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November 14, 2008
The Goal Society: Is it 'A Real Life Economy'?
By Kitty Antonik
What type of society will truly benefit all the members of it? This subject has captured the attention of philosophers for centuries. The recent financial debacle has motivated many writers on the Internet to pose their solutions, one of which was headlined in late October at OpEdNews.
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I read Ann Kramer's article "The banking system is not the economy: Painting a new picture" as result of being asked for my views by a commenter on the article, "The End of Capitalism". Ann's article contains a number of ideas in a version that may appear new to many readers, and which I wanted to address in full rather than with incomplete brevity. This last is because the subject of what kind of society is best is a very foundational one, which I think Ann understands. I am addressing my review of what Ann wrote directly to her because I think of her as a very ardent and caring person, and I too am one of those types of people. What is missing from your article, Ann, and is required for analysis of its philosophical basis, is some detail regarding the "household, volunteer and natural/environmenal[sic] sectors" that you write "a large number of people will need to be making a transition into". What tasks, information, objects, etc. would individuals provide for others that those others would want sufficiently to make a trade with one of their material possessions? Remember that everyone needs some - if only the food that they are currently eating - in order to remain alive and healthy. (And please keep in mind that time too is a value - of varying worth depending on the individual's priorities.) Even if the trade is in barter form, rather than with a medium of exchange - money - both parties to the exchange must be deriving value. The "Community Chest" idea that you have briefly described is a type of credit system that has been part of many science fiction stories going back decades - "credits" exchanged instead of dollars, pesos, pounds, euros, gold, etc. But who in this system decides the value of particular tasks performed by an individual? And what value is the owner of a restaurant to receive in exchange for charging a diner, who has banked credits, half the price as other customers? Are you suggesting that the business owner provide meals to these customers at a financial loss? How are the materials and services to be paid for that are necessary for building the transportation systems you suggest should be replacements for the personal automobile? The same question for the retrofitting of "the glut of houses"? There are numerous unanswered questions of a fundamental nature that are not addressed with what you have written. It appears that you (and many others) have not sufficiently considered the foundational concepts of value and exchange between individuals to mutual benefit. The Federal Open Market Committee, now based in Washington, directs the Fed's most important instrument of monetary policy: the purchase and sale of government securities on the open market. To increase the supply of money and credit, that is "to inflate," the Fed buys government securities from a few handpicked firms with newly created money. To tighten money and credit, the Fed sells securities. In this, it can act on its own discretion. [Read much more valuable information on the Fed's history and practices]
You are correct, Ann, when you write "money is a tool that can help us facilitate the activities of life...but it isn't a situation of money first, economy/activities of life second."
In addition you are mostly correct when you say that if the current mediums of exchange along with the banking systems "vaporized", "[w]e would create barter systems, local 'currency' options and other ways to get our basic needs met." First, though, I am going to object to your heavy use of the pronouns "we", "us" "our" where you have used them to refer to actions taken by government or any group where the members have not all specifically agreed to those actions. I certainly do not include myself in the "we" in your sentence, "we have created a world that put money/credit first and economy/necessary activities to sustain life second." Nor do I consider myself part of the "we" in, "We have this delusion that this is necessary so the economy can run." Do you consider that you, Ann Kramer, are part of the "we" in those and your many other similar usages? The practice of using plural pronouns where all individuals in the group being referred to are not defined is fraught with problems. I have frequently suggested reading "Collectivism in Language: Its Effects on Valid Reasoning" to help others understand this distortion and how to avoid it.
With that bit of important "housekeeping" done, I'll continue....
