Trump Still Shining Big Oils Shoes, WHY? Part 4
Petro Weapon Coalition complex. Syria Arab Spring Parts 1 2 and 3
Sunday The Sixth of February 2022
NOVEMBER 10, 2016
Of the First Way.
I shall not be crucified upon this cross of Carbon Credits.
Bryan’s “Cross of Gold” Speech: Mesmerizing the Masses
The most famous speech in American political history was delivered by William Jennings Bryan on July 9, 1896, at the Democratic National Convention in Chicago. The issue was whether to endorse the free coinage of silver at a ratio of silver to gold of 16 to 1. (This inflationary measure would have increased the amount of money in circulation and aided cash-poor and debt-burdened farmers.)
BRYANT CROSS OF GOLD SPEECH
Question. What is the World’s Energy Budget?
Energy and Money are intimately related, which of the two is real? That might sound like a strange question why would I pose it here?
Fredrick soddy called money the Nothing you get for something before you can buy anything. Essentially money is a measuring unit whether applied to exchange prices or Net worth ( wealth) calculations
when all is said and done though it is the “Something” that has real use-value in Soddy’s little rhyme, not the Monetary unit.
Energy is an equally slippery something to nail down but whether its the Tiger in your tank or Energy for life and creature comforts.
Measuring Energy with monetary units gives us pence or cents per Kilowatt hour or dollars or Kronor per Gallon or Litre in £kw/h and £per Gallon you see that the £sign is the nothing you get and the Gallon or KW/h is the something you get for that nothing. Before deciding which unit of measurement to allocate any something by, one has to decide how much of the something is available and how much of it we feel we need before the next occasion we need to access some more. As individuals we may fill our gas tanks every week, have a propane gas delivery or oil delivery for heating once a quarter, Where our Electricity and gas services or sewage and freshwater services are connected to a utility service then our metered supplies will come with the particular payment plan each utility provider offers, usually these days according to our credit scores.
Energy though is something which does something, money is a ticket price of entry or access and that is the important point to take away from The First day to Sunday.
Of the Second way. He who has the Gold makes the rules.
Notes from the talk:
Gold was primarily an energy currency because more energy meant more gold, and cheaper energy made cheaper gold.
Gold standard broke down when the Spanish raided America and then Spain started to import everything and lost their interest in making things themselves.
The curse of oil — too sudden an influx of money.
If you have a source of energy under your control, then you have the power to decide what is done.
Importing energy is like a loss of sovereignty.
The late Richard Douthwaite explains very well how Energy and economic activity are intimately related, for this second day on the way to Sunday, we will continue to focus on how much energy is available over the period in which we can sensibly plan our budget. The slide in the screen capture shows the anticipated Peak Oil moment in around 2015, as it turned out the Peak was shortlived, in any event by a pretty well documented and accepted view there are at least 50 years of Oil reserves available, and should we be making a sensible plan 50 years ahead is actually pretty ambitious after all predictions are difficult, especially about the future.
Brendon O Connell 111.
·
Feb 21
Defacto Bi-oilism. Petro/CarbonDollar Standard. The Burning Platform, Seeking Alpha and British Interests in Ukraine? A failure to deal with Abundance. Watching the Wheels.
AUTHOR:ROGERGLEWIS PUBLISHED DATE:DECEMBER 11, 2021
The third way to Sunday. Control the debt. Control the Access to energy.
The two bounded orders, which are beginning to form, will include institutions that aim to foster economic cooperation among their members, while
seeking to gain economic advantage over the rival order. The Obama administration, for example, explicitly designed the Trans-Paciic Partnership for this purpose, although Trump withdrew from it after he became president. China’s
highly ambitious “One Belt, One Road” initiative, which was launched in
2013, is designed not just to help China sustain its impressive economic
growth, but also to project Chinese military and political power around the
globe. And because the United States refused to join the Asian Infrastructure
Development Bank, that impressive institution is likely to become a central
part of the China-led bounded order.
In short, the rivalry between the China-led and U.S.-led bounded orders will
involve both full-throated economic and military competition, as was the case
with the bounded orders dominated by Moscow and Washington during
the Cold WarBound to Fail John J. MearsheimerThe Rise and Fall of the LiberalInternational Order
The Fourth Way to Sunday, Swing production control through Carbon Credits.
Carbon credits and carbon footprints even tons of carbon equivalent metrics are ubiquitous in much modern Sustainable economics literature. Carbon emissions are a handy proxy for how much “Fossil fuel is burnt” Some more Sophisticated analysis from say the WEF tends to use Hydrocarbons instead of “Fossil Fuels” but the big three energy sources are Coal, Gas, and Oil, and in that order regardless of the present consumption patterns which are definitely not! Market determined. Following the big three, there are two other Staples of modern Energy production and these are Nuclear and Hydro Electric. Then there are Wind, Wave, and Solar which are usually referred to as “Renewables.”
