Laying out the facts rather than debating theories about money

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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.

 

 

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Re: Laying out the facts rather than debating theories ...

Very nice work Damon.

Tom

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Re: Laying out the facts rather than debating theories ...

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 comingWink

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'Joe The Plumber' Has All The Power.

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.

 

 

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Re: 'Joe The Plumber' Has All The Power.

Strabes, Outstanding!Smile

I was just thinking how I wished I learned this in school.

JAG wrote:

...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. 

Global Human Trafficking 

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. 

 

-littleone 

 

 

 

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Re: Laying out the facts rather than debating theories ...

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.

 

 

 

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Re: Laying out the facts rather than debating theories ...

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...

- Nickbert

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Re: Laying out the facts rather than debating theories ...

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.

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Re: Laying out the facts rather than debating theories ...

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.

 

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Re: Laying out the facts rather than debating theories ...

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.

 

 

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Re: Laying out the facts rather than debating theories ...
strabes wrote:

how does the consumer have the choice to opt out? 

Excellent! That is what we should be discussing in every thread and every post of this site IMO. We need to quit wasting our time, energy, and emotion on things we can never hope to change, and start concentrating on the things we can change at the personal level. While I doubt many of us are willing to make the sacrifices necessary to completely opt out of the system, we should all be taking steps on that path everyday, should we not?

Damon, I think you are absolutely one of the smartest posters/bloggers that I read. But whether its you, or Mish, or Dr. M that I'm reading, I always have to ask myself "does this content have any actionable value to me?"  Unfortunately, most of the content that I read doesn't deliver in this regard. I was drawn to this thread by its title, but facts or not, blaming the system does no one any more good than blaming a politician. In fact, the act of blaming itself engenders a mindset that I find somewhat counterproductive, especially when its so obvious as to 'who is to blame".

With respect....Jeff

 

 

 

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Re: Laying out the facts rather than debating theories ...
JAG wrote:
strabes wrote:

how does the consumer have the choice to opt out? 

Excellent! That is what we should be discussing in every thread and every post of this site IMO. We need to quit wasting our time, energy, and emotion on things we can never hope to change, and start concentrating on the things we can change at the personal level. While I doubt many of us are willing to make the sacrifices necessary to completely opt out of the system, we should all be taking steps on that path everyday, should we not?

Damon, I think you are absolutely one of the smartest posters/bloggers that I read. But whether its you, or Mish, or Dr. M that I'm reading, I always have to ask myself "does this content have any actionable value to me?"  Unfortunately, most of the content that I read doesn't deliver in this regard. I was drawn to this thread by its title, but facts or not, blaming the system does no one any more good than blaming a politician. In fact, the act of blaming itself engenders a mindset that I find somewhat counterproductive, especially when its so obvious as to 'who is to blame".

With respect....Jeff

These are definitely good points you guys are bringing up. Every drug dealer needs a viable drug addict to consistenly stay profitable. Asking the average person to completely "opt out" of the system (by choice) is like asking the hardcore drug addict to quit cold turkey... very difficult to do and not without real consequences. However, there are always options for people to withdraw support to a certain degree, and there is a wide range of difficulty associated with each option. Some may be as simple as refusing to buy a product from a specific company, and others may require you to sacrifice large material benefits, move from where you live, use up a lot of time, etc. Ultimately, it's hard to argue with the fact that a system cannot concentrate large amounts of power and wealth without a certain level of complicity or voluntary cooperation by its agents. Practically, though, it is true that many times cooperation is coerced or even forced by centralized structures of the system.

Anyone interested in this line of discussion may also want to take a look at the following piece: http://peakcomplexity.blogspot.com/2010/09/confronting-our-complicity.html

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Re: Laying out the facts rather than debating theories ...

JAG WROTE:

While I doubt many of us are willing to make the sacrifices necessary to completely opt out of the system, we should all be taking steps on that path everyday, should we not?

Yes we should.  Can you imagine 'sacrificing' getting rid of all of the debt and then having a medium of exchange simply used to enhance fair and honest trading instead of having a medium of exchange designed to transfer everything from the borrower to the lenders?

