Mark Ames: The One Percent’s Plan for the Rest of Us – Livestock to be Milked for “Rent”

Yves here. Mark Ames’ post discusses the institutionalization of a regressive policy, that of trying to eke more corporate growth out of extracting more and more out of workers rather than sharing the benefits of productivity gains with them. As we’ve discussed, Henry Ford, who was hardly a chartable sort, voluntarily doubled the wages of his workers, both to improve retention but also to enable them to be able to afford to buy his products.

As Thomas Palley has discussed, and the chart below underscores, the US changed in the early 1980s from a model where rising worker wages were seen as the driver to growth and hence a focus of policy, to one where rising consumer debt levels and asset appreciation were used to substitute for stagnant incomes.

The problem, as we discovered in the crisis, is that that paradigm is self limiting. Yet as Ames reveals, McKinsey and presumably other fonts of orthodox thinking are pushing for an even more aggressive version of that failed model.

By Mark Ames, the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine. Cross posted from The eXiled

This article was first published in

A little over a year ago, while researching the Confederacy’s economy, I stumbled across this unnerving graph charting the value of America’s “stock of slaves” in the last decades before the Civil War.

This graph tells the real story behind the South’s secession: the value of the South’s “slave stock”—the property of the ruling class — soared as secession approached, reaching an almost 90-degree angle in those final years before Harper’s Ferry. The South’s ruling class seceded to protect their riches, period:

From afar, if you didn’t know that human “slave stock” was the asset being charted, you could easily mistake this graph, and its parabolic trajectory, for one of the many destructive asset bubbles this country has suffered right up through our own time.

Up close, this graph drips greed, mass murder and shame — it strips away the historical revisionism that falsely ascribed the South’s “cause” to an almost selfless, tragically romantic attachment to “tradition” and “culture”; it gives lie to the myth that slave owners kept their slaves to the detriment of their own bottom line.

Like the worst wars and the worst of history’s villains, the Confederacy’s one percenters seceded and fought in order to continue profiting from their most valuable investment properties — their human slave stock.

The graph comes from a grim working paper, “Capitalists Without Capital”, written in the late 1980s by a UC Berkeley economist, Richard Sutch, and a UC Riverside historian, Robert Ransom.

As they showed, slavery produced huge profits for southerners who invested in slave capital — to the detriment of all other portfolio investments, as the value of slaves soared in the mid-19th century. By that time, by far the largest cotton-growing states’ wealth was in slave stock, not in real estate or other investments.

The slave trade was outlawed in 1808; but the slave population quadrupled from 1 million in 1800 to 4 million in 1860 — encouraged by slaveowners who “bred” their human stock, thereby multiplying their profits as the value of each slave rose.

Slavery is often portrayed by revisionist historians as somehow antithetical to market capitalism; in reality, slavery was a winning portfolio investment, the very incarnation of just how evil “free-market” capitalism can be. As the authors write:

“If slaves … were an investment included in the asset portfolio of the planter/entrepreneur, they helped satisfy the owner’s demand for wealth. But unlike most other forms of capital, which depreciate with time, the stock of slaves appreciated. Thus, the growth of the slave population continuously increased the stock of wealth.”

What makes this graph so disturbing for us in 2012 is what it suggests about today’s “1 percent” — and how they view the rest of us. It gives form to the brutal crackdown on the Occupy protests — and suggests darker things to come as we try to free ourselves from their vision of civilization, and our place in it.

Contrast that with this McKinsey report put out a few years ago by the director of the consulting group’s New York office. Titled “The New Metrics of Corporate Performance: Profit Per Employee”, the report argues that the best performing firms in our increasingly financialized era are those companies that have learned to squeeze ever-larger profits out of each employee — and not by the more traditional “return on investment” metric.

The McKinsey report looked at the world’s 30 largest companies between 1995 and 2005, and found that their return on human capital more than doubled, from an average of $35,000 profit per employee to $83,000, leading to this rather frank and nauseating conclusion:

“If a company’s capital intensity doesn’t increase, profit per employee is a pretty good proxy for the return on intangibles. The hallmark of financial performance in today’s digital age is an expanded ability to earn ‘rents’ from intangibles. Profit per employee is one measure of those rents. If a company boosts its profit per employee without increasing its capital intensity, management will increase its rents.”

Extracting rent from “employees” as a business strategy: This is supposed to be the language of feudalism, not modern advanced capitalism — and yet this is the cutting edge in 21st century capitalist thinking, unashamed and unvarnished:

“One way to improve a company’s profit per employee is simply to shed low-profit employees. But if they generate profit greater than the cost of the capital used to support their work, shedding them actually reduces the creation of wealth.”

As with slave stock in a Southern investor’s portfolio, the McKinsey report argues that as a corporation learns to successfully extract rent from its employees, the more employees it extracts rent from, the greater its aggregate profits.

The new metrics: How much “rent” can be extracted from employees, not investments

To compare “the 99 percent” to African slaves would be crude; but the mindset of “the 1 percent” then, as now, is eerily consistent. They view the rest of us not as human beings with rights, but as livestock whose meat is “rent” to be extracted.

This is the language of plutocratic capitalism, a brutal system totally incompatible with democracy and antithetical to republican government and civilization. It is the language of misery, and misery is what “the 1 percent” is promising “the 99 percent” for years to come, in ever-greater doses.

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  1. David

    Very disturbing, but with slavery came rebellion. How long do we have to wait for a F.D. Toussaint Louverture or a John Brown ?

      1. Danny


        We do not need rebelion. What we need is organization, caring. We vote year in and out with no change and guess what?

        People still vote for GOP or Dem. When will people realize 2 parties dont care about anyone but theselves?

        The rich can can lobies, the unions too. What about uus middle class? Who defends us?

        Keep voting for them and things are guaranteed to continue the way they are. I venture to say that us humans will ignore the truth until we are already falling from the.cliff.


        1. Nathanael

          It took 15 years from the last ‘trough’ in slave value to the Civil War.

          Debt slavery is *less stable* as a system than chattel slavery. Therefore it will collapse sooner.

          However, it also has fewer guns, whips, and chains involved in enforcement, so it will probably go down more peacefully.

          1. Historicaecon

            Less chains and whips than the modern corporate state? I doubt it. Wage slaves are less likely to suffer corporeal punishment, of course, but the coercive apparatus of the debt-state is in fact far more extensive and, more importantly, sophisticated than anything Southerners had in 1861.

        2. nonclassical


          before we go the “vote” route, we must realize what has been done to the vote-check out Michael Connel, Cheney’s I.T. man, who in Ohio invented “vote shunting”=electronic transfer of votes to Tennessee basement for tabulation, then back to Ohio-no checks or balances..this, 2004. Connel asked bush-mukasey for witness protection=denied. Deposed one day prior to bushbama
          swearing in, he was apparently dead 3 weeks later in small plane crash. Video
          can be found at “Free For All”-Video The Vote…

          If that isn’t enough vote worry, consult Greg Pallast’s works on the issue…

          and this is before we discuss the one party system inherent…
          only way out is to END $peech=$$$$….$$$$=PROPERTY-“Citizen’s United”.

          1. polistra

            Unnecessary paranoia. They don’t need to rig the voting electronically.

            Mathematically-modelled gerrymandering takes care of Congress, and mathematically-planned use of the Electoral College takes care of the presidency.

            When each district is permanently guaranteed to vote one way, the ballots don’t need to be altered. They are perfectly predictable to start with.

            When you can find the few hundred voters in Florida who actually count, you can bribe them with Medicare Part D and get everyone else to pay for the bribe. Again, the X’s on the ballot are perfectly predictable.

            Remember, the “parties” don’t want MORE votes. They want to eliminate all non-robotic votes. Toward that end they make all candidates maximally identical and maximally disgusting. Non-robot voters recoil in horror and cycnicism, leaving the nice mechanical D-bots and R-bots to do their mechanical duty.

          2. Walter Wit Man

            Why even give them the option of hacking the machines? The machines are hackable.

            We should demand there be no back doors to democracy, even if our wise leaders claim they will never use it. We have seen how deregulation and letting private industry act in secret has harmed the country in other areas, why should the voting industry be any different?

            Maybe you’re right they haven’t employed this method that much in the past, but how do you know? It’s proved to be possible and it wouldn’t necessarily be traceable. Why have a back door that is hackable? Why not use the open democratic method? Plus, we have seen funny business with Ron Paul’s votes and we should also look to France for possible electronic voting fraud. It’s possible people (cough CIA cough) may have exported rigged voting technology to the world. Why shouldn’t we be paranoid about secret back doors to democracy?

            But I agree they have other means of control.

            Rigging votes is probably only one of many tools the perps have to control us. They probably only use it on close calls. Maybe Sarkozy could use some help.

          3. Requia

            There’s nothing to gain from vote rigging right now. Third parties aren’t going to win, rig or no rig, and the 1% controls both sides.

        3. Walter Wit Man

          Agree with nonclassical. Starting to figure out voting is rigged. Hard for me to break old habits and thinking though and get used to this new (probable) reality.

          I’m looking for more info on this subject so I’ll look at nonclassical’s links.

          The 2006 documentary Hacking Democracy is good as well and shows how the electronic scan machines are hackable.

          1. lambert strether

            Walter, besides the obvious candidates –FL 2004, OH 2004 — be sure to look into the D TX 2008 caucuses. The blog of choice in these matters is Brad Blog.

        4. jonboinAR

          Mass write-in voting might help. Always vote for exactly who YOU would like to see as President.

          1. Peter T

            Does the name Nader say something to you? Do you still think it doesn’t matter which party is on power after 8 years of George W. Bush? The democrats are a power hungry, clientle serving, corrupt political machine. The Republicans are worse. In the plurality election, as we have them, voting against the larger evil makes sense. We need a better election system, ranked choice, run-off, proportional, you name it.

      2. Woodrow Wilson

        “Do we need to have another civil war to get change?” –

        Do readers think the current crop of career CONgress cronies will change the path of the long-term sustainablility of this country? Global finite resources versus a growing population is fine when you need a Ponzi, but when the resources start to run dry is when the real problems start. Give it a decade, maybe two.

      3. Doc Who

        Wageslaves are much more efficient for corporations than old school slavery. Wageslaves can be expected to provide for the education and upkeep of the next generation of wage slaves out of their own wages. Wageslaves also make excellent cannon fodder after proper indoctrination in sentimental patriotism.

        When a wageslave is no longer needed, the wageslave can be “downsized” for any reason or for no reason. No need to keep feeding them—this would be a welfare state.

        Best of all, wageslaves are easy to enslave with propaganda and superstition, due to the inferior quality of public education. Although technically, wageslaves do have the right to vote, the influence of “corporate free $peech” tips any election in favor of the interests of the 0.1-1%%.

        Indeed, wageslaves do not revolt, rather they are fascinated by lifestyles of the rich and famous, and emulate their “job creators” by mimicking dress and consumption habits of the 0.1-1% to the extent that their credit card limits and pathetic “incomes” permit, by proudly displaying “designer” logos on their tawdry possessions.

      4. JamesW

        Speaking of the slave trade, this is an interesting and little-known historical tidbit, which ties in to the super-rich and the manner in which they continue to hide their wealth and ownership.*

        Chapter 7: The Foundations

        We have read ad nauseam about men of great wealth who, after careers of astounding ruthlessness while amassing their fortunes, suddenly underwent a profound conversion, like Paul, and became men of goodwill. It is true that the “benefactions” of the Carnegies and the Rockefellers are the most potent influences in American life today.

        They collect ever higher taxes, increase the control of government over every aspect of human life, and plan more wars and revolutions to further their goals. From the outset, American foundations have exhibited a twofold image – in front is the tireless do-gooder who balks at nothing if it serves a good cause. Behind him are the evil conspirators who are intent on preserving and increasing their wealth and power. The foundation in its present form, originated in the concept of a Boston family, the Peabodys. Henry James in his novel “The Bostonians”, ridiculed a family friend, Elizabeth Peabody, for her fifty years of relentless humanitarian zeal, portraying her as the legendary Miss Birdseye. George Peabody, after slave trading operations in Washington and Baltimore, moved to London, where he was set up as a front by the Rothschild family. He amassed a fortune by buying up depressed stock in American panics, and chose a Boston trader, Junius Morgan, to carry on his business. In 1865, Peabody set up the first large-scale American foundation, the Peabody Educational Fund, endowing it with $1 million in government bonds. By 1867, this had grown to $2 million; by 1869, $3.6 million. Ostensibly set up to educate Southern Negroes after the Civil War, it was a key operation in the carpetbagger strategy to gain control of Southern lands and to control their state governments. These states had to borrow heavily from Wall Street bankers to rebuild their services, and they remained deeply in debt for the next century.

        *Yes, I realize everyone believes that Gates and Buffett are the richest guys in America, because they read their names on the Forbes list, which is compiled from public sources, and that few understand the the wealthiest monies are recorded in private sources, and I also realize that few Americans are intellectually capable of realizing that a Forbes telling the truth about ANYTHING, will be a cold day in Hell!

        1. Lidia

          Thanks, James. Buffet and Gates are the arrivistes.

          I’ve come across A TON of pro-Gates/Buffet propaganda recently, to the effect that Gates somehow “gives back” all the millions and trillions of workers’ hours that he has consumed in trying to get people to come to terms, over time, with his defective computer interfaces.

      5. Glen

        Thanks for all the discussion. I have to admit, I did not like the slavery analogy since the sub context implies civil war (not something I would want or support), yet, I do not see recovery or reform happening right now and don’t see how it will happen in the near future. Makes me feel like I’m living in a dystopian technopunk novel.

