This
is a refutation of an article by Tom DiLorenzo, who certainly should
know better, and after this we sincerely hope he will know better,
because otherwise Tom has contributed mightily to our understanding
of certain critical periods in our past and certain important
historical personalities who played crucial roles in the events which
have led inexorably to our present place in history. The article
appeared on September 7, 2015: his article is reproduced here in
blue, with our commentary in black:
In
the early days of capitalism there was a mass exodus from farm to
factory. No one forced the masses to work in factories; they did so
because factory work was better and more profitable than the
alternative – sixteen hours a day of backbreaking farm labour for
less money. Or begging, prostitution, crime, and starvation.
Two
points: 1) Tom uses “the masses” instead of “the people.”
Shame on you, Tom! “The masses” is what those who consider
themselves better call the rest of us, as to them we aren't even
people. Stop using their term! 2) What drove “the people”
off their farms was the lure of money, their money thank-you
Tom, certainly not money that ever would belong to the people as they
had nothing to do with issuing it. If you don't happen to think that
single bit of irony is important, may I suggest you start reading
this blog beginning with the collected works of E. C. Riegel which
appear here. We'd also like to point out that keeping people from
begging, prostitution, crime and starvation
begins and ends with just whose money we're talking about here
or anywhere and how it is issued.
As
Ludwig von Mises explained in Human Action (p. 615):
The
factory owners did not have the power to compel anybody to take a
factory job. They could only hire people who were ready to work for
the wages offered to them. Low as these wages were, they were
nonetheless much more than these paupers could earn in any other
field open to them. It is a distortion of facts to say that the
factories carried off the housewives from the nurseries and the
kitchens and the children from their play. These women had nothing
to cook with and to feed their children. These children were
destitute and starving. Their only refuge was the factory. It saved
them in the strict sense of the term, from death by
starvation.
Ludwig von Mises certainly never bothered
to consider just whose money was being discussed either. When
push comes to shove, all “Austrians” consider nothing but
precious metals to be money anyway and just who is it that controls
those? Yes, the precious metals, all of it, is certainly not your
money either, never was and never will be. Gold and silver are just
other commodities used to price other commodities. No commodity
can possibly be money without its own value contributing to the price
in a trade. Who controls the relative market prices of silver
and gold? Right, it isn't you or me Tom and we made no agreement as
to what that value any of it should be, so it never was and never shall be our
money Tom. Precious metals aren't even wealth Tom because nothing
is wealth that does not produce an income and no gold or silver
(despite centuries of alchemy) can ever reproduce more of itself.
The
same can be said of the conditions in some of the poorer countries
today. Labour unions that complain about “sweatshops” and “child
labour” are not concerned about the well-being of Third-World
children. Quite the contrary – they see them as competition for
unionized labour and want them all thrown out of work and into the
streets. Academics and clergy who assist labour unions in these
crusades are viewed by the union bosses as useful idiots.
Well
Tom, these are the “useful idiots” of one side of their
paradigm or dialectic. Remember an idiot is someone who just doesn't
know any better and can learn to not to be an idiot. A moron, on the
other hand, is someone who it is impossible to teach, train or inform
for any number of usually physical reasons. The “useful idiots”
on your side of the dialectic Tom are those who still want to accept
that their money is the only real money when it clearly is and
has always been the biggest SCAM going throughout all of human
history. Sorry to inform you but Rothbard was either a liar or
woefully uninformed when he made statements to the effect that gold
and silver were chosen naturally as best suited to use as money, when
it can be asserted with definite historical certainty that both were FORCED into
use by despots and trading associations going right back to ancient
Babylon. Indeed the banking interests and the military industrial
complex have always been closely associated – please read The
Babylonian Woe by David Astle.
As
capitalism developed, there was an inexorable increase in wages,
thanks mostly to capital investment by entrepreneurs. Increased
skill, education and experience on the part of the workers themselves
(i.e., human capital development) makes them more valuable to
employers by making them more productive and hence increases wages,
but this is a slow and very incremental process. Capital investment,
on the other hand, is capable of producing much larger leaps of
productivity. Think of the productivity of a farm worker who plows a
field behind a team of horses, compared to performing the same task
on a tractor. He is no more skilled or hard working, yet he is
infinitely more productive in terms of acres plowed per day.