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Re: Laying out the facts rather than debating theories ...

Jeff, I respect your view.  as for me, I guess I was naive enough to believe in a republic and that the only hope it has is if the people 1) are informed as Jefferson said and 2) the informed ones participate in its governance rather than just hunkering down with gold and food as criminals loot it.  so my goal is to help with #1 so thousands of people seeing my stuff can somehow help #2.  maybe I'm living in fantasy land, but I can't just watch America go down in smoke when I can see who the attackers are and the source of their power.  plus I'm a West Pointer...I was indoctrinated with the "duty honor country" crap.  I can't help it.  :)   the last article I wrote was to alert the military that they're focused on the wrong enemy.  didn't work so well...pissed them off...oh well.

for anyone looking for personal action plans or survival advice, I can save you the time...don't spend time on my blogs...it's not my focus.

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Re: Laying out the facts rather than debating theories ...

Damon,

Just wanted to clear up any misunderstandings....

  • I certainly don't think your naive in any way.
  • I do recognize the value in what you do and I'm grateful for your efforts.

I have enjoyed our discussions over the years and if you will indulge me just one more question; what do you tell the people who write you asking "what should I do?"

Jeff

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Re: Laying out the facts rather than debating theories ...

no I'm calling myself naive.  not saying you think I am.

I tell them

1) see Martenson's resilience articles if that's the type of info they're looking for,

2) spread the word, especially trying to get local groups together because the lack of local community is what creates the need for all-powerful DC/Wall St ,

3) do whatever they think helps with spiritual/psychological awakening because, as Chomsky says and guys like MLK and Gandhi have demonstrated, it's the only way enough people will become aware of the bondage systems to change them.  I've tried #2 and it just doesn't work except with the few people that had #3, so I think #3 is the key.

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Re: Laying out the facts rather than debating theories ...

Hi Jeff:

JAG wrote:

but facts or not, blaming the system does no one any more good than blaming a politician. In fact, the act of blaming itself engenders a mindset that I find somewhat counterproductive

I agree.  The blame game is generally counterproductive, but people are often surprised to the extent that the environment influences one’s behavior.  This forms the basis of the classic fundamental attribution error.

W. Edwards Deming, a pioneer in quality control, management and systems thinking, found that 93% of the time, problems in organizations can be traced to the design of systems, structures and processes.  Only 7% of the time did people cause the problems and in about half of those cases, the issue could be rectified with additional training.  This should not be construed as advocating unaccountability. Blame and accountability are vastly different.  Blame means to find fault whereas accountability emphasizes keeping agreements and performing tasks as required.  The focus of accountability is generally on the problem and not the person.

While blaming the system might not help, the system should often be the focus of our attention. Let me give an example I think you can relate to.

Have you ever investigated other systems of government?  I’m no expert on this, but I’ve done a fair amount of reading.  I marvel at our system of government with the numerous checks and balances.  It represents an outstanding achievement, in my opinion.  How is it working today?  From my perspective, not very well.  The constitution has essentially been discarded and democracy is a mere illusion.  What went wrong?  Since the system of government is so good, it must be the government officials, correct?

If so, let’s get past blame and go right to accountability.  Why are they not being held accountable?  There are a thousand facets to this, but there are numerous procedural tricks that I’ve been told are used all the time by politicians to skirt accountability.  An official can sponsor a popular bill, but then fail to vote on it.  The media only reports their sponsorship.  An official can vote against a popular bill and when the caucus determines the bill will fail anyway, change their vote. The media only reports their changed vote.  The President can claim a pocket veto of a bill despite the presence of agents to receive his veto message. The media only reports the veto.  Then there is the voice vote.  Obviously, many of these tricks rely on the press reporting what they are told rather than investigating what really happened.  Again, I’ve just selected one facet of this complex situation.  