In the Carbon Credit and Carbon debit system of Cap and Trade and Al gores Billions, The Big Three are Debits, Nuclear is a Don’t know, and Hydro Wind Wave and Solar are Credits. In the available energy budget on the Debit side, we have 94% and on the credit side 6% The Ratio is interesting, Bear in mind, it also appears in the slides in the William Jennings Bryan video above.
Oil continues to hold the largest share of the energy mix (31.2%). Coal is the
second-largest fuel in 2020, accounting for 27.2% of total primary energy
consumption, a slight increase from 27.1% in the previous year. The share
of both natural gas and renewables rose to record highs of 24.7% and 5.7%
respectively. Renewables has now overtaken nuclear which makes up only
4.3% of the energy mix. Hydro’s share of energy increased by 0.4 percentage
points last year to 6.9%, the first increase since 2014.
So the good credits for renewables amount to 5.7% of 2020 production and growing if the current dispute at the EU where Nuclear and Natural gas are touted for inclusion in the definition, In any event, the blueprint for the Credit side of the Carbon monetary equation has 5.7% of the supply of good energy ranged against 94.3 % of the energy supply which is bad.
let’s say 6/94 or a ratio of 15.6 to 1.
The History of the Gold-Silver Ratio
Historically, the gold-silver ratio has only evidenced substantial fluctuation since just before the beginning of the 20th century. For hundreds of years prior to that time, the ratio, often set by governments for purposes of monetary stability, was fairly steady.
The Roman Empire officially set the ratio at 12:1. The ratio reached 14.2:1 in Venice in 1305 and remained at this level up until 1330 when it fell to 10:1. In 1350 it fell to 9.4:1 in some places across Europe. It climbed back to 12:1 in the 1450s.1 The U.S. government fixed the ratio at 15:1 with the Coinage Act of 1792.2
The discovery of massive amounts of silver in the Americas, combined with a number of successive government attempts to manipulate gold and silver prices, led to substantially greater volatility in the ratio throughout the 20th century.
The Fifth Way to Sunday. Carbon Rationing and programmable money.
It will be left to the rising mists of the future to explain how a Panacea administered in such a manner
to fight the Pandemic of Covid 19 Sars 2 Coronavirus, will also deal with
FILL in blank for your own particular Ill here.
Some suggestions, Climate Change, Climate Change, Peak Oil, Climate Change, Climate Change, Rising Sea Levels, Donald Trump, Populism, Conspiracy theories, LGBTQ 8 XYZ rights, The Far Right, the Alt-Right, Hate Speech……………
Unboxing the Panacea That Cures All ills. #CovidPurpose
The Sixth Way to Sunday- Why usury always leads to jubilee.
“Tripartite accords of old, a Gold StandardAs Piggs Shit Brics and Lutheran Shardsprofer Gaping anuses and Calvinist certaintiesDivine providence and eminent domain democracy perverted. Union now as then in ´38, current quarrels Mr. Streit’s Union and Mr. Orwells Niggers Not counting Niggers, the other´s not like us six hundred million disenfranchised, is it more today? Russia is brazenly refusing to learn from the EU’smistakes and may walk directly into its trap How can banking union serve the tributaries of society. Pigs do not fly nor water flow uphill real brothers can curse each other, friends. Someday. Britannia will give Columbia a piece of her mind, Elysium also needs telling and she is curiously afflicted offering no teet for the eastern bear. an exasperated Englishman: “I pray to God they keep out of the end of this war anyhow. We shall never hear the last of it if they don’t….”Cabalists, Gnostics, Manichaeans, the Old Man of the Mountains, Knight Templars, Satanists, Rosicrucians, Illuminati, Freemasons, Rousseau, Voltaire, Cagliostro, Madame Blavatsky, Mrs. Besant, Trade Unions, Anarchists, Socialists, Theosophists, Communists, Those Bolsheviks, a frightful horde all plotting and getting hold of power and handing it on and doing down Christianity and the Christian life”
February 7, 2020
SWEDEN SWITCHES SIDES ( DAGEN H (H DAY) #SWEXIT #PEAKOIL, GEO-POLITICS AND FALSE NARRATIVES.
YUGO90 ON FEBRUARY 6, 2020 AT 9:19 PM
Here is an extremely interesting article which goes through the core topics of energetic economics, based on a research project funded by the Finish government, worth reading the summary and the complete report (link inside the article). An utter importance is given the concept of ‘debt exhaustion’, previously discussed here by Dr.Morgan.