This
is acknowledged, but we will have to make a distinction between
capitalism and finance because they are not necessarily the same
thing. Also it matters who does the investing in capital
improvements; the entrepreneur is usually a single individual who
heads a team of workers or supervises or manages them to do something
with a useful outcome to him / her. The number of workers is usually
no more than a single person can manage, knowing all of the other
people involved. But the characteristics of the investment and the
organization itself are affected by just who it is that's
doing the investing; if it's people outside the group actually
engaged in the business, absentee owners, stockholders,
“stakeholders,” etc. then these broad statements have a far
different meaning.
When
capital investment increases worker productivity, it means more
profits for the capitalists who must them compete for the more
skilled labour. They must pay them more or risk losing them to other
employers – and losing the revenue that they can help generate as
well. Under capitalism there is a strong correlation between the
growth in labour productivity and the growth in wages.
Except
that there is always the diminishing returns to scale to contend
with. All globalists and really big manufacturers and those engaged
in corporate farming would really like it if there were no end to
their productivity, that all of their products could find a market,
that all of their products could sell with a price capable in
aggregate of covering the actual costs of production, etc. But as
corporations get to be “too big to fail,” and since they are all
creatures of states and banks, they will stay in operation whether
they are actually profitable above a certain level or not, because
certain "special people" matter more than “the masses” do Tom.
In
addition to being responsible for higher wages, capitalism produces
cheaper products, more products, and better quality products, thanks
to the never-ending process of competition. The lowering of prices
gives workers an even bigger pay boost with which they can purchase
the increased array of products and services produced by capitalism,
thereby enhancing their standard of living.
Except
we're all supposed to accept that these cheaper
products or more products are in
fact really better quality which in fact
they may not be and all because the capitalists (and the states and
banks) must be paid back first. How do you know Tom that an entirely
different kind of society with entirely different technical structure
might have been possible if their money hadn't been the basis
of it all? You don't and neither do I. But there are definite
reasons to criticize capitalism on terms of actual quality of
products rendered for the prices in any money asked for them.
Nothing
benefits “the masses” economically more than the growth of
capitalism, for capitalists have always understood that the way to
become really wealthy is to provide more value at lower prices to the
largest possible customer base. Thus, products like cars and
refrigerators that were at first the exclusive province of the
wealthy soon became available to everyone.
We'd
like everybody to notice how the word “wealthy” is always used to
connote those with “more stuff” rather than our narrower view
that any and all wealth must produce an income or it is not wealth.
Here's a way to render this:
Nothing
benefits “the poorer people” economically more than the growth of
capitalism, for capitalists have always understood that the way to
become really rich is to provide more value at lower prices to the
largest possible customer base. Thus, products like cars and
refrigerators that were at first the exclusive province of the rich
soon became available to everyone.
People
with a lot of their money are the rich. Anyone with a useful
skill that someone is willing to pay for has natural wealth. You see how common words are twisted.
Productivity
growth spurred by capital investment is also responsible for
shortening the work week. The only way workers can work less but get
paid more is by being more productive, i.e., producing more revenue
per hour or week for their employers. Human capital investment plays
a role here, but so does capital investment and risk taking by
entrepreneurs. Thanks largely to capital investment, the work week
in America is about half of what it was at the advent of what
economic historians call “the second industrial revolution” that
began at the end of the American Civil War (1865). The shorter work
week is the result of capitalism, not lobbying by labour unions or
federal legislation that only codified what already existed.
We'll
accept most of this except to say that the reason labour unions
become necessary is simply because the money in question was and
never really is the people's in the first place. You have an
artificially scare commodity pretending to be money (whether that be
of metal or paper, there is NO difference!) and then you have people
fight over how much of it they get in order to live their lives.
They barter their labour for their life in terms of what that money
will buy.
Capitalism
is also responsible for the demise of child labour. Young people
originally worked in factories (and still do in many parts of the
world) out of economic necessity, for the alternatives were crime,
prostitution, begging, or starvation. As workers became more
productive and better paid, thanks to capitalism, they were able to
take their children out of the factories and send them to school.
