[GJM] Steve's response to Rodney Shakespeare

[Steve Consilvio]

On Aug 10, 2007, at 3:24 PM, discussion- 
request at globaljusticemovement.net wrote:

> Steve,
> You wrote:-
> "Binary Economics seems to believe that we need MORE centralized  
> power."
>
> More centralized power?  What makes you think that?
>
> Binary economics spreads  economic power.  Binary democracy is the  
> usual vote plus economic democracy i.e. the control over your  
> everyday life which comes from having an independent economic base.
>
> Trying clicking on www.binaryeconomics.net or visit the Wikipedia  
> page on binary economics.  When you've done that, we can discuss  
> further if you want.
>
> Rodney Shakespeare.

To implement Binary Economics there needs to be  "central clearing  
house" of people "watching the numbers" and making adjustments, etc.   
That is the same role that the Fed has today, but the Fed has  
significantly less power.  If I am mixing up BE and TFE, then I  
apologize, but I believe BE still needs a banker and banker of some  
sort.  It is one of the unavoidable consequences of creating money;  
somebody has to create it and regulate it.

Am I mischaracterizing it?

>
> 1.    I am really only trying to make one straightforward point in  
> respect of Kucinich -- he has a consistent record of promoting the  
> use of interest-free loans for public capital investment and so he  
> is potentially somebody with whom co-operation can be made.  I am  
> not particularly interested in his alleged "crimes" and the like.   
> I tried to get cesj in Washington to talk to Kucinich because  
> Kucinich at the very least has some understanding of the use of  
> interest-free loans and cesj certainly has a lot.  But, alas, cesj  
> gave me a long list of Kucinich's "crimes" and would not move an  
> inch to talk to him (or those around him).
>
> I am trying to tell everybody that the use of interest-free loans  
> (particularly for public capital) is the one thing that is  
> practicable now, implementable now, and can provide the unifying  
> force among all monetary reformers.  And please don't think that  
> 'monetary reformers' is just the people in a few groups.  There are  
> big forces (e.g. in Islam) wanting to do things anew  and I am  
> picking up information about non-Islamic countries, too.  Very  
> generally, they understand interest-free loans which halve the cost  
> of investment.  If you want to build co-operation you have to find  
> (and then persuade) the thing people can agree on (and,. of course,  
> stop nit-picking about all the things you  and they disagree on)

I, too, was just offering an observation of Kucinich.  Let's not  
dwell on him too much.

I agree that interest-free loans would be a big help, however, it  
also requires people to recognize that taking interest is  
destructive.  If the government simply underwrites the interest  
payments, then that doesn't change anything, people will still be  
profiting on the debt of others.  That is what the government is  
doing now in regard to education loans, and it is a solution that  
does not address the reasons why tuition is so high.

There are many people sitting on gigantic hoards of wealth.  If they  
do not stop collecting interest, then nothing can change.  The Bible  
calls these payments "a bribe against the innocent."  Every pension  
is funded the same way.  The pensions create the inflation they are  
designed to escape.

>
> 2.    You appear to be saying (and rather despondently saying) that  
> all economics is a zero-sum game.  That's just not true. Since the  
> beginning of the industrial revolution (say, circa 1750) there's  
> been an absolutely huge increase in output per head and that  
> increase, percentage-wise, is largely due to the input of  
> technology in various forms.  It's human institutions, practices  
> and mindsets that prevent solutions to poverty and lead to  
> authoritarianism etc.

Economic output is a misnomer.  True, more people are able to survive  
on the planet.  Machines do the work of men.  But it is economic  
"throughput" that I am concerned about.  The landfills fill as fast  
as the machines produce, yet people are still poor, labor is  
mismanaged, etc.  I agree the human institutions are the problems,  
but it is still an intellectual battle.  The machines only do, or not  
do, what the human hands calls them to do.  Idle gluttony is the  
primary product of mankind, because the only way to survive is to  
sell to somebody who has more money than yourself, or to encourage  
someone to go into debt for your benefit.  As such, it is a zero-sum  
game.  Your profit is their expense.  Their profit is your expense.   
There is no way to escape that equation, except with 2+2=4.  If  
everybody's time and labor is valued equally, then we will all have  
what we need, and destructive behaviors will automatically be  
unprofitable.
>
> 3.    The  purpose of lending and requiring payment is ultimately a  
> matter of ensuring physical efficiency. If you don't have the  
> efficiency the standard of living will be low.  So you lend for  
> what is desired (i.e. people will pay for it in some way, either  
> directly as payment for goods and services, or indirectly via fees  
> and taxes as in some, but not all, forms of public capital).