Enjoy the read!
https://www.vice.com/en_us/article/8848g5/government-agency-warns-global-oil-industry-is-on-the-brink-of-a-meltdown
DRTIMMORGANON FEBRUARY 7, 2020 AT 5:48 AM Good article (with the caveat that renewables aren’t a fix for this problem).Fundamentally, the ‘real’ economy of energy-determined prosperity, and the ‘financial’ economy of money and credit ‘claims’ on that prosperity, have diverged beyond any sustainable relationship. The financial economy is like a car with no brakes and extremely faulty steering.
ROGERGLEWISON FEBRUARY 7, 2020 AT 9:36 AM Nafeez Ahmed does not, in my opinion, do the report justice, he does link to the original document though.
http://tupa.gtk.fi/raportti/arkisto/70_2019.pdf
The report is 500 pages long but not text dense and an easy read and a very good reference source, due to the fantastic graphics of all of the data sets it analyses. The Report is very strong on the geopolitical and petrodollar aspects of the question and does not major on EROI although it does a good job of introducing the concept.
The report hints at Circular economy but does not go deeply into it, Embodied Energy concepts are absent and the difficulty of applying the Energy insights to an economy historically modeled in Financial metrics is quite apparent, I do not think the report successfully separates the two things out although it does highlight the apples and oranges comparison problem.
https://www.countercurrents.org/wild140910.htm
https://web.archive.org/web/20190306141841/http://theoildrum.com/node/6912
What are the Odds, Not Even Wrong “Das ist nicht nur nicht richtig; es ist nicht einmal falsch!”
Counsel for the people charge usury of its crimes.
This baron abstract that claims fruit.
This heavy invisible burden,
a yoke. Fashioned in language,
felt but never seen.
inflicting scars as deep as any lash,
claiming lives as real as any canon.
This nightmare device of imagination.
Who are the slayers of this mythical dragon?
Coleridge saw beauty in nature where sweet amaranths bloom. And Shakespeare compared his summers day.
What of this hamlets ghost of a spectre?
something is rotten in the danegeld,
many more promises are written than can be kept.
So much nectar strained from thin broth,
which bargains can be made?
When the music stops and the dancers
sit down. Chairs are our metaphor for the real.
Always too few.
Rascals become clothed in robes
and honesty is reduced to rags.
Elisabeth lease had a purchase on truth.
”When people starve how can overproduction stand charged. It is money promises, kept short in supply that causes starvation. The consumption in the lungs of the community, is the usurers confection.
A counterfeit Nobel laureate, theres an irony.
Denies that in money there can be a place that gertrude stein called there, home once but no longer there , there in Oakland. A precursor to some sub prime heritage.
A speaker of truth to power could follow Pauli ´Das ist nicht nur nicht richtig, es is nicht einmal falsh!
Not even wrong, not even there.
All counterfeit, yet to counterfeit the counterfeit? a crime.
The courtiers of the Exchequer address the king;
We economists beholden as we are to the princes of usury and the false prophets of usury fit the horse foot to the shoe that suits us best it matters not that the horse becomes lame and less furlongs are ploughed. As we deny the posion in our own usurious medium we also deny that what ills our patient could be from any panacea concocted in our own alchemists crucible.
”Money is usually defined
from a functional perspective as a “unit of account, store of value
and medium of exchange.” However, this definition does not take into account the quintessential attribute of money that money always trades at par on demand and the institutional arrangements that underpin this attribute. Money claims are also hierarchical (see Mehrling, 2012),
in the sense that not all money claims are equally strong in their par on demand promise in all states of the world, and that always and everywhere money is something different for central banks, banks, shadow banks and all other participants in the financial ecosystem.
Our only debt is to Nature and ‘What Is’. Environmental Pragmatism, Live and let live.
AUTHOR:ROGERGLEWIS PUBLISHED DATE:NOVEMBER 10, 2016 10 COMMENTSON OUR ONLY DEBT IS TO NATURE AND ‘WHAT IS’. ENVIRONMENTAL PRAGMATISM, LIVE AND LET LIVE.
Mr. Gores 3 Strikes
As humans, we know we can change our own conditions and of course, we can do much to build a better life and better conditions for ourselves our families and our loved ones. In this, we develop a curiously human-centered world. A world where we place our species at the center of things, this is called Anthropocentric. It is natural that we see ourselves as the object at the center of things it is our ground zero from where we need to measure our own progress and experience. It is a large jump from there, to believe then, that the cause of things is for our benefit or stems from us or is Anthropogenic. Our efforts are a small sum of all the work done in the world and we recycle What Is and harness What Is rather than create What Is.
That is, our ability to build what we build is limited by the feedstock that preceded us and which will outlive our species as far as anything we can gather from our earnest and ingenious scientific inquiries and human industry.