Legislation banning child labour only codified what capitalism had
already been hard at work abolishing. Moreover, such legislation was
usually inspired by labour unions who wanted to throw young people,
who competed with union labour, out of work. This kind of “child
labour” legislation was designed to harm children by depriving them
and their families of economic opportunities that they so desperately
needed (and need).
None
of this would even be necessary under a Valun based monetary system.
True, there wouldn't be businesses of gargantuan size capable of
putting all competition out of business, and destroying wealth in the
process. There would be far more variety as true competition would
be enhanced under such a system. There would be far more redundancy
but any new idea would soon be taken up and used by more and more
entrepreneurs / businesspeople. People would enter or leave business
for reasons other than a lack of their money. Finance would
likewise be decentralized and in almost as many hands as there are
workers. Many things would be different and better Tom.
Capitalism
has also made the workplace safer. In relatively “dangerous,”
strenuous, or dirty jobs, employers must pay a wage premium because
relatively few people want such jobs. Economists call this a
“compensating difference.” The man who rides on the outside of
the garbage truck at daybreak, in the winter, in the northern states,
does so because he makes a very good salary – better than any of
his alternatives. Profit-seeking capitalists have always understood
that they need to pay more to get people to perform risky or
dangerous work. Therefore, they have also always understood that
there is profit in making the work place safer. A safer workplace
requires a lesser compensating difference. Lower wages paid to the
workers can mean higher profits for the capitalist. Thus, the
American workplace had become safer and safer for generations before
the Occupational Safety and Health Administration (OSHA) was
established in the 1970s. Indeed, OSHA has often reduced workplace
safety with its clumsy and stupid workplace rules enforced by
government bureaucrats with no knowledge of the specific work that
they are regulating.
We
are with you concerning OSHA. In fact we include the following as
essentially busybody PARASITE organizations that should not have the
right to FORCE anyone to do anything: the FDA, the EPA, the DEA, the USDA, the
various state organizations performing similar nannying operations.
But we are living under a “beast” system, the current arrangement
of states and BANKS, and for the time being we must live with it.
Labour
unions, on the other hand, have never benefited anyone but the
highly-paid union bosses and some of their members, who have never
accounted for more than about one-third of the American labour force
(less than ten percent today in the private sector). If unions are
successful at raising wages above market rates with strikes, strike
threats, shut downs, sabotage, or negative smear campaigns against
corporate executives (“corporate campaigning”), the laws of
economics dictate that some of their members will lose their jobs –
usually those with the least skill, experience, and seniority.
Employers will not pay workers more than they can produce in revenue
for them and still stay in business. Thus, a new hire who can
produce say, $500/week in additional revenue, is not employable if
the union “succeeds” in negotiating a $700/week wage. This is
the “disemployment effect” of unionism.
Again,
this all rests on the foundation of their money not yours or
mine Tom, and yes it certainly does matter.
In
addition, labour unions in America have long been the main source of
anti-capitalist propaganda, and of lobbying for anti-capitalist
legislation (corporation income taxes, minimum wage laws, labour
regulation, etc.). By weakening capitalism in this way, they weaken
the main source of productivity growth and hence the main source of
wage increases. The union bosses keep their high-paying jobs by
benefiting at best a slim majority of their members, while harming
the economic prospects of other union members and especially
non-unionized workers, whom they demonize and slander by calling them
“rats,” “scabs,” and much worse. Indeed, there is a very
long history of violence perpetrated against competing, non-union
labour by American labour unions, who are celebrated with their own
holiday at the end of every summer.
This
is all part of their dialectic Tom, don't you see it? They
control the money and the size and composition of the organizations
within which employment is offered. But there is something else
wrong with Tom's analysis right from the beginning and it is
capitalism itself.
Capitalism
is basically making money on money. It is supposed to be a private
matter else the state would be making money on money through running
a command economy and that would be called communism, which does not
work -except for bankers who make money no matter what the economic
system because the money is theirs no matter what the politics
or economic order happens to be. Capitalism is the making of
money from the lending of money at interest. It is not just, as
Tom would believe or have the rest of us believe, that entrepreneurs
are the investors. Oh no. It is potentially anyone out there with a
little extra cash that can be an investor in any big state sanctioned
potential monopoly enterprise (public corporation) by owning stocks
(pieces of the ownership in the business) or bonds (pieces of the
debt of the businesses). In fact Tom, and you should have told
everyone out there in your article, the principal investors have not
been entrepreneurs but bankers. So let's get a few things straight.