Those remaining in such a society would return to a barter economy, similar to what existed prior to the invention of exchange media with value separate from the tangible values being exchanged (money, in all its functions, first came into existence many thousands of years ago, although barter has also continued to be useful for some purposes up to the current day) and then progress (hopefully quickly) to one of the prior items - gold, silver, copper , etc - or a new one. It will be something that serves the same purposes - that of a standard against which each person can measure the value to hirself of any economic factor, a medium of exchange of such value and a store of value. (And, I will add that for an orderly society - which does not necessitate imposed order, individuals will again invent and use such money for their mutual benefit, just as they did in the past.) It is simply a lot more convenient for someone growing beans and tomatoes, raising sheep for wool and/or meat, baking loaves of bread, etc to obtain their many needs of clothing, housing, food, personal services, supplies for their production, etc. to use a medium of exchange rather than carry around for trade bushels of beans and tomatoes, amounts of wool or mutton, or loaves of bread, none of which may be wanted by the person who has the economic factor for which and exchange is desired. "Money" is simply the short-form word for a commonly and voluntarily accepted medium of exchange and is not something to be scorned and avoided.
Ann, your brief interjection, "Global warming and a consumer economy are running straight into each other" is faulty, no matter what many popular environmentalists write. Specifically, the use of the term "global warming" is not scientific, but I will not spend time critiquing it here. I will suggest that you and others read beyond those who profit by promoting an apocalyptic vision of catastrophic anthropogenic climate change.
The term "consumer economy", although frequently used in all sorts of media, is equally non-scientific and extremely ambiguous. In any economy there are both producers and consumers who act in either capacity depending on the exchange occurring. (The phrase "consumer economy" reminds me of the phrase that has been lately used to describe a day's stock market activity - "a big sell-off", whereas in reality there must always be exactly as many shares bought as sold - except when a company issues new shares). However, what is related to what I think is a concern of yours - that resources that derive from the earth will become far more scarce, and garbage, trash and other discards will become overwhelming - is that the understanding, appreciation and recognition of private property (including boundary covenants) and the full responsibility for one's actions and possessions, which are concepts on which any solution to the problems beneath your concern must be based, are being ignored.
The definition of economy you use, "all the activities that we engage in order to live life" is close but not quite right. Actually, the economy of a society is the sum total of all the exchanges of value between the members of that society, or, more generally, it is all the interactions between those members, which includes non-monetary exchanges. You are correct that the highly publicized exchange-measuring entities - government and financial markets as probably the largest - use only money to assess the worth of the items exchanged, but that is, first, because of the near universality of mediums of exchange, and second, because people have not learned to compare all the less tangible values (all the factors that contribute to one's happiness) with the strictly economic factors of goods, services and information. Something that must be understood as a primary is that ascribing value to anything is an individual process; and this assessment is subjective based on each individual's unique priority ranking of importance of all sorts of things, material and not. At the very basis of this process is the purpose of each person's life - the maximization of hir lifetime happiness, even if s/he has not consciously realized this to be so. I wrote more about Value in early October at OEN
The "systems" that are a large factor in what you have written are a top-down control of an economy by an entity with the legal power to use force to insure that its decisions are enacted - government. A "Universal Health care system" is the one not yet in effect, but of those you have suggested, closest, unfortunately, to coming about in the US. And how are all the services, equipment and products that would be part of it to be paid for? Where is the value to be traded for them to originate? The education system that you decry, because you see it as supposedly "designed for the 20th century" is entirely government controlled. Currently, even those who choose to home school their children or send them to private schools (while simultaneously being taxed for the public system) must follow a battery of regulations or risk being legally prosecuted. (And if they resist, enforcers are at liberty to use physical force - up to the ultimate.)
The questions and points I've raised are not addressed by the many who think that government is the source of wealth and should be providing goods and/or services (value) to citizens. In actuality government is a redistributor of value (wealth) relatively taken from those who produce and given to those who do not - and, unfortunately, most of the net producers appear to think that they will benefit under such an arrangement. This is always the way governments operate. This fact is not discussed by you (and rarely by others who propose similarly) - and consequently that this practice of extorting value from producers (at any level) demonstrates the underlying idea that the output of individuals is owned by government and, therefore, in essence, so are the individuals themselves. I often think that the lack of this coverage is because the authors of such ideas have never considered the ideas they promote sufficiently deeply enough.