    1. Walter Wit Man

      Our slave managers are much more ruthless than the slave managers of the past . . . they probably buy into the system far more than Uncle Tom did in the past.

      Also, many of the slaves don’t know they are slaves. They signed up for slavery in fact. And they mock the free poor people for not being able to be slaves.

      Also, television as propaganda. And drugs. The slaves are doped up and dumb.

      I don’t think the slaves have any fight left in them.

      1. ECON

        Right On!! Give every “free slave” in the exceptional nation a free channel changer and TV.

    2. MrColdWaterOfRealityMan

      I can’t name a time, but the triggering *event* for rebellion will be a breakdown of the supply chain ecology so that cheap food, cheap entertainment and cheap psychoactive drugs are no longer available to the general populace. Other stressors like intermittent power, heat, drinking water and medical care will certainly speed things up.

      The timeframe is anyone’s guess. If an adequate substitute for oil is found, it could be a long time. If not, I’d give the current world regime of elites about 50 years, tops. A few might bunker down (literally) here and there in the equivalent of castles and walled city-states, but the international network won’t survive. A lot of individuals in that network will not survive, no matter how they try and prepare, since siege tactics still work and even oxygen can be cut off if one is determined enough.

      Perhaps the 99% will be sensible enough to eliminate them as a species, but this is doubtful. More likely they will survive, roachlike, until the world’s economies and social structures recover and parasitism can begin anew.

      1. ambrit

        The DIY Boxxstore I work in now has instituted a modified form of “strawboss” internal control. You are now a ‘facilitator’ responsible for the ‘education’ of your team members, referred to as, I’m not making this up, “targets.”
        As the person who explained this new system to us remarked; “You’re either in with the program or you should seriously start looking elsewhere for employment.” Part of the new regeime are ‘enforceable’ metrics. I’m beginning to feel like one of the ‘Sharks’ in the entrance to your friendly local car dealership.

        1. Masonboro

          At GE it was/is? called “self-directed workforce” – a Welsh invention to justify the elimination of shop floor supervisors. The result was that conscientious employees and support staff (engineers,planners) were forced to work longer/harder to compensate for slackards over whom they had no control. In essence employees were set against each other while “Management” concentrated on “making the numbers” each quarter. I retired early to get out from under this condition.


        2. different clue

          If that is true for one chain of boxtores but not-yet-the-others; then the proper response would be an extermination-boycott designed to exterminate that particular chain of boxtores from existence. Customers would be forced to take their bussiness to the other no-strawboss-yet chains of boxtores, and hopefully the transferred customer bussiness would support transferring the disemployed workers from the targetted boxtore over to the other boxtores to follow the transferred customer bussiness.
          Of course it would take a heavily informed citizenry, mobilized and hungry for OverClass blood; to be ready to think and act in such terms.

    1. Jim Haygood

      ‘Plantation associates’ is the preferred designation at the more progressive employers.

      1. Peter T

        Three posters came up with he same name, and it rings true: “Plantation Associates” is it.

        1. different clue

          One could further subdivide that into House Associates and Field Associates if/when/where it would make sense to do so.

  2. Danny

    I think this post is missing a critical point that should be addressedwith a follow up. I have read so many articles with the same flaw that it scares me. I swe the jaqs of socialism taking over.

    The post about how Henry Ford was so nice that he double their wages. Pardon my ignorance but I think I will call thos one BS. Ford did not build an empire by being nice. I will leave it to you pros to find the answer but I can guess it may have had to do with tryong to avoid competition

    Why isnt th e role of credit allowing people to buy things without salary need the main ingredient in your post?

    Capitalism is not a sad excuse for socialism you promote in this post. I find it interesting that the 99 % people the post seems to be defending are actually being con’d to support the privileged class -those breaking the back of tax payers.

    Let’s put the blame blame where it belongs, the fed.


    1. Nathanael

      Danny, it’s public record why Ford paid his employees more than his competitors did.

      “So that they earn enough money to buy a Ford.”

      He understood macroeconomics, which so many people do not understand.

      1. wunsacon

        Ford’s policy was practical and that his statement *might* have simply been good marketing.

        1. nonclassical

          Kevin Phillips’ books “American Dynasty” and “American Theocracy” show what happens when society turns to “financial sector”=paper debt economy, rather than manufacturing…England, Spain, Holland…none survived. “Financial sector=Wall $treet was 19% of economy 2001, today 41%…

          1. wunsacon

            No disagreement here. I’m merely saying it’s difficult to know what Ford really believed.

            Setting aside that skepticism and regardless of Ford’s true motivations, I like what Ford did…

          2. Yves Smith Post author

            Did the post say anywhere that Ford was altruistic? The fact that a hardheaded guy like Ford decided higher wages were in his interest is further proof of how far management has decayed in America. It’s about looting, not about building businesses.

    2. alex

      Danny: The post about how Henry Ford was so nice that he double their wages. …

      Ford doubled compensation when he switched to assembly line production. Previously he’d paid the going wage. When he switched to assembly lines the work was so boring that there was enormous absenteeism and turnover, which hurt production. So he continued to pay the going wage but offered an annual bonus that roughly equaled the year’s wages if an employee didn’t quit and wasn’t absent too often.

      So no, Ford wasn’t just being a nice guy. The “so they can buy a Ford” line was cute but not the real reason. However, unlike today, Ford was willing to share the benefits of increased productivity with his employees. Instead of moaning and whining about a worker shortage or a bad work ethic or some other such garbage, he was willing to dramatically increase employee compensation to keep his business running. That’s very different from what you see today. As I’m sure you’ve heard, Ford got insanely rich that way. These days he’d be derided as a bad businessman.

      1. jonboinAR

        So is what Ford did something like offering a nominal hourly wage plus a piece-work bonus? I can see that being effective for maximizing production. As others above have pointed out, the macro-benefit was likely a fortunate, fortuitous side-effect.

      2. reslez

        Ford was sued by his shareholders for paying his workers more than the prevailing wage. They won.

    3. Doc Who

      I think it may be correct that Ford needed to bootstrap the car industry by getting enough cars on the road so that there would be a need for roads. More roads, more cars.

      More cars, more roads.

      Has nothing to do with nice or not nice. Just business.

  3. Danny

    The sad state of affairs is that a revolt will mean the majority, middle class, against the soldiers, also middle class. The rich and privileged clas, gov workers, will probably be watching from their warm and cozy mansions. People need to wake up and stopped being con’d by the people who claim they are defending. Enough….

    1. ambrit

      Dear danny;
      You seem to forget all those ‘lefty’ regeime changes facilitated by the junior officer corps around the world.

      1. Nathanael

        And the junior officer corps are certainly being screwed over pretty damned badly by our elites right now. The elites act like abusing them in a hopeless quagmire in Afghanistan until they get PTSD and then trying to deny their medical benefits is a reasonable tactic.

        It isn’t. It’s insane behavior for an elite which wants to stay in power, totally insane.

        1. nonclassical


          everyone should now know bushit “fight them there so we don’t have to fight them here” was really disposable military setting up security for oil fields-Greg Pallast documents Shell Oil CEO Carroll, telling bushitters “Shell doesn’t want to own oil facilities on perpetual fire….AND we’re making more with OPEC than ever”….

    2. Walter Wit Man

      Hey Danny. I agree. Saw something on Youtube about Marines “waking up” to the fact we have an out of control government and that Panetta claims the ability to wage war in Syria without Congressional permission, etc. Also talked about how Panetta disarmed the troops because they are worried about a marine shooting him. Also, the enlisted supported Ron Paul more than anyone else.

      But . . . in that video saw some major hostility to Occupy (I think the person posting is a libertarian) and the person thought Occupy part of the broader attempt to control our government by Obama and in this case, Soros (via his alleged support of Occupy). Also, many of these people that care about liberty are very hostile to other left-wing causes.

      So anyway, while I actually have my doubts about some actors in Occupy, it is disheartening that there is a major division between the civil liberties groups.

      This explains the agenda to attack Ron Paul.

      Progressives attack Ron Paul with such vigor because the perps do not want all Americans uniting on an anti-war and pro civil liberties agenda.

      1. JurisV

        Revolt by “the troops” always happens and has happened when oppression reaches critical levels — mostly by the officers losing touch with the troops. The Vietnam war was a good example. The “fragging” of officers was so common that all sorts of restrictive measures were taken. Needless to say, morale spiraled into the sewer.

        For example, at the base where I served our weapons were locked up after somebody fired at an incoming (to the Division HQ) helicopter. We all “joked” about having to stand in line to get our weapons if we were attacked in a war zone.

        So, a weapons embargo was not an unusual historical event for Panetta’s visit. But it is an indicator of a critical rise in the usual tension between the Leaders and “the troops.”

        1. Walter Wit Man

          My understanding is that it was unusual for the marines to disarm in the Afghanistan war.

          There have been many visits by VIPs and Secretaries of War the last 10 years and from what I saw the troops always had their weapons. The Afghan troops have always been disarmed on such visits though, which makes the cultural excuse the DoD came up with bullshit (the marines were probably not disarmed in this instance to make the Afghanis feel better).

          Interesting anecdote about Vietnam. I can only imagine “joking” about my own death in that manner. Thankfully, I have never tried out humor in this type of situation but it doesn’t seem very funny to me. Clever may be a better way of looking at it.

          Reminds me of how Putin was joking about Assad’s death not too long ago . . .

        2. Walter Wit Man

          Why did the person fire at the helicopter?

          Was it a act of hopeless rage and anger? As in, “I’m being sent here to die and do bad things so screw this country and screw this army, I’m going to take one of these bastards down before I get killed.”

          Or was it to kill a particular officer?

          Did they do it hoping to get caught and sent back to relative safety?

          In Afghanistan the possible motives for shooting Panetta scare me.

          Part of me is scared that the troops feel like they have a right to execute children in revenge and they are mad at the DoD for stopping them.

          Or are they mad because they realize the war is pointless and the are being made to kill innocent people so they want to kill the people that are making them do this?

          1. JurisV

            I have no idea why some soldier fired at that helicopter, but I’m sure it was not for any reason that remotely could be seen as coherent or rational.

            In any dysfunctional military operation (I see Afghanistan as one) the stresses on troops are enormous. In Vietnam,. even in a base camp, it was a chore to remain “sane” because of the heat, looney officers, or any of a number of the usual suspects. A few people seriously cracked up in this environment. A Sgt I worked with reached the limit one day after some harassment by another soldier in the chow line and went after him in his bunk with an M-16 — totally out of control. Luckily he got too close to his intended victim who was able to deflect the muzzle before the rifle fired. The helicopter incident was later — it took an incident against an “elite” to have our weapons locked up.

            Very few soldiers reached this limit, but we were all a little bit crazy, I think. And when I think of the Afghan tours that the current soldiers have to do, I am amazed that there aren’t more atrocities.

            These “random” events are part and parcel of War! All wars! Warfare in incredibly toxic. They are never clean, “surgical” nor rational. When society throws hundreds of thousand of young men into warfare some number of them are going to crack and do horrible things. War is visceral, bloody, nasty, not predictable, and should be avoided.

            Excuse the rant, but wars and the people that glorify them are totally bats*it crazy.

      2. Lidia

        Progressives attack Ron Paul because he is a stone-cold theocrat, misogynist and racist who dog-whistles “states’ rights”.

        He still wants the State (rather than individuals) to decide human destiny, just not a Federation of States. This is cold comfort to the average citizen.

        Paul wants the federal judiciary supplanted by a coterie of religious judges:

        From the Thanksgiving “Family Forum” debate:

        We have weighed too much government. We should go in other directions. Before you know it the next step — what if the next step is, “Wouldn’t it be wonderful if the United Nations defined marriage?”

        I don’t want to go that way, I want to go back down… all the way to the family and the Church — believe me it would be a happier and more peaceful world if we went in that direction, rather than asking the government and asking the King to solve all these problems… we need the family to deal with it.

        And we can take our message and learn something from the Old Testament, how there was such a strong emphasis on the Patriarchal society and the disputes settled by judges rather than looking for Big Government.

        An obvious religious nut, Paul is a “libertarian” for 49% of the population only.

        1. F. Beard

          An obvious religious nut, Paul is a “libertarian” for 49% of the population only. Lidia

          It’s too bad that the average Progressive is not Biblically literate enough to refute Ron Paul.


          Now Deborah, a prophetess, the wife of Lappidoth, was judging Israel at that time. Judges 4:4

          Hmmm! A female judge!

          And RP is no doubt devoted to usury too being a fan of the Austrians even though the Bible forbids that between fellow countrymen.

          1. Lidia

            Sure bEard,

            what happened to that female judge during her menses? She was “impure”, wasn’t she? Holed up in the mikvah?

            I really don’t get this male hankering for Old Testament society.

          2. F. Beard

            Men could become unclean too.

            Btw, Jewish cleanliness has been an important contribution to their survival as a people.

    3. different clue

      Are gov workers a rich and privileged class? You mean like mail carriers and garbage collectors? Those are a rich and privileged class? Or maybe you mean park rangers and teachers? Or USDA researchers? Are they a rich and privileged class?

  4. Maju

    “Extracting rent from “employees” as a business strategy: This is supposed to be the language of feudalism, not modern advanced capitalism”…

    Actually, if you follow Marx’ thought a bit, that’s exactly what Capitalism is about: extracting the surplus value from the work of employees.

    There’s another source of surplus value that Marx, trapped in the labor model of wealth of Ricardo, missed: Nature. The exploitation of nature and workers is what creates every ounce of wealth under Capitalism.

    1. Danny

      Can I ask what is the difference in a Marxist society?

      Your comments makes it seem as it was any different?