Would you not agree that the politicians that pull these tricks are despicable?  They should be replaced with better politicians, no?  If I asked 10 people this, I’d wager at least nine would say yes.  I disagree.  I think the system warrants our attention – not the politicians.  Why?  The politicians used these tricks.  That is true.  However, the media only reported what they were told and failed to investigate what actually happened.  They must share some of the blame too, if you want to play the blame game.  What about the public?  If constituents took the time to check out what really happened, these tricks would not work.  So shouldn’t they share some of the blame?  In fact, what assumptions were present when our system of government was created?  The founders assumed (among other things) that there would be an engaged and informed citizenry through the efforts of a fourth estate – an independent press.  This assumption is no longer valid.  So despite our system of government being one of the best in the world, it may have some aspects that warrant attention.  In fact, I assert that replacing the politicians would have little effect.  If politicians consistently vote against the wishes of the caucus, they will almost certainly suffer severe consequences.  If politicians consistently vote against the wishes of their constituents and their constituents are made aware of what’s going on, they may not be re-elected.  So they have devised clever strategies to keep the public in the dark.  New politicians are going to see what others are doing and, by and large, they are going to do the same thing.  The system has incentives built-in that facilitate and encourage this behavior.  I assert this is not a people problem, but a system problem.  Replace the politicians with new ones and I predict you will continue to see the same behavior.

How do you fix it?  Does the public have the power to change the rules?  No.  The politicians themselves would need to do that and the system is serving them well.  But all is not lost.  Create a website that would track every member of congress and everything they do.  Yes, you can look bills up and see the votes on dot gov sites, but this is not really easy for the public to use.  Have something that the public could sign up for and specify which people they want to keep tabs on and get the website to send them emails so they always know what is going on.  Make sure that the people who gather the data are aware of all the tricks and report the correct information so the public can be an informed citizenry and hold their politicians accountable.  Why should the public have to do this?  I’m a very pragmatic kind of guy and if this is what needs to be done to get results, why not.  You get the idea.  My points are:

1. Even the best system can be subverted.
2. Most problems are system problems and not people problems.
3. If you perform a thorough analysis and you are clever, you can almost always create strategies to fix the situation even if you don’t have complete control over the rules of the system.

I’ve been advocating this sort of analysis for years.  It really represents the keys to the kingdom in many cases.  Unfortunately, this is not what is being done.  The public elects politicians that eventually vote against the wishes of the constituents.  The public becomes enraged and votes the bums out. The public then elects new politicians that eventually vote against the wishes of the constituents.  Rinse and repeat. "Insanity is when you keep doing the same things expecting different results."
 
Tom

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Re: Laying out the facts rather than debating theories ...

Damon:

strabes wrote:

StrategyPraxis, yes I attribute it all to the monetary system.

Ah – I had a feeling you were going to say that.  Complex systems rarely have a single root cause. If you focus on the monetary and economic systems.  They are closely interconnected.  A capitalist enterprise differs from what is generally referred to as a free enterprise in two respects: separation of ownership/work and the growth imperative.  So growth is built into the economic system.  What drives the growth?  Some would say that the monetary system is the root cause because the creation of money by banks on the basis of interest-bearing debt creates a “debt imperative,” which in turn creates an economic “growth imperative.”

However, I think one could argue that the “growth imperative” is artificial.  If you look at the emergence of capitalism in Britain, you’ll find the capital holders made fundamental changes in British government policy - changes, which both compelled and enabled enterprises to continue growing, regardless of social benefit.  Land taxes were increased, for example, making traditional agricultural practices unprofitable and forcing landowners to either sell out or increase the scale of their operations. These and other pressures toward growth forced businesses to increase their borrowing - and the repayment burden increased the growth pressure still further.

Actually, you said the same thing in this thread:

http://www.peakprosperity.com/forum/exponential-growth/42696

strabes wrote:

Private capital holders demand exponential growth

If we are in the mess we are today solely because of the monetary system, then changing it is worth an all out effort.  However, I see no viable strategy for doing so.  However, if we are in the mess we are today for a variety of reasons -the monetary sytem one of many - then through a careful analysis of the situation we may be able to make significant progress even if we are unsuccessful in monetary system reform.
 

strabes wrote:

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.

