Laying out the facts rather than debating theories about money
Thought I’d share the 1st video in a series that will eventually have about 10 volumes discussing money. For those who understand the monetary system, this one will probably seem too simplified, and therefore potentially misleading because it leaves out a lot of details. But this is baby steps to overcome all the disinfo.
The goal of this one is to layout a mental framework for people to use when considering that the monetary system is 1) debt-based and 2) privately held, and then discuss the power dynamics that come from it.
Very nice work Damon.
Thanks strabes, I had no idea that you could break the whole thing down to such a simple image, very powerful
Keep up the good work, our time is coming
Great video strabes, you continue to provide excellent thought-provoking material…thank you.
I have a question, however (surprise, surprise, lol). Doesn’t the ultimate power in the system lie with the consumer? Isn’t the R.O.C of the banking and private capital components of this system totally dependent on the consumer to take on debt, either directly or indirectly? Without a viable consumer, the “people” component of your model cannot service or take on additional debt, as both business revenue and tax collections would drop considerably. How is the banking system going to profit without an economy to plunder? Sure, they can create money to buy government debt and invest in the financial markets, but their R.O.C is still ultimately a function of the consumer.
I guess my point is that power that you ascribe to the banking system is an illusion. The real power in this system lies with “joe the plumber”, if he doesn’t have money, neither do the banks.
I was just thinking how I wished I learned this in school.
…the “people” component of your model cannot service or take on additional debt, as both business revenue and tax collections would drop considerably. How is the banking system going to profit without an economy to plunder?
Yes, this is key…this is how people are the real money/tool. People are the prime resource/tool in a debt/profit system, we cannot continue to believe that we are using money as a passive tool.
The UN is attempting to tackle a global issue of mammoth and complex proportions that requires a coordinated effort by the worlds governments, Non-Governmental Organizations (NGO’s) and private enterprises. Each year over 2.5 million people around the world are kidnapped and trafficked to regions where slave labor and prostitution are in big demand. That’s more people than live in the U.S.’s 4th largest city, Houston, Texas. …
*bold emphasis added to quote
This is the double bind. The above quote ignores the necessity to use resources for maximun profit.
double bind: …Double binds are often utilized as a form of control without open coercion–the use of confusion makes them difficult to respond to or resist.
JAG, look at the foreclosure crisis, the bailouts and TARP, law, etc. who has the power?
show me a dollar you can use to do things like buying food to survive that doesn’t feed the banking hierarchy without being thrown in prison or having your property stolen by the IRS. joe the plumber can’t plumb, can’t eat, can’t raise his kids, can’t establish a shelter for his wife, without being a servant of the banking system. who has the power?
who had the power in New Jersey under the mafia system–the mafia or the people being farmed? who had the power in the slavery system–the slavemaster or the people being farmed? until the people recognize we aren’t in a free system, that we’re being farmed, we’re under a subtle mafia structure (not so subtle since 2008), we have no hope of fixing this system.
I think in the long term JAG is right, at least in the sense that the consumer has the power to make or break the system. They may not necessarily be in control of it, but the system’s ability to exist does depend on them. TPTB and authorities may be able to control many aspects of the system or coax it along for a time if the consumer doesn’t cooperate, but the system will ultimately collapse without the consumer’s cooperation. Unless the authorities implement an extreme authoritarian, central-planner state that controls most or all aspects of the consumers’ lives… but at that point any illusion of capitalism disappears and the ‘consumer’ as such no longer exists.