      My own thought, I would rather live in a capitalist society where I know everone is out for themselves than in a socialist state that cons the mass for the benefit of the few.

      1. Maju

        What is a “Marxist society”. Karl Marx was a guy who lived in the 19th century and, essentially, he was a pariah in that society because of his ideas and commitment.

        I’m just mentioning a fact outlined by one of the greatest economists ever (and one of the most ignored ever as well): the man who (arguably if you wish) described Capitalism for what it is and not as an ideal.

        The fact is that capitalists get their wealth from exploiting others (and nature) and that is not sustainable (nor desirable), no matter what you wish, Danny.

    2. Dan B

      “extracting the surplus value from the work of employees.” Precisely, and this is overlooked as a side issue when it’s paramount.

    3. RanDomino

      Not so. It’s accounted for in the idea of “Primitive Accumulation of Capital.” The quintissential example is a fruit tree- the food is just sitting there, waiting for someone to take it… but even the act of taking it is labor! A fruit hanging from a tree is useless; it has to be picked first. That is the act of labor which causes the wealth to become useable. The same goes for any natural resource.

      1. Maju

        It is a most interesting discussion, Ran Domino. But labor alone can be worthless (a thousand guys digging holes with spoons for no reason at all) while very little work can make a lot of wealth (picking the fruits from a tree nobody cultivated and very much easy to reach), it depends. So the source of wealth is not just (human) labor but also Nature (the environment’s unpaid labor, if you wish), which produces a lot of stuff that is most valuable like oxygen or water or sunlight, just to mention a few.

        Under Capitalism, only what is scarce and appropriated is considered valuable (so most of what I just mentioned is not for the pseudoscience of Economics, even if it is essential to life, the same that a jungle is “worthless” but the logged trees are worth a lot). Capitalism thinks short-term and only from the viewpoint of individual profit and Marx was partly trapped in that paradigm, unfortunately (although he also gave us great insights).

        1. JamesW

          Under capitalism, man exploits man.

          Under communism, it is the opposite.

          Economic democracy, now there’s a concept! ! !

          1. Maju

            Contrary to what that rat of Brezhnev (and no one before him) claimed, communism has never been implemented anywhere: socialism variants have but not communism (unless we consider the few and unstable Anarchist experiments in Ukraine, Catalonia, etc.) Per Marxist theory communism = no state (and no private property) and takes its model from the Paris commune of 1971.

            Incidentally I just stumbled on an article on how Marx was opposed to the state: – what implies that neither the USSR, not even Cuba! are the model promoted by Marx in life. They are something else but not communism.

            In Cuba anyhow, nobody is hungry, nobody lacks a home and when a hurricane comes, nobody dies in most cases (because the state and communities take care of evacuations and reconstruction). It’s so much more advanced than the USA in so many aspects (not all, I know) that it is even developing more and more environmentally friendly energy sources.

            But it is not communism, just socialism.

      2. kgw

        Not so ;~) The fruit on the tree came from the seeds of a previous fruit. The “value” of the fruit is the tree itself.

        Just being picky. . .


        ” A fruit hanging from a tree is useless; it has to be picked first.”

      3. Lidia

        The “unpicked” fruit is by no means “useless”. That is an unhelpful anthropocentric construct.

        An “unpicked” fruit, if ignored by humans, will be fodder for birds, insects or other creatures. If they do not make immediate use of it, it will return directly to the earth and serve as fertilizer for the next season.

        Nature does not know waste.

  5. Eddie Torres

    See also the excellent article on this same topic by Robin Harding regarding rent-seeking behavior by US financial elites, entitled: ‘Barriers to break through,’ Financial Times, 2-23-2012. Key quotes:

    “Although Tea Party and Occupy Wall Street activists may not all be aware of it, rage against economic rents is what unites them; it is the hidden factor behind much of what they hate.”


    “For economists, it is the waste of resources on lobbying in pursuit or protection of rents that is their greatest evil. In the jargon, this behaviour is called ‘rent-seeking.’ Studies of economic losses due to rent-seeking and the resulting monopolies have produced figures ranging from 3 to 12 percentage points of national output for the US.”

    The link is behind a firewall, but try Googling “Barrier to a breakthrough” and “Robin Harding” and then clicking on the ‘cached’ version from the FT.

    1. liberal

      Excellent comment. The main emphasis in all these discussions should be rent, rent, rent. (Danny, for one, is too uneducation to understand that curbing the accrual of rent is not equivalent to “socialism”.)

      After all, that’s why we had a real estate bubble in the first place: land is one of those “goods” which throws off rents, which everyone wants their hands on.

  6. Max424

    Great piece.

    Note: I’ve always wondered: How many rich northern plutocrats in 1861 viewed southern slavery as ridiculously inefficient, and wished to see the South defeated, for this obvious reason; legally, as a slave owner, you could enslave only black people.

    I’d put the over/under at 6,000 (Remember, we’re talking super wealthy bankers and industrialists. If you’re talking fairly well-to-do –mostly Christian– folk who would have loved to own a slave, or lots and lots of slaves, of any racial or ethnic variety, then the over/under starts at 1.3 million).

    1. Danny

      Why dont you teach them a lesson and give a chunk of your salary to p#ople poorer than you? I mean, there are millions of people out there that are as poor vs you as you are to thse rich evil bankers and industrialists.

      Look in the mirror my friend, its easy to blame somebody else. The issue are not the riich, the issue is our politicians bending for the rich promising stuff with our and our childrens money to buy votes.

      Dont cry tomorrow for what are not defending today.

      1. Max424

        Are you talking to me?

        Are you sure you’re in the right thread?

        This is the capitalism = slavery thread. My contention is; Mark is correct, slavery is a very efficient use of capital.

        My sub-point was: Slavery in the pre-Civil War south could not possibly max out its productivity curve, because southern slave-owners could only legally enslave a relatively small portion of the population; therefore, the antebellum version of the slave-state could not possibly rank with the best of all-time.

        I also added that many northern Capitalists were aware of this at the time –which should come as no surprise.*

        Pretty basic, ho hum stuff. Yaawwwwn….

        *Today, obviously, all Capitalists know this, as they better educated.

        1. Danny

          All this is fun until you find yourself like Europeans, with a Hitler. All Capitalist know what?

          Why dont you help us understand where the wealth comes from if not from labor aand productivity?

          If you have a better system, than show us. Socialism is definately not.

          Your comments seem sophisticated but lack substance.

          1. liberal

            Yes, all wealth ultimately comes from labor (if we view capital as a form of “stored up” labor).

            However, you can accrue wealth with no labor at all if you collect economic rents.

            Why don’t you learn about economic rents instead of continuing to display your ignorance?

          2. Lidia

            Where does this “labor = wealth” equation come from?

            Labor can transform or transport wealth, but certainly cannot create it. Labor can extract wealth, not create it. Labor, in its expression, consumes wealth along the way.

            Extraction is the key to all.

      2. wunsacon

        >> Why dont you teach them a lesson and give a chunk of your salary to p#ople poorer than you?

        Employers take most laborers’ excess contributions as profits. That leaves the bottom 80% with not much more than living expenses. Nevertheless, if we jack up the top .01%-ers’ tax rates progressively back to ~70% then even this 5%-er will be happy paying 20% more.

        1. JamesW

          Several economists from Goldman Sachs stated, back in a NY Times article on Aug. 28, 2006, what should be obvious to every American:

          “The most important contributor to higher profit margins over the past five years has been a decline in labor’s share of national income.”

          (My comment: Which is EXACTLY why they are always lobbying against workers’ rights, etc.)

        2. Lidia

          Wunascon, thanks.

          I, not all that long ago, worked for a boss who complained that I “cost him” money.

          I didn’t MAKE him money (it was obvious to all in our small office whose billable hours were essential).


          I was supposed to feel guilty in that I “cost him” money, even though the work of my colleagues and myself paid his salary, the rent on his home, the rent on his office, and so forth, with excess to spare.

          We were supposed to feel as though WE (employees) were decadent cost sinks.

          Ma va fan’ culo!!

    2. nonclassical

      ..try “rich northern industrialists” whose factories lacked natural resources grown in south-which were being sent to Europe instead, for armaments…

    3. Historicaecon

      Sven Beckert’s “The Monied Metropolis” is a good book to read on what Northern elites were thinking. Basically, the financiers (who financed slavery) didn’t want a Civil War. The manufacturers did. They benefited from war-time contracting, and were ideologically opposed to slavery because of their interest in “free” labor.

  7. Richard Kline

    “They live! We sleep . . . We ar being bred for slavery.” That goes on my signage for my next Occupy action. A sub-mediocre film which nonetheless embedded the keenest critique of post-industrial capitalism you’ll yet see on a screen, never more relevant than today.

    Why do I mention this otherwise obscure film? Because the genius of post-industrial capitalism is to induce slave-level profitability without having to actually pay for the upkeep of the chattels. As mentioned in the study cited, and as demonstrated in other lengthy studies of the economics of slavery, the ‘repulsive institution’ (as it should have been tagged) was highly profitable, but the slave-exploiters nonetheless till had to feed and house their livestock at least to a minimal level; a cost of doing that dirty business. In post-industrial capitalism, actual ownership would entail such costs, and might yet carry with it legal obligations of various kinds, such as for injury. So the genius of post-industrial capitalism is to move away from owning specific physical persons to economically boxing in the mass population as ‘worker drones’ from which rents can be extracted but to whom no support of liability is entailed. ‘Drone units,’ I or you or, say, a LAN administrator, are generic, and readily replacable so long as the mass audience is loaded with debt, immobile, stripped of political representation, and neutered in the courts. People get hungry; hungry people run scared, hide in their burrows, and work hard for crumbs.

    Post-industrial chattelization is _better_ than owning slaves, is what I’m saying. I am firmly convinced that when the historical analysis is done, we will find that the huge putative boost in ‘productivity’ claimed for Western, and specifically American, economies from the late 1980s has _nothing_ to do with the increasing technification of the work place and everything to do with forcing more work out of the workers for the same pay and no benefits. This is the profit vector alluded to in the post. Companies don’t have to do anything better/smarter, and in fact often don’t; what companies do is extract an even larger share of the profits of the enterprise from their labor component. ‘Productivity’ is all about better miliking mechanisms.

    I wouldn’t go quite as far as saying there is a ‘conspiracy’ in all this. But the components of de facto chattelization all interlock. Induced demand for consumer expenditure on ephemera. Ready credit on bad terms, with lenders protected by the government and owning the legal system. Hiring protocals so narrow that anyone can be rejected and few are ‘qualified’ even for ‘no brain jobs,’ putting those looking for work in a bind and all in the same pool. ‘Performance metrics’ at work completely out of worker control, and steadily escalating in pace and breadth. Trivial wage gains effectively made income losses by an induced inflationary environment. Benefit reduction, leaving workers trapped in the remaining jobs which have benefits at all, or debt-smacked outside of such shrinking ice floes. Electoral politics completely owned by the ownership class in every respect. Education reduced to ‘vocational training and compliance socialization’ of greater or lesser complexity, but the outcome is largely the same whether doctor or patient even in the cash flow is differentiated.

    Debt-chattels; the system produces that outcome, all the aspects interlock. They live rich; we sleep dumb . . . Until . . . .

    1. Richard Kline

      As I neglected to add, it’s the ‘company store’ with America entire reduced to ‘a business,’ the political catch-phrase of the 1% of a generation ago, now more or less realized.

      As a mention to a comment above, it was Northern factory capitalists who pioneered the company store model; factory towns with all transactions only payable in company scrip; labor competition from ‘children, aliens, and inferiors’ to supress wages and undercut labor action; line ‘speed-ups’ and ‘mandatory overtime’ and ‘expected voting lists’ and ‘private security (not constrained by legal rights)’ and the rest. Well four generations on, the cyclical index, here we are again, with all of that emplaced by the wealth class as a whole on the citizenry as a whole. America, Inc. indeed . . . just a digital Metropolis.

      1. Danny

        God.. I didnt think people were so easy to dup.

        Same as previous – give a chunk of your salary to poor folks, there are people poor vs you as you are to the evil rich. Look, there is nothing wrong with wanting to make money. Isnt thhat wwhat made America great?

        Wanting something free is what should be scaring you. When you allow the gov to provide for all, they will demand control.

        The issue not addressed in this post is how credit allowed demand to continue to increase without giving people raises. The article is dubious at best go have that effect.

        Again the fed and our politicians are the issue.

        1. M.InTheCity

          Danny – lets step back a bit here. Who pays the politicians? I mean, who financially backs their campaigns? Who CREATED the Fed? WHY did the banks create the Fed? Did things suddenly go shit about 100 years ago when the Fed was created? Are you saying there was no exploitation before 1900 by the capitalist class of politicians, workers and the economy? Are you saying that the gold standard will make everything better? Have you ever heard of The Cross of Gold speech? Do you know about the depression that started in the early 1870s and went through the 1880’s? And Lastly, did you know that that depression occured whilst on the gold standard?

          If you can answer those questions, then I might take you more seriously.

          1. Danny

            Will try.

            The fed was created in 1913 to rip off the masses via slow devaluation.

            The great depression did happen in 1913, right under the fed’s watch.

            If you are trying to justify blame on the rich, you are arguing ahainst the wrong guy. Of course the rich will leverage anything they can to get richer. But argue that anyone would do the same. I mean, if you got a raise much larger than your colleagues, would you fight for them to get the same? If you hit the lotto, would you share your wealth with anyone else?

            Going back to the real issue, the fed and politicians. If we were on gold standard without fractional lending, 2 things are solved, devaluation of the currency and gov spending. The fed would not be able to fund

          2. F. Beard

            If we were on gold standard without fractional lending, 2 things are solved, devaluation of the currency and gov spending. Danny

            1) Gold is the traditional reason for fractional lending since it is in limited supply and the money supply should be able to expand (but not normally contract).

