Governments Exist to Further the Interests of "Favored Groups"
"We the People" are Never the Favored Group
Professor John Kozy - 13 July 2012
"Liquidate labor, liquidate stocks, liquidate the farmer, liquidate real estate. It will purge the rottenness out of the system."—Herbert Hoover’s treasury secretary Andrew Mellon.
Governments have never existed to solve problems domestic or international. Governments and their institutions exist merely to further and secure the interests of favored groups, but We the People are never the favored group.
Paul Krugman recently wrote that
- the fact is that the Fed, like the European Central Bank, like the U.S. Congress, like the government of Germany, has decided that avoiding economic disaster is somebody else’s responsibility.
- None of this should be happening. As in 1931, Western nations have the resources they need to avoid catastrophe, and indeed to restore prosperity — and we have the added advantage of knowing much more than our great-grandparents did about how depressions happen and how to end them. But knowledge and resources do no good if those who possess them refuse to use them.
- And that’s what seems to be happening. The fundamentals of the world economy aren’t, in themselves, all that scary; it’s the almost universal abdication of responsibility that fills me, and many other economists, with a growing sense of dread.
Krugman and most other Americans are fond of blaming social problems on the personal failings of individuals rather than on the systemic failings of institutions. It is people borrowing more than they can afford rather than banks lending too loosely or consumers saving too little rather than businesses paying too little to enable consumers to save that causes all of the problems. But borrowing and lending and saving and income are not independent variables. People are persons with personal failures but banks are institutions with systemic failures, and the systemic failures can entice people to engage in activities that may look like personal failures but are not. Krugman and many others assume that governments and their institutions exist to solve the problems peoples face. When the problems persist, these people again assume that it is because those in government just aren't doing their jobs. But there is very little historical evidence to support this view.
The government of Louis XVI made scanty attempts to solve the problems of the French people which ultimately led to the French Revolution. The various governments in the United States in the early 1800 made few attempts to resolve the problems raised by slavery in American society and the Supreme Court made any resolution of them impossible which led to the Civil War. Emperor Franz Joseph of Austro-Hungary made no effort to resolve the ethnic problems his empire faced in the Balkans which ultimately led to the First World War. Great Britain and France made no attempts to ameliorate the problems Germany faced as a result of the conditions imposed on it by the Treaty of Versailles which then resulted in the Second World War. No government has made much of an attempt to resolve the problems created in the Levant by the creation of Israel, and instability, slaughter, and war have prevailed ever since. Now a third world war, an atomic conflagration, may be in the offing.
Domestic and international conflicts are being exacerbated world-wide by similar failures at problem resolution. The Western nations and Israel are not making any serious attempts to resolve their problems with Iran. The only possibility of resolving the problems in Western minds is for Iran to merely conform to what the Western world wants. Western European nations are treating the debt crisis similarly. There is only one resolution: the Southern European states must merely do what the Northern ones say regardless of how it affects the peoples of Southern Europe. And the American Congress is paralyzed by each party's insistence that its way is the only way.
So what is really going on? What are Krugman and others missing? The answer is as plain as sunlight on a cloudless day.
Governments have never existed to solve problems domestic or international. Governments and their institutions exist merely to further and secure the interests of favored groups. For instance, each nation's foreign policy always consists of "protecting our interests" somewhere or other. Whose interests are "our interests"? Why the favored group's, of course. And who are the favored groups? Well, it all depends.
The favored group of European governments is international investors, not the common people of a single European nation. The Greeks can be damned so long as the investors get repaid even though the common people of Greece did not borrow one euro from international investors, the Greek government, which has no income it doesn't take from ordinary Greeks, did, and the investors were not only willing but anxious to lend. The favored group of the Mubarak government in Egypt was the Egyptian military that even after the overthrow of Mubarak is still trying to secure its interests. The favored group in Jordan, Saudi Arabia, Bahrain, Syria, and Yemen is a royal family. In Iraq and Iran, a religious sect is favored. Every one of these governments except, perhaps, Iceland has shown a willingness to kill those common people who are never the favored group.