The options that you envision for education and health care (as well as transportation, construction and food industries) could and would come about if individuals were at liberty (free from government coercion), but will be stifled and stillborn with a "system" devised and controlled by government. (To the extent that the ideas that you mention are not legislated against, they do exist and thrive if enough people want/use them - ie. are willing to trade value for them - to make them profitable to the owners. Some exist on the black market - underground from government interference - simply because that is the only way that buyers and sellers can trade to mutual benefit.) When an entity with the legalized authority to use physical force - government - dictates what choices people will have, the full range of options that could arise from the voluntary exchange between individuals for mutual benefit never can come about. In addition, many of the choice options that previously existed have disappeared with the growth of government from a purely protective function from initiation of force by others for citizens/residents in its jurisdiction - the purpose envisioned by the US founding fathers, but destined to deterioration with the mechanism created.
There is a very big item missing when you say "he who has the gold makes the rules". Actually, in the current societies it is governments that make the rules; the entities that have the monopoly on the legalized use of force in a self-defined area. A person with a great deal of wealth, or even just more than someone else, cannot force another person to do anything without impunity, except by effectively purchasing such ability from government. Only government enforcers have that ability. All the rules, regulations, mandates, laws, etc of government legislators would be nothing but empty words without the enforcers, those willing to initiate harm to others. In a proper society, all that each person can do is choose whether or not to interact with another. In the current society of the USA, government has made it illegal to make many such choices and prosecutes those who do not act in the way it dictates, even when no initiation of (physical) force has taken place.
The "Golden Rule" - "do unto others as you would have done unto you" - is a maxim used by many without, I think, sufficient thought. Each individual is unique in hir values and therefore what one would like to have for hirself is very often not what another would choose. The "Golden Rule" instead assumes that all humans are the same and if you, Ann Kramer, for example, want (because you hold high value for) a particular type of education for yourself or your children (one without "a lot about subjects we rarely use"), then this type education is what you should "do unto others". But I do not want to be limited to educational sources that some ruling entity has mandated is "a 21st century education system ... based in optimal human development" - and I know that there are many others who want a full range of choices that can come about only with individuals at liberty to offer whatever content and methods they can create and offer for sale. Therefore, the "Golden Rule" presents an insolvable problem - how is one to know what others want? If you are going to think of "doing unto others" at all, then at least a rephrasing of this old maxim is necessary - "do unto others as each would want to be done unto". This, however, would require that each person know another very well as to what s/he values before any "doing unto" takes place, or be ready to accept the consequences of dislike (and even negative social preferencing) as a result of doing the wrong thing (no matter how "well-meaning" it was).
The financing arrangement that you recommend for the various systems you outline, is a highly government controlled one - even more than already exists. It removes open choices arising from the innovation of unfettered minds and replaces it with systems dictated from regional authorities and likely overseen by a central one. It doesn't matter if the medium of exchange is government-issue dollars or government-issue "community credits", the medium of exchange in societies, like that which exists everywhere in the industrialized world, is under the control of governments - that is the meaning of the word "legal tender". There is currently no totally free open (above ground) market in mediums of exchange - the commodities portions of trading markets are strongly government controlled. (Even one's liberty to barter is infringed upon within the US since IRS regulations require the dollar worth of it be declared as income.)
Ann, you have written, "the brightest minds in the private system have brought the world banking system to its knees and sparked a world-wide depression." Contrary to what you appear to think is true, the financial markets and banking are and have been highly government controlled in the US (and all industrialized countries). The degree of "private" is minuscule in comparison to the amount of regulations that exist. The US, unfortunately, has had a central bank sporadically from its beginning and continuously since Lincoln. This is despite the fact thatEngland's economy was government controlled under the practice of mercantilism (little different in kind than the current operations of governments and big business to support each other), which policy was responsible for much against which the colonists rebelled. The first central bank started in 1781 by congressman and financier Robert Morris was granted monopoly privileges by the Continental Congress - the Bank of North America's notes were receivable in all tax payments to state and federal governments and not other banks were permitted to operate in the country. Despite these monopolistic privileges, a lack of public confidence in the Bank's inflated notes led to their depreciation and the Bank was privatized by the end of 1783. This did not end Morris' determination for a central bank. Alexander Hamilton became his protege in this scheme - political puppet may be more appropriate since Hamilton had no real understanding of economics or finance, despite being Treasury secretary in the administration of George Washington.