However…. just because the consumer HAS the ability to make or break the system doesn’t necessarily mean they’ll EXERCISE that ability. Maybe that’s what Damon is getting at. Our current situation I would liken to how the drug dealer ultimately depends on the addicts. Sure the addicts could decide to change their habits at any time and put the dealers out of business, but the dealers have a degree of psychological influence over the addict which makes the likelihood of that low. Well, as long as the dealers don’t kill the addict or inhibit their ability to pay for or acquire their product, that is. And it looks as though in our current situation the dealers got so greedy that the addicts are in fact being killed off (metaphorically speaking) or pushed so far as to where they make the hard choice to break the habit. So right now I think TPTB and the system as we know it are living on borrowed time; I just hope enough people become aware so TPTB don’t have the opportunity to embed themselves deeply in whatever new system replaces the old…
The word power comes from the French “poeir”, which means the capacity to act effectively. The system facilitates effective action. Power is really dynamic, involving back and forth actions and reactions within the entity relationships that comprise the system. The bankers/financiers can act; the public can act, but it is the system that facilitates EFFECTIVE action between the two. “Joe the Plumber” will have a hard time leading a productive life outside the monetary system due to legal tender laws. Barter and local currencies can only go so far. Real competition to the monetary system, such as from e-gold or Liberty Dollars (among others) received an overwhelming smack down from the establishment.
The situation with the monetary system is analogous to the situation with the capitalist system. I’m creating a somewhat arbitrary division here for discussion purposes – obviously, these two systems are interrelated. I think the later situation is just easier to explain and understand. The deck is stacked against the public in the capitalist system just like it is stacked against the public in the monetary system. The capitalists after all control the means of production. Capitalists want to maximize profit and one way to do that is to drive down wages – to discipline labor. Workers want to earn as much as possible. So you have a struggle. What happens depends on the relative power dynamic of the two sides. Labor can unite against capital to drive up wages. That was the point of trade unions. Capitalists can likewise take steps to divide workers or increase worker supply to drive down wages. The side that comes up with the better STRATEGY for maximizing their relative power and through effective action advancing their self interests will come out further ahead. Advances are always tenuous, however, because the situation is constantly changing. The key here is creating an acceptable balance.
The crisis comes when the balance is upset. The capitalist system consists of various sub-systems such as the production system and the sales system. Taken as a whole, this involves the same “Joe the Plumbers”. In other words, all the workers in all the production systems in the entire capitalist system also represent all the consumers in all the sales systems in the entire capitalist system (with some rare exceptions). If the capitalists succeed in obtaining a larger slice of the pie than the system can withstand to keep the available relationships in play, the system eventually breaks down. The workers fail to earn enough to act as consumers. Unfortunately, there is a lag time that masks the connection between these events.
I’ve greatly simplified this discussion because I don’t want to detract from Damon’s thread. I think Damon has done a stupendous job and agree with almost everything he has said in his many videos and articles. I diverge from his perspective on only a few points. Damon has serious issues with the monetary system. Is this system inherently unfair? Oh, absolutely. Unfortunately, so are most of the systems we interact with. Divide the world into sub-systems and look at each one. The capitalist system is inherently unfair. Up until the Internet, our media system was inherently unfair. The political system is inherently unfair. You can continue down the line. How you frame a “problem” generally influences the “solutions” that are proposed.
Are we where we are today (our big “mess”) because of our monetary system? I ‘d be interested in Damon’s response. My response is absolutely no. The monetary system is flawed and inherently unfair, but there was a time when our society thrived in spite of it. We had one of the most egalitarian societies with one of the most vibrant middle classes in the history of the world during the 1950’s and 1960’s. I think I can convincingly back up this assertion with appropriate statistics. The world changed considerably in the 1970’s. The US lower 48 oil production peaked in 1971. Nixon ended Bretton Woods on August 15, 1971. The Business Roundtable was formed in 1972 and the Trilateral Commission was established in 1973. The Business Roundtable and the Trilateral Commission partnered with the existing Council Of Foreign Relations and Bilderberg Group to affect US domestic and foreign policy. Neoliberalism, globalization and financialization took off like a rocket. US wages decoupled from productivity and a downward spiral in US standard of living began. Our system of competitive capitalism switched to corporatism. This is not just my opinion. There are several objective measures of corporatism in the peer-reviewed literature and it began its ascent in the 1970s. Our culture began to change, and in my opinion, not for the better. These are all related along with the growth imperative of the monetary and capitalist systems.
