Economic Justice

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missing pictures of economist and magic pudding and indian workers.
Aand schwartzwald opictures etc...
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" ...we live in a time when bad economics probably kills more people and causes more suffering than armaments." Edward Fullbrook / Evatt Foundation publication nov 2005.
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Preamble Once upon a time two holidaying hobby philosophers who worked at the stock markets were deadlocked in a serious debate. One claimed that spirituality was the only true temple of philosophy. Whilst the other argued that the body was the temple of spirituality and hence the cradle of philosophy. In the background rolled railway wagons full of grain. They were followed by hungry people who scoured the railway tracks for a few corns of grain which drained from a small puncture in a railway carriage. The two philosophers arguing was interrupted by the commotion at the railway tracks. Both stopped talking looked at the commotion , then turned to each other, shrugged their shoulders and continued arguing. Suddenly one excused himself and rang his boss who was at work at the stock market and said John, I think the price of grain will rise. There are hungry people here steeling grain from the railway tracks and I think you should also alert the army because there may be food riots and I fear we may loose our export grain to the hungry locals.!
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Admittedly, this story is a bad fairytale, but it just about sums up our behavior towards the world's poor. I only wished that we, the educated world's elite did behave with the same honesty as our two amateur philosophers, because we behave much worse. How much worse on a scale of 0 to 10 ? Off the scale. Totally off the scale! In fact I will try to convince you that the true extent of our actions is closer to genocidal than to ordinary murder. A genocide of the poor and ill informed by the well informed and economically savvy. Most of us can see a connection between our nation's economic well being and our own financial security. Whilst this is true, it does not explain why vast number of people can exist in the informal economy. ie. They are self sufficient and economists find if too hard to identify and include their contribution. In other words these people are truly free and fiercely interdependent. Yet they do not necessarily conform to Liberal ideas of freedom through wealth. Instead, they are more like peasant/warriors of old who walled themselves in to defy oppression. A handful of these societies amazingly stayed independent since Roman times, whilst most lasted for around 800 years until the middle of the industrial revolution or the onset of corporate capitalism and communism. But more of this later... Here I am mostly interested in the current version of economic self defense activists who show us the way to end poverty and wars through simple life-style philosophies. To understand humanities needs we invented Economics as a tool of inquiry that tries to understand human behavior on a grand scale. This is done to allow the grand and powerful to govern us sometimes as elected rulers and more frequently as unelected super wealthy individuals and corporations. This in itself is not a crime, but it creates a divide between peoples natural understandings and instincts of justice and human values and economically driven policies which rarely agree with humanities fundamental aspirations or environmental stewardship. This friction between folksy human desires for peace and harmony, are increasingly in conflict with economic theory and political
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liberal free trade ideologies. Politicians frequently equate our welbeing with the welbeing of wealthy individuals, stock markets and corporations and less frequency concern themselves with finding ways to allow their people to live independent, self sufficient lives that do not depend on the eternal boom and bust cycle of the stock market or the ever more aggressive winning of market share by corporations hell bent on stealing independent livelihoods. Corporate and stock market funded business organizations do not compete fairly, like equal competitors on a race track. It is more like the independent is starting the race with a bicycle whilst the corporate competitor has a support helicopter and a super charged motorbike. The outcome is inevitable and in the absence of political will to build self sustaining communities, people do what they have done through the ages, they find their own ways to create methods of economic self-defense. Ways to defeat the night of the mighty whilst flying below their radar and this is where this book starts... It asks the question:- do we really want to be free and independent or are we happy to join corporate aggressive business methods that destabilize our own way of life as well as diminish humanities ability to prosper on our finite, fragile planet.
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Economics
Humanity's evolution from the Stone Age to the Iron Age was quite slow. The pace of our technological evolution only accelerated with the discoveries of scientific methods of inquiry, steam, oil, water and waist water management as well as advances in medicine and hygiene, which then triggered population explosions and mega cities. The old world order depended on manpower. This forced us to invent ideologies that cleared our collective conscience and allowed us to profit from human exploitation and suffering. Colonial pseudo sciences were once based on colour and race and served as a tool to justify the mistreatment and exploitation of "inferior races". After 1950 we finally replaced the pseudo scientific hocus pocus of the past with the equally comical and equally nasty pseudo science of 19th century Neo classical Economics. Whilst the old world order depended on manpower, colour and race were used to justify slavery and colonial exploitation. But as industrialisation and automation progressed, manpower lost its importance and we lost interest in the well-being of almost 4 billion people. Manpower was no longer needed and we had to re-invent the colonial typecasting. We needed a new socially acceptable logic" to explain poverty and wealth. Where once ignorance and racial typecasting helped us to dominate the world we discovered the benefits of the pseudo science of "Economics" and specifically liberal, free trade economics. At last we had developed a new socially acceptable tool to whitewash our naked greed based aggressions towards the weak, poor undereducated of the world! Colonialism was officially dead! We did not need it any longer to achieve our objectives. Long live "Free trade, Banking, floated currencies and boarder less corporate power!". Together, they
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are much more effective to extract wealth from the poor and ill educated. Economics has become the foundation for our reasoning we feel personally powerless to argue against a worldwide consciousness which has usurped the status of "Oligarchic economic omnipotence"! To humanise these statements I am reminded about an Australian economist who was working feverishly on the rebuilding of Haiti after the 2010 earthquake. This Economist was working in a well lit room with other academics on a Marshal-type rebuilding plan for Haiti, to be presented to the UN as a blueprint for spending billions of donor Dollars. They debated on how many harbors roads and other infrastructure was needed to develop a free trade economy. The irony was as tragic as it was comical. People needed immediate jobs, housing food and water to rebuild their lives. What they got instead, was money to build infrastructure which will help to institutionalise and deepen their poverty. ...but I digress too soon, because this book is not so much about the state of our economic ethics, but more about a ethic consciousness which is as old as humanity itself. We all have a deep, strong link with our past which has shaped our laws and behaviors for millennias. Its ideals and values have build and destroyed empires and its power is as indominable today it has been throughout history. It is the simple notion of "Natural justice" and it's modern reincarnations like the "civil rights movement" and Gandhian philosophies like Satyagraha. The forces with drive "Natural justice" will eventually reach an equilibrium between the powerful and the powerless. This journey will be a monumental struggle between war and peace and will happen as surely as your next breath, because it has raged since the dawn of our consciousness. And weather humanities future will be violent or peaceful depends on our understanding of these exciting concepts which I describe in "Economic Satyagraha"!
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To understand economics, lets firstly dispel a few myths and delve a little deeper into the science of economics. Let me begin by stating the obvious. The mainstream science of economics, is neither evidence based nor does it have a selfcritical pear review mechanism- which forms the basis all other hard science faculties! But most serious among the failings of economics as a science, must be the fact that it distorts and demeans the value of individual human beings. Its callousness demeans individual people and reduces their plights to mere economic collateral damage. Economics is not and was never intended to be a doctrine that recognises or protect an individuals right to natural justice. Mainstream economics is therefore more like a weapon! But unlike a gun, it does not kill quickly, instead mainstream economics literally starves body and soul, by the millions, simply to extracting profit and steals it from those who initially produced or owned it. Economics is nothing less then "plunder by trade" which maintains the live style of the powerful and educated. Which most likely includes you and me! For instance. We all accept Thou shall not kill. This is a universally agreed measure, a baseline by which all our action are judged. However, main stream economics is devoid of any scientifically verifiable or humanly acceptable "Baseline" idiology. Instead it has simply plucked its ethical "Baseline" from liberal ideologies to build consensus among their rich and powerful employers in government bureaucracies, industry and banking circles. Most economists have busied themselves building justifications for indefensible greed, wars and suffering. Mainstream economists simply manufacture their opinions to suit the needs of the rich and powerful, governments both liberal and labor, capitalists and bankers. They in turn reward, feed and maintain a pseudo science which is based on ideological fantasies instead of scientifically verifiable facts!
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Economic "findings" are non-the-less presented to us as sound facts and used to manipulate and shape public opinion. But worse then this deception is the role many economists play in actively manufacturing, maintaining and exploiting poverty, hunger, war and diseases. Ignoring the suffering mainstream economics inflicts, makes as much sens as dismissing scientific astronomic discoveries and instead pushing for the recognition of astrology as a hard science. We simply can't ignore economics dark flip-side because it is the heart of dankness itself. We must begin to see the science of economics for what it is:- namely a killer mechanism that murders millions. Mainstream economics must therefore forfeit the authority it commands in our society and must he held to account for its crimes. Economics is a Psychological curtain, which shields us from seeing reality. It allows us to profiteer guild free! Pension funds, Stock markets and many corporate jobs depend on the rigorous and unquestioning application of economic theory, for income. But, if we continue to ignore its dark side it will eventually confronts us in the form of recessions, unemployment, illiteracy, gender inequality, slavery, human trafficking, health epidemics, hunger, slums, terrorism, the collapse of the world's banking system and war! Irrespective of our ideological blindness towards economic theory, humanity has entered its most profound turning point ever. We are leaving behind the natural order of things and are beginning to assert our evolutionary independence. But we yet have to grasp why everyday economics, the simple act of buying and selling, holds the key to end poverty and wars forever.
The end of the natural world order is nigh!