I recognize that some will take far more than they need, but  
eventually they tire of it.  Today we encourage "more" as a sign of  
success, but the moral taboo could just as easily be different.

>
> However, at the same time you also want to lend so as to develop  
> and spread productive capacity (and so, at the same time, spread  
> the associated consuming power).  This is not just a matter of  
> deepening democracy.  Say's Theorem -- 'Theorem' because 'Law'  
> suggests that it works and is implemented in practice at present --  
> but that isn't so) requires that producers and consumers be the  
> same people.  BInary economics implements Say's Theorem -- and with  
> only one lot of financing (simulfinancing).

People need to be free to do what they want to do.  An entrepreneur  
wants to build or solve a problem.  He enjoys the work.  There is no  
reason to do it "for the money."  This is similarly true for  
everyone; artist, teacher, inventor, laborer, etc.  Money constrains  
people's choices, but credit does not free them either, since they  
MUST profit to pay back the loan.  Credit is a double-edged sword.   
It gives people power and liberty, (and the poor can generally be  
described as those without credit) but to have credit one must follow  
a destructive path.  You are poisoned with it, and you are poisoned  
without it.  Since the biggest source of, and need for, credit is for  
mortgages, the current situation was inevitable.

We don't need more productive capacity. We have too much already, and  
throw too much stuff away.
>
> 4.  I am sorry to be a bore and mention two websites again but  
> please visit either of the following two websites to read the short  
> section as to how Binary economics addresses environmental issues.   
> www.binaryeconomics.net and the b.e. page at Wikipedia.  (I had  
> better say now that there's going to be more from me on websites   
> in the next few hours or day or so as I deal with the publication  
> of The Modern Universal Paradigm and The Universal Paradigm and  
> Islamic Worldsystems)

I have read them, but I will take another crack at it.
>
> 5.  You mention interest-free loans for 'real estate'.  Binary  
> economics has certainly considered and written about this subject  
> as a part of capital investment that can pay an income.  And if you  
> mean 'houses/homes' there has also been binary writing but my  
> present view is that, until there has been a move somewhere to 100%  
> banking reserves, it would be unwise to use interest-free loans for  
> people's homes because that use would accentuate the huge wall  of  
> money which is going, and has gone, worldwide,  into house prices  
> (now about to be one of the factors which will probably  crash the  
> world financial system).  So if you look at the loans diagram at  
> those websites you will see that it does not mention at the moment  
> loans for houses.

Um, what does 100% banking reserves mean?  Money is an abstract  
thing.  This may be the crux of the issue between us.  You can't  
"back up" your imagination.
All of these discussions just involve numbers on paper.  Land and  
people are real; money, numbers, inflation, the marketplace, etc are  
all abstract.
>
> You also rightly refer to house prices distorting the economy but   
> I do not clearly understand your reference to a property valuation  
> check of .005% per year.  If, for any reason, the housing market  
> rises to an average house price of $1,000,000 and, for years, there  
> has been a rising price market, the valuer will value at $1,000,000  
> (and if he prudently says $900,000 his advice will be ignored --  
> that is the present situation).  I think much better would be  
> deposit requirement and vetted ratio between reasonable assessment  
> of income and payment of amount outstanding.  But, in any case,  
> once the fractional reserve system is allowed to get out of hand,  
> as now, all this prudent stuff is just ignored -- until the crash,  
> that is.

