The Perversion of Capitalism: A Credit-Based Versus Capital-Based System - Jeff Nielson
Ideologies are mind-killers, all of them, because they are all (severely) flawed. The ideological labels which are so frequently parroted in our societies are terminology which has lost all meaning. This begins with the fact that our political/economic ideologies are not practical blueprints for creating and managing economies (and societies).
These ultra-popular buzzwords are the theoretical models of philosophers. With philosophy (and philosophers) now banished to the lowest rung in the world of academia; how can the work of philosophers be regarded as the (supposed) epitome of political and economic wisdom, in these same societies?
The other reason why these political/economic buzzwords do much more to confuse than enlighten comes from the fact that most of the people who bandy about these terms have little-to-no idea of what these theoretical models actually represent. Nothing illustrates this principle better than the grossly-abused buzzword “capitalism”.
As always; sound analysis begins with definition of terms. What is “capitalism”?
a) Capitalism is competition.
b) Capitalism is free markets.
c) Capitalism is a system of equal (economic) opportunity, an inevitable byproduct of having free markets and competition.
What do we see in our own, supposedly “capitalist” systems?
We see the opposite of competition. We see economies which have been almost entirely carved-up into the domains of a handful of mega-oligopolies.
We see the opposite of free markets. We see markets where a single, financial crime syndicate marches these markets (collectively) higher and lower, like some gigantic, synchronized yo-yo. Bubble and crash. Bubble and crash. Every eight years.
We see the opposite of equal opportunity. We see an economic system where the deck is ridiculously stacked in favor of engorging the oligopolies still further, and throttling small business and the individual entrepreneur.
In real capitalist systems; oligopolies (and monopolies) are the Ultimate Evil, and we have very strong laws in all our regimes, to prevent these economic abominations from ever coming into existence. In our pseudo-capitalist perversion; these corrupt governments have simply refused to continue to enforce these laws. Instead, our traitor regimes worship the oligopolies (and the Oligarchs who hide behind these corporate fronts). “Too big to fail” has become the mantra of all.
In real capitalist systems; there is no such thing as too-big-to-fail, only too big to exist. Corrupt and/or insolvent entities are supposed to be put to death, as the sole mechanism for purging malinvestment, and restoring economic health to that system.
Japan is the proof of this principle (and proof of our own perversion of it), in reverse. A quarter century of “too big to fail” has brought nothing but perpetual economic stagnation, and skyrocketing debt. Western economies reinforced that proof, by copying Japan’s failure, and copying Japan’s consequences: skyrocketing debt and perpetual stagnation (at best).
As a matter of simple arithmetic; nations with skyrocketing national debts must implode into debt default. As a matter of simple arithmetic: nations with skyrocketing debt and stagnant economies must implode much, much sooner.
How perverted has the term “capitalism” become? How meaningless? As noted in a recent commentary; we have two economic models which are both (universally) described as “capitalist”. Yet not only are these models different (entrepreneurial capitalism and neo-feudalist capitalism) they are opposite to each other. As a matter of elementary logic; no concept, model or system can be its own opposite.
However; there is an even more-fundamental perversion of our pseudo-capitalist system. It is a principle so fundamental that by itself it is responsible for the cancerous, parasitic rot, in our once-thriving/once-prosperous societies.
“Capitalism”, as the word directly implies is a system of capital. Why do we hail those successful (crooked?) enough to accumulate wealth (i.e. capital)? Because in any/every real capitalist system; these entrepreneurs invest this wealth directly, back into the system. We rarely see this, in our pseudo-capitalist perversion.
What we have instead, openly acknowledged by the bankers, politicians, and media drones alike is “a credit-based system”. Why is a credit-based system a perversion of a capital-based system (i.e. real capitalism)? In one word: interest.
Real capitalism, where the wealthy invest their wealth (i.e. capital) directly into the system, is a clean system. Every penny of that capital goes directly into generating new economic growth, new jobs, new wealth, and more prosperity. But what we have instead is a grossly inferior, totally parasitic, and hopelessly unsustainable version of this model: creditism.
In creditism (as opposed to capitalism); wealth is not invested directly into the economy. Rather, it is loaned into the economy, and thus virtually every penny of actual investment is encumbered by useless, parasitic debt.
As a matter of simple arithmetic; we can predict what must result from any government foolish enough to adopt inferior/parasitic/unsustainable creditism, rather than adhering (more or less) to the principles of true capitalism. All such economies must end up drowning in debt. Every increment of investment means an increase in debt, and thus an increase in (parasitic) interest payments, compounded, in perpetuity. The result is obvious to anyone with sufficient intellectual firepower to operate a calculator.
Look around us, and what do we see? We see Lemming Regimes, proving this elementary principle, perpetuating the same, failed system (creditism) which – as a matter of simple arithmetic – must result in our complete economic destruction. Total suicide.
The epitome of his insanity, perversion, and suicide is the surreal melodrama known as “the Greek crisis”. What do we see here? We see an economy which everyone agrees is bankrupt. And what do the “creditors” of this economy (the ECB, EU, and IMF) demand that Greece agree to? Taking on much more debt.
Here the arithmetic descends to the level of fingers-and-toes. A bankrupt entity – by definition – cannot afford to continue to service its present debts; at all, period. Obviously (using one’s fingers and toes) it’s easy to “calculate” that such an entity cannot possibly take on even one more penny of additional debt.
In this perverted, pseudo-capitalism which we can only call “creditism”; the solution to bankruptcy is more debt. Total suicide. Absolute insanity.
What does (real) capitalism preach? The solution to insolvency is always (without exception, ever) to “restructure the debt”. Here we can divide insolvency into two categories: those where it is necessary/desirable for the insolvent entity to continue its existence, and those where it is necessary/desirable for the entities to be liquidated (i.e. the “too big to fail” Big Banks).
Where it is necessary/desirable for the entity to continue its existence (as is the case with any sovereign nation); capitalism dictates that the “restructuring” reduce the debt-level down to (clearly) manageable proportions – without exception, ever.
What have we seen Greece’s (new) government insisting upon, as it attempts to negotiate with the insane, corrupt “Troika”? It wants its debts reduced to manageable (i.e. post-Austerity) proportions. For this; the corporate media has relentlessly and unequivocally labeled Greece’s government as being “radical, left-wing”.
Greece’s negotiating position is the only negotiating position for any rational/reasonable entity, in any (real) capitalist system. The Corporate media characterizes Greece’s capitalist proposal as being “radical, left-wing”. This can only mean, in the insane perversion of creditism, that true capitalism itself (competition; free markets; equal opportunity) is now equated as being “radical, left-wing”.
In such a world of institutionalized insanity; it behooves us all to cease to use the ideological buzzword “capitalism”. As has been clearly demonstrated, this word is now nothing more than a perverted euphemism used by corrupt Liars – to attempt to deceive the brainwashed masses into accepting (and even endorsing) policies which are the antithesis of everything that our economies and societies used to represent.
Say “no” to the perversion and propagandizing of the term capitalism. Instead, demand that our corrupt governments openly acknowledge our creditist system (in honest, non-euphemistic language) for what this really is: parasitic, cannibalistic, suicidal, insanity.