Where nature once provided us randomly with food, water and shelter, Economics now determines where, when and who should have food, water, health care and shelter. But this new technological power comes at a price because not all humans have equal access to this new, man-made artificial bounty. Therein lie seeds of inequality, conflict, war, poverty and a loss of our finest hard-won human quality:- natural justice and compassion. Asking some simple questions illustrates this point.:- . Do corporations have the right to deny poor countries the benefits of patented, life saving generic drugs? Are not all compounds on earth derived from nature and is not all of nature entitled to use natures bounties? Does denying a poor person a lifesaving drug, exclude that person from nature and reduce that person's humanity to a sub
human class? and how does this differ morally from the profits once made from slavery or colonialism? Where once we prayed to our Gods for good fortunes, protection and guidance, we now manufacture our future in our own image and like Gods, can stay in artificial and hostile environments. We fly through the sky, swim under water, deliver war, thirst, hunger, pestilence and famine. We decide who is master and who is slave. Our laws and believes are not universally applied and not equally accessible to all. Most of our laws are property based (such as the introduction of rape into law as a damage to property rather then a violation of natural justice) and can easily be ignored by the well educated, the rich and the powerful. Whist these inequalities of justice occur, religion, poverty and terrorism hold the "Narren Spiegel' up to us. But is this ridicule enough to usher in an enlightened future? For millennia's, our most powerful global forces have been commerce and in its simplest manifestation the rules of economics and economic warfare. Economics is integral to many religious believes as well as it forms the foundation of wealth, privilege and power. Economic theory is guiding many nations and millions of livelihoods depend on it. Because economics is such a powerful force, it should be well understood and used like any powerful weapon, with care. But the opposite is true. We use economics to construct a concept that measures and report illogical, selective areas of our economy. What was once called To the victor the spoils! should now be called 'To the victor the economic rules! Because many of us misunderstand economics, we frequently create wars, hunger and famine as a by-product of our ignorance. To demystify the science of economics we need to first recognise that economics is not a robust science but a selectively manufactured means of measuring the potential profits derived from the consumption of a nations goods and services. Economics as a
science has only validity, when you have a lot of money or are a government competing with other equal Governments for market share of your export products and services. Economics affects us personally in different ways. If our leaders get it wrong, corporate wage earners might loose a job, but if you are a family sized local baker, farmer or dentist, then it probably won't impact on you at all. It is the disconnect between our formal national economy and what actually happens in your town or suburbs economy that causes wars, poverty and hunger. Paradoxically, the people with the right morals who live in our small towns and suburbs have no say in national economic theory. It is mostly a case of good local morals versus big business sponsored government economic immorality. With the ultimate outcome being an increase of wars and poverty. Another major reason why we need to study the limits of the pseudo science of economics because it can only measure activities that generate taxes. The rest of the economy is conveniently named informal economy in developing countries and cash economy in developed countries like Australia. In developing countries their informal economy tends to be 4075% of all employment. It is characterised by self employed opportunistic entrepreneurs who hire workers who's condition of employment are arrived at by a private arrangement between employer and employee. Informal entrepreneurs frequently shun government bureaucracy due to a clash of values. Governments are obliged to follow world-bank norms of economic measurement and frequently open their markets to foreign competitors who aggressively destroy the livelihoods of informal entrepreneurs, creating more social unrest and a deepening level of poverty. Since the discovery of the informal economy in the beginning of the
seventies, many observers subscribed to the notion that the informal economy was marginal and peripheral and not linked to the formal sector or to modern capitalist development. Some continued to believe that the
informal economy in developing countries would disappear once these countries achieved sufficient levels of economic growth and modern industrial development. The informal economy can however no longer be considered as a temporary phenomenon. Furthermore, the informal economy has been observed to have more of a fixed character in countries where incomes and assets are not equitably distributed. It seems that if economic growth is not accompanied by improvements in employment levels and income distribution, the informal economy does not shrink. The situation is therefore that the informal economy is continuously increasing in most developing countries,Sida 2004 (World bank)
Lets be plain about what the above means. For Millennia people have worked and lived independently and suddenly in the 70's an economist discovered that more than 70% percent of the population is looking after itself through self employment or is employed in the informal economy. Furthermore they discovered that when markets become free markets more people are forced into poverty. When reading between the lines there is no distinction made between developed and developing countries because in either type of economy there is no equitable distribution of assets and income. Period. So the poor in India are being treated as badly as the poor in a developed country... relatively specking... because developed economies have a permanent pool of unemployed who get paid to be unemployed. Whereas in poor economies, the jobless starve, die, or become involved in criminal activities like prostitution, drugs, people smuggling, piracy etc... The World Bank study confirmed that poor entrepreneurs are not necessary opposed to paying taxes, but invariably many avoid government interferences and protective labor laws because their governments conspire against them. Generally developing countries that conform to the norms set by the
world bank, do not support people who want to live independent lives. South Africa's StreeNet organisation for example is involved in many struggles with civic authorities who want to demolish street market, often to cash-in on Mall development. Government authorities happily go about destroying thousands of independent livelihoods as long as the new-development is a World Bank approved activity that can be economically measured. In countries like Australia, which is envied even by the Brits and Americans, the informal economy is around 20% +-10%, pending on who you ask. There the suggestion that someone is working in the cash economy has an stigma of criminality and tax avoidance attached to it. Unsurprisingly, government preference is again given to corporations and big business, whilst the small business sector actually creates more jobs, trains most apprentices and pays most of the taxes. Australia is a typical big-business controlled economy where neither of the two big political parties dares to upset big business, but rather panders to their open market free trade ideologies to the detriment of the small, self employed business sector. Australians love to refer to the level playing field as a metaphor for fair competition. But please, let me be perfectly frank here. There can never be fair competition between corporations, the super wealthy and private small time communities or individual entrepreneurs. The public's perception of competition is frequently epitomised by likening it to a race. Only that the independent sector is a runner whilst the corporate competitor has a super-charged super-bike complete with a helicopter, legal team, engineering support and a fully blown media outfit. How this can be called competition is an enigma. It is more akin to a hunting sport. Where the hunters choose their weapons and the hunted dodges for cover or adopts guerrilla tactics. In Australia the media is sold licenses by the government allowing it exclusive access to its population. They can broadcast lies, false advertising and lazy reporting, all dressed up as a pillar of Australia's
democracy. But behind the scene, the same people who own the media also own upwards of 80% of the groceries market. Also most of the banks are intertwined with big business and mining as well, truly having created an oligarchy-0 in the land of the Fair go! It is a miracle that Australia's democracy still works at all. Another important point about economics is how activities are counted as either positive or negative aspects of the economy. Things that indicate a good economy:- You die. A plain crashes. A town burns down. A mine destroys a national park. Mindless consumerism. Easy credit. Inflated house prices. Car accidents. Illness. Currency fluctuations. Deregulated banks. Free market economy. Petrol guzzling cars. Free trade. Smoking. Things that indicate a bad economy include:- Selling anti depressant drugs. Doping hyperactive kids. Education. Solar powered homes or cars. Self sufficient people. Paying off credit cards. Savings. Wearing out your cloth and gadgets. Repairing your car. Walking. Riding a pushbike. Exercising. High levels of home ownership. Low interest rates. Green politics. Government regulation on big business. Government regulation on tax havens and crackdowns on big business tax avoidance. Now consider the worst economic crime. No economic growth! A balanced self sustaining economy that produces what it consumes, stores or trades surpluses and is otherwise carefree! That is just just pure economic evil! We might well wonder if there ca n ever be an end to the stupidity that is enshrined in economic theory and if following its doctrines will ever allow us build a better world. One of the industrial revolution's biggest lies is that we need ever-bigger factories and ever-bigger, ever more competitive corporations in order to compete globally! However, the opposite is true if we want build a self sustaining, environmentally friendly economy. Since the advent of home computing, a new-kind of
technological manufacturing revolution has begun to free us again from large scale centralised manufacturing through miniturisation and the spread of technologies that allow us now to make and consume almost anything in our own neighborhood or region. Our reliance on large scale manufacturing today is mainly used as a means to control supply to customers and access to resources and markets. The key phrase that describes this phenomena is monopoly! It is exercised in forms. We have monopolies of political parties monopolies, that block the entrance of new comers. We have government bureaucratic monopolies that enshrine their rights into laws and benefits unattainable by ordinary citicens. Lastly we have workers unions, big business, banking, currency monopolies and resources monopolies that dictate their demands to our government. The concerns and aspirations of private citicens can mainly be found in the art of politics where we are presented with spin that is tainted by the big monopolies that silently run our governments. Only when our monopolies' interests are safeguarded, are our politicians able to govern us. It is therefore refreshing to to see that many of these monopolies will soon be broken up by new manufacturing technologies that miniaturize the production process to a desk-top machine. Table sized manufacturing ro-bots can already print plastic castings and electronic circuits and electronic components which once were the domain of big industry. Self replicating Bots are the new catch phrase. They are computer step-by-step controlled printing devises that, build useful things out of very small particles. The process is almost as simple as building a sand castle because these technologies join small grains like particles into useful, functioning object, that once required large scale manufacturing. But that can now be build on the kitchen table. Imagine a world where you bring home a real of raw plastic or metal wire and the bot builds from these material parts that easily fit together until you have a chair, a solar chip, a computer circuit, a wheel or a small motor to drive your dishwasher. Whilst it sounds a bit fanciful, these things are already being done and are already heading to a nerd-shop near you. But unlike the last industrial revolutions which required huge
amount s of capital and monopolistic business acumen, this one takes place on your kitchen table, thanks to open-source technology and open-source software. Together they will usher in the next technological revolution I predict will be named Digital Anarchist Technology. If you can imagine a world where you can make almost anything at home, from a gun to a table cloth, then you can imagine the disinterested corporations, governments and economists have in promoting these technologies. They simply would make many forms of asserting and wielding power redundant. You don't need a trade unionist to run your desk-top. Nor do you need a stock-market to finance and dad corner a market segment. Transport, packaging, fashion , energy production and retail industries could quickly become redundant. Building useful objects could be as easy as sending dad into the garage with a design on a USB stick and some wires under his arm and a few days later he would again emerge from the garage smilingly handing over a new computer, fashion garment or a bazooka. The consequences of miniturising manufacturing are enormous. Say dad goes into his garage and works out the electricity costs of building some stuff for Christmas. Little Johnny wants some Lego bricks. Do dad checks out the cost of downloading the building software. Lego wants 10c per brick and junior wants 1000, so it would cost Dad $100 for the software plus the plastic material and the electricity. All in all just over $200. He discovers that $75 would go to his local electricity monopoly and that buying the bricks in a shop would only cost on another $30. The figures just don't add up! So he searches for generic, open source Lego building software which is named go, which is written by a guy working from home, for just $10 per 1000 bricks. Then he sets about giving his local electricity company the boot. He downloads plans to build solar cells and plans for a steam turbine. He calculates that he can now build
enough solar cells to get his $200 back in just a few months. Bargain! In the months leading up to Christmas he is busy fixing his new prismatic- multi-directional- focus intensified solar cells to his garage roof. Every time he adds a cell to his garage roof, his electricity bill shrinks as hot water and electricity are produced by himself. Dad is beginning to wondering if he can save enough money to work only three days instead of four days. Four days work outside the home is enough to pay external bills with some money left to run his hobby bot. Last year's project was making and installing a new garden fence. He traded the metal from the old fence for bod wire and his neighbors metal cinthering bod had build the new hydroponic food terrace which saves both families about $200 every week in grocery bills. This year Bob has agreed to use his metal cinthering bod, this year to make the hardware to fix the solar tiles to dad's garage roof. In time both dad an Bob are becoming increasingly independent from mainstream economics which is contracting every year, while the informal economy is blooming. Non of what dad and Bod his neighbor are doing in this story is science-fiction and the techno Jeanie that can do it, is already out of the bottle! It is now only a matter time until the manufacturing world as we know it is miniturised and the power of corporation, banks and unions broken for all times... well almost... Dad and Bod, doing their simple everyday tasks are engaging in Techno anarchic behavior. They are also building the foundation of world-wide peace and prosperity which is as simple as right sizing our local economies We naturally want to be naySayers and have to question if a local economy could deliver sufficient food, water, shelter, education, justice, defense, entertainment and arts, to offer a meaningful, peaceful life for the entire population? But what is actually more amasing, is that we even have to ask this question. Humans have already proven timeand-again, and have done if for thousands of years and in all corner of the globe. It is just that only the rulers have understood how an economy works whilst the common people rarely grasped the entire concept. But such exceptions included the Haseatic league and the
many free-town that existed throughout Europe before the process of economic monopolising and nation building began in earnest. The conclusion we need to draw from this slightly ahead-ofit's time, desk-top manufacturing scenarios is astonishing:- almost everything will improve when we downsize manufacturing! The smaller the manufacturing scale becomes the more things improve in regards to living standards, third world hunger, poverty, corruption and peace building. This happens because normal economic rules can no longer be applied to monopolise and maintain power. The process of downsizing manufacturing and farming will find it's natural equilibrium between local and household scaled / desk-toptechnologies over time. The equilibrium in right-sizing industry and food production, is the glue that can hold self-sufficient local communities together. It will also determine population levels as well as be a barometer for happiness. This link is more deeply explored in other economic Satyagraha books... Consider by contrast our current behavior. Our economic model is so perverted that we applaud when corporations drag manufactured goods across the worlds oceans in order to make greater profits! We applaud when we buy cheaper goods, even if these purchases maintain and worsen low wages, bad health care and poverty. Together they are the main source of deep desperation not only in our own countries, but also in the poor nations that making our products? Evidence is mounting that suggests that we create more harm than good by consolidating our economic efforts into larger more efficient enterprises! We should begin to ask if we really have to use our classic top down model of government, where business leaders and the stock market dictate to us our daily reality? Do we have to play the game by their rules? Could a well researched and balanced "right sized economy with scaled down manufacturing and farming solve our global economic problems as part of our simple daily social and business activities?
What would happen if we decided to use this scaled down manufacturing and farming economic model to re-shape the world? Would big business and national governments try to convince us that what they are currently doing, is in our best interest? Could they really prevent their house of cards from falling down if we as individuals made a conscious efforts and embraced positive change? We can answer these questions by examining what happened in 2008, when the Global financial crisis struck unexpectedly? Was the international banking system just a giant ponzy scheme designed by clever bankers and economists to enrich themselves by artificially inflating asset prices or did the world financial markets simply collapse because Ma&Pa investors stopped believing in the robustness of the ruling economic system and the robustness of the US dollar ? Can we, as individual-thinking-consumers learn to control world peace, war and hunger as a by product of our personal consumption? Can we overcome our personal economic misconceptions and set a path to a future without poverty, hunger and war? Do we have the strength and willpower to see it through? ...or are we just too comfortable with out easy lifestyle to bother ending poverty hunger and wars? Economic Satyagraha examines the foundation of polite and civilised intercourse between people based on the enlightened principles of Gandhian believes in peaceful change and the enlightened principles of natural justice. It furthermore challenges the inevitability of economically induced environmental vandalism, poverty, war and hunger! Our scientists have pondered the possibility of a butterfly wing in the Amazon creating a storm elsewhere in the world. Surly our economic theory, which is practiced by 1 and a half billion of the world's best educated, most powerful people, and most greedy people on earth, must have an effect on the other, 5 billion of whom 3 billion live on about a dollar per day? There is no such thing as
being an innocent bystander. The idea of the innocent Mitleufer died with Hitler. Simple everyday, personal decisions have profound collective effects on the world's poor. If we really don't want something, then it will disappear if we stop buying it. Period! The buck stops with us and with our simple everyday decisions to buy or not to buy something from someone whom we trust or distrust to end poverty. It is really as simple as that! Humanity is at a turning point and we have to decide if we want to extend our scientific achievements and compassion to the poor and powerless of the world. We have the capacity to develop a less selfish right scaled and down scaled economic model which can usher in a truly enlightened age based on science, reason, compassion and natural justice. What we don't have is a clear view of the world our mundane everyday actions has created. Current world events are wholly shaped by economics and are a measure of how we behave personally- multiplied collectively to one and a half billion other co-rulers. World events are a measure of our moral fiber and when our world is rotten, then that is a direct consequence of our personal desires which reflect our collective morals. In the end its what you and I decide to do or omit to do, that will cause humanities suffering or a blossoming of its lofty potential. Never in the history of humanity did we have make such a grave, collective- but individual decision. Do we prefer that poverty to maintains our easy life style, or are we willing to reinvent ourselves into holistic moral beings that see the humanity, beauty and grace in our fellow world citizens?
"Where justice is denied, where poverty is enforced, where ignorance prevails, and where any one class is made to feel that society is in an organized conspiracy to oppress, rob, and degrade them, neither persons nor property will be safe." Frederick Douglass,abolitionist and statesman, Speech, April 1886
Economic connectedness
We distinguish between war, economics, trade and corporate commerce. But these distinctions is seriously flawed because in reality they are very similar in how they adverse effect people. They all can and do kill people in large numbers. But we turn a blind eye when death, hunger and diseases come from a boardroom decision or from trade negotiations. We only judge the military actions and forget that the majority of the world's population suffers from economically induced poverty. We have a long Road ahead of us before our legal systems recognises crimes against humanity that were deliberately caused by trade, economics, the stock market or Corporations. When that day comes, we will have achieved peace on earth!