All
the money anyone knows of is their money Tom, not yours or
mine. If it is credit as most of it is, then it was issued by a bank
as a loan to a government at interest. The borrowed money was
created; issued. It was loaned into existence from nothing, but that
isn't actually as important as some make it out to be. The key point
is that the money with which to pay the interest was never
created, therefore no matter how much money any government spends
into an economy this way, there is always a scarcity of money and
there will be a natural “musical chairs” phenomenon when it comes
to businesses; someone must fail – the system is designed to
operate that way. In fact Tom, as economies of scale are allowed to
grow in this way, with the higher centralization that seems required
to manage them, it isn't just small businesses that must fail but
whole countries, like Greece. What are they going to do about it?
They'll resort to whatever they possibly can to take the heat off
themselves; they'll start a war or threaten one, these attempts will
generate floods of refugees who will come from wherever they come
from into the advanced and developed places on earth and by their
sheer presence shall destroy all that the humblest workers of “the
masses” in these once advanced countries have managed to procure within a short
time. What of the capitalists Tom? They will continue to live
better than anyone else because no matter what they must be paid back
their money or they shall use the FORCE of the states they have in
their thrall to ensure that they do get paid. Understood?
The
solution is Free Enterprise; smaller businesses (some might be quite
large), far more redundant, all truly privately owned and managed -no
absentee owners allowed, truly competitive rather than the managed
competition we have now, all of it operating best over much smaller
areas. This puts an eventual end to all forms of imperialism as that
form is no longer economically viable. Since all the labour (or most
of it) and all the money creation in a Valun system is “self
financed” the individual labourer become his / her only source of
true wealth. The limiting factor is how much the end product or
service costs and how much of that product can be produced under real
economic accounting, not the inconsistent and frankly misleading
accounting tricks used today to attempt to show that a business is or
may be profitable when it really isn't. Never assume anything Tom.
Just because a prospectus says certain things and would have the
potential investor believe certain things does not necessarily make
it so.
Capitalism,
the making of money on money, never benefits anyone but capitalists.
Anyone owning real property or doing any real work is usually
impoverished by the practise. Free enterprise is the ability to go
out and do what one wants to make a living using one's own wealth
which always begins and ends with one's natural or acquired talents
or skills, that's right one's own labour is his / her real wealth. Free enterprise presupposes that their money is
unsuitable for real freedom. E. C. Riegel had the idea how to get
out of it, by starting a parallel system. Until such time as your
money is actually yours, you are a slave to capitalism and
to capitalists. Everyone must start by accepting reality before one can
ever have any ideas how to change it. If one accepts certain
presuppositions which are not in fact correct, such as that their
money can ever become your money, then you'll never get
anywhere. Any money you have or have ever had, whether you willingly
worked for it or not, is and was never yours. You just had the use
of it while you possessed it, that's all.
PS:
Persian rugs, the old fashioned kind, not those made by machines
today, were made by children because small hands can tie tighter
little knots. Most of those children were paid in their money of
course and still lived at or near the poverty level else their rugs
would cost far too much to sell to outsiders who would in turn
contribute more of their money to the Persian (Iranian)
economy. As they grew older they were naturally less fit to do rug
making and in any case their hands were ruined to do anything else.
Most died young ... and poor. Though I like Persian rugs, I have
never been able to look at one the same way since knowing how they
were really made.
[9-11-15:
So since Riegel was a Democrat and you now
have clearly indicated you and your proposal are not Capitalism, you
must be Socialism, right?
No. Riegel may have been a
Democrat, we don't know what his party affiliation was, though from
his writings he seems to favour what most mainstream Democrats
believe about social issues; after all, he was among the first
consumer advocates, etc. But he was in favour of Free Enterprise
which cannot automatically be associated with Capitalism.
