ARTICLES Part II
This page is still under construction.
Only the article titles that are underlined are active.
A note from the author: I have been endeavouring to present ideas in a way which is very uncommon in economics: to proceed from the whole to the parts in such a way that, as the parts are examined, the whole is not lost sight of, while the parts are seen in their relationship to the whole. Perhaps an analogy is in order. Imagine you want to describe in detail what a car is to a person who has never seen one, and that this person has an aptitude for understanding chemistry, mechanics and electricity. You can explain how all the parts of the car works, and how they all fit together, but if he does not see a car in front of him to begin with, he will have difficulty seeing how it all comes together. This is the same with trying to understand how a Threefold Economy 'comes together' out of its parts. One needs to firstly see how the whole works, in order to see how the parts fit into the whole. The analogy has its shortcomings: hardly any of the aspects of a Threefold Economy can be represented visually - one has to recreate it conceptually on having it explained.
In the homepage I started with a broad overview of what the essence of Capitalism is. The List of articles then expanded on this theme beginning with the article A Bird's-eye view of Capitalism. The other twenty-odd articles then expanded on the broad picture presented in in A Bird's-eye view of Capitalism. These articles were made as short and simple as I could. In this section, Articles Part II, I flesh out in more detail the themes of these articles and also examine some new and related issues. Articles Part III moves into areas not strictly about economics but more in the field of social and political science, and philosophy.
You should stop paying other people’s rent and the interest on their loans. A lot of people tolerate the social injustices of Capitalism because they harbour the fantasy that one day they can be one of the few who can live off the unearned income of their own assets. If people realised where, how, and to what extent they are paying into other people's unearned income, they would not be so easygoing about Capitalism.
Capitalist 'investments' do not do anything for society. Apart from the construction of buildings and the like, capitalist investments do not create any value for society. Just because a venture earns a profit/income, doesn't mean any real investment has taken place, or any value created. This is true for the work of hedge funds, investment banks, the entire stock market speculation, currency and bonds speculation, land speculation, pension funds, and so on. What little genuine investments do take place in Capitalism can be done much better by a commons bank.
Countries do not need foreign investment. We see and hear it all the time in the media: how foreign investment of one kind or another is going to 'create jobs' and so on. If we understand how currency exchanges work (floating exchange, that is), we will realise that there is no influx of money into a country/currency when 'foreign investment' takes place - the money was always there in the domestic economy. This thought should lead one to conclude that no country needs to open itself up to foreign banks.
Unions need to make themselves obsolete in a post-Capitalist economy. Unions have been a collective force arguing/fighting for better wages and conditions for workers against company owners. If the (larger) corporations have been eliminated and replaced by profit sharing cooperatives as a result of the loan making practices of a commons bank; and if these profit sharing cooperatives actually have no owners; then the divide between owners and workers no longer exists. At this point unions are no longer needed.
Why alternative currencies don't do much. Although advocates don't often articulate it clearly, the various alternative currencies exist to address the issue of unemployment (lack of monetary demand for goods and services). Do alternative currencies address the cause of unemployment? I think not.
The madness involved in trying to bring back a gold standard. A gold standard describes a currency backed by gold. Proponents of this idea usually come from the right wing of the political spectrum in the U.S. They suspect - correctly, in my opinion - that something nefarious is going on in Wall Street and the Federal Reserve, and believe that a gold standard will prevent the massive blowout in the supply of U.S dollars. However, no currency can be on a gold standard while its banking system practices credit creation - and no modern economy can function without credit creation. On top of that, a gold standard can easily be crashed by a process known as short selling.
We do not need a basic income. The argument for a basic income is a capitulation to the forces of Capitalism - a little like trying to bargain for the most favourable terms of surrender. Arguing for a basic income is admitting that the conceptual battle against the capitalist ideology is lost. "We surrender; we are your prisoners, but please guarantee us that we will not starve." In fact Capitalism and all the social injustices it entails, can easily be defeated with the right ideas. Create an economy with full employment (which in essence is an economy without unearned income) and there will be as many jobs looking for people as there are people looking for jobs. Couple this with a decent welfare system (income for those who can't work) and one does not need a basic income.
Labour should not be a cost of production. Alienation is a subject rarely raised among discussions on economic matters. Human beings are disengaged from their work, and therefore from life in general. A major source - if not the only source - of this disengagement arises from the fact that they work for wages; they are a cost of production, and the businesses they work for see them that way. They have no say in the running of their companies. It is important for the human spirit to overcome this alienation by overcoming the share-ownership principle in corporations with profit sharing cooperatives.
Why credit unions, mutual banks, and other 'community banks' cannot prosper under capitalist banking regulation. Why is it that 'community banks' do not make much headway against capitalist banks? The answer lies in a little known regulation in the banking industry called Capital Adequacy Ratio. CAR restricts a bank's lending capacity to the value of the assets that it owns. This puts a community bank in a dilemma: if it serves its members well, it might say, charge lower interest rates, or turn over its profits to help with various community projects. But such actions jeopardises its profits and hence its future assets holdings, and hence its future ability to make loans. The capitalist regulations have such community-minded banks in a bind. There is a way for community banks to overcome this capitalist regulation.
A workable international currency. We need a genuine international currency for a number of reasons: 1. So that Anglo-American banks (and the U.S. military) do not dominate the world economy via the world's dominant reserve currency - the U.S. dollar. 2. So that we can insulate countries from the depredations of international banks, and consequently, so that 3. Countries can develop healthy banking and financial systems (which might include commons banking). 4. To stop the stupid, unproductive, and economy-wrecking, activities of currency speculation. This article explains how such a currency can work and how easy it is to establish.