Slavery and Economics share a common thread. Both ideologies try to rationalise an indefensible position which is shadowed by its accomplices:- Greed, War, Hunger and the denial of an individuals right to natural justice. In the 1850's US Chief Justice Taney summed up the prevailing attitude towards slaves thus: slaves have..."been regarded as beings of an inferior order, and altogether unfit to associate with the white race, either in social or political relations, and so far unfit that they had no rights which the white man was bound to respect" Australia's Prime minister Howard said in 2006:"There is no connection between poverty and terrorism!"
Whilst both statements are vastly different in substance, they however both show a disrespect towards basic humane values. Like slavery advocates of old, Harvard schooled economic realists choose not to see the evil which is inherent in our economic system. Their cavalier attitude towards poverty, hunger and wars and the extraction and denial of life sustaining economic resources for profit is simply immoral by any standards of the new Millenia. We must ask ourselves the question:- why we allow our political and business leaders to kill people trough busies methods, hunger, economics, war and preventable diseases without challenging their ethics, motives and methods? Why do we not hold our leaders accountable by comparing their actions to basic standards of morality and decency? Modern day Economics has a dark side, which we do not acknowledge because every person who is lucky enough to be born into the privileged developed world directly profits from the existence of poverty, war and hunger. Slavery abolitionists needed two hundred years to awake humanity to the inherently evil nature of slavery. It is therefore reasonable to assume that free trade and economic abolitionists will face another two hundred year battle to turn the "collateral damage" of our war like economic behavior into a clearly morally reprehensible act of aggression towards humanity. This new ideology will turn today's economic behavior and lack of morality into an amoral and eventually illegal act which will be unfit to be used in any polite, peaceful and humane society. Economic Satyagraha is deliberatly confronting conventional economics thinking by pointing out the dark by products of our civilisations economy based believes. The solutions put forward in Economic Satyagraha, are based on concepts which have been with us since the dawn of time. Today, they have largely fallen into disuse in the developed world. But this does not mean that they are no longer useful or no longer practiced or that we have totally forgotten their beneficial effects. Economic
Satyagraha- fuses ancient wisdom and methods of delivering natural justice to every human being to stimulate the development of two major changes in humanities behavior. Firstly, to solve poverty, hunger and war, the developed world needs to reduce its war-like economic aggression towards the less developed world and secondly, we need the developing world to stop behaving like powerless victim and begin to develop people based economic self-defense techniques and economic independence by adopting a dual economic model that is half formal and half informal in nature. We can dream about equality all we like. But it can never happen, because no two people are every alike and no two people can live equally well under just one economic system. We need a strong informal economic system that can hold it's ground in competition with the formal economic system. A lot of noise is made about ending poverty, hunger and war. But, when faced with these issues we feel totally powerless and overwhelmed by the scale of the problem and the systematic methods, which the developed world employs to maintain and profit from poverty, war and hunger. But we ignore the most obvious solution. Namely to allow informal an formal economic models to compete with each other. The formal economy panders to big business whilst the informal economy should be developed enough to defend the needs of real people.
Technocrats
The above Technocratic chart has its starts in the early nineteen hundreds and peaked during the depression years of the thirties. The technocratic movement is to this day, still a hardscience-based ideology which believes that our economic system can never function indefinitely. That it restricts the availability of
abundant resources to make a profit. Technocrats believe that issues like poverty and hunger can be solved through scientific means and that the very existence of these issues is a legacy of our ancient, cruel and inefficient economic system. They claim that the materials, goods and services needed to make most products are in abundance, especially those critical to society's needs like food, shelter, transportation, information, etc I find inspiration in history and it does not come any more colourful than the Technocratic movement. They sound like something from "Brave new World", except they were and are real.
This is a picture of a Technocratic meeting which was probably held during the 1930 in the USA.
Far from being loopy they proposed as early as the 1920's an "Urbanate" a kind of self sufficient, energy conserving resort town which would have all the facilities needed for a community, including schools, hospitals, shopping malls, waste management and recycling facilities, sports centres, and public areas." Urbanates would be "..designed to give each citizen the highest standard of living.." and that "Getting around in an Urbanate would be inherently easy and efficient. Every kind of major facility would be placed within walking distance of a housing complex, eliminating the need for cars." Wikidedia 2007 Technocrats claim that using money as the foundation of our society must eventually create poverty and that the USA's current prosperity had "been propped up by wasteful tactics, major patches to the economic system, and increasingly huge amounts of debt " in the forms of "national debt, mortgages, credit debt, and the growing stock market." "Technocrats see growing debt as a threat to the stability of capitalism. Technocrats claim that the " money "system will eventually fail" and be replaced with a system (a Technate), which is based on the use of energy in a zero growth economy. This sounds a little spooky, especially after the GEC in 2008 and even prophetic considering this was nutted out in the 1930's. What is especially interesting about is that the above chart shows a deadly inconsistency with our economic theory. For example it might have taken a man twelve hours to make a broom in 1860 whereas a machine can make it in 2007 in a few minutes. This means that the earnings from a single broom can today no longer sustain the worker and his family. That is why Technocrats claim that total automation must eventually create total poverty. Technocrats argue for the establishment of a system, which reduces the reliance on conventional money and substitute it with a energy usage based unit of value. Like one kilowatt of power equals one dollar.
I think that the Technocrats had discovered the real causes of poverty but were unsuccessful as a mainstream movement. I am convinced that we can overcome world-wide poverty that our advanced big-scale manufacturing processes create by adopting a dual economic system. Our current ways are unsustainable. We export to expand our markets, deliberately impoverish someone else somewhere else in the world and happily enlarged the entire human population past the six billion mark. The Technocrats however had developed a method of preventing poverty by redesigning our energy inefficient cities so that we can live in a state of balance that exists between our human needs and greed. But I fear that their "energy currency" system can only work in a small, protected environment. Who knows what would have happened to the USA, if they had adopted the Technocrats less agressive system of currency together with a little more respect for people's innate natural human rights. Even if the technocratic system lacked a good foundation in human rights, they have shown us how we can live better if we build our cities and our lives on hard science instead of our current greed based pseudo scientific economic system. Technocrats also lacked a system that used power fairly for the benefit of all. It simply could not break down existing power structures because they did not have tools like PSP. But we should consider that thousands of people during the great depression already debated the issues of poverty, energy usage and the efficiencies of a simple dignified, self-sufficient city life. When confronted with this eighty year old economic ideology, one begins to take the Technocrats a little more serious. Especially when in 2007 we are again revisiting the same issues in light of four impending man-made disasters. Global warming, armaments escalation, our war on terrorism and our first major confrontation with radical, self appointed campaigners against poverty. Islamists! I also want to demonstrate by quoting a movement like the
Technocrats, that economic theories are a game that is played in deadly earnest and that we must begin to better understand its workings. But I will have my brother Lutz have the last word on the value of work. "If god wanted us to be slaves, we would have been born with chains." Lutz Grosche In our societies justice is something that is bought and sold for the benefit of the rich and powerful. It is not something, which can be obtained by an ordinary person-without first loosing house and home to the lawyers. Nevertheless, Natural Justice is still the foundation of many "Bills of rights" which define and defend the moral "Natural rights" of the individual against the potentially tyrannical power of the state. But there is no bill-of-rights that defines the rights of the individual against the might of Corporations and their economic actions. This enlightened view is still a long way off. "They (corporations) cannot commit treason, nor be outlawed, nor excommunicated, for they have no souls:"Lord Edward Coke 15521634 entrepreneur, parliamentarian and writer of texts of law, which were in use as definitive legal texts for some three hundred years. "Democracy must be something more than two wolves and a sheep voting on what to have for dinner." James Bovard , (libertarian author and lecturer)1994 Source: Lost Rights. The Destruction of American Liberty (St. Martin's Press: New York, 1994), p. 333 "criminal, n. A person with predatory instincts who has not sufficient capital to form a corporation" Howard Scott 1890-1970, founder of the Technocratic movement which was a social movement in the United States during the 1920s and 1930s that advocated a form of society where the welfare of human beings is optimized by means of scientific analysis and widespread use of technology. Wikipedia 2007
Who has the economic right to live on our Planet ?
Are we wage slaves in the land of knowledge. Consider the
following thinker's thoughts on the topic of property & profit. "The earth is given as a common stock for men to labour and live on." Thomas Jefferson (1743 - 1826) Current economic thinking "...Carried to its logical conclusion,...means that" the wealthy "..have the right to prevent others from living.. " or to be just "born as trespassers". Ambrose Bierce (The Devil's Dictionary, 1911) In "The politics of hunger", Ignacio Ramonet takes stock of our situation with the following reminders:At time of the "..the 50th anniversary of the Universal Declaration on Human Rights..states that "everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services". But for most of humanity, these rights are increasingly inaccessible." "Now here's a statistic you might have missed. The total wealth of the world's three richest individuals is greater than the combined gross domestic product of the 48 poorest countries - a quarter of all the world's states." "...inequality has increased over the last 20 years.." In 1960 the income of the 20 % of the world's.... richest countries was 30 times greater than that of the 20 % in the
poorest "...in 1995 times Almost people world's live on less than two dollars a day."
countries. it was 82 greater ... three billion half the population -
Franciscan friar, William of Ockham 1285-1347? The greatest abstract logical thinker who ever lived.
He is often quoted as "Ockham's Razor" which refers to a logic key he developed. If you are offered two propositions, one simple and short, the other long and complex, the simple short one will usually deliver the better outcome.
Consider a war fought across a long distance. A government offering complex reasons why a raise in interest rates will personally benefit you.. A politician offering economic reasons for an unpopular decision. Government intervention in small-town economics. It is at times like these you should take Ockhams advice which you probably already know by the engineering term KISS: "Keep it simple stupid.".
Plunder by trade ? It is said that "plunder by trade" locks our world into violence and war. It is said that eliminating the monopolisation of land, technology, and finance capital and equalising pay for equally productive work, both within internal economies and between trading nations, will automatically create a fairer distribution of life sustaining resources, end poverty and end wars. So let me introduce you to one of these visionaries who is actually an economist from the left. He plainly states these simple truths: Once all nations and all people have access to technology and their labour is paid equally for equally productive work, the buying power of labour in different nations, and within nations, will equalise. "Eliminating ... monopolies will instantly distribute a share of the wealth" " Dr. J.W. Smith, The Institute for Economic Democracy.2005 There is no ideology, which can offer a justification for our system
of economically inflicted cruelty. You may naturally disagree with the word cruelty because you have not been actively involved in them. So consider this:- If by creating wealth for yourself you deny basic life supporting opportunity to others, then that makes you an accessory to a horrible crime. To paraphrase Dr J.W. Smith on the related topic of Internationalism (the non-fascist version) and adding Ockham's razor one can sum it up as:"If you have a pothole- in your local street- it does not make sense to form an international institution which deals with potholes in other parts of the world. Problems of economics, population, environment, poverty etc - are basically local problems- which need an international-interference free - local approach, unlimited access to technology, a system of governance which is inward looking and based on natural justice. But above all- we have to become aware that our economic system must kill others by denying then access to life sustaining resources. We must become aware that our business actions are a means to "plunder the already poor, by our institutionalised, technologically driven economic warfare. Once individuals realise that profit derived from monopolisation, aggressive foreign invasions by multinationals, the dishonestly named "free trade" ideology, patents, Din, CE, War and from the gamble of the stock market, is actually blood-money, and is actually just another name for loot and plunder by trade, then good people, who have been deceived by the system, will look for just alternatives." But before we can cook-up a better world- we need a simple recipe. It is all very well to high-brow upon the issues of poverty and wealth extraction, but without a solution- one might as well forget about writing or reading such a book. So, not only do I have to get you off your behind to actually do
something about this issue, but I also need to give you a cast iron recipe to effect some positive change. There are two ways to effect change. One is to start a revolutionwhich is unlikely to succeed or even get off the ground. After all, why would you destroy your own livelihood, just to save the life of a total stranger. The other is to create alternatives that individuals can implement in their daily lives- without harming themselves, but with massive positive consequences, which can lead to peace and the elimination of poverty. Think of it like recycling. Your own actions matter little on a planetary scale, but collectively, identifying issues and acting accordingly and irrespective of political persuasions, can create a massive, passive force for good. We live in the "age of knowledge"and knowledge is power. So, lets use knowledge wisely, as our weapon of first choice against poverty and oppression. Let me introduce you to some very simple economic concepts. They have been derived from first principle and are based on logic keys, as opposed to economics, which are manufactured justifications for basically unconscionable acts of cruelty. But first I need to clarify the nature of the authority by which we can judge our economic and political system. I'll briefly cover the law of rent which condemns half the worlds population to poverty. Then I'll introduce you to a few champions of human rights and Natural Justice. Then come the accusations which we are collectively facing and why they are levied against our economic system and why we have to answer them in earnest due to the vulnerability of our Achilles heals. Both wealth and poverty is manageable if we learn the laws which create and nurture both of them simultaneously.
Adam Smith, 1723-1790
Scottish economist
political and moral
philosopher. Professor of logic & moral philosophy.
He wrote the best-known intellectual rationales for free trade, capitalism and libertarianism. He is widely and freely misquoted to clear the conscience of the rich, but is rarely red. His famous invisible hand metaphor
states that to create wealth by following ones self-interest, one is simultaneously also assisting the poor. It is still used as the best justification for unrealistic wealth.
The Law of rent
(((Sadly the vacuum cleaner which sucks the profits upwards towards the super wealthy, also sucks the ))) Henry George's 1839-1897 American political economist.
The Law of Rent should be as well known as e=mc2. It is a fascinating way to make sense of poverty. The Law takes many forms, but I would like to illustrate one, which creates poverty quickly. Imagine a pristine valley, which is planted with fruit trees. The first human arrives and takes the best land, which produces 4 buckets of fruit per year. The second human must settle for a block, which is
twice as large because it has poorer soil. He also needs one helper to get through the work. The third lot is three times the size of the first and needs three workers to harvest the fruit. The fourth four and so on The fist farmer has 1 bucket of fruit for himself and three he can sell for profit the fourth farmer has one bucket for every worker and no profits. If we take the example to 10 workers, suddenly we have just enough food to stave of starvation. If we take the example to 20 or beyond we have civil unrest because most of the population is starving. So, we simply need poverty if we want to live a lifestyle that produces limitless profits. -----------------------------The law of wealth-"Those who have the wealth make the law! " It is said that power, profit and war are the nursery of evil. That together they form a web of lies, deceit, confusion, deprivation and death. So let us delve into the issue of wealth and the mechanism which creates it. The law of wealth dictates that in order to make profits, there has to be a large pool of very poor people. To be in a position of power a person must be able to control the economic prosperity of other people. This control can be as small as denying people the chance to work, condemning the individuals to a life of systematic starvation or side lining them, like it is happening to small German and USA towns, to languish indefinitely on the dole. We believe that power is solid and rock hard. But when we examine it, th abuse of power begins with very very small denials of access to life sustaining resources. For example: A company makes drugs, which it sells, to the chemist. The chemist sells them to you. You work and earn money by either
performing a service like repairing a car or actually making something, which is useful to somebody else, or simply by growing food. The pyramid of profit dictates that if a drug company is to make a profit, it has to have millions of customers. The money you earned through your toil flows upwards to the already rich drug companies. The drug companies pay a dividend to their owners/shareholders/banks. The banks pay the money market the interest for borrowing the money they invested in the Drug Company. The profit made by money market players goes into the pockets of the super wealthy. money out of the pockets of the worlds poorest people. The super wealthy then, find new ways to invest their money and so they become even wealthier and the poor steadily must become poorer. The events, which drive this vacuum cleaner, accelerate as the rich reinvest their profits into new ventures. So the upward pull of the money generated by vast working populations accelerates every year. Our economic system is like a merri-go-round that without brakes, accelerates until it spins out of control. We have set no limit on profits. SO the merry-go-round can spin as fast as it likes or until disaster strikes. To show how crazy our money system is consider that an economy can work if we invest only $3 of speculation in research, new products and technologies for every $1 of real investment. In 2000, we speculated $55 for every $1 in real investments. This means that money earned from speculation is depriving us of social advancements and forces us all to pay higher prices for common
goods and services. So, every time we see a rise in the stock market, we have to earn more to pay for the same goods. In contrast, Henry George's championed "Law of Rent" calculated that if we did run a properly balanced economy, we would only have to work 3 days per week to pay our bills. The other 2 days go to speculators and the already rich providers of money. The banks and the super rich! The effect of this is evident everywhere we encounter poverty. Even in small, first world economically depressed towns can be left economically deprived if the upward pull of money remains unchecked.
The Law of Rent! 2
"If a Chinese worker earns $1 per hour and a USA worker earns $100 per hour, performing the same type of work, the "Law of rent" shows that after all economic forces have played themselves out, that the USA worker will in the end have his wages cut down to $1per hour!
"The law of rent" clearly shows that our economic model relies on the creation of poverty, both in the industrialised as well as in the developing world. If this law were false, then both workers should earn today earn $100 per hour. This is clearly not the case. So somebody is getting less, so that someone else can get more. The effects of this law are clearly demonstrated in the USA, where the gap between the richest and the poorest is the greatest in the world. But, in our current economic system, not all is gloom and doom because the $99 dollars, which were lost by the USA worker, have been added to the profits of corporations, banks and the obscenely rich. It is this madness which allows CEO's to walk away from their responsibilities with hundred's of millions of dollars in golden handshakes. So, we must expect more sackings as corporate profits and salaries soar! Our current economic model can keep on working for centuries. But we must be prepared do deal with the ensuing unrest which will be fuelled by increasingly hard local and foreign poverty. In the meantime, most of us will all profit from cheap Chinese made