In making his case to President Washington for the constitutionality of a central bank, which had been explicitly rejected at the constitutional convention, Hamilton invented the idea of "implied powers" of the Constitution. These were "powers" that were not expressly delegated to the federal government in the document, but could be "implied" by clever lawyers like Hamilton. This of course became a roadmap for the total destruction of constitutional limitations on the powers of the federal government. [Read more]
I strongly recommend further reading on US history of banking and how the central bank scheme that was rejected by then current and potential users, was reborn in 1791 as the First Bank of the United States. The above source additionally relates: It issued millions of dollars in paper money and demand deposits "pyramiding on top of $2 million in specie." The Bank invested heavily in the US government, and "The result of the outpouring of credit and paper money by the new Bank of the United States was ... an increase [in prices] of 72 percent" from 1791–1796.
The bank's government charter was not renewed after its first 20 years, but it was resurrected after the War of 1812 (1817) and very soon afterward "ran into grave difficulties through mismanagement, speculation, and fraud," and "a wave of hostility toward the Bank of the United States swept the country", wrote James J. Kilpatrick in his book, The Sovereign States. As a consequence President Andrew Jackson vetoed the legislative bill to recharter the bank. Abraham Lincoln, held as the savior of "The Union" by so many (though he destroyed the voluntary nature of it), was a proponent of mercantalism (renamed the "The American System" by Alexander Hamilton, carried on by Henry Clay and then Lincoln), and consequently worked tirelessly to bring about central banking. This was achieved with the National Currency Acts of 1863 and 1864, and there was a virtual explosion of government subsidies to railroads and other businesses that bankrolled the Republican Party. The inevitable consequence was the notorious corruption of the Grant administrations. [Read more]
The Federal Reserve System born in 1913 as an improvement on the system begun during the Lincoln years, is no more free market than any of the other central banking arrangements before it. While its form is different it still has a government protected monopoly control over money. There are twelve regional reserve banks concentrated in the East and in the Midwest. The board of governors of the Federal Reserve controls and coordinates their activities. The board is made up of seven members appointed by the president. Even though there were twelve regional banks, Wall Street soon ran the show. As president of the New York Fed, Morgan protégé Benjamin Strong seized control of the board's Open Market Committee operations. Strong would remain the dominant force at the Fed until his death in 1928.
It is clear from a studied reading of US banking history that government has created the problems that you, Ann, and I, as well as so very many others, decry. However, your solution, Ann is another government program - even bigger and more controlling of the choices that those under that government's jurisdiction would be allowed to legally use.
I understand, Ann, your intense desire to live in a society considerably better than the current; one in which you will be at liberty to meet your "[m]aterial needs, [c]onscious living, [c]reativity, and [c]aring" objectives - which I describe as maximizing your lifetime happiness, noted earlier as the purpose of each person's life. What is necessary for you to be able to do so, and for others also to accomplish this goal for themselves, all at the same time, is a society based on principles that make full use of the nature of human beings. The nature of human beings does not automatically lead to the conclusion that individuals must be ruled by others in order that there be orderly interactions between them. Society, just like any other natural system can be self-regulating by means of interactions between its members, if only humans are allowed to develop the methods by which such self-regulation can be effective, rather than the social system constantly being held in an unnatural (and very unoptimal) state of balance by the operations of its rulers and other influencers. Unfortunately, Ann, your ideas in "The banking system is not the economy: Painting a new picture" are for more government and less individual choice.
The idea of social self-regulation has been touched on by me and husband Paul Wakfer at OpEdNews.com in "Critique of 'Bio-Politics' Article: Argument for Societal Self-Regulation" which contains links to fundamental essays elsewhere. I very much hope that you, Ann, and all others who want (or may be currently only curious about) a society of individuals interacting to mutual benefit (each with the goal of maximizing hir lifetime happiness) will do a studied reading of the more in-depth discussion of this most important of subjects.
Authors Bio:
I am a professional life-extensionist and liberty promoter who practices what I and husband, Paul Wakfer, encourage. More detail about both of us - philosophically and physically - at http://morelife.org/personal/
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