The United States of America is an extreme case. The Democrats in Congress have their favored groups; so do the Republicans. But the common people is not the favored group of either party, although the politicians pay homage to it. America is comprised of a mass of groups, some favored, some not. Even though the nation's founders warned the Colonists about the danger of factions, every issue in America attracts a faction, and sometime or other, government favors one or more of them. Americans have pro and an anti-immigration factions. Within these, there are pro and anti-Asian factions, pro and anti-Latino factions and within these, Central and South American and Cuban factions. There are pro and anti-gun control factions, abortion factions, contraception factions, labor factions, business factions, healthcare factions, free and regulated market factions, free trade and protectionist factions, global warming and anti-global warming factions, more and less taxation factions, big and small government factions, federal and states' rights factions, imperialist and anti-imperialist factions, religious and anti-religious factions. Factions here; factions there; disagreement everywhere! Where Americans once believed united we stand, divided we fall, today they believe division secures our group's special interests. And the moneyed groups have made this work by using raw power and bribery.
But the nation? Oh, well, its seams are all coming apart. The nation doesn't matter to factions; only the interests of the favored group does. And that is why American society does not work. It is a nation whose people do not live together; they merely live side by side, where neighbors who have lived side by side for years break into violent conflict over the most trivial of things: a barking dog, a crowing rooster, a loud party, a minor inconvenience as, for instance, a parked car, children playing in someone's yard, a tree-limb extending over a property line, a sign or even an American flag on a pole, the color of a house, the height of a lawn and the kind of plants in it—just some of the recent neighborly conflicts I have observed.
America is a nation comprised of people who revel in conflict. Even the legal system is adversarial. Our cities, or at least parts of them, are war zones. More people are killed daily in America than in Afghanistan. Since Americans can't get along with each other why would anyone expect them to get along with the rest of the world? What makes anyone believe Americans care if Sunni and Shi'as get along?
The human condition will never improve until governments everywhere begin governing for the people, all the people, and none but all the people. So long as governments govern for the benefit of special groups, antagonisms, dislikes, and hatred will prevail; the Earth will seethe with conflict.
Some will say it's just human nature, that human beings have a dark side rooted in greed that cannot be extirpated. If so, we are just like ants where workers and soldiers live merely to provide for queens and their entourages of drones who exist merely to produce more ants, where common people are but beasts of burden that exist for the sake of the greedy. Perhaps this view is accurate, but the best of humanity has never thought so. Only Machiavelli's The Prince among thousands of works is renowned for this view (although Ayn Rand may be catching up). Religious and humanitarian works that contest it abound.
The trouble is we have too many people like Paul Krugman. Generally his heart seems to be in the right place; he seems to genuinely care about what happens to people, but he never goes far enough. He and those like him seem never to be able to mine an argument deep enough to find the source of its lode. They stop digging when they get to something that fits their preconceptions, as, for instance, personal human failures.
During an interview on Internet radio, I was once asked, being a veteran, why soldiers fight. The host, I am certain, expected some profound response such as for God and country, for human dignity, for the rights and freedoms our people enjoy. But I merely answered, because they're there!
When we take perfectly normal young Americans off the street and send them into battle, we do not presume that they are inherently killers. After all, killers are bad people. Yet we send these good young men and women off to kill and they do. When they return, we again do not assume they are killers. We expect them to return to being perfectly normal young men and women. So do bankers do what they do because they're bad people or because they're bankers and banking requires it? Are politicians corrupt because they are bad people or are they corrupt because politics requires it?
People, ask yourselves this question. Do our institutions make us what we are? If our institutions promote greed, will we be greedy, if our institutions promote killing will we be killers, if our institutions promote bribery, will we be bribed, if our institutions promote corruption, will we be corrupt? What will we be when our institutions promote goodness and how can we build such institutions?
The Romans had an expression—cui prodest?—meaning “who stands to gain?" Who advocates a specific view isn't important; what is important is who stands to gain from it. Only then can who the view favors be known. But in today's world, cui prodest? is too general a question. It is too easy to conjure up arguments that purport to show that many or even all gain. That everyone gains from tax cuts for the rich can be argued ad infinitum.