goods. But we must also be prepared for lower wages or, in order to compensate for this shift, we must negotiate better terms with our trading partners. Which in practical terms means, that we have to lower the price we pay them for all imported goods and raw materials. What we are in fact doing, is shifting our poverty to our trading partners, so that we can maintain our life-style. It is this shift, together with the other end of the pincer movement- unchecked use of personal credit, which further impoverishes our trading partners. So much for "Free trade"! to call our model of trade "Free" is downright dishonest, unless of course, we refer to our economic "Freedom" which we enjoy to the detriment of our "Free trade" partners. Our model of economic trade is often referred to as "deferred theft". Everyone from the top of the economic pyramid down steals form someone below them, until it reaches the desperately poor. It is often argued and thought at university, that wealth is created in the west through natural evolutionary technology based forces and not as I argue, in no small parts by theft from the poor. Popular economic opinion puts it this way:" where (does) wealth comes from. Wealth creation is not a zero sum game. The fact that some people are getting rich in one place does not automatically mean that others are becoming poor or have been exploited. Wealth can be derived from exploitation - but that does not therefore mean that all wealth derives from exploitation. (I think Marx was wrong on this point). It is a very common misconception that the West grew rich *primarily* through the exploitation of its colonies. In fact the majority of the wealth of the West was created within the West by a long series of innovations in the areas of institutions, technology, politics, law, science, banking and finance, health care, infrastructure and so on.." Brett Parris, Senior Economic AdviserWorld Vision Australia 2007 The magic link between poverty and our wealth is our believe in the
US$ system. The USA as well as its allies, simply produce debt which is sold as government bonds to underpin the currencies of the developing as well as the developed world. This trust in fictitious (not backed by gold) money is underpinning our world economy and is the cause of endemic poverty. When Brett Parris (who is a very decent anti poverty campaigner) talks about "a long series of innovations", then be only sees the global picture- not the personal costs to people or the limited means through which resources can be turned into wealth. He sees our technological innovations as wealth producing assets rather then as tools which create and cement the strangle holds of poverty. I will deal with this issue in more detail later. Another issue is the assertion that wealth was and is mostly created through innovation and manufacture. I claim that wealth is created through the consumption of goods and services. This is a fundamental difference in how we view the power structure of the created wealth. The current system gives the power to the manufacturer and service provider in my system the power lies with the end-consumer. It is the old question of who is the master and who is the slave. I say who ever ultimately produces the raw materials and the food as well as the people who consume the products and services are the master. Period! Everything between these two points are only the agents that make the creation of power possible. The banks, manufacturers, merchants etc , should therefore be serving us, the consumer and primary producers of the raw materials and foods. But current business and government thinking places us into the position of a slave - without will and without considered intelligent. All the noble economic talk about where wealth was created is based on shallow logic. Wealth can only be created if the "technologically clever" products can be sold. This means that wealth created in Europe and sold/consumed by populations in Africa, enriched Europe and not Africa. It is not the place of consumption that shows an increase in wealth, but the place of creation, which includes the
mechanisms of monopolisation (large scale enterprises), advertising and shipment. Therefore we have only two-end -consumers in the early industrial revolution. The growing populations of Europe and the fast growing increasingly independent colonial territories, are the most likely consumers of the manufactured wealth. It is no coincident, that corporations are targeting China and India as the next quickly developing economies. Their huge populations consume vast amounts of goods and services, both from the old manufacturing centres as well as from their own new factories. In addition their cheap labour allows a growth in profits, as the old manufacturing centres, like England change the economy to the service sector and cheaply Import most of their goods. The "Service sector" being the very institutions that keep sucking a margin from everything we consume. It does not take a genius to work out that we are heading for a cataclysm of our own making. As we accelerate consumption under the current economic system, we are denuding our forests, exhaust our fisheries, oil reserves and increase trade. This ever-growing mechanism consumes unimaginable amounts of resources as we literally drag mountains across the oceans. People that I meet during my travels, both in Asia and in Europe long for more green space and a fresh air. I added a quote from Aldous Huxley because it clearly shows that some people are naturally gifted to take a situation and through a process of extrapolation, arrive at the correct conclusion. This conclusion can lie years, decades or centuries in the past or future. Like Huxley, I am also a naturally systems analyst and can see complex issues. It is like seeing a roller coaster ride. Where most people see the obvious shapes of the contraption, natural systems analysts can tell you where the iron ore cam from, how it formed into iron in the furnace. How it will rust and fatigue under strain, how the wheels are connected and where the electricity that powers it comes from. In fact, we can see any place, any connected incident, in the past, present and future. Far from being freaks of nature, this phenomenon is quite common among people. But most of us never develop it to a level where this process becomes an intimate part of
our daily lives. This process can be plainly laid out, like in this book, or it can be simply an answer that is formed without prior analyses. Only when a trail-of thought arrives at a sound conclusion, am I able to put it to rest. Only when there are sound connections between the various stages of an issue does it form a harmonious, calming logic. Current economic theory makes me queasy and restless. There are convenient explanations, but they rarely ever connect at a sound junction. Frequently, economic issues move the size of the scale of events to suit their argument. For example:- "Petrol prices in Australia are below world parity and the current increase is simply adjusting the price consumers pay for petrol, to the level of world parity." So prices went from about $0.70 per litre to over $1.40 per litre- allowing oil companies humongous increases in profits. To show how stupid thee "world parity" argument is, simply reflect on the price per litre of petrol that was charged around the same time in China. The Chinese price was around $0.30m cents per litre. Economic arguments were given to say that Australians had to adapt to a global economy and that they would benefit from the increase in the end. They benefited all right! Many suddenly had to bring their sandwiches to work, so that hey could afford to buy the petrol they needed to commune between work and home. What the oil companies actually did, was a test of the retail price elasticity of petrol. By charging prices that were far too high, they were able to test the markets ability to pay higher fuel prices. When prices eventually fell to about $1.10, the oil companies had established a point where consumer discontent could be contained. "For the great majority of mankind are satisfied with appearances, as though they were realities, and are often more influenced by the things that seem than by those that are.": Niccolo Machiavelli (1469-1527) Italian Statesman and Political Philosopher - Source: Discourses, 1513-1517 Therefore, the price, which they previously charged, was $0.40 too low- because consumers could pay more. So, both the oil companies
and the government coffers swelled by $0.40 cents per litre. The government of Australia has a big budget surplus, the oil companies bigger profits and the lower income earners in the mortgage belts had another twenty years added to their home mortgages or simply sold-up and went into personal bankruptcy. But the economic picture looked good, as consumption grew, the economy grew. And we all know that a growing economy is a healthy economy.
Air Balloon economics The PSP Air Balloon economic model assumes that conventional economic models are too complex and to chaotic to ever make sense. Taken in isolation, almost anything can be read into, or justified by, selectively presented economic data. GDP growth driven governments try to fix everything with a solid growth in GDP. But growth comes with a price and this price is extracted through human sufferings. GDP growth models are also lazy, unimaginative and ill-analysed economic models. The model PSP champions is based on reality rather then illusions. The Balloon model assumes that the earth has limited amounts of resources and that therefore wealth is also limited to the level of available resources.
The Balloon system furthermore assumes that everything is finite like the air in a sausage shaped balloon. Poverty and the working poor are represented at one end and wealth at the other opposing end. Our hand represents the wealth-producing workforce. We hold this balloon and squeeze it. The working middle class acts like a valve between poverty and wealth. It is important to note that whoever controls the middle class controls the world. The air inside the balloon represents the flow of money, resources, or wages. Say the middle class allows wages to rise, inflating the wealth end of the balloon. This would cause a reduction in the wages available to the poor. Shifting the squeezing hand along the balloon basically shifts the balance between rich and poor. Limitless wealth The amazing thing about the Balloon system is the realisation, that the balloon actually has no walls at the wealthy end but finite wealth producing resources at the poverty end. Wealth is therefore unlimited and is sucked out of the balloon and into a black hole. The more wealth is employed to help elevate poverty, the faster even more wealth is created and sucked into the black hole. The more compassionate the wealthy are by even free putting resources at the poverty end of the balloon, the faster they produce even more wealth and thus even more misery.
Our current system swards every attempt to correct poverty by crating even more poverty. It is a vicious cycle- that neither the rich nor the poor have much control over. Having grabbled with economic theory, it looks like that the finite resources of the earth, the things that sustain life as well as things that sustain our economies, get sucked into the direction of the already well-off. The wealth created by the workforce is being sucked from the poor towards a higher level of wealthy individuals. The reason we can't find a balance between the poor and the wealthy is that wealth is unlimited and largely unreal. So the flow of resources is away from the poor towards the consumer/workforce classes. The product of the consumer/workforce classes produces through it efforts, even more unreal (as in not tangible- touchable) unlimited wealth. I t is important to realise that the accumulation of unlimited profits blocks our best efforts to build decent societies. So, everything we produce or consume, must also promote poverty and wealth simultaneously. When the well off workforce/consumer class works harder, it also consumes more and more consumption which produces more poverty and more wealth. That is the nature of our system. It is not only consumption and speculation that produced profits, its is in large parts also the waste produced of this process which we turn into profit, that accelerates poverty. Wealth overheads If you look at corporate wealth, legal and accounting accumulated wealth and ask who actually owned and produced it in the first
instance, then you realise that these overheads- wastes are accumulated in our huge metropolis centres. like London, NY, Sydney, Tokyo, Singapore, Frankfurt, Paris etc are not part of the natural honest production cycle. They are part of the waste- by product of our economic activities. They do not serve any other function then to manage the exploitation of the worlds riches to the detriment and exclusion of the worlds poor. They flourish because they control technologies, which enable them to extract the world's wealth, via remote control of monetary and economic systems. Free trade is necessary to these centres of power and finance because it allows them access and control over the world's natural resources. Poor countries are rarely poor because they lack natural resources. The are usually poor because we have to extract their wealth so that we can finance our excessive lifestyle. The middle classes consumer key The best thing about our system is the realisation that the silent middle class, the consumers are the key players in this process. Whoever controls the consumer class- controls, by default, the wealth and well-being of this earth! Our economic model can therefore be best manipulated by monopolising and directing the level of consumption. It is a perfect system for corporations to produce wealth for their shareholders. Largely it is an acceptable system for the comfortable workforce/consumer class, but a diabolical system for the poor of this world. This means that the workforce/consumer classes have it within their means to rule the earth. So, a model of self-government, which keeps created wealth resources within the community, which produced it, is the antidote to most of the world's poverty.
A reduction on the reliance of finance handed down from the super wealthy and a replacement of this finance from a local-self generated and self-serving source is the key to break our diabolical poverty/super wealth cycle. Keeping wealth within small communities rather then importing finance, which creates, more unlimited, unreal wealth. This would reduce the suction capacity and ultimately breaks the power of the "Black hole". The amazing thing about this realisation is, that it is a totally peaceful, non-invasive process with positive global consequences for both rich and poor. Is there room for multinationals ? Self-sufficient models- don't have to exclude multinational corporations. For example: rather than importing fully assembles fridges into Ghana, It would make more sense for a corporation to send the fridges as unassembled parts. This would reduce shipping costs, and allow Ghana to run small factories and employ their own people as workers. These workers over time raise their standard of living and also become modest consumers. There are many examples of Win-Win models, which can work anywhere starting with a small village. As a counterpoint. World parity pricing is just a lazy way of sucking wealth more quickly from the poor- upwards towards the unimaginable wealthy. Our economic system kills about 20,000 people, every day, of the year. There is no justifiable reason why human lives should be held this cheap. Our standard of living is directly responsible for killing almost 10 million people every year. Ironically, we are not equipped and have no say in preventing or planning these killings. But our ability to
consume- is all that takes to facilitate the killings. It is a systematic, organised form of genocide. However we love euphemisms and we should call it Technocide. It is like the clean, high tech version of the old fashion, blood stained, hands on -genocide. It is a killing of the technologically unsophisticated by the technologically advanced. It is war! You can now clearly determine where you stand in this nexus of evil. But how are we going to correct this mechanism, which condemns millions of people to death every year? Let me again mention the PSP system of economic power sharing. PSP does not blame the rich for being rich or condemn the poor for being poor or subjugate them to staying poor. Whatever the rich think of the poor or the poor think of the rich, both are trapped in an economic system which defines their functions. Neither can in a meaningful way change their role. The role they play is dictated to them by the mechanics of the economic system to which they are subjugated. PSP simply shares humane, life sustaining economic necessities between people, creating peace, security and prosperity. PSP also creates small economically independent cities, which can better serve the needs of their otherwise marginalised citizens. Furthermore, we desperately need to further develop and improve our forms of government and single person form of leadership. Our representative democratic model is not serving everyone equally well. Again PSP can stimulate debate and offer an alternative to single person leadership. I'll deal with PSP in detail in the later chapters. But I need to point out the flaws in our current system by offering a little hope and PSP is right on the mark !
Economic gobbledigook
World Parity Pricing, Free trade and Personal responsibility; World parity pricing Another issue which accelerates the upwards pull of wealth is world parity pricing , the darling issue of international corporations. Speaking simply. World parity pricing means that 1 litre of petrol will cost the same price anywhere in the world. It is an apparently innocent enough concept. But when considering the issue from 2 opposing perspectives it becomes clear why it is such a powerful tool in power politics. Say that both the USA and Ghana sells its Petrol for $1 a litre at the bowser. In the wealthier USA- where wages average u$70 per day compared to Ghana where wages are about U$7 a day. A car does about 10 litres per 10 kilometres. So, a Ghanaian has to house, clothe and feed his family for U$7 per day for the same amount as a US citizen spends on hid daily petrol needs. It is clear that world parity pricing makes Petrol unaffordable for Ghana. But so far we only spoke of Petrol. Imagine all the everyday things that Ghanan have to do without. Medical, pharmaceutical, Military, communication, sanitation and water technologies etc Clearly it is impossible- short of a miracle
that, that Ghana could ever become a developed Nation. A smarter approach would be to develop an economic model that sells Petrol in the USA for US$2 and in Ghana for $0.03. Then there would be a level playing field. Another solution which are less radical- would be a small-scale economic model which raises Ghana to a greater level of self-sufficiency.
Who gains from Free Trade?
To be blunt, we have to stay ahead of our competitors by increasing our consumption. Otherwise, we will become poorer. It is the economic equivalent of the "arms race" and just as dangerous and just as deadly! Under our economic system, we simply can-not afford to be out gunned by our competitors. In Australia, the Howard government has understood this issue, by running a model growth economy for the last decade. Greed is good, consumption is good, real-estate speculation is good, unexplained corporate windfall profits are good, spending more on armaments and waging a war in Iraq is also good for our economy. As long as we buy and live beyond our earnings, we will enjoy economic prosperity. So, for Australians it is not the participation in foreign wars, which is good for the country, but the extra Military expenditures, which uphold their prosperity. As long as GDP grows, this swindle will look like real growth- rather then the economic bitter lemon it actually is for the lower income earners. Our economic model will prosper as long as we can find willing new participants which we can a burn to fuel the "the law of rent". Papua New Guinea, Sierra Leone, Iraq etc.. are all testaments to our economic madness. Even such noble organisations such as the Grameene "bank of the poor" which gives life sustaining loans to the poor and populists western activist movements with superstar status like Geldorf and Bono- are unable to offer long-tern, secure alternatives to the real causes of poverty. The positive situation created by these fine people, exists only while the poor can work in
their own, closed economic environment. As soon as they are exposed to international or free trade, these benefits derived through Grameene will again evaporate. Nonetheless, they mitigate suffering and save lives and deserve our full support! However, we must look deeper into the issue and we must begin to educate ourselves and learn which of our personal actions produce and which of our actions reduce endemic poverty. Personal responsibility Recently I sat beside a father of three. He was on his annual holiday and chatted happily while his kid's snorkelled in the Whitsunday's. He was a street cleaner. Getting up at 3am, he would go to his depot and mount his sweeper-truck for the next 8 hours plus another four hours overtime. It is clear that this hard-working man deserved everything he had. Who could begrudge him his holiday and who would deny him his modest income? Simple issues of justice are in practice never easy to interpret. Clearly, this man does many small-economically-sound things. He earned the money for his holiday fairly and used his savings to finance it. He lives local-in a small-town. He earns his living locally and the locals via their council-rates pay him. Yet, this man's family would undoubtedly produce some poverty elsewhere- due to their consumer-driven life-style. The more we delve into the causes of poverty, the more apparent the link between our personal economic behaviour and world-wide poverty becomes. Both sides, the well-off as well the vast range of poverty afflicted majority of the world, have an equal right to enjoy their lives in relative comforts- as long as these comforts do-not offend against someone else's rights, to enjoy the same privilege. So, do we demand that the street-cleaner stops his holidays and reduce his conspicuous consumption? And how are we able to give the poor their rights to the same relative comforts? This statement is a trick question, because the poor can-not be simply given comforts. They
have to be allowed to keep more of their earnings- or simply to earn more. Providing seeding infrastructure is not that hard. But providing on-going charity to make the poor comfortable is absurd and can't work as an indefinite charity model. So, the question is not "what can we do" to reduce poverty. But what can we do to enable the poorest of this world to keep more of their earnings! Clearly, both the rich and the poor can-not wok under the same rules. Specifically, economic and the falsely names "Free-trade" and Globalisation of trade. We need local protectionism- to simply protect the poor from our exploitation. Our exploitative profit motives are so-squeaky clean, that we act as if we have forgotten their destructive powers. I argue that we need several levels of economic self interest. Our global economic system- with all its excesses and crazy workings as well as protective, near self sufficient local economy. Perhaps, in time we can develop a world-wide model that works, but for the moment we should settle on local protectionism. This would at least rid us of endemic poverty and slums. We need to adopt local protective systems so that both the rich and poor prosper in all avenues of our natural life cycles. "Only a large-scale popular movement toward decentralization and self-help can arrest the present tendency toward statism... A really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude. To make them love it is the task assigned, in present-day totalitarian states, to ministries of propaganda, newspaper editors and schoolteachers." -- Aldous Huxley (18941963) Author Source: Forward to 'Brave New World', 1932 If we add the de facto "white hand " power of the corporate world to Huxley's statement, then we have sunk up-to-our necks in to the