            2) Deflation is also a means of stealing wealth.

            3) A monetarily sovereign nation should be able to spend its own money freely. The problem is that its money is usually de facto legal tender for private debts instead of just for government debts only.

            I believe you mean well but a gold standard is fascist.

          3. Danny

            I dont know about you but I would love to see prices drop, btw this is a normal progression of an economy. As productivity gains are made, costs should drop. You dont see those drops because the fed is busy funding our gov, thereby devaluing our currency and our wealth.

            Allowing the congress control of creating money without gold backing will not change anything. Free markets without the fed, a gold standard which exposes inflation everytime the gov prints is what we need. Remember people will try to steal if you let them. A gain, a gold standard without fractional lending is the solution because the ones in power cannot steal without the populus knowing. Should the gov print, the populus will know immediately and take appr action. This is the diff between this solution vs the others.

          4. F. Beard

            A gold standard would replace government counterfeiting of private money with private counterfeiting of government money.

            Matthew 22:16-22 (“Render to Caesar …”) implies the proper solution – government and private money supplies. Government money (inexpensive fiat) would only be legal tender for government debts and private money (including gold assuming it could exist as a truly private money form) would only be acceptable for private debts.

        2. SidFinster

          And if you are rich, you use your money and social capital to rig outcomes in business, in politics, in the courts, in social interactions. (I think the technical term is “entrenchment”.) This can work equally well in socialist and unregulated economies.

          History is ripe with examples.

        3. liberal

          “Look, there is nothing wrong with wanting to make money. Isnt thhat wwhat made America great?”

          Depends on how you make the money.

          If you make it by a contribution to production, that’s great.

          If you make it by collecting rents, it’s just legalized theft.

          People have understood the distinction for hundreds of years now. Stop blithering like a moron and try to understand the difference.

        4. wunsacon

          >> God.. I didnt think people were so easy to dup.

          Danny, when something from Richard Kline sounds incredibly stupid to you, it’s most likely because you don’t understand it.

        5. jonboinAR

          >>Look, there is nothing wrong with wanting to make money. Isnt thhat wwhat made America great?<<

          No, there's just something wrong with being able to aggregate all the money to oneself, making everyone else essentially chattel. There has to be redistribution or a few end up owning everything. Play the board game Monopoly. You'll see. At the end of Monopoly, what do you do? Start over. There has to be a "start over" sort of mechanism.80% high marginal tax rates, once upon a time, helped achieve that. I don't know if you realize it, but calling any system of redistribution "getting money for free" you advocate the legitimacy of making most of the population virtual slaves.

        6. Richard Kline

          Oh hey, Danny, hi. Say: Who’s paying you to hang around blog threads to sandbag comments? Wouldn’t be some o’ those ole evil rich? Would it??

    2. Nathanael

      See, you’ve articulated the argument which some of the 0.1% are probably thinking.

      But it’s a false argument. Company stores collapsed far faster than slavery collapsed. The “company store” system depends for its survival on treating the workers “well enough”. And the greedheads running the company just *won’t do it*.

      At which point there is unionization. And eventually even the US Army can’t stop the union. Though I have to say the mining unions have an advantage what with ready access to explosives.

      (Chattel slavery doesn’t depend on the same things; it instead depends on keeping the slave population substantially smaller than the overseer population, and keeping the *overseers* “happy enough”. This is more stable, unfortunately.)

      1. RanDomino

        That’s a call to action- to organize. But this time we need to organize of a different basis than as “workers” and for different goals than just a ‘fair slice’- “Instead of the conservative motto, ‘A fair day’s wage for a fair day’s work,’ we must inscribe on our banner the revolutionary watchword, ‘Abolition of the wage system.'”

  8. Eddie Torres

    Other great quotes from the Robin Harding article at FT:

    “The creation of an economic rent – often by persuading the political system to grant some kind of a monopoly or privilege – means a one-off chance for someone to get rich and then a permanent barrier to newcomers entering a market.”

    “Economic rents arise from other legal monopolies such as extended copyright protection. The financial sector is riddled with them; some analysts say that part of the reason for high executive pay is because managers can extract rents from shareholders.”

    “No politician is likely to use the term ‘economic rent’ in this year’s elections – but being seen as someone who is fighting rather than creating that is likely to be crucial to victory.”

    “’We know that executive pay consists at least partly of rents because both the level and insensitivity to performance of compensation increases with executive power vis a vis shareholders,’ says Jesse Fried, a professor at Harvard Law School and co-author of Pay Without Performance, a book critiquing executive pay practices.”

    “There is no easy way to eliminate rents, because wherever they can exist there will be a temptation to seek them. ‘One solution is trying to get courts to enforce the commitment device known as the US Constitution,’ says Peter van Doren, senior fellow at the libertarian Cato Institute.”

    “An alternative, where there must be regulation or where rent stems from a private transaction, is transparency. ‘Transparency nearly always reduces popular support for public policies which produce rents for a favoured few,’ says Roger Congleton, professor of economics at West Virginia University.”

    1. liberal

      Excellent comment.

      A quibble, though. The largest amount of rent in our economy goes to land. It’s going to be much harder to get people to give up more of that rent than the devices the people you quote mention.

  9. Middle Seaman

    The economic model seems reasonable, but a model requires verification using real data. This part doesn’t appear here at all. The histograms tell a story but the same effects can be caused by other models as well.

    Intuitively, we see banks getting rich mainly by transferring trillions to them from debt we accumulate. That is, the country’s debt balloons and the 99% end up paying the price. Banks also gamble with same money and investment money and when they win, individuals do not. That is, banks keep most of the profits of their use of my pension funds see little profit.

    In the political arena people like Wisconsin’s Walker and Obama were elected on a populist agenda. Once in office they starts to transfer government assets to private entities thereby destroying the population’s assets and returns.

    The post’s model fails to include the multifaceted attack by the 1% on the 99%.

    1. Danny

      Good post.

      The rich buy off the law makers to their benefit.

      The fed allows the gov to spend by providing funding upon request. This endebts the nation.

      Now that not much is left to steal, you have the politicians lie and stupefy the populus. Shit is not free. The go gov takes from a hand and gives the other a fraction, each time getting more power. In the end you have a group of lazy asses that think that the gov just has free money. Truly amazing times.

  10. greg

    Astounding. But real lesson of the South before the war, and why they lost it, was the arrested economic development brought about by failing to develop their own domestic markets. A lesson lost on our rentier masters, and their cronies in government. The idea that they can support any sort of modern civilization, and thus their own comfortable life styles, in the absence of a middle class, is bizarre, and shows how out of touch they are with economic realities.

    What is most disturbing though, is that our masters haven’t absorbed one of the lessons once taught to four year olds, the parable of the goose that laid the golden eggs. It is simply impossible for them to rule in such ignorance. The only issue is whether the succession will be orderly or not.

    The graph on slave values does look like an asset bubble ready to burst. Was the cost of a slave becoming out of line with the return on the investment in one? Can one imagine an alternate history without the war, where, in the 1880’s say, millions of ex-slaves are let loose to wander the country side, no longer valuable becaue their labor was in such surplus, their value/cost reduced to the subsistence wage necessary to keep them alive and working? Thousands of planters ruined and foreclosed?

    1. SidFinster

      Another way to look at the Old South was as a variant on Dutch Disease.

      Before the Civil War, the South had very little industry. At that time, W.T. Sherman reminded a belligerent Southerner that the South could barely produce a pair of shoes on its own, much less a locomotive or a steamship.

      I wonder whether the reason the antebellum South had so little industry was because the plantation economy was too easy for the plantation class, and using slaves as plantation labor was more profitable than using then in industrt. (At the same time, the plantation economy wasn’t even necessarily profitable – a lot of the plantation class was asset rich but cash poor. Many were in hock up to their necks financing their lifestyles.)

      According to Sherman, that was the problem – there was a whole leisure class of young men infesting the South: gamblers, lawyers about town, various moderately well-heeled parasites that would have to be exterminated, as they literally would rather die than have to get a job.

      1. Mel

        A while ago I read Jeff Rubin’s _Why Your World Is About To Get A Whole Lot Smaller_. One of his hot buttons is the badness of a Petrodollar economy — I don’t recall that the book explained why. I guess this is it. A one-resource economy makes a very few people rich, but doesn’t extend capital to develop other industries. So the South lived and died with cotton; petro-economies are mostly pretty thin (Norway taxes heavily to force the money to spread out, don’t they? In Canada we think we’re escaping, but we should never, never take our eyes off that ball.); Spain’s bullion economy just after 1500 left the money everywhere but Spain.

        A few formal problems here: how else would you expect a so-called one-resource economy to act? Is there some logic that prevents it becoming, like, a two-resource economy (or even more)? Or is the lack of development merely an effect of convenience and chasing a local optimum?

    2. Jim Haygood

      ‘The graph on slave values does look like an asset bubble ready to burst.’

      Some context would help. Cotton prices were rising after a depression in the late 1830s-early 1840s, and reached an extreme peak around 1864. Naturally land prices and slave prices would be rising alongside.

      Global Financial Data (available though most university libraries) publishes historical data series for both cotton prices and South Carolina slave prices. Most likely they are correlated.

      Greg mentions the arrested economic development of the antebellum South. Frederick Law Olmsted, designer of New York’s Central Park, was commissioned by the New York Times to tour the South in the 1850s. His collected writings were published as Journeys and Explorations in the Cotton Kingdom in 1861.

      As he travels through north Louisiana and east Texas, Olmsted harps on how primitive, backward and crappy everything is. Some of the farmhouses he stays in don’t even have glass windows, and serve nothing but greasy bacon and cornbread for meals.

      Industry is virtually nonexistent in a subsistence agriculture economy. Land values and wages are but a fraction of those in the North, Olmsted details with obvious disdain.

      But at a time when the federal government was largely financed by Customs and excise taxes, Southern cotton exports were vital in balancing the U.S. capital account and funding imports and government spending. If ‘the South’s ruling class seceded to protect their riches,’ then it’s equally true that Lincoln sacrificed half a million American live to protect his government’s riches — revenues from the indispensable cotton exports.

      Richard Kline gets it exactly right: post-industrial chattelization is BETTER than owning slaves. Now that all risk has been transferred to the chattels, THEY take the hit when their capital value falls, not their de facto masters.

      Lesson for the greying Boomers: you’re depreciating fast, such that the value of your mineral content might exceed your productive value.

      1. Bam_Man

        Yes, “Soylent Green” is coming. Just with a catchier name and some slick packaging. Will give new meaning to the term “Aspirational Marketing”.

    3. Roger Bigod

      It wasn’t a bubble, and the claim distracts from his argument. As he mentions, the slave population went up by a factor of 4 in 60 years. If you back that out, the value per slave doesn’t go up like the curve for a bubble. It was possible make a fundamental calculation from the price of cotton, the interest rate, the maintenance costs of a slave and lifetime productivity. The auction prices reflected that calculation.

      IIRC DeLong has an analysis in which the markets were stable for long enough that everything discounted out to an equilibrium. In that analysis, nobody made much money over the value they put in except the consumers of the textiles, who got a windfall in the form of cheaper prices for clothes.

      One analysis I’ve never come across is how much of the value of the slave population was balanced by loans.

  11. jim

    This post is not about the main point of the article, nor is it a comment on the immorality of slavery as it existed then or now. While the civil war was certainly about slavery, and could rightly be called America’s only religious war, I think the interpretation of the graph on the value of slaves could use a little perspective. The value of slaves probably did rise as the graph shows. However, the idea that the “bubble” caused the war is not at all convincing. The rise in slave value seen in the graph may well have been the result of the coming war, rather than the cause of it. Since the founding of the republic there were a number of constitutional crises regarding the slavery question. Slavery came under attack every decade or so, and the South threatened succession and war each time. The fluctuation or spikes seen in slave value in the graph were probably due to external factors like the banning of importing slaves, the restriction of slavery in the territories, the invention of cotton gin, monetary instability, and the threat of war. Slaves were viewed both as a hard asset haven in bad monetary times and as the means of production. The potential political restrictions on acquiring or trading that assest would only increase its value for those holding it. The South has lost control of the country in the years just before the war. Prior to that they elected the Presidents, the Supreme Court, most of Congress, and they controlled the military. Even so, very few people, North or South, thought the war would end slavery in the south, or that slavery would be abolished. Most likely Lincoln was one of the few. In some ways the run up on slave value was probably more like the run on gold today. That is, correlated to economic troubles and war, but not causal. For the record; I think slavery is evil, and that the war to end it was just.

    1. Sufferin' Succotash

      I don’t think anyone is arguing that “the bubble caused the war”, but when two-fifths of a region’s wealth is tied up in slaves it’s safe to assume that slave owners will be prepared to take extreme measures to protect slavery.
      Despite fluctuations the long-term trend in the value of slaves is pretty clear; the downturns coincide with speculative bubbles in land and/or railroads that ended with the Panics of 1819 and 1837.

    2. nonclassical

      as most historians are aware, the Civil War was not fought to free the slaves..
      had more to do with resources-south secession due to resources they controlled…north needed resources for factories.

      Lincoln didn’t come to slavery issue till after 2nd election, concerned with loyalty of mid-states between north and south un-electing him…little woman
      abolitionist met with him after election-his supposed words, “So you’re the woman who has caused all this trouble”…(as his 6’4” towered over her, standing up, behind his desk)

      1. Historicaecon

        The Civil War was over slavery, not for the North but for the South. They seceded because they were worried that Lincoln would make it harder for them to keep their slave property. For the North, at least initially, it was a rebellion. That was enough.