Man is his own false idol, and oftentimes religions prohibit idolatry. Whether one is of religious faith or not there is a secular atheistic substitute for the prohibition of idolatry found in Islam, Christianity, and Judaism (the Abrahamic Faiths). In other faiths and in most cultures, the idea of Pride or Narcissism is warned against. The story of Narcissus is found in Ovid’s Metamorphoses, a myth arising from ancient pagan beliefs. For me, Narcissus is a story of a disconnected ego, estranged from a true sense of the individual singular self and of course a self that refuses to recognize Echo’s presence. Echo is the scorned suitor of Narcissus and Narcissus falls in love with his own image as a punishment for tormenting Echo, surely a story of pride and idolatry.
Shadow Banking
: The Money View
Zoltan Pozsar
Put more bluntly, the hybrid character of banking – always a joint venture between private capital and governmental liquidity safety nets – is morphing more and more towards government-sponsored banking. Yes, I know that is harsh, but sometimes the truth is harsh. Capitalism and banking may not be divorced, but certainly are engaged in some form of trial separation.
Paul McCulley
”The monetary and financial system of an economy are part of the socio-politico-economic control mechanism used by every state to connect the economy with the polity and society. This neural network provides the administrative means to collect taxes, direct investment, provide public goods, trade. The money measures provide a crude but serviceable basis for the accounting system which in turn, along with the codification of commercial law and financial regulation are the basis for economic evaluation and the measurement of trust and fiduciary responsibility among the economic agents. A central feature of a control mechanism is that it is designed to influence process. Dynamics is its natural domain. Equilibrium is not the prime concern, the ability to control the direction of motion is what counts.
Money and financial institutions provide the command and control system of a modern society. The study of the mechanism, how they are formed, how they are controlled and manipulated and how their influence is measured in terms of social, political, and economic purpose pose questions not in pure economics, not even in a narrow political economy, but in the broad compass of a political economy set in the context of society. ”
Martin Shubik
7th April 1823.
The national debt has, in fact, made more men rich than have a right to be so, or, rather, any ultimate power, in case of a struggle, of actualizing their riches. It is, in effect, like an ordinary, where three hundred tickets have been distributed, but where there is, in truth, room only for one hundred. So long as you can amuse the company with any thing else, or make them come in successively, all is well, and the whole three hundred fancy themselves sure of a dinner; but if any suspicion of a hoax should arise, and they were all to rush into the room at once, there would be two hundred without a potato for their money; and the table would be occupied by the landholders, who live on the spot.
Coleridge, Table Talk.
http://www.gutenberg.org/cache/epub/8489/pg8489.html
Wall Street Owns The Country
A Speech by Mary Elizabeth Lease (circa 1890)
This is a nation of inconsistencies. The Puritans fleeing from oppression became oppressors. We fought England for our liberty and put chains on four million of blacks. We wiped out slavery and our tariff laws and national banks began a system of white wage slavery worse than the first. Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street. The great common people of this country are slaves, and monopoly is the master. The West and South are bound and prostrate before the manufacturing East. Money rules, and our Vice-President is a London banker. Our laws are the output of a system which clothes rascals in robes and honesty in rags. The [political] parties lie to us and the political speakers mislead us. We were told two years ago to go to work and raise a big crop, that was all we needed. We went to work and plowed and planted; the rains fell, the sun shone, nature smiled, and we raised the big crop that they told us to; and what came of it? Eight-cent corn, ten-cent oats, two-cent beef and no price at all for butter and eggs-that’s what came of it. The politicians said we suffered from overproduction. Overproduction, when 10,000 little children, so statistics tell us, starve to death every year in the United States, and over 100,000 shopgirls in New York are forced to sell their virtue for the bread their niggardly wages deny them… We want money, land and transportation. We want the abolition of the National Banks, and we want the power to make loans direct from the government. We want the foreclosure system wiped out… We will stand by our homes and stay by our fireside by force if necessary, and we will not pay our debts to the loan-shark companies until the government pays its debts to us. The people are at bay; let the bloodhounds of money who dogged us thus far beware.
As Paul Krugman the Riechsbank prize holder in Economics in honour of Alfred nobel has remarked regarding another Ecomonists views from the hetrodox school steve Keen,
”There is No There There.”
“There is no there there“
“What was the use of my having come from Oakland it was not natural to have come from there yes write about if I like or anything if I like but not there, there is no there there.” -Gertrude Stein, Everybody’s Autobiography (1937), ch. 4
Keen may well equally have replied to Krugman that he was not even wrong?