quagmire of a rule by total plutocracy. Even Military men have closely observed and have stated the obvious thus:- "I believe that if we had and would keep our dirty, bloody, dollar-soaked fingers out of the business of these nations so full of depressed, exploited people, they will arrive at a solution of their own -- and if unfortunately their revolution must be of the violent type because the "haves" refuse to share with the "have-nots" by any peaceful method, at least what they get will be their own, and not the American style, which they don't want and above all don't want crammed down their throats by Americans. ": -- General David M. Shoup - Commandant of the Marine Corps 1960-63, winner of the Congressional Medal of Honor - Source: May 14, 1966 I love the two following quotes. They have been written such a long time ago and because we have changed into an even more aggressive system, they ring true louder then ever before. The issue of local power abuse in any human society can be defused with a PSP based system.
Jeffrey Sachs and economical truth "People who shut their eyes to reality simply invite their own destruction, and anyone who insists on remaining in a state of innocence long after that innocence is dead turns himself into a monster.": James Baldwin Biography - Fiction Writer, Essayist, Social Critic, 1924-1987
Washing one's hands of the conflict between the powerful and the powerless means to side with the powerful, not to be neutral. Paulo Freire 1921-1997, educator and foremost proponent as education for the poor. Author "Pedagogy of the Oppressed". Anti colonialist. UNESCO 1986 Prize winner for Education for Peace Sex, fun and frivolities Oops, sorry I lied, the topic is actually economics. Specifically debunking economic theory as a blatant misinterpretation of the facts. Better known as lies. If I had called this topic Economic misinformation is spread by the school/science of economics, you and me both, would have skipped this section. Lets face it economics is about as exciting as having a tooth pulled. Yet, we are berated about it every day in the media. We are endlessly told why we are in the middle of an economic muddle that requires interest rates to go up-again, which of course in the end benefits us greatly, because the economy stays healthy, blah, blah, blah . But, if you want to stand your ground in an argument where you wish to barrack for the elimination of poverty- or any other social issue for that matter, then you have to face this chapter in earnest. However, I will try to crack a few jokes along the way - to disperse the tediousness of the topic.
Jeffrey Sachs-
Born 1954 Economist, renowned economic adviser to Latin America, Eastern Europe, the former Soviet Union , and the UN Millennium project. Author & influential anti poverty campaigner. Sachs is the foremost proponent of the "economic therapy" system which forces states with emerging economies to withdraw subsidies and embrace free trade liberalisation. The short-term effects of "economic therapy" is "primarily negative, such as long-term unemployment rates ranging from 20-40%, increased crime rates and increased social tensions between the poor and the rich." Wikipedia 2007. While things apparently get better with time, the immediate effects of the quickfix "economic shock therapy" on the local population is often quite devastating.
Let me begin with an apology to Jeffrey Sachs the influential economist and Bono the rock-star-anti poverty campaigner who glowingly introduces Jeffrey and endorses his arguments in the popular culture. I feel especially sympathetic to Bono, because his intellectual standpoint, was my own standpoint not that long ago. When I discovered the truth, which is reasoned on the principles of natural justice, then I felt cheated and stupid for my misguided understanding of economic theory/science. But I must stress that unlike Jeffrey, I keep an open mind to alternative possibilities to end poverty. He sees everything from the inside of a cage made of invented interpretations. The basis of this economic cage is a web of miss red statistics, which simply manufactured the pseudo science we know as economics. It is a science which finds its justifications in Adam Smith's misguided and narrowly researched writings. I am deeply ashamed that I am taking these two fine gentlemen to task. If their efforts improve or save the life of just one single person, then I really don't care what they say or do, in order to achieve it. In my eyes, they are heroes who have done some good
and for that they must be admired. What I am taking issue with is the assumption that what they promote is actually a sound solution to the issue of poverty. In all fairness, I can-not know if my theory or their economic science will be more beneficial in the future. So I take the standpoint of my friend Vern Jackson. "If you don't know where to start, start anywhere!". Any effort is commendable and perhaps a combination of many will bring us the desired result. In any case, based on the principles of natural justice, these two fine gentlemen are already in the "right" because, in all probability, while I am still writing this book, they have already done some good. Which means that I am committing the act of intellectually attacking, two Mother Theresa's and are committing not one, but two sins. Therefore I will stick to pointing out the errors in their arguments and refrain from attacking these fine people personally. So, having finished sucking up to these two celebrities and having grovelled for my errors in advance. Lets have fun and really rubbish their arguments. (:
Hard core Sex Let me begin with a clarification. The word economy means "the management of the resources of a community, country, etc., esp. with a view to its productivity. ". It also means "thrifty management; frugality in the expenditure or consumption of money, materials, etc.." Dictionary.com. In other words. In managing an economy, business is concerned with creating cheap goods which are of sufficiently good quality so that they can be traded/exchanged for money. Therefore a growing economy is creating more goods, as they did in the past and if this economy is also claiming to be more productive, then these goods are also created cheaper then they were before. To make an item
cheaper, we can try to buy the raw materials cheaper, lower labour costs or by introducing more technology / automation. All this is done for the benefit of industry, not as we are made to believe for the benefit of you or me. This process produces huge profits, which are enjoyed by the ultimate beneficiaries of these profits. The power derived from these profits ends up ultimately in the hands of a few powerful and wealthy individuals and their associated banking and commercial empires, which stretch across the world. This point offers me the opportunity to talk about a world-wide conspiracy. But this would be a cheap shot and factually incorrect. It may be true that many corporations engage in international profit shifting to avoid paying taxes. They even do a large bit of social engineering by shifting jobs to low labour cost countries. But to ascribe them more intelligence or guile then is required to fulfil their greed- is giving them too much credit and reeks of conspiracy paranoia. To assume that there is a commercially based evil movement, whose aim is world domination, is false. The reality is more like an old-time Chicago gang war. As soon as one gang falters another takes over its territory. This is called gaining market share. It is also known as a process, which leads to the formation of monopolies. Which when compared to Chicago gangs, serves the purpose of keeping competitors away from a lucrative racket. So, if you are looking for conspiracy windmills to tilt at, then don your armour and lance and break-up a monopoly. All this raises the question why we, the citizens should bare the burden of our national economies. Let me put in bluntly. Industry looks for methods to lower the cost of producing goods. They push down the prices of raw materials, make flimsy, short lived, nice looking gadgets- and sell them for hugely inflated prices. The margin for most goods, starting with the raw material is about 16 times, or for every one-dollar of raw material we are made to pay $16 dollars. So a $6 hamburger costs about $0.40 cents to make. A $20,000 car about $1,250. A $300,00 house about $56,000. . Naturally some of this price rise is needed to
make the thing. But it is clear that our wage component must stay low to make the system work for its commercial owner. Likewise nations who produce cash-crops, beef or engage in mining, must always bare the brunt of downward spiralling commodity prices. So, when a poor nation backs our economic system they are signing a poverty agreement with our stock markets. But I digress and must return to our main point of explaining economic ideology. Sachs in his book "The end of Poverty" makes my task easy. He clearly describes the flawed basis of the science of economics. He begins by telling us that about two hundred years ago, almost everyone around the world was poor and that only a few privileged rulers enjoyed high living standards. This statement already is factually incorrect. Serves who bought their freedom formed free cities and enjoyed prosperity through trade and small-scale manufacturing. Then according to Sachs, suddenly, with the population explosion of the 1800's, the "novelty" dare I say miracle of "modern economic growth" had occurred. This miracle had mainly occurred in the industrialised nations. It has coincided with a growth in agricultural yield, the industrial revolution and advances in science and banking. So today the poor are poor because they could not benefit sufficiently from the advancements made in the industrialised world. He further argues that ie. England became a powerful commercial nation because of its favourite climate, many ports and above all a liberal society, which offered social advancement. Furthermore, the landless poor- who were becoming superfluous to agriculture were "induced" to be shipped to the new colonies of the Americas and Australia, where they prospered and contributed to the growing economy of the industrialised nations. All this trade "of manufactures for distant sale and of all the improvements which these can occasion" Adam Smith 1776, favoured England. Therefore England had a population shift from
the land to the manufacturing cities where people settled in new suburbs "high density urban life" which offered greatly improved living conditions and badly paid work in the factories and if lucky a promotion into the service sector as non-productive profit harnessing agents. This process worked so well that it can be repeated today in any poor nation to lift it out of dire poverty! I already feel queasy after writing the summary of this drivel, but it gets better with the following statement "Let me dispose of one idea right from the start. Many people assume that the rich have gotten rich because the poor have gotten poor." Jeffrey Sachs in "The end of poverty" He argues that the rich nations got rich because they had economic growth, not because the stole wealth from poor nations. Instead the rich nations have prospered because of technological innovations.
Norma Lidsay's screamed "Eat me
magic pudding. It Eat me ! ".
That may have been true for a brief moment. But the level of poverty that existed prior to the 1800, has grown worse today. So we have to look for the "magic pudding" that either has created this wealth or the poor suckers who have had it snatched from their grasp. Current economic theory appears plausible. But it is seen through the eyes of Adam Smith in 1776. He saw the good that came from trade in England and rationalised that this was leading to good everywhere. Or as is often associated "It is better to be a slave in the house of a rich man then a slave in the house of a poor man.". What appears to be a plausible justification for our economic system misses the point. The key to understand why we don't share our
technologies with the poor is not our unwillingness, but the fact that they can't pay for it because we suck the life out of their economies. Jeffrey Sachs argues "Let me dispose of one idea right from the start. Many people assume that the rich have gotten rich because the poor have gotten poor .Economic development is not a zero-sum game in which the winnings of one are inevitably mirrored by the losses of another." The growth and history of slums alone reduces his argument to rubbish. He says that economic growth is the driving factor of wealth creation. It's the same argument that is used by the magic pudding - "eat me- eat me" and the magic pudding would endlessly plead to be eaten and then regenerate and if you whistled twice it would even change its flavour. But the poor have gotten poorer and they grow in numbers with the growth in "Free trade" and application of technologies and globalise monetary policies. Another point I must take issue with is how economists use statistics. They freely change in mid sentence between global and selected local statistics. For example, if I say that economic growth has given rise to an increase in per capita income, them I am misrepresenting the truth. Currently the rich enjoy huge rises in income, but this lifts the statistical average for the world and makes it look like everyone is better of. This is a blatant lie, the rich are simply getting the lion share which lifts the statistics for everyone. If you are a corporate monopoly, hen this is important because you can raise prices. But if you are at the bottom end, then this rise will place a harsher burden on your existence. To rationalise things on the basis of economics is an affront to natural justice. Sachs further argues that any economic activity, like poor young village women walking hours to work in western textile factories, to earn a small wage, is desirable economic progress, which empowers these women. In his view they have climbed the first rung of the economic ladder. To demonstrate, how illogical this argument actually is, Imagine,
that every person on earth has climbed the economic ladder to the top rung, where Londoner's are today. If it is true that Britain manufactures zip- compared with China and that its citizens work in the services sector, then everyone around the world would also have to work in the services sector to enjoy the same standard of living. But who on earth would then do the manual work required to create wealth ? In Sachs' economic world, everyone would own a "magic pudding". His arguments are clearly rubbish. In the same breath, it is often argued (not Sachs thankfully) that an increase in economic activity will lift every country that is ready for "Free trade". Like a rising tide lifts ships which are sea worthy. So, it is Ok to let the other hulks sink and drown? Australians have the best saying and swear words. They would call this argument "as sound as rowing up shit creek in a barbed wire canoe". Sachs concludes by saying that if the first world keeps its promise made during the euphoria of the millennium celebrations, to pay a 0.7% percent of GNP in foreign aid, that everything will be fine and that economic forces that worked so well everywhere else will work their miracle again. This rise is to come from moving Military spending to foreign aids and from the super wealthy doing their bit. Nice sentiment, and I am quite gullible but I have come to the conclusion that "Pigs fly!". As I will discuss at a later point foreign Aid- is not a benevolent to the poor as we might think. But aside from that, the methods needed to eliminate poverty are quite well documented. What is needed is quite simple. Debt cancellation. Ending armaments shipment profiteering and associated bank rackets. Returning infrastructure to public ownership.
Establishing local economies, which are protected from global forces. Re-establishment of non-competitive import replacing manufacturing. Aid in food production and general technology. Help with many small-scale water, sanitation and energy projects. Investment in health and education. Fixed payments for commodity prices. Tenure for slum dwellers through low-cost housing. Aggressive disincentives to open markets to international forces. PSP governance of resources. Technology seeding based aid This is a good pint to begin wondering where the "magic pudding" in my own argument comes from? Who is going to pay ? and how could the poor pay at all ? I met an Indian Ophthalmologist who started a health fund for the poor. The poor pay a pittance each from their meagre earnings and this pays for the largest chain of high quality clinics in his state. The answer is simple. Communal projects rather then individual enrichment are needed to solve these issues. I was confronted with the same question in Kindelbrueck, an impoverished small town in Germany. The citizens felt poor and despondently saw the reunification miracle pass them by. When I examined their plight I realised that this settlement existed for nearly one thousand years. The reason why they could no longer balance their books was because they had become workers rather then the self-employed small industrious individual their forefathers were.
Their ancestors furthermore owned the city and ran it like a business. The town's geographic advantage was the reason it was established a thousand years ago. This advantage still exists today, but an out-of-town supermarket now sucks the life out of the old city. So the decline of the city is due to the citizens disinterest in their own economic fortune rather then the influence of out-side forces. If a country is subject to draught, then farmers could pay a small percentage into a state or nation-wide cash-fund, which could keep them from starvation in the leaner years. There are countless means to keep a small economy healthy. But it requires an understanding of where wealth is naturally created and how most of it could be made to stay in a local economy. I can't stress enough the importance of not adopting/adapting our economic system to developing and poverty stricken regions. It is very nice for poor workers to earn a few dollars in 1st world owned factories, but when our booms-bust, then they have to regress to their original position. Take Bali, after he bombing. Where did all those bright young Balinese people go when the tourist dollars dried up and the beaches lay deserted? Back home to mama and papa! But what happened to those poor families that moved to the tourist settlements? Without fail everyone returned to their villages, placing an even greater burden on their community. What happened to local investment, which was secured by houses and land titles? Fire sales! That's what happened. This misplaced idealism of economic development is dangerous. It may have a fragile short-term gain, but it can't solve the fundamental problems associated with general poverty. Sachs even admits that his goal to eliminate poverty by 2005 is a measure to eliminate extreme poverty. Which raises a very important question. What about the common variety of poverty endured by slum dwellers? Will they move up another rung on the ladder of economic opportunity as the extremely poor move into the statistics
formerly occupied by the slum dwellers? This goal is clearly nonsense. But it highlights the fact that a different approach, based on real-life economic activity is needed. Our current economic thinking is definitely not able to deliver on its promise. Just look at the slums of Bombay. Since the days of the earliest British settlement, a slum of one kind or another accompanied "white hand" economic activity. What does modern day economic thinking, which still harks back to Adam Smith offer the poor, that it did not already offer the poor during his lifetime? If Adam Smith was really such a clever economist, why after hundreds of years is his vision still a total mess for over half the world's population. How many more centuries are we willing to give to Mr Smith and his economic "mini me's" before we accept the fact that his theories are on a global scale total rubbish. It is often argued that many poor people actually have some assets in the form of land, houses or crops. It is widely believed that the reason the banks won't lend these people any money is based on a lack of property identification such as land titles, tenure documents for dwellings and methods of crop evaluation. It is thought that by introducing such titles of ownership, banks would begin to lend money more readily to the poor. This ideology is total rubbish and downright dangerous and life threatening to the poor. We only have to remind ourselves that in the developed worldwith all our sophistication, we have less then 15 % of business ventures survive more then 10 years. So what chance do the poor have to keep a roof over their heads or arable land under their feet. Their economies are frequently exposed to the fluctuations of the stock market and western economic cycles in particular. They are the first to feel the pain of a commodity glut. The banks will be quick to snap up their meagre assets as rock-bottom priced bargains. This processes only exacerbates the plight of the poor and will even further swell their numbers. Just look at the battle fought in Port Moresby in Papua New Guinea. The traditional landowners are constantly berated about the good
that will come from land titles. Every time they agree, the social problems in Port Moresby increase as the number of dispossessed swell due to title issues. Frankly speaking lending money without offering business help and a support system, such as is offered by the Grameen bank is nothing more then a theft by deception because through land-titles, many will loose the roof over their heads and the arable soil under their feet. If Banks were serious about their business, they would do well to learn from Grameen and develop loan products that rely on social pressures and education as a basis for securing a loan. In China 2007 the first "Village bank" opened. It has a registered capital of just under U$300,000, which would be laughably low for any normal bank license. Farmers can get loans for up to $2,500 without any guarantees. This means that the farmers may perhaps default on their loan, but because they don't have to have to handover the title deeds to a greedy bank, they also will never join the ranks of the desperately poor. It is hoped that profit motives will drive the rural sector in the future. This is of course a little ill conceived, because the poor farmers have to pay higher interest percentages to the banks. Banks use these methods as a kind of hedge fund or insurance against losses. The Grameen bank has a better method, which uses social pressures, business and health education and family planning to manufacture a very-very low loan default rate. The Chinese government is trying to kick-start the rural sector by allowing banks to take profits. This method has built many of today's modern Chinese cities. But it has failed to bring wealth, better health and improvements to education and sanitation to its vast countryside. If the system begins to be successful and the villages are increasing their productivity, I imagine that this could just put downward pressures on rural commodity and produce prices through over production.