You are well versed.  It is sad that so very few Americans realize what has been done in our names outside the US for DECADES.  These events always remind me of the poem from Rev. Martin Niemoller, starting with: “First they came for the Communists, and I didn’t speak up, because I wasn’t a Communist.”  I’ve seen “Century of the Self”.  It is excellent.  I’ve also read Noami Kline’s “The Shock Doctrine”.

Looking forward to your future videos.  I'm a huge fan of your work.

Tom

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Re: Laying out the facts rather than debating theories ...
Strategy Praxis wrote:

Damon:

strabes wrote:

StrategyPraxis, yes I attribute it all to the monetary system.

Ah – I had a feeling you were going to say that.  Complex systems rarely have a single root cause. If you focus on the monetary and economic systems.  They are closely interconnected.  A capitalist enterprise differs from what is generally referred to as a free enterprise in two respects: separation of ownership/work and the growth imperative.  So growth is built into the economic system.  What drives the growth?  Some would say that the monetary system is the root cause because the creation of money by banks on the basis of interest-bearing debt creates a “debt imperative,” which in turn creates an economic “growth imperative.”

However, I think one could argue that the “growth imperative” is artificial.  If you look at the emergence of capitalism in Britain, you’ll find the capital holders made fundamental changes in British government policy - changes, which both compelled and enabled enterprises to continue growing, regardless of social benefit.  Land taxes were increased, for example, making traditional agricultural practices unprofitable and forcing landowners to either sell out or increase the scale of their operations. These and other pressures toward growth forced businesses to increase their borrowing - and the repayment burden increased the growth pressure still further.

Actually, you said the same thing in this thread:

http://www.peakprosperity.com/forum/exponential-growth/42696

strabes wrote:

Private capital holders demand exponential growth

Very good points SP. The distinction between "capitalist economies" and "free market economies" is especially important, and I would argue that the debt-based monetary system may even be a inevitable outgrowth of a capitalist economy. A debt-based economy can take many forms, and could even be a commodity money system. I think it's best defined as one where financiers control the broad money supply in one way or another. Anyway, my analysis of the evolution of capitalist economic systems in the context of emergent fragility in complex systems can be found here if anyone's interested:

http://peakcomplexity.blogspot.com/2010/09/complexity-manifesto.html

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Strategy Praxis
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Re: Laying out the facts rather than debating theories ...

Just watched Damon's latest video (part three of this series):

Debunking Money (#3): The Civil Rights Issue of the 21st Century

Damon:

FANTASTIC!

Sorry, you are getting threats, but that doesn't surprise me in the least.  I tried doing something along the lines you are doing (not regarding the monetary system - another injustice) many years ago and I was stunned at the number of people who came out from almost nowhere to attack what I was doing.  There are so many people who depend on this system and even if they have antagonism for it, they will defend it with their dying breath because of fear for a future without it.

This post from Giordano Bruno is so pertinent to this discussion:

High Noon In America
http://neithercorp.us/npress/?p=832

I think you will identify with his message.

Tom

 

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Re: Laying out the facts rather than debating theories ...

Damon,

POWERFUL video!  After watching it, this poem came to mind:

BREATHES there the man with soul so dead,
Who never to himself hath said,
‘This is my own, my native land!’
Whose heart hath ne’er within him burn’d
As home his footsteps he hath turn’d
From wandering on a foreign strand?
If such there breathe, go, mark him well;
For him no Minstrel raptures swell;
High though his titles, proud his name,
Boundless his wealth as wish can claim;
Despite those titles, power, and pelf,
The wretch, concentred all in self,
Living, shall forfeit fair renown,
And, doubly dying, shall go down
To the vile dust from whence he sprung,
Unwept, unhonour’d, and unsung.

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Re: Laying out the facts rather than debating theories ...

Damon,

Impeccable and bold...thank you, thank you! 

I agree, we cannot be silent or unconscious about participation. 

