Critical advantage of the 1%

Businesses and Governments have both always used money.  Business uses it to facilitate commerce, the government uses it to collect tax.  Government is for public purpose, so there is not competition for profit.  There are bribes of government officials, and officials may compete for business favors (campaign donations), but those officials are not expected to create profit for the government.  A businessman must make a profit or risk eventual loss of the business – he can’t raise a tax to cover his loss.  Long ago the most astute businessmen learned that a critical advantage was gained if everyone else was kept in the dark about money operations.  This was a very powerful critical advantage.  If others didn’t know anything about money operations, they could be easily tricked.  To facilitate the needed ignorance, they used primarily distraction and division.  The most astute businessmen (plutocrats) distracted the focus on their tricks and misdeeds by pointing at their own minions (politicians).  The politicians simply pointed back, blaming the plutocrats, and the protesters became divided.  (Of course, some political minions blamed “the entitlement generation” and tried to take the heat off both the plutocrats and politicians.)  Some protesters saw through this and sat down to study.  For them the plutocrats created something called “schools of economic thought”.   There are many of these “schools of thought” – wikipedia lists about thirty, but there are more.  The protesters soon became confused.  Which school was correct?  Everyone took a position and the division and distraction continued.   Here is the kicker:  none were correct.  All schools were presentations of economic theory.  There were always lengthy discussions of fiscal and monetary policy, even brief descriptions of federal reserve operations.  But the real knowledge about money remained hidden.  By “real knowledge” I mean something that is not theory – I mean actual monetary operations.  Who creates money, how and when do they do it, who do they give it to, what do they do with it?  Knowledge of monetary operations is the critical advantage that allows the very rich to become even richer.   This same knowledge can be used to bring prosperity to the 99%, not just the 1% and their minions.  Why?  Because if we begin our analysis armed with a clear description of what monetary operations are, then we start from a description.  If we start from a theory, be it the “invisible hand” theory or whatever, we will depend on theory.  I say, start with a description of how money works and doesn’t work in practice – not theory.  If others are interested, I would like to begin with a question for discussion:  Who creates money, and how do they do it?  For starters, my answer to the question – the government.  Let’s enjoy a friendly discussion/debate.  Peace.

3 thoughts on “Critical advantage of the 1%

  1. The battle to reserve the money supply in private corporate hands is written into the transcripts of the Founders debates in this country about how things were going to work. It just takes recognizing the points of the debate and knowing what to look for. The material is carefully removed from our educations. Steven Zarlenga makes this clear in The Lost Science of Money. Robert Morris and Alexander Hamilton knew exactly what they were doing in those early days of the Republic to get their hands on the private bank provision of public debt bonds and therefore money supply. This is the Bank of England system of world colonization.

    I am not sure history shows that Pols “pointed back” and blamed the Plutocrats. They more often blame ethnic minorities, women, gays, immigrants, foreigners. This was the point of the paid sophists in Ancient Athens to confound and demean the Demos to keep them off the scent of the real villains. Even “the Bourgeoisie” gets blamed for the economic conditions the real Plutocrats setup with their money (and war) system (the two go hand in hand according to David Graeber in Debt). Even Marxist scholars today have no vocabulary about money operations and the deleterious effects on the human psyche and society (and therefore their nasty bourgeoisie which turns into a mere fetish). David Graeber does a wonderful job recounting all these terrible effects in his book Debt: 5,000 Years going through all the major societies and all the major religious traditions and how they got around the money operations questions themselves in all their holy books. Our experience of Human Nature is nowhere near accurate since these kinds of money systems have underlain most every society since Ancient Egypt and Sumer. China had a better system. The Islamic Empires had a better system (surprise surprise they are vilified by the $Bs in media and political assets in the West).

    One small point. The Govt uses money to provide goods and services that businesses cannot profitably provide. History also shows that coined money was always spent into existence by the Government paying soldiers. It was not debt-money. They used these coins to provision themselves wherever they went to by buying goods and services from local people. Since ancient times, the Govt has always been a major spender of money into existence out of which grew the local market economies. Graeber details how the states were the first major spenders of money into existence. When Andrew Jackson paid off the national debt, there was no money in circulation and an economic crisis ensued. Even today, most of our money supply comes from public debts at the moment. The Private sector has slowed down spending money into existence here and instead are focused on BRIC countries because of the profit potentials there. The American people, and particularly the young with $1T in student loan debt, are hung out to dry as happened countless times in history with these systems.

    • Hi B ~ Well, I would say that the private sector can never spend money into existence. The private sector can only create credit/debt agreements that balance to zero – not new net money. Only the federal reserve can create new net money in the private sector

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