I fear that it will lead to an extraction of profits from the rural sector, rather then a raising of the rural life style through a spread of the productive wealth which could be initiated by a Grameen type poverty banking system. In any case it is a good initiative that in the short term, is expected to build a better "socialist country side" the China Daily further writes in 2007 "..individuals, private companies and all financial institutions (are) encouraged to get involved in rural financing." International aid should foster local initiatives, which have a good chance of leading to small-scale local manufacture and foremost, an increase in locally consumable products and services. A simple example may be the manufacture of drilling rigs, water tight membranes, local research, local innovation, fly screens \ netting, conversion of raw materials into medical dressings etc , local transport based on low-tech multi-fuel engines. Light engineering that can produce parts, water treatment chemicals, teacher schools, fuel growing, sewerage treatment technologies. milling and bakery equipment, electricity generating wind turbines, batteries, water pipes, roofing and building jigs and materials. The list is almost endless, but they have all a few key elements in common. A seeding technology and ongoing employment of local labour. An understanding that these technologies will be made available to the next- non-competing settlement, or indeed anyone who wished to use them, should also be included. . It is fine and noble to send aid in desperate situations. But to alleviate long-term poverty, we have to stop selling our own 1st world products and begin to think of methods that keep these remote communities economically viable in the long-term.
Banker for the poor.
One of the deep secrets of life is that all that is really worth doing is what we do for others. Charles Lutwidge Dodgson (pen name Lewis Carrol) 1832 - 1898, author (Alice in wonderland (controversial ).etc..),mathematician & logician. His thoughts are still deeply influential in our modern culture. "Of the 100 largest economies in the world, 51 are corporations; only 49 are countries (based on a comparison of corporate sales and
country GDPs)." globalissues.org 2007 Poverty solutions are tough through the history of human settlements The best way to improve the life of the poor is to invest in communally funded and maintained locally infrastructure. Wealth comes largely from rural and small manufacturing activities. Consumption of these activities comes from a larger body of people. Meeting the needs of this larger body of people can keep a thriving local community going without having to produce many goods for export and local trade. This would strengthen communities through better schools, improved health services, cleaner streets, better houses, clean water, cheap locally produced fuel and electricity. The key to solving this problem lies in the growth of old-fashioned, small-scale agrarian/manufacturing cities. These types of cities have existed and prospered over thousands of years and there is no reason that they can't work even better with the use of today's modern technologies. I have studied quite a few of these small cities and there is a strong trend that goes through all of them. Human companionship. Increased Security. Longer life expectancy. Greater prosperity. Local markets. Short supply lined between producer and consumer. Locally founded banks and lending institutions. Trade of excess goods for export. Local small manufacture. Local law and law enforcement.
Locally owned councils. Communal health and education services. Local water and waste water purification infrastructure. Locally grown fuel (both fuel for cars and through animal husbandry). Local electricity production (solar, wind, water etc ) Grameen, had been honoured in 2006 with the Nobel peace price. The initiatives undertaken by the "bank for the poor" are truly astonishing. They have a PSP type structures which means that there is communal responsibility for loans and their repayment. Profits stay locally with many small-scale and single person enterprises. But even this enlightened effort could be subject to global market forces when it engages in activities, which are intertwined with global market forces. But it also shows us the resilience and harnessing of local talent in a small-scale local economy, which is, designed to mostly benefits the locals. It is hard to visualise a process where the desperately poor could raise them selves out of poverty. Clearly there are many levels of poverty. But most of the answers to poverty are found by observations of the environment in which poverty thrives. Humans can-not exist on nothing. There is always something that makes their settlements viable or had a positive impact on their living conditions in the past. Exposing this point of viability and focusing on improving, sharing and storing some surplus is the first step to economic independence. The next step is a local green revolution. Soil enrichment through planting and evaporation reduction (as pioneered in Australia by simply slowing down waterways and growing indigenous shade cover), and the building of an agrarian/small scale manufacturing and services / trading town, ensures a sustainable future almost anywhere. I would like to take you a little deeper into the world of Muhammad
Yunus, the founder of the Grameen bank. He has discovered through practical analytical, hands-on trials, that Jeffrey Sach's / Adam Smith type of economics are a sham. Both economists are heavyweights on the world stage. Sachs wields influence with in the UN and with many World Bank and government organisations as policy adviser. He is enamoured with his Millennium goal to elevate poverty. While many nations signed on during the euphoria of the millennium celebration, to pay more in aid to the impoverished world. They pay in a fashion that adds to their own GDP and they spend most of the money with companies hat are rooted in their own economic jurisdiction. This looks good on paper, but has little impact on the worlds poor. Yunus is a hard critic of the "Aid" circus. He claims that "Aid" organisations are the biggest "Aid" benefactor themselves. He deplores their wasteful methods and has no respect for their high -brow talk. I side with "Yanus on this issue through personal experience. I participated in a funding petition which shook loose some 32 million A$ for projects that both help the Australian economy and tackle the issues of blindness in the poor world. I had some memorable meetings in exotic places, was fated by our Governor General in 2004 and saw my funding allocation miss-appropriated by the board of a university which were the governors and project organisers. One of the professors asked me at one of these functions "what do you think about our bleeding heart club?" He meant the "dogooders" who were all flown to a flash sabbatical weekend retreat. I answered "When you run out of money, you simply make up another funding submission. You will no doubt hope that everyone will have forgotten the current funding targets. But we in private industry would go broke, if we can't produce a useful outcome in a fixed period of time and budget." As it turned out, years later, The good professor claims to have made many millions of dollars in IP (intellectual property). And in reality very little has been done to help the poor and sight impaired.
At one meeting there were a number of eminent optical engineers who produced in their idle time 2 free, patentable methods that could solve a number of problems that were raised by the participating professors. Both ideas ended up in the rubbish bin because the engineers missed the point of the meeting. Solving problems was just not relevant to the professors main concerns. The meeting was not intended to solve the problem of preventable blindness, but the problem of justifying their own academic existence and the existence of their own academic departments. One participating professor even quipped while toasting "How is the research into red wine as a preventative measure to "Macular degeneration" going? We had great talk- fests, nice week-end retreats, were fated in the press and by government officials. But it was for the most part a political sham and a way to keep academics in their cushy ivory towers. Multiply this sort of misguided charitable enterprise which exists almost in every country and you will quickly realise where the "Aid" dollars go. Yunus recently received the Nobel peace price which he shared with his creation:- the Grameen bank. Sachs is a stodgy believer in the good that derives from our economic theory and the benefits, which can be harnessed by poor nations when they undergo "structural adjustments" and embrace free trade. Yunus, on the other hand has left the world of the hallowed lecture halls and got his hands dirty in the real world of poverty. He has systematically challenged the wisdom on economics and has nearly converted himself to become an economic agnostic, some would say even a "economic non believer" (: Yanus is the brightest star that shines over the huts and houses of the poor. But more then being a good manager of human activities, Yanus believes that truly poor people deserve an additional right as human beings. Namely, the right to receive credit. Furthermore he sees the poor as "once economically empowered, are determined fighters in the battle to solve the population problem,
end illiteracy, and live healthier, better lives. When policy makers finally realise that poor are their partners, rather then bystanders or enemies, we will progress much faster" Banker to the Poor M Yunus 1997 He has delivered iron hard proof that the denial of credit to the poor, through institutionalised arrogance and simple ignorance, is a major contributor to their plight. I will discuss the difference between Sachs and Yanus in more detail later. But first let me introduce the modern - "economically nonbelieving" Yanus. Yunus said:- "Economic theory postulates that you are contributing to the society and the world in the best possible manner if you just concentrate on squeezing out the maximum for yourself. When you get your maximum, everybody else will get their maximum." As a reselect of your own success. "Many of the problems in the world remain unresolved because we continue to interpret capitalism too narrowly"...we can only consider "one-dimensional human being(S) to play the role of entrepreneur."...without considering "religious, emotional, (and) political (human) dimensions. We are "dedicated to one mission in"...our "business life ---- to maximise profit."...with "masses of one-dimensional human beings who back (us)up with their investment money to achieve the same mission." "We have remained so mesmerised by the success of the free market that we never dared to express any doubt about it. We worked extra hard to transform ourselves, as closely as possible, into the onedimensional human beings as conceptualised in (economic) theory"... and our "free market" mechanisms.
..."sometimes doubts appear in our mind whether we are doing the right thing. Things don't look too good around us. We quickly brush off our doubts by saying all these bad things happen because of "market failures";(because) well-functioning market(s) cannot produce unpleasant results. Muhammad Yunus 2005, Nobel peace price winner 2006 (jointly with the Grameen Bank he created) He then goes on to postulate a world with two kinds of people. The currently trendy type who live only for profits and the socially responsible/aware type- who can consider a world consisting of many very small businesses which do not make any or only a modest profit. These low-profit businesses are for Yunus the key to unlock the poverty trap, which has over half of the worlds six billion people, trapped in its iron jaws.
Yunus
economics .
"High
salaries dull the compassion for the
poor." Yunus 2005 I have always wondered where current economic thinking stops to have any positive effect on the way down to the desperately poor. On the way down, there comes a point, when our large-scale economic system becomes increasingly irrelevant to the lives of the common people. After passing this point, which is about where much of the self employed middle class stands, there is a no-man'sland. This is known to economists, as the "informal sector"! A huge part of the world's economic efforts resides there- without representation and without recognition and effective government or banking assistance. Still further down, past this no-man's land, the Grameen bank type economic system becomes increasingly more relevant to the lives of the poor and our current economic system. When viewed from the bottom up, our current economic system looks totally ridiculous. I think the interfaces between the two economic models are where we, the educated middle class stand. The small-scale independent sector! We have the smarts and the mobility to make things happen in either system. We are close enough to the poor to discover and manage civic reforms, which benefit us at home and we are also close enough to the economics of the corporate sector to know when to involve, avoid or protect ourselves from them. Based on the nature of small-scale enterprise, we are totally flexible and obnoxiously inefficient by current economic standards. But our small-scale sector is not an inferior system. It is by far the most socially advantageous economic system. We produce more jobs through inefficiency. We spread wealth more widely and produce locally favoured goods, foods and services. We should actually restructure our councils to reflect this more soberly when dealing with large corporate pariahs that want to do business in our midst. Because, if we can't solve our social problems locally, corporations
are surely not able to offer us better solutions! They haven't done it in the past centuries. Why should they corporate leopard suddenly change its dots? Yunus's economic low-end model is in itself fine. It gives poor families a way-out of poverty. Yunus's Grameen bank has a 10 point indicator which grades poverty. The highest indicator is the point where people have "moved out of poverty". 1. The family lives in a house worth at least Tk. 25,000 (twenty five thousandTake = u$357. 1U$=70 take in 2007) or a house with a tin roof, and each member of the family is able to sleep on a bed instead of on the floor. 2. Family members drink pure water of tube-wells, boiled water or water purified by using alum, arsenic-free, purifying tablets or pitcher filters. 3. All children in the family over six years of age are all going to school or finished primary school. 4. Minimum weekly loan instalment of the borrower is Tk. 200 (u$ 2.80) or more. 5. Family uses sanitary latrine. 6. Family members have adequate clothing for every day use, warm clothing for winter, such as shawls, sweaters, blankets, etc, and mosquito-nets to protect themselves from mosquitoes. 7. Family has sources of additional income, such as vegetable garden, fruit-bearing trees, etc, so that they are able to fall back on these sources of income when they need additional money. 8. The borrower maintains an average annual balance of Tk. 5,000 (U$72)in her savings accounts. 9. Family experiences no difficulty in having three square meals a
day throughout the year, i. e. no member of the family goes hungry any time of the year. 10. Family can take care of the health. If any member of the family falls ill, family can afford to take all necessary steps to seek adequate health care. " Grameen Communications 2006. This indicator is far below what the worlds elite would expect. It is certainly not a luxurious level of comforts. But it does represent a sound - life-sustaining basis, when families can finally claim to have broken free of poverty. It is about the level of a middle class's relatively poor, young teenager's monthly pocket money allowance. Or about 3 hours of overheads in a small retail shop. Yunus makes the poor work for themselves but offers assistance in the form of finance, companionship, business peer mentoring, business technology franchises (phone etc..) and suitable technologies which can create work and modest personal profits. But when we take his model to a larger community, it become a little bit more challenging to make it work. Only 10 % of Americans work for themselves. They are mostly reliant on the welfare system as a security net. But we also know that the US has 15million working poor. Grameen tried his methods in the USA with great success. But it took many interventions to wean social security recipients off the well-fare-hand-out mentality. The chief objections, besides the personal struggle to break free of welfare, was the government imposed welfare rules. As soon as the welfare recipient earned an extra dollar, the welfare support was cut by a dollar. Only after heavy lobbying were concessions won from governments. The disincentives to self-reliance were formidable. But the Grameen system proved that it works anywhere after winning concessions form the welfare authorities. In one example, the welfare authority granted 1 years "tax free" status of a participant's welfare status to give them time to establish themselves. This was then assessed on a yearly basis. But the same issues that were stopping poor people in Bangladesh from lifting them selves
out of poverty, also stopped the US and European poor. Government welfare recipients were simply too afraid to become self reliant - and even more afraid to start a business. Bureaucracy was simply misunderstanding the obstacles poor people had to overcome to receive credit. To Yunus, the poor are creative and in a social lending system that also offers credit as well as companionship and mentoring, he was just as successful in the first world as he was in Bangladesh. I will summarise Yunus's successful system a little later. For the moment I must concentrate on the issue at hand. Namely: why Yunus can not be totally successful in our current economic system. When we gradually move up on the scale of personal financial success, we will come to a point where Yunus's economy meets our greed economy- of "profits at any price are right". Sachs's economic theory is limited because the system he believes in sucks any personal gains away from the poor as soon as they are made. This again is the same interface where Yunus's economy hits a brick wall of greed and trade. If we truly want to reduce poverty, we need to erect a protective barrier/buffer between the Yunus economy for the poor and Sachs's economy for the greedy. It does not need to be anything grandiose. Simply an acknowledgement that they two systems cannot exist side-by side on the same "level playing field". Rich economies must pay fair prices, which fluctuate only upwardsto give the poor producers minimum profits as well as higher profits. Simple measures are:Fixed food-stuff export prices- for poor countries (adjusted to reflect the same value to the poor, after currency fluctuations are
calculated.) Protection for local growers / manufacturers in poor nations through simple minimum price fixing- down to a point where modest profits can be made while locals are offered affordable goods. (Non of the poor benefits by dumping cheaper hen locally produced foods and products, into a poor country.) Importing of suitable technologies and local assembling/of imported components. Access to high-tech water, electricity, communication and schooling. The above examples are by no means comprehensive, but they are a sound alternative to wasted Aid moneys. But to make a poverty protectionist system work effectively, we also need to address the issue of Power sharing at the local town-hall level. To bets understand the issue of local or top-down poverty elimination, we have to define the point where individuals can no longer be self-reliant. Take for example a local hospital, local schools and trade schools, a local water supply, sewerage treatment or electricity plant. All these things are desirable as a support infrastructure. Some of these things, like a hospital are emergency infrastructure while others are a means to grown a small village into a more efficient small-scale agrarian/manufacturing and services town. This model would soak-up some of the surplus human capital from the countryside and create a lively hood in a profitable city environment. But, even Henry George, who witnessed a new US settlement developing quickly into rich and poor quarters. To avoid this conundrum, we need a better method of administering local towns. The system of PSP is ideally suited to be used in the administration of a town, that is owned by the locals, rather then being administered by a corporate council. Locals must be involved in the running of
their settlements or they will grow to understand the workings of their settlements, rather then becoming despondent citizens. PSP ensures that simple decisions, like who should enjoy education, or water or housing etc.. are delivered based on better decisions that are untainted by local traditions and local power issues. Sachs is far removed from poverty alleviate infrastructure like one horsepower flower mills, cane weavers and telephone ladies making a living in remote villages. He is more into power stations, sewerage works, dams, ports, airports and large scale roads, that make the extraction of wealth from a country easier. He is then content with offering the locals poorly paid jobs in foreign owned garment factories. Sachs's economic modelling would destroy the benefits brought by the Yunus's Grameen bank in an instant. A protective city-style selfdefence mechanism is needed to keep our system from harming developing and traditional Nations. Small city economies are ideal and green as a barrier to protect Yunus-type economic activity from our greed economy. Yunus once remarked that " Economists can not alleviate poverty". But that poverty can be alleviated through the survival ingenuity of the poor- if we offer suitable technologies, a system and a little financial help. Yunus's methods are worth mentioning. Through the Grameen bank he formulated simple- true, tried and tested solutions. "Traditional credit institutions favour the rich and kill the poor" "..our current economic model is unjust to millions " Yunus 2005 Give credit without collateral as security.
Ask only for how the borrower will use the credit and how they plan to repay it. Let borrowers use their own ingenuity to find a way to support themselves. Offer new borrowers peer support and mentoring by arranging borrowers into support groups. Deal only with the leader of the group and let the group dynamics take care of all minor business. Offer education and training, but without strings attached to the borrowing process. Be generous and flexible with loan repayments when dealing with personal tragedies. Deal only in public- never behind closed doors. Make credit an inalienable human right. Accept no support or directions from the World Bank. Ensure that a percentage of the profits derived from loans is used to offer the poor access to health care by sponsoring health care and schooling to borrowers at minimal costs. Have many small self-sufficient communities acting as hedging methods to offset the effects of natural disasters. Diversify a family's sources of income to better deal with seasonal and market fluctuations. Offer technology, which can be used and or made locally or at home. Forster small-scale local businesses in both low and high tech. Offer a "Pork economy" in non-Islamic regions for extra income.
Overcome gender inequality and slavery by uplifting the human spirit by allowing people to provide for themselves through their own ingenuity. Making the poor a little richer also generates jobs in our own greed economy - because the poor would begin to consume more.
Sachs and Adam Smith's wholly "invisible hand".