Pauli remarked sadly, ‘It is not even wrong’.”[2] This is also often quoted as “That is not only not right, it is not even wrong.” or “Das ist nicht nur nicht richtig, es ist nicht einmal falsch!“ in Pauli’s native German.
p.49 Tragedy and Hope
The Two Major Goals of Bankers
Hundreds of years ago, bankers began to specialize, with the richer and more influential ones associated increasingly with foreign trade and foreign-exchange transactions. Since these were richer and more cosmopolitan and increasingly concerned with questions of political significance, such as stability and debasement of currencies, war and peace, dynastic marriages, and worldwide trading monopolies, they became the financiers and financial advisers of governments. Moreover, since their relationships with governments were always in monetary terms and not real terms, and since they were always obsessed with the stability of monetary exchanges between one country’s money and another, they used their power and influence to do two things: (1) to get all money and debts expressed in terms of a strictly limited commodity—ultimately gold; and (2) to get all monetary matters out of the control of governments and political authority, on the ground that they would be handled better by private banking interests in terms of such a stable value as gold.
These efforts … [were accelerated] with the shift of commercial capitalism into mercantilism and the destruction of the whole pattern of social organization based on dynastic monarchy, professional mercenary armies, and mercantilism, in the series of wars which shook Europe from the middle of the seventeenth century to 1815. Commercial capitalism passed through two periods of expansion each of which deteriorated into a later phase of war, class struggles, and retrogression. The first stage, associated with the Mediterranean Sea, was dominated by the North Italians and Catalonians but ended in a phase of crisis after 1300, which was not finally ended until 1558. The second stage of commercial capitalism, which was associated with the Atlantic Ocean, was dominated by the West Iberians, the Netherlanders, and the English. It had begun to expand by 1440, was in full swing by 1600, but by the end of the seventeenthcentury had become entangled in the restrictive struggles of state mercantilism and the series of wars which ravaged Europe from 1667 to 1815.
Supremacy of Charter Companies
The commercial capitalism of the 1440-1815 period was marked by the supremacy ofthe Chartered Companies, such as the Hudson’s Bay, the Dutch and British East Indian companies, the Virginia Company, and the Association of Merchant Adventurers (Muscovy Company). England’s greatest rivals in all these activities were defeated by England’s greater power, and, above all, its greater security derived from its insular position.
Industrial Capitalism 1770-1850
Britain’s victories over Louis XIV in the period 1667-1715 and over the French Revolutionary governments and Napoleon in 1792-1815 had many causes, such as its insular position, its ability to retain control of the sea, its ability to present itself to the world as the defender of the freedoms and rights of small nations and of diverse social and religious groups. Among these numerous causes, there were a financial one and an economic one. Financially, England had discovered the secret of credit. Economically, England had embarked on the Industrial Revolution.
p.57
The Key International Banking Families The names of some of these banking families are familiar to all of us and should be more so:
They include Baring, Lazard, Erlanger, Warburg, Schroder, Seligman, the Speyers, Mirabaud, Mallet, Fould, and above all Rothschild and Morgan.
Even after these banking families became fully involved in domestic industry by the emergence of financial capitalism, they remained different from ordinary bankers in distinctive ways:
they were cosmopolitan and international;
they were close to governments and were particularly concerned with questions of government debts, including foreign government debts, even in areas which seemed, at first glance, poor risks,
like Egypt, Persia, Ottoman Turkey, Imperial China, and Latin America;
their interests were
almost exclusively in bonds and very rarely in goods, since they admired “liquidity” and regarded commitments in commodities or even real estate as the first step toward bankruptcy;
they were, accordingly, fanatical devotees of deflation which they called
“sound” money from its close associations with high interest rates and a high value of money) and of the gold standard, which, in their eyes, symbolized and ensured these values; and
they were almost equally devoted to secrecy and the secret use of financial influence in political life. These bankers came to be called “international bankers” and, more particularly, were known as “merchant bankers” in England, “private bankers” in France, and “investment bankers” in the United States. In all countries they carried on various kinds of banking and exchange activities, but everywhere they were sharply distinguishable
International Bankers Felt
Politicians Could Not Be Trusted With Control of the Monetary System
The influence of financial capitalism and of the international bankers who created it was exercised both on business and on governments, but could have done neither if it had not been able to persuade both these to accept two “axioms” of its own ideology. Both of these were based on the assumption that politicians were too weak and too subject to temporary popular pressures to be trusted with control of the money system; accordingly, the sanctity of all values and the soundness of money must be protected in two ways: by basing the value of money on gold and by allowing bankers to control the supply of money. To do this it was necessary to conceal, or even to mislead, both governments and people about the nature of money and its methods of operation.
Money Power Is More Concerned With Money Than Goods
The obsession of the Money Power with deflation was partly a result of their concern with money rather than with goods but was also founded on other factors, one of which was paradoxical. The paradox arose from the fact that the basic economic conditions of the nineteenth century were deflationary, with a money system based on gold and an industrial system pouring out increasing supplies of goods, but in spite of falling prices (with its increasing value of money) the interest rate tended to fall rather than to rise. This occurred because the relative limiting of the supply of money in business was not reflected in the world of finance where excess profits of finance made excess funds available for lending.