    3. ajax

      Yes, I’m skeptical in part on the correct interpretation
      of “value of slaves”. There was no CPI in 1850’s, and second
      trading internationally in slaves was getting harder and
      harder. Could 1850’s cross-border slave-trade be viewed
      as in part analogous to trade in contraband?

      Then, there’s the Caribbean, Haiti, Dominican Republic, etc.
      But, in Brazil in the Amazon when natural rubber was in
      high demand, (later in 1800’s, early 1900’s ?), native
      Amazonians, while perhaps not slaves, had few meaningful
      human rights under the rubber tree plantation owners, who
      were of European descent. [ situation in flux ca. 1850
      re: slaves internationally ?]

      1. Sufferin' Succotash

        No, there was no CPI in 1860, but there are surviving records of antebellum slave markets which do provide some clear long-term trends in slave prices. In New Orleans, for example, a prime field hand(young make, able-bodied, unskilled)cost $1,000 in 1818, $1,300 in 1837, $1,500 in 1856, and $1,800 in 1860. The same trend occurs in Richmond, Charleston, Louisville and Montgomery. Clearly, slaves were considered more valuable as time went on.

        1. Tim

          $1800 in 1860? What is that today? A million dollars? I had no idea. Based on that I’d have to assume slaves were well taken care of in general. You’d be an idiot owner not to.

  12. John Merryman

    Rebellion without an alternative just feeds the security industry.
    The worm on the hook is that capitalism treats money as a commodity and instills in us the belief that it is private property, rather than a multiparty contract:
    ” If people understand that money is a form of public utility and not actually private property, then they will naturally be far more careful what value they take out of social relations and environmental resources to put in a bank account. This would serve to make people’s own self interest a mechanism to put value back into the community and the environment and allow more organic systems of economic connectivity and reciprocity to grow, as well as reduce the power of large financial and governmental systems over our lives.”

  13. Bill Tozier

    I have to say this also makes me wonder about intellectual property holdings, and the possible complementarities in notional portfolios.

    Suppose we count these more “direct” rents from employees (and contractors) as short-term income, and add in the contractual “ownership” of employees’ (and contractors’) ideas.

    Am I wrong in thinking this accentuates the picture you’re drawing?

  14. Lidia

    Coincidentally, John Michael Greer has been addressing the economic context of the Civil War over at the Archdruid Report:

    It’s really always about extraction. An intriguing aspect that Greer brings up is the extent to which Southern economic activity sustained the UK industrial base.

    Jim, I don’t see that there was much ‘religious’ about the Civil War, except to the extent that religious people can generally be manipulated. The Bible is full of slavery. Jesus never said a word against the enterprise.

    Slaves, obey your earthly masters with deep respect and fear. Serve them sincerely as you would serve Christ. (Ephesians 6:5 NLT)

    Christians who are slaves should give their masters full respect so that the name of God and his teaching will not be shamed. If your master is a Christian, that is no excuse for being disrespectful. You should work all the harder because you are helping another believer by your efforts. Teach these truths, Timothy, and encourage everyone to obey them. (1 Timothy 6:1-2 NLT)

    Slavery apparently only became a bad thing in America when a.) practiced by one’s competitors and b.) new fossil-fuel resources coming onto the market alleviated the “need” for menial slave labor.

    There’s also to consider that slavery without expansion was becoming unprofitable. Sure, the Southern capitalists had their “human resources” quadruple, BUT they were facing soil depletion. They needed to quadruple their extraction rate from the earth to feed the “riches” in their “vault”.

    1. F. Beard

      Jesus never said a word against the enterprise. Lidia

      Jesus came to set us free from sin, a far more serious form of slavery:

      As He spoke these things, many came to believe in Him. So Jesus was saying to those Jews who had believed Him, “If you continue in My word, then you are truly disciples of Mine; and you will know the truth, and the truth will make you free.” They answered Him, “We are Abraham’s descendants and have never yet been enslaved to anyone; how is it that You say, ‘You will become free’?”

      Jesus answered them, “Truly, truly, I say to you, everyone who commits sin is the slave of sin. The slave does not remain in the house forever; the son does remain forever. So if the Son makes you free, you will be free indeed. John 8:30-36 New American Standard Bible (NASB)

      Jesus came to change us from slaves to sons.

      Also, it was Christians who were the driving force behind the abolition of slavery.

      The Bible is a subtle Book; a passing acquaintance is not sufficient.

      1. ajax

        Respectfully, Mr. Beard, “Son” is capitalized in the
        passage: “So if the Son makes you free, you will be free indeed.” (John 8:30-36 ).

        So it seems Jesus was referring to himself there as the one
        who had the capability of “making free”. And I’m wondering
        if the freedom might be the freedom gained in the
        “Kingdom of the Heavenly Father”, presumably in the afterlife or after the Apocalypse …

        Also, there’s the question of “freedom for whom?”.
        Maybe Jesus addressed that; I’m no expert on the
        New Testament, or the gospels.

        1. F. Beard

          And I’m wondering if the freedom might be the freedom gained in the “Kingdom of the Heavenly Father”, presumably in the afterlife or after the Apocalypse … ajax

          The “freedom” is freedom from the power of sin and eventually freedom from the presence of sin.

          But my point is that Jesus is very much concerned about freedom. But there are priorities.

        2. sunny129

          All these quotes ‘ supposedly’ from Bible(s) intrigues me because the first gospel was written 30 years AFTER the death of Christ. Koran was written 100 years AFTER the death of Mohamad, although it is ‘suppose’ to be words of God given to prophet!

          Prior to 2003 before Dubya invaded Iraq, he made his Ministry of Truth brainwashed the at least the majority ( over 55%!) that there were WMDs as an execuse! S.Palin thought Saddam was responsible for 9/11! This is in the age of internet-information age!

          Now, imagine centuries ago how the ‘truth’ was massaged to fit the covenience of the ‘masters’ be they be king or high priests!

          1. F. Beard

            Now, imagine centuries ago how the ‘truth’ was massaged to fit the covenience of the ‘masters’ be they be king or high priests! sunny129

            One can imagine anything. However, the Bible says this:

            “Indeed this city has been to Me a provocation of My anger and My wrath from the day that they built it, even to this day, so that it should be removed from before My face, because of all the evil of the sons of Israel and the sons of Judah which they have done to provoke Me to anger—they, their kings, their leaders, their priests, their prophets, the men of Judah and the inhabitants of Jerusalem. They have turned their back to Me and not their face; though I taught them, teaching again and again, they would not listen and receive instruction. Jeremiah 32:31-33 New American Standard Bible (NASB) [bold added]

            Does that sound like self-serving propaganda to you or the words of a genuine prophet?

            Jerimiah btw, was put in a deep well for his unpopular message.

          2. Lidia

            FB, If Jeremiah lived in my town, I would heartily support putting him in a deep well.

            Any being who glosses over slavery and torture in the here and now, as an excuse to cultivate souls for a less-tortured hereafter, is more complicit, in my opinion, than those who would enslave people directly for obvious and straight-forward gain.

            Who is worse, Fox News, who obviously seeks to exploit? Or NPR, who collegially co-opts with supposed good intention?

            Who is worse, speculators in grain, or speculators in souls like Franklin Graham, bringing religious tracts and plastic trinkets to the starving??

      2. Lidia

        Beard, I don’t find the Bible to be at all subtle.

        The Jesus character is said to have stated, more than once, that he who would follow him must not only abandon their family but sell all that they have and give the proceeds to the poor.

        I don’t take anyone to be a serious “christian” who has not followed this, Christ’s, commandment.

        Lots of religious folks try to “subtle” their way out of this, honey. I feel bad for the minority of Catholic nuns and priests who take this teaching to heart — suckers!– because the bulk of the Christian®™ Enterprise works tirelessly against that philosophy of voluntary poverty.

        1. F. Beard

          I don’t find the Bible to be at all subtle. Lidia

          The subtlety is to be found, for example, in reconciling apparently contradictory passages.

          I feel bad for the minority of Catholic nuns and priests who take this teaching to heart — suckers!– Lidia

          The problem with Roman Catholics is they think the RCC has authority over the Bible. Thus they become enslaved to man-made doctrines.

          1. Lidia

            Yes, the RCC is horrific, but you seem to want to extinguish even its few low lights.

            Better that we all put our shoulder to the Protestant extraction wheel? Proclaim the Prosperity Gospel?

            Religion is created for those who cannot think for themselves. “Atheism” is denying 1001 gods rather than 1000.

            There will be no Salvation, no Apocalypse (lifting of the veil) except that which we enact ourselves to reveal the corruption and manipulation behind all religions, including the religion of the free market, the religion of schooling, the religion of high-technology, and so forth.

            The world will grind on, with more of us (unlikely) or fewer of us, impervious to human elaboration of tapestries of religious import. More have been extinguished than have survived, and christianity is merely another one of the gaggle.

            Its current pre-eminence is astutely explained in the excellent work “The God Virus”, by Darrel Ray:


            Both Catholic and Protestant denominations are desperate to conquer new “souls” particularly in Africa, with the sad result of over-population, succumbing to AIDS via anti-condom teachings, and anti-gay hysteria to the extent of gay extermination via the death penalty for the “crime” of homosexuality (such penalties supported by the American multi-millionaire mega-churches like that of Rick Warren).

          2. F. Beard

            Better that we all put our shoulder to the Protestant extraction wheel? Lidia

            Via usury and the Protestant Work Ethic?

            I’ve covered usury enough but the following refutes the PWE:

            One hand full of rest is better than two fists full of labor and striving after wind. Ecclesiastes 4:6

          3. Pete

            Beard, you don’t need an old book of fables and declarations to justify human empathy.The moral zeitgiest is a slow moving iceberg but we’re doing just fine without dated parables (often used to keep the sheeple in control). A quick glance at the contrast between perpetual growth and a finite planet/resources is all the logic we need to make a shift in the collective consiousness of “economics….”

  15. Planck

    I am curious about this remark: “…focus of policy, to one where rising consumer debt levels and asset appreciation were used to substitute for stagnant incomes.”

    Just who owns the real assets in this country that appreciated? Was the policy really about “substituting for stagnant incomes”, or appreciating assets for the 1% who actually own most of them?

    Of course, we can be sold on the lie that is was to “substitute for stagnant incomes”! Yves, please consider an alternative explanation to the Standard Party Line and Explanation for Everything! See it both ways and then ask yourself “Qui Bene?”

    The truth is the Ruling Elite of this country are protecting their assets too. SCOTUS allows them to do it on our backs using a wide range of mechanisms including FEC 1974, Buckley vs Valeo, and now Citizens’ United.

    They use money expansion from the banks they also own in their vast portfolios of holdings to do it!

    Then, they bring on a contraction to starve everybody else of cash so they can go in for the jugular! They’ll grab the last round of valuable assets in this country.

    The same game is being set up for the first rounds against the smaller of the first rich Chinese businessmen, after 2 decades of hard work. Watch there for the same game that happened here over the last century.

    1. Containment

      Makes me glad they shitcanned the Constitution, since domestic law is now a weapon of the state against its population. This state is now losing sovereignty along with domestic legitimacy. As people here realize that the state is out of control, they will have to turn to the outside world, like Palestinians did, and black South Africans did, and Jews did in the Soviet Union when their states went off the rails. Everything depends on Putin and Hu Jintao outsmarting the US predator state until it’s weak enough to impose human rights and humanitarian law. So far so good.

      1. nonclassical

        ..always said bushit was all about turning U.S. into Israel…none would have suspected more of same from bushbama..

      2. Planck

        Weapon of whom against the Population? How can you just say “State” without acknowledging what FEC 1974 did to this State? And, this Constitution?

        And just who does “finance”, “lawyers”, and “real estate” work for?

        We should be careful of easily baited fetishes to take us off track from the real problem. Look at how the “bourgeoisie” side tracked Marx and all his Marxists? Buckley vs Valeo shortly after FEC was all about baiting…

      3. different clue

        As if Putin or Hu Jintao wish to upgrade the human rights situation in America. Maybe Europeans and others can help upgrade the human rights situation in America before Putin can help Hu Jintao work with America’s own superrich to turn America into a total corn/soy/wheat/coal colony for

    2. Mel

      A month or two ago Robert Reich observed that as much as the elite hated paying taxes, they loved funding government on credit by buying bonds. It isn’t just the government. The War on Payroll, in the three decades up to 2008, destroyed a huge proportion of the wage and pension income of the consumer class. The difference was made up with credit. Credit cards supplied spending power, perhaps up to $10,000 per consumer, but the way to inject really large amounts, in the hundreds of thousands of dollars per consumer, was by leveraging home equity. This money kept spenders spending, sellers selling, and even (in construction, for example) workers working.

      The miracle of credit, of course, was that after the consumers had spent the money, they would pay it all back. Your P&L doesn’t get that lovely bump when you pay wages.

      People are starting to doubt now. They think that the “pay it all back” thing might not happen. Whocoodanode?

      1. Planck

        They love issuing bonds. US Treasury bonds are the biggest source of money still in circulation in this country. They are also the biggest source of proprietary trading account trading profits on Wall St. They are the backbone of every derivative trade that needs a “risk free” rate in its pricing formula.

        Those T Bills are the backbone of the Plutocracy’s wealth here. Of $21T in circulation, $14T got there through outstanding Treasury Debt.

        And, to top it all off. FEC 1974 means they get to direct that borrowed Treasury Money into their own businesses! Pete Peterson will never say that at his conferences about gutting Social Security. Nor will Columbia University Grad students at Teachers’ College paid by him to “educate” American school children about financial responsibility.