 

-littleone

 

 

The difference between the almost right word & the right word is really a large matter--it's the difference between the lightning bug and the lightning. ~Mark Twain


 

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Re: Laying out the facts rather than debating theories ...
Strategy Praxis wrote:
strabes wrote:

StrategyPraxis, yes I attribute it all to the monetary system.

Complex systems rarely have a single root cause. If you focus on the monetary and economic systems.  They are closely interconnected.  A capitalist enterprise differs from what is generally referred to as a free enterprise in two respects: separation of ownership/work and the growth imperative.  So growth is built into the economic system.  What drives the growth?  Some would say that the monetary system is the root cause because the creation of money by banks on the basis of interest-bearing debt creates a “debt imperative,” which in turn creates an economic “growth imperative.”

However, I think one could argue that the “growth imperative” is artificial.

What a great video!

It is heartening to see this thread take the direction it is taking. Strategy Praxis’ discussion of the interconnectivity of capitalism and monetary systems is pure gold, and points toward a direction of productive and actionable thinking.

When I went through the Crash Course last year, this (implied) association of debt based currency with high level macroeconomics bothered me, and still does. I suspect that elimination of debt based currency will spell the demise of capitalism, as well as the governance built around this system, which to me is a far larger concern than how money is created and whether or not interest is charged.

Strategy Praxis has introduced this very real consideration into the discussion, and it is quite important. The thesis that the capital holders are the dominant initiators of growth is in direct opposition to the thesis that the monetary system intrinsically requires growth. This is a very important distinction, as it goes directly to the type and means of corrective action.

Perhaps one technique to explore this thesis is to examine another country as a surrogate for the US economy, and apply both theories to try and predict possible outcomes. Let’s use Mexico as an example.

Mexico is basically a failed narco-state, to which we might assign the dominant causation as drug trafficking embedded deeply in virtually all phases of the government. It is also uses fractional reserve banking, and has a debt based, fiat currency. It has suffered numerous difficulties with the currency, including devaluation, and there are currently initiatives to convert to a PM (silver) backed currency from some reformists within Mexico.

So, what would happen if the currency construct was changed to a sovereign (or some other type of non-debt based) currency immediately? I would argue virtually nothing would change. The drug traffickers would continue to ply their trade. The violence and corruption would continue unabated.

Why? Because caustic external forces have irreparably corrupted and compromised the goverments ability to govern. Yes, the oligarchy does control banking, finance and monopolistic corporations, but the structural system that they operate under has corrupted the entire economy. Recasting the currency will be but a minor speed bump, and they will again (and quickly) emerge with control over the entire country.

The comparison of the US economy with a failed nation state may be unfair, but similarities are evident. In the US, with 12,000 lobbyists chasing 535 legislators, how does monetary reform impact this reality? How does currency reform affect the creation of credit default swaps, and the alphabet soup of derivatives?

It seems to me that to explain the collapse of the US financial system in 2008  requires the casting of a much larger net. This is a challenge to the very core of capitalism. The basic system is no longer working, and an argument can be made that there are severe structural defects, and yes, the currency system is one of them. I am unconvinced that simply addressing the means of money creation will make a substantive contribution to the situation that we find ourselves in. I applaud the effort, and it is a positive step, but more discussion with a system wide focus needs to occur.

I hope Strabes disregards the threats and negative commentary concerning his excellent sets of videos, and continuous to push in this direction. I’d also suggest that his field of view be widened to look at a larger picture of capitalism.

We are not the first to ask these questions. These questions have been asked and answered long ago. The trouble is, the source and constitution of these answers is not viable in American culture, where unconstrained capitalism and its first cousin of entrepreneurial endeavor is ingrained in our DNA. As Dr. Martenson has said, the next 20 years  is not going to look like the last 20, and this means much more than just the means of money creation.

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Re: Laying out the facts rather than debating theories ...

Quite frankly, unlike some on this site, I don't see capitalism per se to be the problem.  The corrupt and criminal capitalism which is presently operative is obviously high dysfunctional and not working.  But throwing out capitalism is like saying you ate some bad food and got sick and therefore you want to get rid of all food.  I realize there will never be capitalism that is entirely free of corruption and criminal activity but it is the nation that has failed in its responsibility to uphold and implement the rule of law and it is the people who have failed in their responsibility of demanding accountability from the state.   