"It's amazing how people can get so excited about a rocket to the moon and not give a damn about smog, oil leaks, the devastation of the environment with Sachs and Adam Smith's pesticides, hunger, disease. When the poor share some of the power that the affluent now monopolize, we will give a damn.": Cesar Estrada Chavez Biography - Farm Workers' Union Founder, Human Rights Activist, 1927-1993 The "invisible hand" doctrine of Adam Smith followers seek their answers across the seas in far away countries who have no interest in the misfortunes of others. "One of the main points of 'The Wealth of Nations' is that the free market, while appearing chaotic and unrestrained, is actually guided to produce the right amount and variety of goods by a so-called "invisible hand" (originally written in Moral Sentiments). If a product shortage occurs, for instance, its price rises, creating a profit margin that creates an incentive for others to enter production, eventually curing the shortage. If too many producers enter the
market, the increased competition among manufacturers and increased supply would lower the price of the product to its production cost, the "natural price". Even as profits are zeroed out at the "natural price," there would be incentives to produce goods and services, as all costs of production, including compensation for the owner's labour, are also built into the price of the goods. If prices dip below a zero profit, producers would drop out of the market; if they were above a zero profit, producers would enter the market. Smith believed that while human motives are often selfish and greedy, the competition in the free market would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and argued against the formation of monopolies." Wikipedia 2007 Three points are important to note, Smith even warned about the evils of monopolies, but monopolising is exactly what our international trade is doing. Namely creating commodity, shipping, refinement/manufacturing and retail monopolies. The second issue is which deals "demand and supply" is also total rubbish. Anyone who has ever survived the ordeal of running a small business can tell us how difficult it is to compete with large firms. Differences in the size of raised capital, enable large operators to dominate or wipe-out smaller operators. I glibly like to call this effect the "Wall-mart" effect. Therefore Smiths argument of demand and supply are of the "what came first, the chicken or the egg type". The argument that falling manufacturing costs benefit anyone other then the largest manufacturer is totals humbug. Manufacturing favours the largest with the best distribution and advertising. That has nothing to do with supplying goods to you and me on a timely and low-cost basis. It also clearly means that raw materials prices must be driven down. The third issue is the dropping-out of producers when they no longer make a profit. That sounds quite innocent, but reality it hurts mostly small businesses that loose their source of income. To poverty
stricken nations it is can be the final nail in their "free market" coffin, which then leads to desperation, instability growing poverty and deaths. Smith's arguments and reasoning stem clearly from observations gleaned from an economy model, which is based on two or three village bakers, working and competing in a village market. Taking this Smith's model any further then a village- and claiming that it can magically work globally is downright stupid. I would like to demonstrate the stupidity of this argument with a small deviation into perceived values. A well-made shirt may be sold by an indigenous tailor for $30. A shirt made in a factory in China costs about $5 to be made and shipped and could also sell for about $30. The same garment sold as a "Branded" cotton shirt can sell for as much as $100 to $200. The asset value of the shirt is about $15. So a local tailor would make perhaps $15, the hypermarket about $25 and the "Branded" seller anywhere from $25+ to $185. This inflation of the shirt's value through advertising and misrepresentation, places Adam Smith's assertion that the "production cost, (is) the "natural price" (when goods are exposed to competition etc ) straight into the rubbish bin. We do never pay the low "natural price" of a product. Smith's economic think-tanks have seen to that through the promotion of inflated products and services. It is the swapping of local observations with global facts and global observations with local facts that makes economic arguments appear so reasonable. But when we study these assertions, they frequently are randomly plucked out of thin air to persuade us to accept a nonlogical argument as economic logic. Ever since the days of Adam Smith, this illogical approach has been further developed in to the science and application of economics. Sadly, this approach has hidden many ill conceived economics policies from public scrutiny and has contributed in no small part to humanities worst excesses and many of humanities darkest hours.
When I was in Germany, pondering the issues of relative poverty in one of the world's most affluent nations, many people said why are our politicians not doing anything for us in Germany? They were desperately waiting for a Messiah- in the form of a big factory or some tourist miracle to raise their living conditions. But they totally missed the point. Their answers were right around them in their environment and in their history. They could be independently wealthy - if they started by not waiting for politicians to help them, but rather began to help themselves. Their cities were small-town agrarian settlements, which had a healthy small-scale industry. Why they now think that a large factory would ever be considered anywhere near their town, is beyond believe. We have become complacent and expect far too much from our leaders. The answers to our problems lie frequently right under our feet. I am reminded of what a priest, who runs a teachers school in the largest slum of Nairobi said "The slum dwellers are not stupid- They are just poor." People have boundless ingenuity and strategies for survival. We would do more good, if we concentrated out intellectual efforts on developing an economic and environmental model which could work on the moon. Under the protection of a bubble, our mini bubble economies would have to include environmental issues as well as issues of social justice. This fragile settlement would perish if it had to cope under current economic theory, which simply is justifying deferred theft under the guise of trade. To fix humanity, we first have to fix the person. When considering that the word economy implies the manufacture of cheap goods to the benefit of the corporate community, then it becomes also quite clear that normal economic thinking is out of place when people struggle with their daily existence. It is almost obscene to think that poor people could derive any lasting benefits from 1st world style economic activities. I need to clarify one important point here. If we had shared technology and if societies around the world had adopted a PSP type form of resource and power sharing, every nation would now enjoy
about the same level of wealth. Sadly, however whenever we destabilise a country, deliberately or otherwise, our current economic system profits from this instability. Can poverty and Wealth live side-by-side? Yes they can and do in many societies. But what is not possible is that the wealthy would stay at a constant high level of wealth if the poor did not stay at the same, consistent level of poverty. Let me explain this paradox which I experienced through a recent visit to china. The Chinese government requested $150,000 to set-up a company on mainland China. This is perfectly reasonable because a company requires trading capital and infrastructure to operate. The same day, we visited a Chinese friend's aunt in her restaurant for lunch. We had a four course, super delicious meal for two, which costs 15RMB about U$3.00. On the way out, we saw a truck parked opposite. It was laden with delicious pineapples. Each pineapple was 1/2 of 1 RMB. The poor farmer had to grow the crop for 2-3 years, truck it to the city and wait for it to sell. There is no way that he will ever eat a lunch, which costs him 15RMB, let alone a hotel buffet for 180 RMB. There is also no way, that he, or my friend's aunt, would ever be able to afford to form a profitable company (unless they start a poor-company by contributing and pooling small amounts of money to achieve a common goal.) So when we analyse this simple lunch. We have the farmers grow crops which they sell far too cheap to the restaurants. The restaurants sell the cooked (value added) food to foreigners who pay for it with their small change. So, the foreigners or any organisation for that matter can exploit this price difference by shifting cheap foodstuffs to a place where the wages are higher, like Australia. Chinese grown Prawns (shrimps) cost Au$10 a kilo, whereas the Australian Prawns,
which lie in the next tray, cost $30 a Kilo. Commerce can not exist without this price differential between the primary producer and the end user. In my opinion, as long as the farmer and the restaurant charge low prices, both will remain relatively poor with the farmer being at the bottom end of the primary producing poverty cycle. But, he is relatively well off because there are scores of people who don't own arable land. But the poorest of the poor support the merely poor and the merely poor support the poor. The poor support the lower middle class and so on the chain grows to the top of the food-chain. What remains always unchanged, is the very bottom of this mechanism. It is reached when no-one can give anything any more, such as the farmers farmhand who helped him pick the crops. This farmhand probably just worked for food and shelter. The same mechanism exists with everything we produce under our economic system. A further point, which needs examining, is the role the low skilled workers play in low wage countries like China. Working conditions are tough for unskilled peasants. They frequently get the lowest, dirtiest factory jobs. But advancements are possible as workers retire through marriage etc. or after the worker is established, or there might be a better paying job at the next factory. Surplus money is send back home to improve the lives of family and friends. But this money does not build infrastructures or schools etc.... It simply goes hand to mouth and into life's emergencies. Whilst the workers eventually enjoy relative comforts when compared to their home villages, they have to learn to adjust to urban loneliness and the competitive demands of city living. The younger fare better while the older frequently end-up in the city's poverty traps. It is becoming clear that the taxes raised through commerce will not filter down to the village level. They are used mostly to improve
growing urban areas. I had an interesting exchange with a green politician in Australia. We were arguing the relative merits of green politics that protect rocks and green politics that help humans first and rocks and the environment as a consequence of better human living conditions. I stupidly send an e-mail which raised the point of a "worker chained to their work-benches" as a caption, whereas the picture showed the bosses at a pretty Chinese factory's fish pond, being the only ones still at work after 6-30pm. Workers conditions are not always as bad as we imagine. If the factories can sell their goods for a reasonable profit, then working conditions are quite good. The irony I tried to point out backfired a little on my conscience as I began to ponder the consequences of my flippant joke. The bad examples come from very new- poorly financed factories or from chemical industries that are a repeat-vision straight from the hell of our own Dickensian industrial revolution. The poorly financed factories wait for a 50% deposit, which the buyer must pay for new orders. This deposit is used to buy the raw materials. Wages are often paid in the form of free accommodation or accommodation costs, which are deducted from workers wages at the end of the old lunar year, when factory profits are calculated. The beginning of the new lunar year, is a time to visit family and friends and a time to enjoy the fruits of their labour! If the past year was bad for the business, then the workers may not get paid or they may not receive their bonuses. The worst effected industries are the ones we least suspect. They make cheap Christmas, Easter decorations as well as cheap jewellery or rhinestone decorated products. There is no way that workers can be paid proper wages, when these products have to be made using time consuming labour, be shipped half-way around the world and be sold for a few cents in two dollar discount stores. Another point to consider are scores of villages where the healthiest
and strongest have moved to the cities. This is a world-wide trend that stretches across every nation. We would do well to make life in the country-side more pleasant by introducing health, schools and sanitation. Furthermore, we have to give dignity to the poorer country life style. I saw a village in Borneo perched on stilts over a blue lagoon. The cars and motor scooters were parked on the main-land out of sight. The villagers were unwilling to part with their traditional life style, but joined the modern rat-race during the day. They clearly chose the best of both worlds. Such examples are rare and the wisdom required has frequently not been developed through experience. Tranquil - slow paced country life amidst friends and family, is a very rich life well lived. It is a pity that we look don on it with disdain, from our skyscrapers.
Polyonomies Economic poligamy.
Collisions avoidance Responsibilities between vessels(1) a power-driven vessel underway must keep out of the way of (a) a vessel not under command: (b) a vessel restricted in its ability to manoeuvre: (c) a vessel engaged in fishing: (d) a sailing vessel or a vessel under oars; and (2) a sailing vessel underway must keep out of the way of (a) a vessel not under command:
(b) a vessel restricted in its ability to manoeuvre: (c) a vessel engaged in fishing; and under oars etc Much has been written about dual economies. There appears to be an agreement that rich and poor economies don't mix and are an agent for social unrest. South Africa is a good example of a dual economy. The educated elite enjoys a western lifestyle while poor - mostly black people have to live under much poorer conditions and have few prospects of economic advancement. A dual economy in this case is simple an acknowledgement that an elite style economy can't and never will benefit rich and poor alike. Under a dual economy, the poor are allowed certain privileges, which are denied and off-limits to the better of- who live in the advanced, wealthy western exploitative economy. It is cynical to say that splitting a country into two economies, is simply just another form of apartheid. However tempting, this analogy overlooks the earnest attempt, which is made, to avoid a civil war, which threatens to erupt between the rich, and the poor. I placed the "collision avoidance rules of the open sea"- at the beginning of this chapter to illustrate that a separation of ships and economies must exist. These rules assure the safety of lives and ships at sea and similar economic rules could safe and dignify life on land. Ships, like economies have different means of propulsion. Where vessels use diesel, sail or oar, economies use consumption as fuel. Just like ships, big economies have a huge appetite for fuel- whereas small sailing ships hardly use any fuel. Likewise people working in the rich economic sector consume huge amounts of goods and services, whereas people living in poverty consume less per person.
Both rich and poor people have an equal right to be on the ocean just like every human being has a right to live in "economic dignity". But because of their different natures, all vessels must have different speeds and different destinations. We willingly submit to the rules of the sea to avoid collisions and loss-of life. Is it then so strange to consider that we extend the same courtesy on land to both rich and poor people alike? Slower or smaller economic consumption must therefore be protected from fast veracious economic activities. However, we must not fall into the trap of limiting this separation to a dual economy. We should consider the possibility of having multiple economies. The concept of Polyonomies, of an endless number of economies must be part of the solution to end poverty. Polyonomies simply protect slower economies to avoid collisions and loss of life and engage only in profit making trade with bigger economies. This is a total reversal of our current system where the bigger economies simply prey on smaller underdeveloped economies. Polyonomies would therefore send a larger amount of profits from fast economies to slower economies- where it is more urgently needed. This can take may forms such as paying more for raw materials- by agreeing to pay for more expensive and more labour intensive production methods. It must also be remembered that advanced economies prey on one another and that this is simply a contest of equals, where gains are made without destroying the looser. Whereas in our current system, the weaker looses all. Polyonomies should exist wherever people no longer benefit from the major economic activity of the village, town, region, nation or
relations between nations. Henry Georges "Law of rent" clearly shows that poverty always accompanies profits and that only the middle-class is partially shielded from the economic aggression of their own corporations. Critics could argue that Polyonomies are just a form of protectionism and they are right. Polyonomies are a protection against social collisions between rich and poor economies, which exist wherever unconscionable and unsustainable levels of profits are pursued. Our elite economies buy low and sell high to create and maximise profits. This mechanism has created corporate overheads of 70 to 80%. Reducing some of these excessive overheads simply stimulates the lesser mobile economies, which have to co-exist with elite economies. It can not be justified to grow grain in the Americas, ship it to China to be processed into cracker biscuits, only to end up on a supermarket in Sydney Australia for $2.95. The real value of the materials used to make the box of biscuits is $2.95 / 16= or less then twenty cents. The rest are profits derived from a huge carbon-burning footprint, which is created through excessive transport, processing in extreme low wage countries and re-distribution to the corner of the earth. It is not hard to imagine that these biscuits could be made from wheat grown by South African farmers, be backed in small towns as well as in Johannesburg, in close proximity to the consumer to create jobs and be consumed by both rich and poor economies alike. In this scenario, the poor locals have a sustainable income, which in time can build a dignified life style. But there has to be a looser and it is obviously the freight industry that hauls goods across the oceans, stock market speculators who gamble on the fluctuation in commodity prices and shareholders,
who would earn reduced returns on their shares. But profits can still be made, but they would be found in local, short supply chain ventures and to a lessor degree in imports. However, if corporations adapt to a polyonomy model, they still can earn profits, but instead of driving environmental destruction and carbon burning, they would concentrate a little more on doing business between equal economies and business which is local and has a socially supportive short-locally supply chain. In time corporations will have to adapt to an energy poor and resource depleted world anyhow. Change will be forced on corporation's whether they adapt willingly or not. It is just a question of time before circumstances force them to adapt to a new energy and resources poor world. Corporations that fail to adapt, will simply perish. So it is smart to rethink corporate strategy to both reduce social unrest and energy and resource wasting practices. It requires only very small polyonomic concessions to reduce the systematic poverty, which is enforced by our monolithic economic model. Poverty is mainly a matter of policy direction. Consumption happens either way, but smart polyonmic polieced consumption, like "collision avoidance rules of the open sea" need to be enshrined into law. Corporations only follow rules when they are monitored by rich stakeholders who desire peace and poor stakeholders who desire economic viability and self-reliance. Economists focus on what can be controlled, monopolised and monitored in order to calculate profits, flow and distribution of wealth. But these models have failed the poor who live in the "informal sector" of our economies. The term "informal sector" is a euphemism economists have created
for things they can't monitor or control. These issues are then put into the "too hard basket" or the "round filing cabinet", which in tern are euphemisms for rubbish bins! By implication that means that over half the world population is deemed to live in the economic rubbish bin instead of partaking in economic activities.
Polyonomies Economic polygamy.
Yes you guessed right. I have flipped my lid (: What could cuckoo clocks possibly have to do with economics, the industrial revolution, poverty or trade? Well, to the initiated, cuckoo clocks are considered the ancestors of all the above.
Modern Cuckoo clocks are best known for the painted, wooden, tiny cuckoo, that comes darting out of its box on the half and again for the full Monty, up to twelve times, with a more or less diabolical call, on the full hour. They are an ingenious time peace that is gravity activated by one or two weights in the shape of led pine cones. Thankfully they have not always been so kitschy. The earlier versions had a pleasant face painted with flower or rural motives. Imagine Germany's black Forest about three to four hundred years ago. Back then, it was the poor-house of Europe. Its native forests had
been shipped as far as Venice to build the Venetian fleet and to serve as foundations to Venetian houses. Up to 20,000 trees were rammed into Venetian lagoons mud to build a single house. In any case the Black Forest inhabitants had used-up the remainder of natures treasures in mining, leaving the countryside totally denuded and the natives destitute. Agriculture thrived, but poor soils and steep mountains put a quick end to this as well. Far away rich trading cities like Frankfurt were swamped with poor workers and maids from the black Forest. It is hard to believe that today's beautiful Black Forest was once a total environmental basket case. So the locals had to adjust or perish. They coped by inventing a new economy. They exported what meagre produce they had to Frankfurt to survive. They also grew a new type of plantation Forest. The Black Forest pine forest we see and love today. The many access roads, which meander through the fields and forests, were build deliberately to make the wintertime economy of timber cutting more accessible. These roads (Wanderwege) in time also began to serve a thriving tourist trade.
A modern Cuckoo clock. One of the local monasteries developed / adapted through French mathematics the first clock. It was a crude timber device and kept the time, more or less within one hour every day. Hence, when we say today, "I'll meet you at about 1 o'clock", we have derived this saying from a time when it actually meant a meeting time anywhere between twelve and 2 o'clock. The clock technology somehow escaped from the monastery and found its way into the homes of the poorest, the second sons and daughters of the local peasants. Monasteries collected taxes, so it is quite conceivable that it was a way to keep the poor working, and able to pay taxes, even in the harshest winter months, when snow drifts blocked all out-door activities. The clocks were then packed onto a wooden back-pack and taken to the closest cities for sale in the spring time. They were an instant hit and eventually sold in huge numbers. Amazingly, they even made it as far as china. The poor second sons and daughters soon became wealthier then their 1st borne brother who inherited all of the land from his father. They began to specialise. Some would carve and paint the boxes, while others developed special skills to make increasingly more complex metal gears. By the 1800', Schwartswald fairground pipe organs (the "Gebrueder Gebrueder" family brand of organs -are a delightful example) and cuckoo clocks, were made in small factories we would recognise today. This quaint example shows the beginnings of the industrial revolution. It also is a parable of how poverty can be eliminated. Both the farmers through a re-greening and the surplus labour in the form of second siblings were winning in the end.