        Only Social Security and Medicare have to get cut, but not anything else when anything else is their businesses. They took $5T in FICA taxes in exchange for their bogus non-marketeable Treasury Bills, and now they don’t want to redeem them!

        They have to keep buying. They know the house of cards. Don’t worry. They get plenty of dividends and capital gains profits out of the country into property denominated in other currencies!

  16. F. Beard

    Mark Ames’ post discusses the institutionalization of a regressive policy, that of trying to eke more corporate growth out of extracting more and more out of workers rather than sharing the benefits of productivity gains with them. Yves Smith [bold added]

    Doesn’t this go back to the government backed/enforced usury for counterfeit money cartel, the banking system? Otherwise companies would have to either:

    1) Pay honest interest rates for their employees’ savings.
    2) Share equity with them.

    The solution is clear when considered from a moral viewpoint:

    1) Abolish the counterfeiting cartel.
    2) Bailout the entire population, including non-debtors, equally from all debt to it.

    1. Danny

      I cant believe I am even replyibg to this, but god…

      You are prposing we do as we did with banks and bail everyone out?

      How the hell is this morally correct when you yourself got yourself in debt.

      And you call this morally correct?

      You are also not considering the hyperinflationary collapse this will create. Ignorance is no excuse for being a charlattan.

      1. F. Beard

        I cant believe I am even replyibg to this, but god… Danny

        Professor Steve Keen also proposes a universal bailout. Scroll down to “A Modern Jubilee” at id intewrested.

        You are prposing we do as we did with banks and bail everyone out? Danny

        A bailout of everyone would have fixed everyone, including non-debtors, from the bottom up.

        How the hell is this morally correct when you yourself got yourself in debt. Danny

        Because people had no real choice but to borrow from the counterfeiting cartel. The alternative was to be forever priced out of the market by those who did borrow.

        And you call this morally correct? Danny

        Economically correct too.

        You are also not considering the hyperinflationary collapse this will create. Danny

        The bailout should be combined with a ban on further credit creation and metered to just replace existing credit as it is paid off. Since the total money supply (reserves + credit) would not change then neither price deflation nor price inflation should be expected.

        Ignorance is no excuse for being a charlattan. Danny

        Aren’t you the new one here?

      2. liberal

        “How the hell is this morally correct when you yourself got yourself in debt.”

        Without commenting on Beard’s proposed bailout, the fact is that some kind of mass bailout is ultimately unavoidable, in the sense that much of the debt cannot possibly be repaid.

        I don’t personally like it, being a big saver myself. But if the choice is a binary one between some kind of mass restructuring, which will cost people like me some of their wealth, versus complete economic collapse, I’ll go with the former.

        1. F. Beard

          I don’t personally like it, being a big saver myself. liberal

          Savers would receive an equal amount too.

          1. Danny

            Beard you send me off to learn, yet you fail to see the issues with bailing everyone out. Most of the population has amassed huge debt levels, including gov. Do you not see how releaving that debt will only open the irresponsible to put spending on a higher gear? who will stop Obama from borrowing another 15 trillion?

            BTW your proposal seems at fair value, buthow do you account for all diff sorts of dwbt levels?

            I am not against debt, I am against debt that the gov sells the people as ‘free’ money. Would you pay for social programs if your taxes doubed, or a war if the trippled?

            We know full well what thw issues are, the people on this board chose to look the other way and lie to everyone else in their faces.

            God said, you will earn with the sweat from your forehead. This comes from a poor person that grew up getting his hands dirty in a farm.

            All we need is damn personal responsibility starting with the people in dc.

          2. F. Beard

            God said, you will earn with the sweat from your forehead. Danny

            The Lord also forbids usury from one’s fellow countrymen (Deuteronomy 23:19-20) and condemns theft by counterfeiting yet our money system is based on both!

            The Lord also commands just restitution for theft.

          3. Danny

            It does and I have stated this clearly on my posts.

            My solution is to end this, you propose to expand it. How will renters benfit vs home debtors under your system?

            The people on this board hide under pretty sophisticated words from marx, yet run around in circles when faced with the trth. Everyone cannot be rich. Everyone cannot, I and dare say god will support this, why should a hard working man support a lazy one.

            Lets start taking responsibility here and stop making excuses for not wanting to pay the debt you, yes you, accumulated, the debt we allowed our gov to accumulate. Not only that, we want more debt, bailout everyone. That sure will make these bums more responsible.

            This goes to everyone on the board. Enough….

          4. F. Beard

            My solution is to end this, you propose to expand it. Danny

            What part of “1) Abolish the counterfeiting cartel” don’t you get?

            How will renters benfit vs home debtors under your system? Danny

            They’ll have cash in the bank.

          5. F. Beard

            Not only that, we want more debt, bailout everyone Danny

            No. The bailout would be financed with new fiat – pure money printing – aka “Greenbacks”.

          6. Danny

            That plan worked really well in zimbabwe.

            Your plan is like allowing a serial killer to kill someone. It’s ok as long as you dont do it again. The day our gov such a plan, our state will collapse within days. Irresponsible Marxists like yourlves will do what you do best, blame some or something else.

            you agreed that money comes from labor, yet you sti defend a glbal bailout. Where does the money come from?

            Why would a coporation in their right mind do business in a country of charlatttan that can wipe away your income overnigjt?

          7. F. Beard

            Where does the money come from? Danny

            97% of our money supply is credit. A ban on further credit creation plus a universal and properly metered bailout would replace that credit with genuine fiat in a non-inflationary manner AND prevent the problem from reoccurring.

          8. F. Beard

            Why would a coporation in their right mind do business in a country of charlatttan that can wipe away your income overnigjt? Danny

            1) A universal bailout would prevent incomes from shrinking except in the case of loan prepayment.

            2) When the US learns to practice genuine capitalism, the true cost of doing business here should shrink.

            3) I suggest you get a spell checker.

        2. Danny

          Ahhh isnt it easy to run around in circles. We know the solution. Stop spending what you dont have, cut expenses live within your means.

          End the fed, fractional reserve. Stop EVERY SINGLE DAMN BAILOUT. Restore the only thing that can fix our system. TRUST. Bailing out banks has only created a pack of lazy irresponsible chatlattans that are killing that trust.

          That goes to the rich, irresponsible bankers, unions, and the occupy free loaders. You are all the same in my book.

          1. Pete

            The root problem is interest bearing debt based money. It requires perpetual “growth” on a finite planet. Frederick Soddy properly compared our monetary system to a perpetual m
            otion scheme.


            What happens when an unstoppable force (more debt chasing interest bearing debt-based money) collides with an immovable object (physical limitations of a finite planet)?


          2. F. Beard

            What happens when an unstoppable force (more debt chasing interest bearing debt-based money) collides with an immovable object (physical limitations of a finite planet)? Pete

            Excellent question.

            That’s one reason for the use of common stock as private money; growth is allowed but not required.

          3. Lidia

            Danny, the real solution is abolishing interest-based money. But that is so far from happening that we will suffer a total collapse before anyone is taken seriously who proposes it.

        3. Heff

          The awakening of Liz Warren included her discovery that people were simply surviving by ending up in unmanagable debt.
          The modern fairytale is that Liz set up to crucify and hold aloft the immorality of credit card users. (Even though consumer activists and bankers had long know that extending predation was guranteed revenue.) She then discovered, after careful academic review, that the guy who lives paycheck to paycheck, who gets a flat tire and breaks his arm, will go into debt, then Capital One (for example) will race in, get a judgement and really start makin’ money.

          1. Liu Bing

            Yeah, but unfortunately her awakening doesn’t extend to AIPAC (the key arm of the Israel lobby).

            from an article at exiledonline: “The national security/foreign policy position page on Warren’s campaign website reads as though it was cobbled together from AIPAC memos and the website of the Israeli Foreign Ministry by the Democratic Party hacks who are advising her.”

            “Warren repeats…..that the United States must reject any Palestinian plans to pursue statehood outside of negotiations with Israel. [she]… says the US “cannot dictate the terms” to Israel. Warren goes on to describe Iran as “a significant threat to the United States,” echoing a key talking point of fear-mongering pro-war forces….”


          2. Eargun

            And the Progressive Democrats of America use Medea Benjamin and Ray McGovern as bait to get well-meaning antiwar people to vote for a cuddly Blut-und-Boden Zionazi tante like Warren. The Democrats exist to absorb and dissipate real dissent.

          3. ajax

            I read/heard some of what journalist Ruth Gruber had to
            say about the voyage of the “Exodus 1947” ship in 1947.
            According to Ruth Gruber (I think), post-WWII conditions
            in camps for Jews saved from the Nazi camps were “pretty bad”. There was even the story of people telling Jews
            going home in Europe being told: “What, you again?”.

            I’m not defending Israeli policy of today. Rather, I’m relating what I read/heard on the Jewish experience post-WWII
            for European Jews, up to about the foundation of Israel.

          4. Zero state solution

            Yeah, when the Palestinians achieve dignity and self-determination, let’s hope they have somebody good to kick around while they’re getting over being called drugged cockroaches in a bottle (in General Eitan’s bon mot.)

            But you know, the cycle of victimization might just stop here, because those wacky Zionists accidentally sterilized the whole country when they carpetbombed Gaza and Lebanon with depleted uranium. Everybody’s shootin blanks now. They’re all going extinct together.



          5. Jonus

            As Liu Bing eludes to, Israel demands that Palestinians only path to self determination and a state of their own is through Israels approval. Imagine that! Imagine Syria or Egypt or any of the other countries in the region telling the Jews in 1947 that their only path to a Jewish state was through their approval only. Oooops, they tried and what did the Jews do? They fought a dirty little war. Hmmmm…

  17. Birch

    I read recently that the original Roman (as in pre-Marx) meaning of ‘proletariat’ was essentailly ‘proliferating class’. As in: what they do is procreate lots to maintain a plentiful, cheap labour force and bodies for a standing army.

    I can’t find that definition explicitly in on-line dictionaries (which have the modern Marx meaning), but I got it from Herman Daly in an essay on overpopulation.

    1. Travis

      Marx’s use of the word prol does not differ that much from the roman meaning. Add to it his notio of the “reserve army of labour” and the two uses of the word prol are nearly the same.

    2. Lidia

      All I can say is that, in Italian, the word “prole” is commonly and currently used to mean “children”.

      At least, my husband uses it a lot. It translates more to “brood” or “offspring” than to the more tender and familial “children” (bambini).

      1. Maju

        Yes, the word proletarian means “a man whose only wealth is his offspring, or whose sole service to the state is as father” (Wikitionary). I really don’t like it, being way too patriarchal, and instead use the term “working class”.

        1. Lidia

          Depends on what you want to imply…

          My husband’s family (a family not unique in the world) seems to place a premium on procreation, whether said procreation is -at base- fortuitous or less fortuitous.

      2. Lidia

        To give you an idea, my husband will say, “my sister and her prole”, meaning ‘offspring’ in the crudest of senses. However spoiled we have been, the subsequent generation is doubly spoiled, and the love/hate/contempt of the reigning classes for their “prole” is generally palpable here in Italy.

        We are talking about a society in which the sons and grandsons of the pharmacist become pharmacists, the son and grandsons of the lawyers or notaries or doctors become lawyers, notaries, and doctors. There’s a dependancy, a destiny, and a conflict waiting to express itself, if it ever does so.

        “Prole” is destiny.

        “Prole” is a condemnation, a sentence.

        In the best of cases, “prole” is a benediction.

  18. Norman

    F.Beard has the one ontelligent answer, the alternative being all out war and most likely destruction of some percentage of the infrastructure, though that may not be a bad thing, as long as the infrastructure is in need of destruction anyway. Consider that in the past, it took decades of repression before there was rebellion. How long has it been since there was one here? The despots, especially the ones that the U.S. supports, last how long? And how long has this regime in this country been going? Over 30 years now, so by todays standards, it too should fall by the end of this decade, if not before. The unknown factor, is just when, though as with the Occupy, the War Veterans are a big ???? I don’t think there is any doubt whose side they will be on, as well as their numbers are more than enough to augment any action taken. Face it, they have been treated as throw aways by the very Government that turned them into what they are today. They march to a different tune.

    1. Eclair

      “What slaves lacked was freedom; they were unable to act on their own behalf as free agents. That’s what I don’t get about all this “evil capitalist” socialist drivel. When a motivated American doesn’t like his circumstances, he acts on his own behalf, and changes them… that is, unless you buy the leftist lie that others are secretly controlling you. I, and everyone I have ever worked with, have never, ever failed to take reasonable action to improve our own situation, whether it’s telling the boss to back off, asking for a raise, finding a new job, getting job training, or free-lancing when the market presents an opportunity.”

      Fortunate you, Stuart, to have, most likely, never worked picking our food in California’s hot and dusty Central Valley. Or put in hours on the phone in a customer service center, caught between angry customers and supervisors demanding that you make your metrics.

      I will grant you that we are “free” to ditch our gig at McDonalds and boogey on over to Taco Hell or Arbey’s.

  19. Stuart

    The author is missing a couple of key points.