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Re: Laying out the facts rather than debating theories ...

AO,

I really enjoyed reading your post.

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Re: Laying out the facts rather than debating theories ...

+1 ao

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Re: Laying out the facts rather than debating theories ...
ao wrote:

Quite frankly, unlike some on this site, I don't see capitalism per se to be the problem.  The corrupt and criminal capitalism which is presently operative is obviously high dysfunctional and not working.  But throwing out capitalism is like saying you ate some bad food and got sick and therefore you want to get rid of all food.  I realize there will never be capitalism that is entirely free of corruption and criminal activity but it is the nation that has failed in its responsibility to uphold and implement the rule of law and it is the people who have failed in their responsibility of demanding accountability from the state.   

Neither is the opposite conclusion valid, IMO, that simply changing the way money is created solves our dilemma. I wish it were that simple, and who knows maybe it is- it’s just dialogue, raising points and asking questions.

For the record, I don’t see anyone throwing out capitalism, for all it’s problems it still is the very best system we have. The point has been adequately made that there is tight integration between the means of money creation, fractional reserve banking, and the general mechanism of capitalism. I would argue that all three need substantial overhaul.

In my view, choosing just one of the three is inadequate to effect substantive change. Of the three, again in my view, the dominate contributor to the mess we are in is the particular form of capitalism (if it can even be called that) currently practiced here in the US. To reform this, given its convoluted state of dysfunction, would be so extreme that it would not be feasible without some catastrophic event. I think it unwise to wait until such an event occurs to try and have some intelligent discussion about what went wrong, and what the corrective action might look like, as by then it is way too late.

Again these questions have been asked and answered long ago, so it’s not like this is new information. I’ve heard it said that when the student is ready- the teacher appears.

I found ashvinp's article referenced on a previous post to be a pretty good start.

Complexity Manifesto

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Re: Laying out the facts rather than debating theories ...
darbikrash wrote:
ao wrote:

Quite frankly, unlike some on this site, I don't see capitalism per se to be the problem.  The corrupt and criminal capitalism which is presently operative is obviously high dysfunctional and not working.  But throwing out capitalism is like saying you ate some bad food and got sick and therefore you want to get rid of all food.  I realize there will never be capitalism that is entirely free of corruption and criminal activity but it is the nation that has failed in its responsibility to uphold and implement the rule of law and it is the people who have failed in their responsibility of demanding accountability from the state.   

Neither is the opposite conclusion valid, IMO, that simply changing the way money is created solves our dilemma. I wish it were that simple, and who knows maybe it is- it’s just dialogue, raising points and asking questions.

For the record, I don’t see anyone throwing out capitalism, for all it’s problems it still is the very best system we have. The point has been adequately made that there is tight integration between the means of money creation, fractional reserve banking, and the general mechanism of capitalism. I would argue that all three need substantial overhaul.

In my view, choosing just one of the three is inadequate to effect substantive change. Of the three, again in my view, the dominate contributor to the mess we are in is the particular form of capitalism (if it can even be called that) currently practiced here in the US. To reform this, given its convoluted state of dysfunction, would be so extreme that it would not be feasible without some catastrophic event. I think it unwise to wait until such an event occurs to try and have some intelligent discussion about what went wrong, and what the corrective action might look like, as by then it is way too late.

darbikrash, nice post.  It seems like some of the people on the opposite ends of the spectrum are finally in agreement on something.  It may not be much but at least its something.

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Re: Laying out the facts rather than debating theories ...

To Center in on he USA for a second, George Will once said that," America is the worst country in the world, except for all the rest of them." The abuses of our system that need reformed are the only real reason a person has to vote. And yes, I know, you are often forced to choose the lesser of two evils--or between dumb and dumber--but I think voting is still important. But sometimes, as in the case of our very own candidate Dr. Peters, you get candidate that lay out the facts rather than debating theories. Laughing

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