The Great Wave by David Hackett Fischer documents a relationship  
between inflation and social unrest (revolution/war.)  It almost  
doesn't matter what things cost at any point in history, what matters  
is that inflation be near zero.  Real estate (in my view) is THE  
primary engine of inflation.  Take Manhattan for example.  It cost 16  
beads 400 years ago.  A single building can cost more than the  
Louisiana Purchase.  Yet, people think inflation is "under control"  
or 5% a year.  They are ignoring the elephant in the room, and hide  
the numbers that will ruin their preferred answer.   When you factor  
in the labor of machines, the cost of items should be plummeting, and  
instead they are going up faster and faster.  My ideas explain this  
phenomenon, without excluding any numbers.
>
> 6.  I do not understand your last sentence about president/King  
> controlling land values but not the wisdom.

The King would claim the land as his.  All land can be traced back to  
a King of some sort.  (The American tribes make the same type of  
legal claim to their lands, but it is more impersonal: the right of  
hereditary succession by a common bloodline.)  The courts rule that  
the state can claim land for specific purposes, etc., it is always a  
clam  Yet, we know that the state also protected slaves as property,  
too.  The mortgage system is essentially a slave system by proxy.   
Just as the King owned the land and the peasants on it, today  
corporations and stockholders own the land.  That power does not come  
with wisdom, only power.

The common denominator in all of this is Profit.  It isn't the  
property that people want to own, what they want to own is the  
"output" of the human labor, including their own, of course.   
Nevertheless, profit MUST create a Slave - Slavemaster relationship.   
Profit, by a MATHEMATICAL definition, is an imbalanced 2+2=5.  (What  
Marx would call surplus value.) Capitalism = I screw you for my  
benefit. You screw somebody else for your benefit.  The ideal world  
is when everyone has the power to screw somebody else, as equals.  Huh?

Capitalism isn't a system of cooperation, it is a system of  
progressive absurdities.  Credit is the lifeblood of capitalism.   
People get paid millions to throw a ball.  Elvis makes more dead than  
when he was alive, per hour.  ($20,000.00 per hour at last count.)   
Why?  Because we are still paying "royalties."  Patent and copyright  
profits are similar claims of hereditary succession.  As if profit  
and mortgages were not bad enough, then we have the government  
issuing monopolies for "intellectual property."  Any system that  
relies on profit will inevitable require credit for the next  
generation, and that system is capitalism.  The newly born never own  
anything.  BE, TFE, Socialism, Communism, are at their roots still  
capitalism: state issued currency, profit and taxes.

Could our circumstances be any more absurd?

Sadly, the answer is yes.  People fly planes into banks thinking they  
will be rewarded with 12 virgins for their "sacrifice."  They are as  
insane as we are, completely lost in abstract delusions.  And yet,  
their actions are perfectly logical, given the events and ideas that  
preceded their actions.  Like throwing tea into the harbor, you  
attack an empire at its heart.  Trade is at the heart of all  
relationships.  Profit is an unfair trade.  Systematizing unfair  
trade will inevitably lead to conflict and collapse.  Mankind has  
been making the same mistake for thousands of years, which is why  
history always seems so eerily familiar.

Also, capitalistic imperialistic societies keep lots of records, and  
have lots of rules.  People living in harmony have no need for so  
much record-keeping, monuments to themselves, etc.  Thus the great  
discoveries of the past tend to be the remains of the fools.  (The  
pyramids, the Taj Mahal, etc.)  Those societies also had a fantastic  
amount of "output," too, but there was no balance.  It was a society  
of extremes, just like today.

Even in the building of the first temple:

Here is the account of the forced labor King Solomon conscripted to  
build the LORD's temple, his own palace, the supporting terraces, the  
wall of Jerusalem, and Hazor, Megiddo and Gezer. -1 Kings 9:15

Even Solomon was not as wise as he could have been.  Pride always  
comes before the fall.  What we are proud of may differ, but we all  
hit the ground with the same thud.  :-)


> Rodney Shakespeare
>
>
Thank you for taking the time to respond.  I know it seems like we  
have little common ground, but I think we both want the same thing.   
The challenge of a complex problem is that the cause is always well  
hidden.  Imagine my surprise in discovering that I am a major cause  
of the problem!

peace,
steve consilvio
www.behappyandfree.com

If we could first know where we are, and whither we are tending, we  
could better judge what to do, and how to do it. -Abraham Lincoln
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