If you frame the “problem” as a flawed monetary system, then the natural solution is a new and improved (not debt based) monetary system. My issue is that I do NOT believe it will fix our big “mess” and even if it would what is the strategy to achieve this? I assert that only the establishment has the power to change the monetary system and it is against their self-interest. It is far easier and practical for “Joe the Plumbers” to create tension on leverage points in the current system to readjust the balance of forces than to replace the current system with a new one. Maybe I should start a separate thread to discuss this further.
One more point regarding JAG’s comment and this ties into what littleone and Nickbert brought up. Joseph Schumpeter put forth a theory that unchecked capitalism would eventually lead to a form of corporatism and a fostering of values actually hostile to capitalism. Others have extended this to postulate that our current corporatism will lead to a command economy, but a command economy run not by the state but a cartel of cartels (ie corporate forces). Our political system will morph into an oppressive inverted totalitarianism. A good book to read is “Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism” by Dr. Sheldon S. Wolin, Professor emeritus of Princeton University. Journalist Chris Hedges talks about his work frequently. Hedges summarizes:
“[Inverted totalitarianism represents] the political coming of age of corporate power and the political demobilization of the citizenry […] Inverted totalitarianism differs from classical forms of totalitarianism, which revolve around a demagogue or charismatic leader, and finds its expression in the anonymity of the corporate state. The corporate forces behind inverted totalitarianism do not, as classical totalitarian movements do, boast of replacing decaying structures with a new, revolutionary structure. They purport to honor electoral politics, freedom and the Constitution. But they so corrupt and manipulate the levers of power as to make democracy impossible.”
The resulting overall system will ensnare just about everyone. Control will come by controlling food, water, money, jobs, health, mobility, information, education – just about everything needed to survive. The Agricultural Industrial Complex already tightly controls food. This massive control system is just about in place – I’ll give it another few years before it can be completely locked down. It will be almost impossible to opt out of the system. The psychological reaction of most people will then be to protect and defend the very system that is oppressing them because they believe they need it to survive. Double bind.
how does the consumer have the choice to opt out? I can’t tell you the number of people who have written me in desperation, “what can I do?” as they realize how controlled they are. they say things like “I have no option…I have 3 kids in school…am I supposed to move to south america and become a subsistence farmer?” I get these emails from across the board…lower class laborers, middle class office workers, upper middle class bourgeois types.
I know it’s hard to accept in a country that blows stuff up on July 4th thinking we’re free. we’re not. there is a system. it’s top-down controlling. it grows, providing material abundance so the illusion of freedom continues. but if somebody actually tries stepping out of that system, they’ll realize real fast how unfree they are.
StrategyPraxis, yes I attribute it all to the monetary system. it’s a system that enshrines/reinforces pathology/slavery/narcissism/tyrants, and since it’s the foundation of our system, it infects us all and reinforces our negative attributes as well. changing the monetary system wouldn’t eliminate all badness in the world, but it would at least mean that the foundation of our system wouldn’t be a subtle force shaping our society and individual hearts in negative ways. I have a lot of people backing me up on that…Aristotle, Buddha, Jesus, Mohammed, Jefferson, Adams, Franklin, Lincoln, Gandhi, MLK, RFK, JFK, etc. there’s a reason these people have been remembered in history whereas the average corporate guy is forgotten immediately…despite how many of their products consumers in the 50/60’s bought.
regardless of the vibrancy of the 50’s and 60’s, it was still an illusion of freedom. it was top-down corporatism enslaving nations like Guatemala for United Fruit and Iran for BP/Exxon/Chase so those of us here in the US could live that vibrant life. and it was supply-side driven…watch “Century of the Self” to see how the corporations ran a top-down training program to turn us all into shoppers to fuel the usury system, especially the WWII generation in the 50/60’s. whether a top-down controlling system provides material abundance or not, it still violates my sense of healthy human relationships, healthy spirituality, healthy psychology. and it builds unchecked concentrated power…bad thing.