The Money Power—Controlled by International Investment Bankers—
Dominates Business and Government In the various actions which increase or decrease the supply of money, governments, bankers, and industrialists have not always seen eye to eye. On the whole, in the period up to 1931, bankers, especially the Money Power controlled by the international investment bankers, were able to dominate both business and government. They could dominate business, especially in activities and in areas where industry could not finance its own needs for capital, because investment bankers had the ability to supply or refuse to supply such capital. Thus, Rothschild interests came to dominate many of the railroads of Europe, while Morgan dominated at least 26,000 miles of American railroads. Such bankers went further than this. In return for flotations of securities of industry, they took seats on the boards of directors of industrial firms, as they had already done on commercial banks, savings banks, insurance firms, and finance companies. From these lesser institutions they funneled capital to enterprises which yielded control and away from those who resisted. These firms were controlled through interlocking directorships, holding companies, and lesser banks. They engineered amalgamations and generally reduced competition, until by the early twentieth century many activities were so monopolized that they could raise their noncompetitive prices above costs to obtain sufficient profits to become self-financing and were thus able to eliminate the control of bankers. But before that stage was reached a relatively small number of bankers were in positions of immense influence in European and American economic life. As early as 1909, Walter Rathenau, who was in a position to know (since he had inherited from his father control of the German General Electric Company and held scores of directorships himself), said,
“Three hundred men, all of whom know one another, direct the economic destiny of Europe and choose their successors from among themselves.”
The Power of Investment Bankers Over Governments
The power of investment bankers over governments rests on a number of factors, of which the most significant, perhaps, is the need of governments to issue short-term treasury bills as well as long-term government bonds. Just as businessmen go to commercial banks for current capital advances to smooth over the discrepancies between their irregular and intermittent incomes and their periodic and persistent outgoes (such as monthly rents, annual mortgage payments, and weekly wages), so a government has to go to merchant bankers (or institutions controlled by them) to tide over the shallow places caused by irregular tax receipts. As experts in government bonds, the international bankers not only handled the necessary advances but provided advice to government officials and, on many occasions, placed their own members in official posts for varied periods to deal with special problems. This is so widely accepted even today that in 1961 a Republican investment banker became Secretary of the Treasury in a Democratic Administration in Washington without significant comment from any direction.
The Money Power Reigns Supreme and Unquestioned
Naturally, the influence of bankers over governments during
The age of financial capitalism (roughly 1850-1931)
The Development of Monopoly Capitalism This conflict of interests between bankers and industrialists has resulted in most European countries in the subordination of the former either to the latter or to the government (after 1931). This subordination was accomplished by the adoption of “unorthodox financial policies”—that is, financial policies not in accordance with the short-run interests of bankers. This shift by which bankers were made subordinate reflected a fundamental development in modern economic history—a development which can be described as the growth from financial capitalism to monopoly capitalism. This took place in Germany earlier than in any other country and was well under way by 1926. It came in Britain only after 1931 and in Italy only in 1934. It did not occur in France to a comparable extent at all, and this explains the economic weakness of France in 1938- 1940 to a considerable degree.
The Monetary Tactics of the Banking Oligarchy ( TO 1933)
The inability of the investment bankers and their industrial allies to control the Democratic Convention of 1896 was a result of the agrarian discontent of the period 1868-1896. This discontent in turn was based, very largely, on the monetary tactics of the banking oligarchy. The bankers were wedded to the gold standard for reasons we have already explained. Accordingly, at the end of the Civil War, they persuaded the Grant Administration to curb the postwar inflation and go back on the gold standard (crash of 1873 and resumption of specie payments in 1875). This gave the bankers a control of the supply of money which they did not hesitate to use for their own purposes, as Morgan ruthlessly pressurized Cleveland in 1893-1896. The bankers’ affection for low prices was not shared by the farmers, since each time prices of farm products went down the burden of farmers’ debts (especially mortgages) became greater. Moreover, farm prices, being much more competitive than industrial prices, and not protected by a tariff, fell much faster than industrial prices, and farmers could not reduce costs or modify their production plans nearly so rapidly as industrialists could. The result was a systematic exploitation of the agrarian sectors of the community by the financial and industrial sectors. This exploitation took the form of high industrial prices, high (and discriminatory) railroad rates, high interest charges, low farm prices, and a very low level of farm services by railroads and the government. Unable to resist by economic weapons, the farmers of the West turned to political relief, but were greatly hampered by their reluctance to vote Democratic (because of their memories of the Civil War). Instead, they tried to work on the state political level through local legislation (so-called Granger Laws) and set up third-party movements (like the Greenback Party in 1878 or the Populist Party in 1892). By 1896, however, agrarian discontent rose so high that it began to overcome the memory of the Democratic role in the Civil War. The capture of the Democratic Party by these forces of discontent under William Jennings Bryan in 1896, who was determined to obtain higher prices by increasing the supply of money on a bimetallic rather than a gold basis, presented the electorate with an election on a social and economic issue for the first time in a generation. Though the forces of high finance and of big business were in a state of near panic, by a mighty effort involving large-scale spending they were successful in electing McKinley.