    In truth, the increasing value of the slave market in the old south was the result of the energized cotton industry. As we all learned in grade school, the cotton gin, and other agricultural technologies, were revolutionizing the culture of America. Along the Atlantic Seaboard, older tobacco, sugar, and rice plantations were being liquidated, and vast swaths of plantable land further south along the Mississippi were being snatched up and thrown into production. The deep south, along the Gulf and the Mississippi were the Silicon Valley of their day. Planters were buying up slaves by the wagon load.
    I disagree with the idea that the slave market was driving its own bubble. There were very distinct, very local drivers to slave values; thus, I think the parallel that today’s labor market is simply a transplanted version of the feudal land baron system (or old south plantations) is inaccurate.
    What slaves lacked was freedom; they were unable to act on their own behalf as free agents. That’s what I don’t get about all this “evil capitalist” socialist drivel. When a motivated American doesn’t like his circumstances, he acts on his own behalf, and changes them… that is, unless you buy the leftist lie that others are secretly controlling you. I, and everyone I have ever worked with, have never, ever failed to take reasonable action to improve our own situation, whether it’s telling the boss to back off, asking for a raise, finding a new job, getting job training, or free-lancing when the market presents an opportunity. The whole point of our life system is be able to offer value to others; as producers, we enjoy competing with one another to find the best fit for creating our place in the world. Most of us want and enjoy being measured in terms of the profitability we’re offering to the organizations with which we align ourselves. We’re not supposed to be gerbils. We’re supposed to discriminate in our own best interests, justly regulated by the rule of the law of the land.
    I also find it dangerous that many look incompletely at data and jump to conclusions, such as, “the value of slaves in the old south can be charted on a curve thusly, which means I can now conclusively state that the motives of people who lived back then were xyz…” That’s as bigoted as me saying,
    “since slaves were willing to be slaves, obviously they enjoyed being slaves.” Personally, the more I read “educated” opinions, the more I see these irrational leaps of logic, which are in truth, dangerously close to the same leaps of logic made by the KKK (ie: “whites good, blacks bad”)in the depths of the Jim Crow years.
    Be careful in your assumptions, and do your own homework.

    1. Mommy Warbucks

      I notice the one thing you didn’t mention doing is organizing with your super-duper free co-workers. Not quite free enough to do that, are ya? Never heard of the core ILO conventions, I bet. So much for your free association rights. I’m the capitalist here, so thanks for defending me. You’re my favorite kind of hireling, isolated, alone – fungible, as we say, tongue in cheek. Salt of the earth. Now shut up and get to work.

    2. Karl Rove's Brain

      Stuart, did you really post that off-the-charts false equivalency I think you posted?

      Yep, you did. You really think it’s “as bigoted” to draw conclusions about the very wealthiest white slave owners from data on the value of their slaves provided by university professors–as it is for you to say “slaves liked being slaves.” Drawing conclusions about slave owners is “as bigoted as” demeaning the humanity of the slaves they owned, brutalized, raped and ruined as subhuman property. Those two bigotries are really equal in your mind? Yeah, those poor white slave oligarchs, the hell they’ve suffered from people drawing conclusions about their wealth–you really got to pity them.


      Since you’re on a roll, let’s guess your next false-equivalency: Drawing conclusions about Nazi corporations that profited from Jewish death camp labor–from what you deem insufficient data about the profit value of that Jewish death camp labor– is “as bigoted as” (your words) saying that the Jews “brought the Holocaust on themselves.” Heck, I’m just thinking outside the box here–the sanity box that is.

      You know what? You’re on to something with this Stuart. You should really run with this bigotry-equivalency thing, expand on it, and make sure you sign your name to it. Yeah, you don’t want someone else to steal it, that’s how brilliant it is. So go live with it, and make sure you put your real name on it. You’ve got a future in this. “Stuart.”

    3. Tired

      It is also dangerous to generalize from one’s particular experience. People, as free agents, can choose from set of options that are provided to them according to their own circumstances, which considerably limits their freedom to improve their own condition, not to mention the role of luck when choices are being persued. The illusion of freedom of choice plus what is fashionably called rational agency is the root of all evil. The economic platform is created by society, there is no personal created value without organized society and social structure therefore all participants have the right for it’s economic fruits. If the discussion is whether people who work harder deserve larger piece of the pie is a different subject, but in no way we can bluntly ignore the fact that there are people, and seems like the vast majority, who do not have access to and cannot improve their economic situation.

      The question we should all ask ourselves is whether we want to live by the rules of the jungle, everyone to and for himself, or do we want to creat a reality which is above the necessities of nature as much as it is feasable.

      1. Lidia

        I have a decent patrimony, yet I would never consider myself to have free agency.

        You have absolutely no idea of the obstacles to individual movement or to the movement of even modest amounts of capital.

        If one wants to emigrate to Canada, for example, one can do so with, roughly, an “investment” of something like $800k USD. If you don’t have that capital on hand, it doesn’t matter whether you are Mother Teresa: go pound sand.

        It’s basically a bribe, and they would be more honest in saying so outright.

  20. jcdoubleu

    This cutting edge research is nothing more that Marx’s labor theory of value. What McKinsey argues is that “absolute surplus” (surplus value generated from the exploitation of labor) is a more robust predictor of success than “relative surplus” (value generated through temporary competitive advantages over other firms, i.e. technological innovation and increased productivity, whose marginal advantage tends to diminish over time as other firms adopt these same strategies).

    The 1% seems to have re-invented Marxian theory in order to maximize its hold over the 99%. Would that the 99% didn’t automatically equate the word “Marx” with the idea of Soviet authoritarianism whose logic necessarily leads to the gulags.

    1. Planck

      Reinvented Marxian theory? Marx was observing Plutocrat 1%ers of yore in action. His theories are based on what he observed in the industrial slums of European cities and towns. They are simply doing exactly what they have always done to make money. Capitalism, industrial or agricultural, exploiting powerless labor and inestimable nature came first. Marx observed it second.

  21. Klassy!

    The truly sad fact is that his idea has not only been sold to the capitalists, but many workers have bought into it too.

  22. LAS

    I think you are on to something, Yves.
    There’s no indication of improvement either.

    For an example, our firm completed work for a major corporation last month (successfully) and they will not accept the invoice for our work. While we have had to lay out cash to perform the work, they have not. Although they came to us to do the work for them, they have shut down their procurement/accounts payable dept and they have kept it shut for about 2 months now. This is a major international corporation and I believe they are treating other suppliers like this, trying to make their Q1 performance look better than it is.

    I consider this to be theft of service. Until they re-open their procurement/accounts payable system, they are in effect refusing to acknowledge that they owe anything.

    1. Mel

      (Robert Reich wrote another post mentioning the “destruction of meaning”. Why can’t I find these things when I want references?)

      Wait till you see their next move. They’re going to run Accounts Payable as a Profit Center. Because they can.

      1. Lidia

        Is (isn’t) that how banks work?

        As a small business person, I was shocked at the practices OF MY DEBTORS that pretended to keep me on the skids.

        I was expected to be THEIR BANK, me! Someone who pulled in $50k, was fronting money to Siemans, Bard Medical and even larger, more obscure, companies whose names I now forget.


    2. Planck

      We saw this recently too…major corporations who don’t think they have to pay suppliers. Also, procurement officers who want 5% off the top of everything to justify their measily paper pushing jobs for profits that roll up to some Family Office somewhere.

  23. Jim

    This is a popular cultural meme now. Except it is incorrect.

    Since the ’70s, education, inflation, SS, employer paid health care have all crowded out wage increases. That is where the money is going; into the deep pit of government run industries that by their nature do not have a price mechanism and therefore do not experience deflation over time.

    Read those research papers that show the wage line; they overwhelmingly do not satisfactorily measure benefits. I have been a manager since the ’80s; and I can tell you that wage increases were often foregone when benefits jumping at double digits ate up all the increases.

    1. alex

      “health care … where the money is going; into the deep pit of government run industries”

      Oddly, where health care is run by the government to a greater extent than it is in the US, costs are lower. Sounds like those evil socialists get a better bargain than we do.

    2. Hugh

      Almost everything about your statement is wrong. The chart at the top of this post is tracking real, not nominal, wages so inflation has already been factored in. Taxes for Social Security and Medicare would produce a small fixed increase. In reality, these have been more than compensated for by declining corporate tax rates. I have no idea what you mean by education or how it relates to a company cost. Rising health care costs would show up primarily as a decline in productivity but this is not what the graph shows.

      Nor does anything you say account for the massive transfer in wealth upward during this period of flat real wages, resulting in the extreme wealth inequality we see today.

    3. Lidia

      Jim, what it seems that you have yet to process (and you are not alone among NC commenters) is that an increase in “double digits” does not actually correspond to an actual increase in wealth/services/resources.

      This is the paradox we confront when we confront the interest-based money system.

    4. Planck

      Where is the money going? By “money” do you mean profits? They are two separate things.

      The profits are going into dividends and capital gains paid to Family Offices who own and control the corporations. Here are some charts that show this relationship.

      The money stays in circulation as long as the original loan promissary note that created it remains unpaid. Once it’s repaid, that money goes out of the money supply. Money in circulation has nothing to do with corporate profits.

  24. greg

    F Beard at March 23, 9:32AM: “Because people had no real choice but to borrow from the counterfeiting cartel. The alternative was to be forever priced out of the market by those who did borrow.”

    Danny, It’s worse than this. There is more money owed than there is money to pay it back.

    For instance, when banks put the squeeze on credit, companies go belly up. How long can you remain debt free, or pay your mortgage, without a job? Even if you are a net lender, what if the persons who owe you money can’t pay you. What do you say to the persons you owe to?

    The government going into debt is, under the present system, helping to sustain your lifestyle and keep the economy running. It can’t be maintained, of course, but any effort to balance the budget will result in massive economic contraction, and a huge increase in the accumulation of private debt. That is how far out of whack the system has become in a few years. And then our ‘moral superiors’ will comein and strip the remainder of our assets.

    See also: “Money as Debt II”

    Particularly the section about 35 minutes in.

    You go on about morality, I suggest you examine the morality of rentier capitalism, as it has become to be practiced. Most people are virtuous and hard working, but they are being ‘morally’ screwed.

    1. White Heritage Foundation

      So we cut budgets as you imply, allow more people to lose their jobs and their homes? Austerity for the lazy and less than virtuous? Go Paul Ryan! USA USA!

      1. greg

        White Heritage Foundation says:
        March 23, 2012 at 1:06 pm, in reply to greg:

        “So we cut budgets as you imply, allow more people to lose their jobs and their homes? Austerity for the lazy and les than virtuous? Go Paul Ryan! USA USA!”

        Didn’t check my links, did you? Or even read me very well. My fault perhaps.

        Given the current system of money as debt, (See:,) the government is forced to run up a debt to keep the economy afloat, because if it didn’t, most of us would all be forced to run up debt privately, first to maintain our life styles and then even just to get by, and be screwed. So if the government decides to cut the deficit, we will be screwed. Just like is happening in Greece.

        Forgive all, start fresh, with a new money issued by the government, not the banks. The banks would first have to have the money to lend it.

        The present system of money as debt cannot maintain itself, and will eventually fail. Check the video.

      1. F. Beard

        Actually, that video is freaking AWESOME! I don’t know what the recommended solution will be but the diagnosis is EXCELLENT.

    2. Lidia

      This is the issue of debt-money.

      From day One, there is always more money owed than the capacity to pay back.


  25. mike

    Good Article, I’m glad you said it. I can’t stand these cut-throat business types who seek out every sneaky ways to turn a profit.
    This really hits home now because I’ve been fighting with my partner over the past few months about business ethics, and it’s causing our company disolution.
    I have a “share the wealth” mentality, and he has a “take all you can get at any cost” mentality.

    Now I’m starting a new company, built on a revenue sharing model.

  26. MacCruiskeen

    “To compare “the 99 percent” to African slaves would be crude; but the mindset of “the 1 percent” then, as now, is eerily consistent. ”

    It would be crude. I also think less consistent. I think that you should look even earlier in the history of slavery, back to the beginning of the African slave trade in the Americas, in the sugar plantations of the Caribbean. The original workers of the sugar plantations were indentured servants, often Europeans. The indentured servant worked strictly to pay off their debt, in a term of five years, which the plantation owner would find excuses to extend. But the indentured were not great in the field; the plantation owners found that the slaves tolerated the conditions better and they could get more years of service out of the slaves. So they gave up on the indentured. Nowadays we are merely playing the role of the indentured servants; the slaves are in China.

  27. B.A.

    From the 1% view, this is a strong argument for robotics… Which is happening more & more in manufacturing.

    No labor cost… Only utilities, maintenance & programming.

    Which is what we will see.

    1. Jonus

      Yes but without some form of transfer of wealth from the robot owners to the unproductive humans, who’s gonna be able to buy the things the robots make? They rich think they can create more wool with less sheeple and that may be true. but who’s gonna buy that wool?

    2. Kunst

      Robotics, automation in general, is a lot of why we have the 1%/99% so much more than a few decades ago. This is a supply and demand situation. As technology-based productivity increases, we need fewer people to get the work done, and we especially need fewer low-skilled workers who used to tighten bolts and such. Last but not least, there are 4 billion more people on this planet than there were 50 years ago. Think that might have anything to do with the capital-labor imbalances that have built up. What do you think would happen if a disease were to come along and take out 10%, 20%, or maybe more of the world population?

    3. Maju

      But who designed and built and maintained those robots? The 1% only (or mostly only) hires people to do their bid: they are a parasitic caste.

      1. Kunst

        Actually, and this is important, the 1% don’t design and build the robots and other software that automates human jobs out of existence. That is done by the 10%. I know, I was one of them. The 1% make decisions, but it’s the 10% that carry them out and make them happen. The 10% are mostly smart people in skilled professions — I was a software developer for 40 years. You can include the lawyers, accountants, middle managers, and HR folks. In the same way that a tyrant like Mubarak or Al-Assad can’t control a country all by themselves, the 1% hire the next 9% or whatever to carry out their vision. Farther down, they employ a portion of the 90% as police, military, and prison guards to prevent opposition. It’s all driven by money.

