luck or by their own judgment, then are in possession of a resource needed by the community or the society. This gives them power, economic power, over the relationships in the community and the general success of the economic enterprises of the society. This way of obtaining economic power is not automatic or natural or ordained by God. The power bestowed by the accumulation of capital occurs because a society chooses to use private property, and the profit motive, as an economic method to benefit society. Someone made the observation that if we have private ownership of land, the land is exploited to the advantage of society and the owner puts the land -- and tools and machines and buildings -- to productive use in a manner that not only makes the owners a profit but also benefits society, economically. Of course, this process gets more complicated as the industrial society becomes a chemical society and high technology society, because the chemical products of the more advanced industrial society begin to interfere with all of the natural resources and the natural functioning of the life-supporting environment. In our modern society, the benefits of industrial exploitation are being far outweighed by the destruction of our air, water, ocean, and soil resources. We are killing the bacteria and fungi and small plants and animals that make higher life forms possible, including us. One might say that this issue, the industrial waste and consumer products that are poisoning the environment and changing the ecosystem, are another, separate issue. But these are not separate issues: the destruction of the environment is a direct result of the problem of capitalism, that problem being that the capitalists who possess the means of production are able to use their economic power selfishly, for a monetary profit, even though their industrial practices and bad science produce and release toxic substances, including carcinogens and hormone disruptors, into our environment. Therein lies the Achilles heel of capitalism. We like the material abundance yielded by capitalism, but the industrial profit process leads to the illusion that the capitalists own the air, water and soil. And that cannot be allowed. We become accustomed to having private individuals own land, buildings, tools and machine tools, but when they act like they can exercise ownership over the land, water and soil, we discover that the benefits of capitalism exact an impossibly high price. Please note that this argument is not in any way metaphorical or strained; during the second half of the twentieth century and into the twenty-first, private corporations have actually planned to purchase water resources and even went so far as to purchase land and bodies of water based on their argument that the water that everyone needs to live would be managed better if it were privately owned. Does everyone really believe that is a good idea? Private corporations have also argued that the building and control over bridges and highways, normally public property, should be contracted out to private corporations, along with forest reserves and national and state parks. Are you catching on to the craziness that appears when we talk and act like every human activity has only monetary profit as its purpose?
Socialism associated with tyrannical government:
Socialism and communism got discredited in the West with the help of the German Nazis and the Soviet Socialist Communist Party. In each case, these two political entities did not build anything even approximating socialism or communism as originally conceived. Socialism and communism are really higher levels of democracy operating together with a philosophical mandate for social responsibility and economic responsibility. According to Marx and other theorists of socialism, we are not supposed to arrive at a socialist or communal property society by violent force over the people, but just the opposite, a democratic form of government is expected to see the flaws in excessive private capitalism and transform the chosen economic system so that it is re-structured to serve the needs of society without bestowing tyrannical power on people with private capital. Americans, of all people, should be seeing this reality right now (2012). Our economic system has been hijacked by a handful of gamblers who gained control of the investment system (Wall Street) and tried to use it to make our entire economy into a giant casino where they could win billions of dollars producing nothing but figures on paper. Many of the American people understand this, but are they a majority, and will they vote accordingly? President Barack Obama has stated that he will prosecute those who committed the economic crimes that nearly destroyed the American banking system. And as a result, many American capitalists are investing much of their capital in attacking him and political campaign efforts to prevent him from being re-elected. They present their contrived economic arguments, but their real fear is prison.
Central control chosen as the means to compete with the United States of America:
Both Germany after World War I and Russia after that war and at the beginning of what they thought was their socialist revolution, felt desperate to build (Russia) or re-build (Germany) a modern industrial nation as quickly as possible. Anxious and mistrusting the slow wheels of democratic debate and the rule of law, they each opted in their own way for a central "strong man" who would make all the decisions to force rapid industrial and technological development and annihilate anyone who got in the way. Neither of these societies were building socialism or communism. Their real goal was building weapons and political control. They did not fear injustice, they feared weakness. The United States of America played a key role in the evolution of Nazi Germany and Soviet Russia. During the nineteenth century and into the early twentieth century the United States of America acted as a persistently successful imperial nation, defeating every opponent they engaged in combat, continually expanding their territory, expanding to become a continental nation, exercising control by the extension of naval power over the Atlantic and Pacific oceans, and over the Central American and South American nations. America played a major role in the embarrassing German surrender to end World War I, and American troops invaded Russia. All the world admired the rapid development of this new democracy in North America, where people appeared to have the freedoms promised by the enlightenment, but America was also feared. One wondered which country they would challenge next, or annex or buy. Both Germany and Russia were motivated by a desire to compete with the United States and win. Both wanted to demonstrate that this upstart, English-speaking nation was not going to steal their glory from them. A close look at the primary sources of German and Russian history, from 1920 through 1940 will show that beating the United States, in technology or military power, was a pre-occupation of both German and Russian leadership. For the Soviets, this competition continued until 1989. America emerged as the strongest nation, and as the most destructive technological society in the world, filling the oceans with garbage, poisoning the air and water, and changing the atmosphere of the planet so that we could pass a point of no return where climate change will cause cataclysmic geological and meteorological collapse including mass extinctions. This, my dear Karl, is the outcome of capitalism, far worse than even you perceived.
All we have to do to save ourselves is to consciously acknowledge that we have motives other than a desire to make money. All we have to do is see the problems that are created by the economy of abundance, and address them with rational thought.
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