Yesterdays disaster zone- today's pride and joy !
To this day, almost every house in the Black Forest is a commercial enterprise. They are farmers, tourist accommodation providers, timber worker/owners, small manufacturers of clocks, precision engineering, toys and high tech automation. They have learned the hard way that prosperity comes in small parcels through small-scale economic independence. They also support each other and their community by proudly consuming their own produce and manufactured goods.. Export is also thriving with agricultural products proudly displaying "Schwartswald" made logos. Black forest "Schinken" smoked ham is today one of the most a highly priced delicacy sold in Germany. The formula to eliminate dire poverty is all-around us. It only requires a seeding technology, schooling, environmental improvements and trade in a single level of the economy. Such
small-scale opportunities are all-around us. Once we become accustomed to recognise them, they become visible everywhere.
Why we need slums!
The Early History of Slums "Everywhere on the ground lay sleeping natives-- hundreds and hundreds. They lay stretched at full length and tightly wrapped in blankets, heads and all. Their attitude and rigidity counterfeited death." Mark Twain, on a nocturnal drive through Bombay in 1896. Q: What do you get when you lock five economists in a room? A: Five starving economists who are trying to rationalise cannibalism. "Late in the 17th century, Gerald Aungier tried to attract traders and artisans to Bombay. As a result, the population grew six-fold in the fourteen years between 1661 and 1675. Some of the more prosperous traders built houses inside the British fort. The rest lived in crowded "native-towns" around the walls. These were probably the first slums to grow in Bombay. The problem of overcrowding certainly remained through the 18th century. A count made in 1794 found 1000 houses inside the fort walls and 6500 immediately outside. All over the world, the 19th century saw the growth of slums give the lie to the idea of progress brought on by large-scale industrialisation and the understanding and control of diseases.
Bombay was no exception. The cotton boom, followed by the rapid growth of mills and shipping drew a large population from the rest of the country into a city ill-equipped to deal with them. In the middle of the 19th century slums grew around the mills and other places of employment". http://theory.tifr.res.in/bombay 2007 It does not matter how economic theory tries to twist the truth, Trade, colonialism, banking, globalisation and free trade, and not sharing technologies, all have contributed to the shift of wealth from the producers to the centres of modern commerce. How could cities like London, who nearly produce nothing exist without this shift of wealth. Wealth creation is limited by what we can scratch out of and grow in the fertile soils of the world. The refinement of these resources brings further wealth as does their shipment. Asking inflated prices for these goods further creates wealth until we end up in the muddle, which is our current situation. That's all! Therefore, the power to steer our economies comes from our consumption and our exploitative business technologies. The water we drink, the food we eat, the clothing we wear, the cars we drive, the overseas holidays we take and the houses we live in etc Our system only works because we consume raw materials, which we buy cheaply and turn into short, lived goods, which are made using cheap labour. I need to clarify one very important point, which distinguished Satyagraha from Adam Smith's economies. Adam Smith's view says we will all live well if we have a healthy economy, keep wages low and trade/export to our maximum capacity. He naturally assumes that England, the leaders, conservatives and liberals of any epoch will benefit the most from this activity, since this miracle can be fully ascribed to their commercial skills, cleverness and overall superiority etc Satyagraha begins its argument from a human standpoint. We assume that every person has an equal right to life, sharing in the
bounty of nature's wealth and technological innovations. When individuals excel, then we appalled them and bestow whatever benefits they can rightfully claim as their own. We see the economic growth of the industrialised world as being based on the growth in human population and its accompanying growth in consumption, commerce with new colonies and a clever commercial system of wealth shifting from the producer to the end beneficiary. We believe that ie. countries like Great Britain that in 2007 are producing nearly nothing and are enjoying high living standards, are living largely from the efforts of honest work done by poorer people abroad. When someone deprives any human being of food and life sustaining resources, then we will take a firm, even punitive stand against them. We believe that wealth is created honestly through the following activities. Through agriculture. Through mining. Through forestry. Through fisheries. Through research and development of technologies. Through animal husbandry. Through the provision of health services and labour. Through human consumption. Through transport.
Through the refinement process of raw materials into products. The production of energy. The provision of roads, sanitation, health care, education and water. Military expenditure which in peacetime's is used to build goodwill in foreign infrastructure projects in health, water, civil education, and sanitation. We firmly believe in civically owned energy and economic infrastructure . We believe that overheads and profit margin squeezing should be kept to a minimum level required to facilitate trade activities. This makes activities that exist purely to exploit the process of wealth creation Unethical. Such processes are:Monopolisation of food-stuffs. Monopolisation of transport. Monopolisation of information media's. Monopolisation of manufacturing processes. "Free trade" and other misleadingly named exploitative trade activities. Banking, as a financier or monopolisation and Military aggression. Bank and corporate tax shifting / avoidance. Currency speculation, commodity speculation, support of unethical corporations who hold a mix of civic, consumer and armaments interests in the same corporate structure, thus making ethical
distinctions impossible. Exploitation of human populations through natural needs like:transport, education, health, food, water, power and sewerage. Politicians pandering to the de facto government of commerce and industry. We believe that wealth created through human activities should foremost benefit the locals who have created it. We accept the need for two economic systems:- the currently practised Adam Smith version and a more defensive, locally sustainable and environmentally balanced economic system. In summary, we believe that we should all have a "fair go" throughout our lives and that we can change the evolution of our societies into a more stable and peaceful future. But above all, we believe that humans are adult enough to begin taking charge of their own everyday activities, without the patronising interference of big business interests. But this also means that we have to get off our lazy behinds and take an active role in our environment. Because at the moment, we have only our disinterest to blame for the mess we are in.
Pull yourself up by your bootstraps?
If we want to reduce poverty quicker, then the poor also have to help
by doing their bit through poverty friendly-health schemes, local slum initiatives and mini trade manufacturing. We need both ends to do their bit. But most of all, we need a clear vision on how and where to start. Remember Vern Jackson's saying? "If you don't know where to start, start anywhere!". So we have to ask the question:- how can we eliminate poverty when we, the rich are dependant on the poor for our high levels of income? The first thing that is becoming obvious is that change can-not come from the poor as readily as it can come from the rich. Grameen started his bank by giving a few dollars to poor cane weavers, so that they could escape the loan sharks that kept them in dire poverty. He effectively took profits from the loan sharks and empowered the poor to own their first assets in the form of simple raw materials, which they owned. But this meant that someone higher up in the food chain had to work with lower profits. So, by extension, we too have to do with a little less, if we want to eliminate poverty. How much less, I hear you ask? The "less" can come in many forms. Firstly, we can do it by buying direct from the producers/manufacturers. We should buy at fair, but higher prices then the producers are currently receiving. . . . Secondly, we should by from family owned operations, then from co-operative structures, then from companies, then from corporations. Thirdly, Jeffrey Sachs, proposed under 1 percent of GNP- as assistance to the poor. Why not simply add 1 % to GST, as a anti poverty levy or donate/invest 1% of your income to the Grameen bank, or any other of the worthwhile, teachers colleges, schools, water treatment and health projects. Perhaps we should use some of our technologies to float/form low-overheads aid corporations where the director does not receive millions, but gives his business wisdom to a charitable project for $0 and a big pad on the back in the form of
an Aid Nobel price. We have to accept the fact that while our economic system works as it does, we have to have a lot of people earning vastly smaller sums then we do. Otherwise our system could not work. So, if we are serious about eliminating not just dire poverty but poverty and slums, we have to lend a helping hand in the form of seeding projects, short supply line, ideological Satyagraha and PSP. We must realise that there are at least 2 or more economies working below our establish structures and that every one of then has a right to exist and expect some ray of hope to raise their plight in the future. ". . .government is instituted for the protection, safety, and happiness of the people, and not for profit, honour, or private interest of any man, family, or class of men. . .the origin of all power is in the people, and they have an incontestable right to check the creatures of their own creation, vested with certain powers to guard the life, liberty and property of the community. . ." Mercy Otis warren 17281814, poet, historian, patriot, and advocate of the Bill of Rights
Population power and the creation of wealth.
"When buying and selling are controlled by legislation, the first
things to be bought and sold are legislators.": P. J. O'Rourke - (1947) US humorist, journalist, & political commentator The population explosion was made possible largely because we advanced agriculture to yield larger crops and we were able to minimise the harm of diseases for the most part because we introduced sanitation to our settlements in the form of clean water and sewerage. Advances in health issues came much later as blood borne diseases were managed and blood transfusions were developed between the two world wars, more then a hundred years after Sachs ascribes their benefits to the economic miracle. Also these medical advances were small compared to the benefits that water and sewerage management brought in the 1800's. Wealth was created through trade with the new colonies as well as through a growth in the consumption by an increasing population. Everything we consume from cradle to grave is bringing profit to someone. We are not harnessing this profit in our villages and small towns for the benefit of its citizens. Instead we are sucking it away from its place of origin and transport it via a monopoly to a rich person who is located somewhere else in the world. If we would keep more of the profits our toil created locally, and if we were locally economically and environmentally self-sufficient in a local small scale economy, then National economics would largely become irrelevant and the wealth and power shifted in to the hands of a select few, would cease to govern our lives. But we have become lazy and accept two governments. The elected and the de facto government which we elect with the careless spending of our dollars. So where did the economic miracle come from? It's a bit like asking where babies come from. They come from you and me. More people simply consume more and more consumption creates more profits! Additionally, our technological advances and increased agricultural yield also have created new wealth. But this is only a glib statement and ignores the fact that after colonisation, the masses on the periphery are now poorer then they were before we "civilised them".
Let me briefly delve into the history of slums to illuminate and solidify this point. The following text is compiled from UN sources. In his book, "Planet of Slums", Mike Davis, a history professor at University of California at Irvine, has written an incredibly astute analyses of the natural (and artificial) world factor in race, class, geography, ecology, history, economics & politics which explain the existence and history of slums. He writes:- "Two years ago, the head of U.N. HABITAT [the United Nations Human Settlement Program] estimated that 1 billion people were living in slums, classically conceived as having inadequate, substandard housing and missing some essential services. A much larger number, perhaps 2 billion people, live in cities and are poor. More than a billion people, again overlapping with slum dwellers, really exist outside the formal economy and formal employment." That makes almost 50% of the human population live in miserable conditions. Davies coined an interesting phrase "off worlds", which he describes as middle-class theme park urban developments. Within the walls of these theme parks, middle class people all-over the world are creating their version of paradise. They commonly create an infrastructure which improves on that provided to the general population and is a paradise when compared to slums. " in the '70s when developing countries were induced by every means possible to take on large burdens of debt, most of the loan money was designed to be invested in export sectors in agriculture. In other words, it was used to convert traditional locally consumed agriculture to export agriculture, to increase the supply of raw materials, particularly for countries like Japan. Then the crunch came at the end of the '70s. Raw material prices and export prices fell to almost historic lows, reducing these countries' incomes. The IMF stepped in" ...this meant that "almost
everywhere..."slashing public employment and reducing public expenditure, often reducing the footprint of city governments. It also meant policies that eliminated protected industries, like manufacturing for the home market. This had devastating impact, first of all on formal employment in cities of the Third World." Our "free trade" and development at all costs ideologies have created many dire side effects on places of human habitation and the stability of these societies. For example "families in Kinshasa are now stretched to the utter breaking point, so children are cast into the street as witches. It's basically a socially acceptable formula for the abandonment of children." The consequences of misguided economic theory are nearly unimaginable. The below excerpt from an anonymous review of his book summed it up nicely. "Davis gives the official UN definition of a slum as a place "characterized by overcrowding, poor or informal housing, inadequate access to safe water and sanitation, and insecurity of tenure. (pp. 22-23) " "we might ask, whose fault is it that so many people in the world are locked into such squalid conditions? Certainly you and I had nothing to do with it. Well, that is NOT Davis's point of view. He sees globalization and the policies of governments (especially rich Western governments) and NGO's (especially the World Bank and the International Monetary Fund) as the leading cause of slum proliferation and growth. He writes, "night after night, hornet like helicopter gunships stalk enigmatic enemies in the narrow streets of the slum districts, pouring hell-fire into shanties or fleeing cars. Every morning the slums reply with suicide bombers and eloquent explosions. If the empire can deploy Orwellian technologies of repression, its outcasts have the gods of chaos on their side." (p. 206)" "The people in the slums, as Davis points out, represent surplus
labour or even--to use his terminology--superfluous labour. They are the dregs of humanity, caught in a downward spiralling situation in which lack of education, lack of nutrition, high instance of disease and mortality, low wages, bare subsistence, etc. guarantee that they and their children will stay in the same situation. The odds against a leap from the depths of poverty to a middle class existence are greater than ever." "The overarching question that I was left with was, what does this incredible proliferation of poverty mean for the human race as a whole? What does it say about us? How does it bode for the future? Are we looking at not a perpetual war between nation states (as Orwell had it), but at a perpetual war between the haves and the have nots?" "It used to be the case that when things got really bad or just incredibly decadent, a revolution or an invasion from without would change things. Now it would appear that the difference between those at the bottom of the economic pyramid and those in the middle and upper classes will only widen. With the exponential explosion in technology that gap may become so great that the haves may some day regard the have nots as members of a different species." Anonymous 2007 New UN-HABITAT report concludes that economic globalisation adversely affects the poor in developing countries and indirectly contributes to slum formation. World trade has grown rapidly in the 1980s and 1990s, but is still dominated by a small group of countries. Contrary to popular belief, the West has not lost manufacturing share. Rather, it is the less developed countries that have lost their share of manufacturing employment and trade, mainly to a small group of countries in Asia. Some small benefits of globalisation to slum dwellers are outweight by "by a truly formidable array of disadvantages- so many, in fact, that some national governments might be excused for not wishing to participate at all in globalisation, if they genuinely have the welfare
of the urban poor at heart. The major disadvantage of globalisation "is the wholesale loss of formal sector job opportunities in both the public sector and the private import-substitution industries. The remaining formal sector jobs are often insecure and paid at subsistence wages. Another significant disadvantage is that, as those who are able to access global opportunities increase their incomes, economic inequality grows. This means that the prime resources of the city are increasingly appropriated by the relatively affluent. It also leads to inflation as the "new rich" are able to pay" Looking ahead, according to the UN-HABITAT Report, the world appears to have entered a new era of laissez-faire globalisation, with everything that this implies. In particular, exposure to global economic booms and busts ratchets up inequality and distributes new wealth in increasingly uneven ways. In the past, this system was responsible for creating the famous slum areas of major cities in today's developed world, and it is very likely to do the same again in developing countries. As our computer evolution began and we became even more efficient , "real incomes actually fell for the bottom income groups in most countries and the world as a whole - with resulting increases in poverty." As states relinquish their civic responsibilities to corporations and banks, "the "withdrawal of the State" and the cyclical nature of capitalism, an increased demand for skilled labour (relative to unskilled workers), and the effects of globalisation - all of which are, in fact, interconnected." This puts our financial, commercial and stock market system squarely in the limelight. It clearly points the finger at those people who benefit from the misery of nearly half of the worlds population. "in situations where labour has little bargaining power and/or
governments do not actively seek to redistribute wealth, the most economically powerful groups will always take the lion's share of new wealth." According to the Report, "it is not globalisation, per se, that has caused countries and cities to abandon policies aimed at redistributing wealth to the benefit of the majority of their citizens."..."it is the perception of governments that their countries must be competitive in the world economy that has led"..."many countries to deregulate their labour markets and lower social spending." In conclusion, "the rapid growth of inequality, poverty and of slums"... can be found in "specific decisions by governments following economic policies that are guaranteed to have these results. Many national governments have abdicated their responsibilities to their citizens to promote fairness, redistribution, social justice and stability, all in favour of a chimera of competitiveness and wealth for the few." "It is up to countries to articulate social goals and insist on achieving them - recognizing the realities of a global economy, but ultimately not being enslaved by it." Source: www.UNhabitat.org I cant stress enough that it takes two to tango. The developed world is responsible for the current mess and the developing world is responsible for not protecting themselves against our aggression under the guise of globalisation and "Free trade". PSP- people sharing power, is another point to which I would like to draw your attention. Inequality occurs because basic human wealth is not shared among the population, but instead is allowed to be drawn to the Industrialised world.. PSP is a mechanism to deal with these inequalities. Furthermore the above example highlights my proposition, that small-scale locally self-sufficient, environmentally
balanced economies are the future, for places of human habitation and stable societies.
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Economic Justice[1]

missing pictures of economist and magic pudding and indian workers.

Aand schwartzwald opictures etc...

The end of the natural world order is nigh!

Who has the economic right to live on our Planet ?

Are we wage slaves in the land of knowledge. Consider the

countries. it was 82 greater ... three billion half the population -

Adam Smith, 1723-1790

political and moral

philosopher. Professor of logic & moral philosophy.

The Law of rent

The Law of Rent! 2

Who gains from Free Trade?

Norma Lidsay's screamed "Eat me

magic pudding. It Eat me ! ".

Banker for the poor.

salaries dull the compassion for the

Sachs and Adam Smith's wholly "invisible hand".

Polyonomies Economic poligamy.

Polyonomies Economic polygamy.

Yesterdays disaster zone- today's pride and joy !

Why we need slums!

Pull yourself up by your bootstraps?

Population power and the creation of wealth.

"When buying and selling are controlled by legislation, the first

Other books by Rob Grosche

inside back cover

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