Money Power Seeks to Control Both Political Parties
The Growth of Monopolies and the Excesses of Wall Street The agrarian discontent, the growth of monopolies, the oppression of labor, and the excesses of Wall Street financiers made the country very restless in the period 1890- 1900.The Primary Goal of Capitalism The third notable feature of the whole development is closely related to this special nature of capitalism. Capitalism provides very powerful motivations for economic activity because it associates economic motivations so closely with self-interest. But this same feature, which is a source of strength in providing economic motivation through the pursuit of profits, is also a source of weakness owing to the fact that so self-centered a motivation contributes very readily to a loss of economic coordination. Each individual, just because he is so powerfully motivated by self-interest, easily loses sight of the role which his own activities play in the economic system as a whole, and tends to act as if his activities were the whole, with inevitable injury to that whole. We could indicate this by pointing out that capitalism, because it seeks profits as its primary goal, is never primarily seeking to achieve prosperity, high production, high consumption, political power, patriotic improvement, or moral uplift. Any of these may be achieved under capitalism, and any (or all) of them may he sacrificed and lost under capitalism, depending on this relationship to the primary goal of capitalist activity—the pursuit of profits. During the nine-hundred-year history of capitalism, it has, at various times, contributed both to the achievement and to the destruction of these other social goals.
Commercial Capitalism
The different stages of capitalism have sought to win profits by different kinds of economic activities. The original stage, which we call commercial capitalism, sought profits by moving goods from one place to another. In this effort, goods went from places where they were less valuable to places where they were more valuable, while money, doing the same thing, moved in the opposite direction. This valuation, which determined the movement both of goods and of money and which made them move in opposite directions, was measured by the relationship between these two things. Thus the value of goods was expressed in money. and the value of money was expressed in goods. Goods moved from low-price areas to high-price areas, and money moved from high-price areas to low-price areas, because goods were more valuable where prices were high and money was more valuable where prices were low.
Money and Goods Are Different
”Thus, clearly, money and goods are not the same thing but are, on the contrary, exactly opposite things. Most confusion in economic thinking arises from failure to recognize this fact. Goods are wealth which you have, while money is a claim on wealth which you do not have. Thus goods are an asset; money is a debt. If goods are wealth;money is not wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion.”
Merchants Became Concerned with Lending of Money
In the course of time, however, some merchants began to shift their attention from the goods aspect of commercial interchange to the other, monetary, side of the exchange. They began to accumulate the profits of these transactions, and became increasingly concerned, not with the shipment and exchange of goods, but with the shipment and exchange of moneys. In time they became concerned with the lending of money to merchants to finance their ships and their activities, advancing money for both, at high interest rates, secured by claims on ships or goods as collateral for repayment.
The New Bankers Were Eager for High Interest Rates
In this process the attitudes and interests of these new bankers became totally opposed to those of the merchants (although few of either recognized the situation). Where the merchant had been eager for high prices and was increasingly eager for low interest rates, the banker was eager for a high value of money (that is, low prices) and high interest rates. Each was concerned to maintain or to increase the value of the half of the transaction (goods for money) with which he was directly concerned, with relative neglect of the transaction itself (which was of course the concern of the producers and the consumers).
The Operations of Banking and Finance Were Concealed So
They Appeared Difficult to Master In sum, specialization of economic activities, by breaking up the economic process, had made it possible for people to concentrate on one portion of the process and, by maximizing that portion, to jeopardize the rest. The process was not only broken up into producers, exchangers, and consumers but there were also two kinds of exchangers (one concerned with goods, the other with money), with almost antithetical, short-term, aims.The problems which inevitably arose could be solved and the system reformed only by reference to the system as a whole. Unfortunately, however, three parts of the system,concerned with the production, transfer, and consumption of goods, were concrete and clearly visible so that almost anyone could grasp them simply by examining them, while the operations of banking and finance were concealed, scattered, and abstract so that they appeared to many to be difficult. To add to this, bankers themselves did everything they could to make their activities more secret and more esoteric. Their activities were reflected in mysterious marks in ledgers which were never opened to the curious outsider.