But who stands to gain the most financially can't. It always has a specific answer, and if you want to know who the government's favored group is at any time, that is the question that must be answered. When the answer is some group other than the common people, the view must be rejected; otherwise, the human condition is mired in the mud of hate and will never improve, conflict will persist, and the human race will very likely exterminate itself and perhaps life itself.
Jefferson knew that merchants had no country. And that the business of America is business has often been voiced by the established elite and endorsed by the Republican party. The Congress is in gridlock because the Republicans do not care what happens to America or the American people, just so long as their favored constituents' interests are preserved. That is what Paul Krugman and others like him fail to understand. That is why the models of economists, even if any turn out to work, are of no consequence. The only models that matter are those that advance and secure the interests of the favored group. Can the problem of unemployment be solved? Nobody in power really cares! Can the problem of world-wide poverty be solved? Nobody in power really cares! Can peace ever prevail between human beings? Nobody in power really cares! The dead require no benefits, and a very small government will suffice.
Since drafting this piece, I have discovered that three political scientists, Nolan McCarty, Keith Poole, and Howard Rosenthal, have provided empirical evidence for my thesis in Polarized America: The Dance of Ideology and Unequal Riches. Their views are summarized in a piece by Daniel Little:
"What is really interesting about this analysis is that it implies that the sizzling rhetoric coming from the right -- personal attacks on the President, anti-gay rants, renewed heat around abortion and contraception -- is just window dressing. By the evidence of voting records, what the right really cares about is economic issues favoring the affluent -- tax cuts, reduced social spending, reduced regulation of business activity, and estate taxes. This isn't to say that the enraged cultural commentators aren't sincere about their personal belief -- who knows? But the policies of their party are very consistent, in the analysis offered here. Maybe the best way of understanding the extremist pundits is as a class of well-paid entertainers, riffing on themes of hatred and cultural fundamentalism that have nothing to do with the real goals of their party."
There you have it. The people are viewed by the establishment as chickens to be broiled for lunch.
Finally one great compatibility with the need for monetary reform and the transformation of society:
The right calls for even greater working efforts, the left for more jobs. The dream that mechanisation and technological progress will lead us to shorter working time seems forgotten. Why do we still work like niggers in the 21st century? Because if we are busy all day long trying to survive, masters have plenty of time to do whatever they wish, without our objections.
Why Do We Still Work So Much In The 21st Century?
If there's one thing practically all futurologists once agreed on, it's that in the 21st century there would be a lot less work. What would they have thought, if they had known that in 2012, the 9-5 working day had in the UK become something more like 7am to 7pm? They would surely have looked around and seen technology take over in many professions which previously needed heavy manpower, they would have looked at the increase in automation and mass production, and wondered – why are they spending 12 hours a day on menial tasks?
It's a question which isn't adequately answered either by the right or by the official left. Conservatives have always loved to pontificate about the moral virtue of hard work and much of the left, focusing on the terrible effects of mass unemployment, understandably gives "more jobs" as its main solution to the crisis. Previous generations would have found this hopelessly disappointing.
In almost all cases, utopians, socialists and other futurologists believed that work would come near to being abolished for one reason above all – we could let the machines do it. The socialist thinker Paul Lafargue wrote in his pointedly titled tract The Right To Be Lazy (1883):
"Our machines, with breath of fire, with limbs of unwearying steel, with fruitfulness wonderful inexhaustible, accomplish by themselves with docility their sacred labour. And nevertheless the genius of the great philosophers of capitalism remains dominated by the prejudices of the wage system, worst of slaveries. They do not yet understand that the machine is the saviour of humanity, the god who shall redeem man from working for hire, the god who shall give him leisure and liberty."
Oscar Wilde evidently agreed – in his 1891 essay The Soul of Man Under Socialism, he scorns the "nonsense that is written and talked today about the dignity of manual labour", and insists that "man is made for something better than distributing dirt. All work of that kind should be done by a machine". He makes quite clear what he means:
"Machinery must work for us in coal mines, and do all sanitary services, and be the stoker of steamers, and clean the streets, and run messages on wet days, and do anything that is tedious or distressing".