        1. Maju

          “You can include the lawyers, accountants, middle managers, and HR folks”.

          How do these people have anything to do with building or maintaining robots. I was thinking of welders, programmers, mechanics, cleaners, engineers, etc. People who do something other than paperwork.

          Bureaucracy may be a necessary evil (???) but it’s still technically unproductive and tends to become parasitic also. And what you describe in that sentence is nothing but private sector’s bureaucrats.

  28. Schofield

    Hmmm…. now we have the Live-Stock Movement wanting to become the Country-Stock Party. I like it.

  29. Jonus

    Of course, now that the housing market has reached bottom, these greedy ass bastards want to try to swipe the houses out from under the vulnerable. Where was this plan 4 years ago when it was needed?

    1. Lidia

      The housing market has not reached bottom. At best it has reached, roughly, a halfway point to the nadir, imo, in the best of circumstances.

      1. Gil Gamesh

        The bottom is bottomless. Suburbia is dead, dead, dead. And private capital will not invest in rehabbing most urban stock. Our debt constrained, underemployed children, trained for a world that is literally vanishing, won’t save this “market”.

    2. Ian Ollmann

      We will see, but it looks to me like housing pricing has reverted to the historical trend line. It could drop further, but I think that would be a short lived overreaction. Private sector mployment growth is back to 2006 levels. If we could convince state and local governments to stop cutting back so much, then we’d have a much more robust recovery. As incomes and inflation rise, so shall housing values.

  30. Gil Gamesh

    Brilliant. Any system that treats humans as means, rather than ends, is immoral and incapable of justice. The striking similarities between Southern planters and contemporary techno-capitalist managers simply demonstrate the more things change, the more they remain the same, although, in fairness, slave owners were more compassionate.

      1. realist

        Awww. Look at you looking at your financial “superiors” as your daddy. Well, don’t worry. Just keep worshipping “daddy” and I’m SURE he’ll increase your salary and give you your freedoms and treat you like an equal with equal rights. And when you wake up from your fantasy, maybe everyone around you will have done the job that the child that you are clearly isn’t capable of doing.

        What a moronic comparison, really. How old are you? 2?

    1. F. Beard

      although, in fairness, slave owners were more compassionate. Gil Gamesh

      Correct because there was no possible way to blame the victims for their state.

      Also, in pre-post-Christian America many slave owners would have taken this seriously:

      Masters, grant to your slaves justice and fairness, knowing that you too have a Master in heaven. Colossians 4:1

  31. different clue

    The thought . . . is sometimes father to the plan.

    So the One Percent think of us as cattle to be milked. What if a critical tipping-point mass-load of we-the-NinetyNine Percent come to think of the One Percent as a buffalo to be “killed and eaten for their meat”?

    Is there a way to think in those terms metaphorically and take whatever exquisitely-legal actions we can take towards that goal?

    In the meantime, can some of us learn to give sour milk?
    Can we be bad little sheep who stop growing wool and start growing smelly rusty brillo instead?

    1. realist

      As if hte courts would do anything for you. LMAO! You people are in fantasy world. You believe your own BS about “rights”, “freedoms”, and the “greatness” of the US (soon to be DS). The only way you all have a hope in hell of getting control in your hands rather than the “1%” is if you literally start killing them. And it will take a good number of them dead. One or two won’t make a difference. Get through your heads. They have you by the shorties. They own the politicians (READ legislators), the courts, the cops, your finances and they own YOU! You cause trouble, you have no job, you can’t eat, you don’t have a roof over your head, clothes on your back…wtf are you going to do then. Oh and it WILL happen. There will be one person or a group of person who’ll grow balls and do it. You’re dealing with psychopaths and the only way to deal with those creatures is to kill them. Otherwise, start embracing slavery. Good Luck!!

  32. Ian Ollmann

    So, the is one difference between the 1860’s and today. Back then, increases in productivity were probably due to the slaves. These days it might be because of IT infrastructur, robots or CNC milling machines. Management might feel that the company is entitled to the extra profits because it paid for all the equipment.

  33. JTFaraday

    McKinsey geniuses milk productive business by recycling the same report for 20 years. Film at 11.

  34. Danny

    Reading some pf the comments it sure seems lile these were made by educated individuals.

    It’s disheartening to see so many spend their lives leathe pieces of the puzzle, yet, not being able to put it together. Instead of looking from up above, we spendur time learning about someones theory of blah, which makes no sense, but sounds intelligent. Is that were society is headed, based on what i see, it sure looks like it.

    Folks, capitalism has proven it works, Marxism has proven to be a fantasy and failure.

    No 2 people are the same, do not have the same needs, wants, aspirations, view of life, view of people, view of society, view of religion, etc.. How is it that you think a blanket share the wealth equally will work? How does ven cross your minds? Irrespective of fairness, it never works because a group will still make the rules. And we all.know how that ends up.

    Why not let the individual decide how much he wants to earn and spend and save? I’ve seen people get to America with nothing and build wealth.I believe you will wake up soon and realize tjat this fantasy of Marxism is nothi.g but a giant trap for a few control freaks to do exactly the oppsite of what it preaches, and make slaves of you.

    I hope you soon wake up.

    Btw – nothing is free, the gov either creates inflatootion by printing (tax) or by taxing you. On top of that you have the admin cost of getting money from hand a to b.In other words, it destroys wealth. Wake up people..

    1. Pete

      @ Danny – “Folks, capitalism has proven it works…(and then some more Fox news sound bites and social darwinist tripe…)”

      Danny, are you sure you want to become a nightclub comic?

      You should really just spend a minimal amount of time becoming informed intead of reciting useless 1% talking points.

    2. Pete

      Danny “nothing is free..”

      Wrong (and right). Money creation out of thin air (with interest) has been given away for nothing but the endless extraction of human and natural resources at the hands of a few. It’s turned out to be quite costly. The rentier class thanks you for your undying loyalty to this collapsing old paradigm.

    3. Managing Director, Capitalist Collections

      “How is it that you think a blanket share the wealth equally will work?… Btw – nothing is free, the gov either creates inflatootion by printing (tax) or by taxing you. On top of that you have the admin cost of getting money from hand a to b.In other words, it destroys wealth. Wake up people..”

      I could not agree with you more! People on fixed incomes simply cannot afford to see inflation due to too much money chasing goods and services and raising prices, or due to social spending on the insufficiently productive population.

      (I also could not agree more that we’re all different, thus all subject to different outcomes in life).

      That’s why my new career is Managing Director in Capitalist Collections.

      In my new capacity as Managing Director in Capitalist Collections I have, to date, directed the banks to collect your house, Jon Corzine to collect your electronic bank accounts, Paul Ryan to collect your Medicare, and Pete Peterson to collect your Socialist Security check.

      Check back next week for an update. I’ll be looking into the rest of your assets in the interim and should have the last few courthouses rigged in my favor by the time you wake up next Saturday morning.

      Have a good week inflation fighting with me–everything for the good of the cause!


    4. Maju

      Marxism is not right away comparable to Capitalism. Capitalism is the thesis, Marxism is (at most) the antithesis or rather part of the real antithesis which is working class’ struggle in its multiple forms. As anyone familiar with dialectics know, the interaction generates new synthesis, which in turn fight its new antithesis, etc.

      As result of dialectics Capitalism has adapted, via Keynesian pseudo-socialism first (in the Fordist era) and the Neoliberal credit bubble (in the Toyotist era). Both were patches intended to expand demand and extend the limits of the Capitalist paradigm. Even if Neoliberalism has been dubbed offer-side capitalism, it in fact expanded demand by means of easy credit (instead of public investment) so in practical terms it is not different than Keynesianism.

      However now Capitalism, unable to produce anymore useful credit and unwilling to let the state take that role at the expense of the banks (cuts instead of budgetary expansion is the dogma these days), faces its own limits and overproduction is a most harsh reality, generating (in this order) employment destruction, business destruction, widespread misery and a most angry and desperate society.

      Probably Keynesianism would not work either but this Neoliberal bankster BS much less.

      So Capitalism has been proven it does not work: it does not produce social stability, it does not produce happy citizens and it does not produce widespread well being. Except in some conditions, mostly when it does transfer the costs to hidden dumps like Third World countries, the environment or the semi-invisible homeless and other “losers”.

      By contrast even a classical ML (Stalinist?) state like Cuba, guarantees the well being of all, having one of the best standards of life on Earth, specially for the less favored sectors of society.

      I’m sure we can do even better than in Cuba but so far Cuba does better than the USA and most other states in universal housing, universal healthcare, universal well-being, life expectancy, overall health, emergency operatives, etc. And even dissidents are treated much better than in the USA: no pepper spray, no brutal beatings…

      1. Managing Director, Capitalist Collections

        Oh boy. I can see already that I’m going to have to put in a special call to Jon Corzine about you…

      2. Pete

        Spot on Maju. The easy way out of an intelligent and honest critique of “Capitalism” is to go right to binary (either/or good vs. evil) thinking. Run into the crowded movie theater, shout “Communism” at the top of your lungs- congering up fearful thoughts of Totalitarian Stalinist Russia- and then run out of the theater never to be heard from again.

    5. Managing Director, Capitalist Collections

      Oh–and in case you’re wondering how I landed this plum position stripping you of your assets, I got it because I can spell.

  35. different clue

    Mr. Ames and others help state the problem. Should we condemn Mr. Ames and others for not also offering detailed solutions to the problem? That would be unfair. No one person or even no one group of people can do everything.

    Some people will suggest society-wide solutions. Unfortunately the path to society-wide solutions leads through the dead bodies of the Social Enemy Class-members. People can choose to face that fact or not, but Reality remains Real however hard people pray, believe, and have faith to the contrary.

    In the meantime, can persons or small groups of people find temporary partial relief and escape from the Rent-Chiseler-EconoLords? The question deserves an answer and the quest is worth pursuing. People like John Robb, Jeff Vail, The Archdruid, Catherine Austin Fitts, Ran Prieur, and hundreds of others too numerous for me to remember right here have been working on their own little approaches to the problem.

    Every dollar is a bullet on the field of economic combat.
    I am not my keeper’s brother.
    Nobody owes the OverClass a living.

  36. Michael W

    There seems to be a significant confusion in America about democracy and republic. Unless Plato was an idiot it is impossible for a republic to be democratic. Plato invented the form of government known by us as “republic” because the Greek democrats forced his teacher and lover – Socrates – to suicide by swallowing hemlock because he refused to recant the statement that “Not all government positions should be elected because some require special skills which cannot necessarily be acquired through general election and therefore these positions should be appointed.”
    As a result of the Greek democrats killing Socrates, Plato did a historic proportions freak out and created a system of government which was the antithesis of democracy. A democracy is run by the majority of voters, while a republic is run by wealthy elites. It is impossible to have a government which is run by both wealthy elites and the majority at the same time – it’s either one or the other! America is run by and for the wealthiest of elites – the top 10% who own 80% of all traded corporate shares; and it is a true republic. If government is continually stalemated except for war (which as we have seen totally benefits the wealthiest Americans at the expense of lower economic classes), who is benefited – the rich or the poor? The rich of course because they were extracting it fist over paw before and without democratic government activity will continue to do so! America is set up so that democratic political power is stalemated 90 plus percent of the time. If America wants a democracy it needs to reduce the number of states to not more than 15 and go to a parliamentary government where the majority has the unencumbered ability to govern as their voters want and for the benefit of the majority of Americans.
    How is it that the Republicans who constantly harrang for small government are content with obvious duplication and unnecessary expense of 50 states? Because this divides democratic power up into at least 51 pieces and makes it much more difficult to focus it and exercise real democratic power to make changes which benefit the majority.
    The Americans who created the American Constitution were all extremely wealthy or were dependent on the wealthy. What are the chances that this group would fashion a constitution under which a dock worker would have the same political power as the wealthiest??!! Or that the majority would be able to resist exploitation by the wealthiest??!! As it turned out the answer to that question is zero! The top 1% need the other 9% of the top 10% to be their minions and run their corporations which is why I believe that these wanna bees should be included with the top 1%.

    1. Maju

      You are quite confused: Plato did not invent anything and anyhow his book, full of reactionary venom is known in Greek as Πολιτεία (The Polity or The City), although Romans called it the Republic because they called their own regime Republic: res publica: the public matter. Roman Republic was much like a formal democracy until the Empire bastardized it: contrary to common belief the Senate held only consultive power and all offices were elected in popular assemblies, much like in Greek democratic polis, however these assemblies were designed so the rural districts held the most power and that way the patricians, who were able to influence their peasant-citizens (caciquismo), controlled most power.

      Socrates was a political problem in Athens mostly for his pro-Spartan political activities, bordering treason. As usually happens he was actually found guilty of other crimes: “corrupting the youth” and “impiety” (not believing in the gods of the state, de-facto Atheism). Imagine Socrates as British pro-Nazi in 1941 and that won’t be far from the truth.

      Whatever the case Plato did not defend a “Republic” but an “Aristocracy”, what in his mind was the rule of the best (aristos) and somewhat different from the mix of monarchy and oligarchy that our notion of medieval aristocracy was. Plato, who was also an ultra-conservative, hoped that an ideal state would be ruled by the wise (= the best = aristocracy). He considered monarchy and oligarchy as lesser evils and democracy as the worst regime. His memory is kept because he was adopted by the Roman Empire and later by Christendom as their favorite ideologue, an ideologue of tyranny.

      But contrary to what you wrongly believe republic (Latin name for the state) and democracy (Greek name for a government type) are not incompatible, they just mean different things. Like Romans many use now the term republic for rejection of monarchy (Romans also got rid of some Etruscan kings once upon a time), and democracy for love of the rule of the people.

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