The Relationship Between Goods and Money Is Clear to Bankers
In the course of time the central fact of the developing economic system, the relationship between goods and money, became clear, at least to bankers. This relationship, the price system, depended upon five things: the supply and the demand for goods, the supply and the demand for money, and the speed of exchange between money and goods. An increase in three of these (demand for goods, supply of money, speed of circulation) would move the prices of goods up and the value of money down. This inflation was objectionable to bankers, although desirable to producers and merchants. On the other hand, a decrease in the same three items would be deflationary and would please bankers, worry producers and merchants, and delight consumers (who obtained more goods for less money). The other factors worked in the opposite direction so that an increase in them (supply of goods, demand for money, and slowness of circulation or exchange) would be deflationary.
Inflationary and Deflationary Prices Have Been a Major Force in History for 600 Years
Such changes of prices, either inflationary or deflationary, have been major forces in history for the last six centuries at least. Over that long period, their power to modify men’s lives and human history has been increasing. This has been reflected in two ways. On the one hand, rises in prices have generally encouraged increased economic activity, especially the production of goods, while, on the other hand, price changes have served to redistribute wealth within the economic system. Inflation, especially a slow steady rise in prices, encourages producers, because it means that they can commit themselves to costs of production on one price level and then, later, offer the finished product for sale at a somewhat higher price level. This situation encourages production because it gives confidence of an almost certain profit margin. On the other hand, production is discouraged in a period of falling prices, unless the producer is in the very unusual situation where his costs are falling more rapidly than the prices of his product.
Bankers Obsessed With Maintaining Value of Money The redistribution of wealth by changing prices is equally important but attracts much less attention. Rising prices benefit debtors and injure creditors, while falling prices do the opposite. A debtor called upon to pay a debt at a time when prices are higher than when he contracted the debt must yield up less goods and services than he obtained at the earlier date, on a lower price level when he borrowed the money. A creditor, such as a bank, which has lent money—equivalent to a certain quantity of goods and services—on one price level, gets back the same amount of money—but a smaller quantity of goods and services—when repayment comes at a higher price level, because the money repaid is then less valuable. This is why bankers, as creditors in money terms, have been obsessed with maintaining the value of money, although the reason they have traditionally given for this obsession—that “sound money” maintains “business confidence”—has been propagandist rather than accurate.
The Two Major Goals of Banker
Hundreds of years ago, bankers began to specialize, with the richer and more influential ones associated increasingly with foreign trade and foreign-exchange transactions. Since these were richer and more cosmopolitan and increasingly concerned with questions of political significance, such as stability and debasement of currencies, war and peace, dynastic marriages, and worldwide trading monopolies, they became the financiers and financial advisers of governments. Moreover, since their relationships with governments were always in monetary terms and not real terms, and since they were always obsessed with the stability of monetary exchanges between one country’s money and another, they used their power and influence to do two things:
(1) to get all money
and debts expressed in terms of a strictly limited commodity—ultimately gold; and
(2) to
get all monetary matters out of the control of governments and political authority, on the
ground that they would be handled better by private banking interests in terms of such a stable value as gold.
These efforts … [were accelerated] with the shift of commercial capitalism into mercantilism and the destruction of the whole pattern of social organization based on dynastic monarchy, professional mercenary armies, and mercantilism, in the series of wars which shook Europe from the middle of the seventeenth century to 1815. Commercial capitalism passed through two periods of expansion each of which deteriorated into a later phase of war, class struggles, and retrogression. The first stage, associated with the Mediterranean Sea, was dominated by the North Italians and Catalonians but ended in a phase of crisis after 1300, which was not finally ended until 1558. The second stage of commercial capitalism, which was associated with the Atlantic Ocean, was dominated by the West Iberians, the Netherlanders, and the English. It had begun to expand by 1440, was in full swing by 1600, but by the end of the seventeenth century had become entangled in the restrictive struggles of state mercantilism and the series of wars which ravaged Europe from 1667 to 1815.
Supremacy of Charter Companies
The commercial capitalism of the 1440-1815 period was marked by the supremacy of the Chartered Companies, such as the Hudson’s Bay, the Dutch and British East Indian companies, the Virginia Company, and the Association of Merchant Adventurers (Muscovy Company). England’s greatest rivals in all these activities were defeated by England’s greater power, and, above all, its greater security derived from its insular position.
Industrial Capitalism 1770-1850
Britain’s victories over Louis XIV in the period 1667-1715 and over the FrenchRevolutionary governments and Napoleon in 1792-1815 had many causes, such as its insular position, its ability to retain control of the sea, its ability to present itself to the world as the defender of the freedoms and rights of small nations and of diverse social and religious groups. Among these numerous causes, there were a financial one and an economic one. Financially, England had discovered the secret of credit. Economically, England had embarked on the Industrial Revolution.
Is there anywhere where I can listen to you talking about all these topics which have been mailed out today?