Both Lafargue and Wilde would have been horrified if they'd realised that only 20 years later manual work itself would become an ideology in Labour and Communist parties, dedicating themselves to its glorification rather than abolition.
Here too, though, the idea was that this would eventually be superseded. After the Russian revolution, one of the great advocates of the cult of work was Aleksei Gastev, a former metalworker and trade union leader who became a poet, publishing anthologies with titles like Poetry of the Factory Floor. He became the USSR's leading enthusiast for Taylorism, the American management technique usually criticised by the left for reducing the worker to a mere cog in a machine, running the state-sponsored Central Institute of Labour. When asked about this in 1926 by the German leftist Ernst Toller, Gastev replied: "We hope by our discoveries to arrive at a stage when a worker who formerly worked eight hours on a particular job will only have to work two or three". Somewhere along the line, this was forgotten, in favour of musclebound Stakhanovites performing superhuman feats of coal-hewing.
American industrial theorists, strangely enough, seemed to share the socialists' view. The designer, engineer and polymath Buckminster Fuller declared that the "industrial equation", ie the fact technology enables mankind to do "more with less", would soon eliminate the very notion of labour altogether. In 1963, he wrote: "[W]ithin a century, the word 'worker' will have no current meaning. It will be something you will have to look up in an early 20th-century dictionary". If that became true over the past 10 years, it was only in the "we are all middle class now" sense of New Labour – not in the sense of actually eliminating menial work, or the divide between workers and owners.
Surveys have long shown that most workers think their jobs are pointless, and looking at the heavily contested vacancies at the average jobcentre – call centre staff, filing clerks and above all the various tasks of the service industry – it's hard to disagree.
Yet the utopian vision of the elimination of industrial labour has in many ways come to pass. Over the past decade Sheffield steelworks produced more steel than ever before, with a tiny fraction of their former workforce; and the container ports of Avonmouth, Tilbury, Teesport and Southampton got rid of most of the dockers, but not the tonnage.
The result was not that dockers or steelworkers were free to, as Marx once put it, "hunt in the morning, fish in the afternoon and criticise after dinner". Instead, they were subjected to shame, poverty, and the endless worry over finding another job, which, if it arrived, might be insecure, poorly paid, un-unionised work in the service industry. In the current era of casualisation, that's practically the norm, so the idea of skilled, secure labour and pride in work doesn't seem quite so awful. Nonetheless, the workers' movement was once dedicated to the eventual abolition of all menial, tedious, grinding work. We have the machines to make that a reality today – but none of the will.
Author: Owen Hatherley
Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves.
1947 film released to public by government: Know Your Money
"From historical experience, gold and silver emerged as the most durable, most convenient, and most satisfactory money. The values of the money we use every day are the values fixed by the government. The paper bills, and even the coins, are not in themselves actually worth the amounts they represent. Their face values, however, are guaranteed, not only by huge reserves of gold and silver, but by the stability of the government, which fixed those values. As long as people remain confident that our government is strong and secure, they will continue freely to accept and spend its money without questioning the value."
Money is not only a medium of exchange, money is also a standard of value. Treasury Secretary John Connolly in 1971 when principle of materially backed money has become abandoned in United States because government defaulted on promise to its own citizens and other world countries of paper dollar bill convertibility into gold: "The dollar is our currency, but your problem."
Today 2012, global central banks: "We are the planetary crisis and proud of it. Just keep quiet about what we preach and continue to have faith".
Mario Draghi More Powerful Than God And Hitler Together!
Hermann Göring: "God gave the savior to the German people. We have faith, deep and unshakeable faith, that he [Hitler] was sent to us by God to save Germany".
27 July 2012.
Egan-Jones credit ratings agency cuts Italy´s sovereign debt rating to almost junk, from B-plus to CCC-plus.
Mario Draghi: "I have a clear message for you - within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough".
Milan Stock Exchange flies to +5.62%.