We
have stated elsewhere on this blog that Socialism is essentially hand
outs from states given to those whom the system has sidelined, left
behind or more importantly driven out of business through dishonest
competition – that's right DISHONEST competition. When a going
business fails and its income stream to its managers and workers is
no more, wealth has been destroyed. Corporate capitalism, as most
know it, destroys wealth, it does not create it.
Two
points: 1) If you have a state sanctioned enterprise -a “public”
corporation- that wants to be or become a monopoly holder of some
commodity, good or service and then you have YOUR small business
that's competing against it, who do you suppose is going to win in
the struggle (pardon the use of this loaded word)? That's right, the
state sanctioned business will win, and it will have the support of
every BANK you can think of too because banks make more money on
their money dealing with a business that's big vs. one that's small.
And 2) Due to the mathematical certainty of the perpetual
scarcity of money that comes from having money created through bank
loans whilst the interest to pay the loans back is never created, you
produce a “musical chairs” economy whereby certain numbers of
businesses must go out of business because they can't pay off their
debts.
Now in any national or regional economy, who is the
biggest debtor in the room? Who is most in debt to BANKS,
particularly the CENTRAL BANKS? That's right, it's the governments.
All states in the modern world are debt captives of the money
power residing in the CENTRAL BANKS and MUST do their bidding
accordingly. Bankers are hence “above the law” when it comes to
getting what they want, which is the right to continue their puff and
squeeze credit cycles and taking of that which didn't belong to them
by having their debt slave states FORCE their other debtors into
giving up their real assets to pay back their loans.
Meanwhile,
politics is just “smoke and mirrors” to hide the real villains in
the piece; the bankers and their insistence on USURY, the loaning of
money expecting a return in money that was never created and cannot
be generated from nothing because that's a banker privilege.
Capitalism -the making of money on money- has been sold to the public
as necessary, even considered a patriotic duty to defend, to send
your sons and daughters to foreign lands to die for. To die for?
What is it about capitalism that's worth dying for? So someone who
makes money on money without doing any meaningful work can live
better than anyone else while others die? Think about it. Why is
there Socialism? To keep “the masses” from revolting, pure and
simple. Otherwise everyone would do what they needed to do to make a
living using what money? Clearly anything coming from a CENTRAL BANK
is their money not yours. States need more of their
money in taxes, not to pay off the principal debt as some stooges
think, oh no. Your taxes go to pay the INTEREST on the debt the
government racks up, never the principal which can literally never be
paid off. Remember that interest is paid with money that was never
created in the first place so all your taxes are a SCAM to keep the
bankers happy. Everything that is a real asset that is surrendered
in such a system is STOLEN; so we have today a monetary system that
we all must live with and under -since they are the true rulers not
the figureheads we elect to office; another SCAM since they are
selected and then that's the only choice we get- until it is finally
discovered by the majority of the people to be fraudulent and then
what? Whose money are they expected to run to? Precious metals of
course. Who controls those? The same people! Get it? Capitalism
and Socialism are two sides of THEIR coin and neither one is a
solution to your problems, your children's problems, your
grandchildren's problems, etc. Oh, and by the way these same people
have always -going back hundreds if not thousands of years- had
control over the military industrial complex, so they have more than
enough power to FORCE anyone to do as they say, etc. You are all
slaves of their system. All the bromides meant to make you think
that little you have any part, any say, and control over any of it
are ridiculous and outright lies which nevertheless happen to work
pretty well. I once upon a time believed them too.
The
solution is to set up a parallel system that runs by different rules
and uses a different money that is NOT theirs but yours. The
more people and businesses that wake up to their true situation, the
more that the real future of this world can be decided by the
majority of the people rather than a tiny self appointed few.
Believe me, when the scales fall from most of the eyes of the people
of this world, there will be something different. Doesn't it make
sense to start NOW to build something worthwhile for the future?
It's long past time to organize and the first step is to set up the
proposed International Valun Exchange Society or IVES.
David
Burton
dpbmss@mail.com ]
[9-17-15:
Here is a brief conversation between me and someone I'll call Bob.
I live within a capitalist system..and without
me they wouldn't exist. Marxists & socialists claim that workers
are oppressed in capitalist societies. Yet workers in communist
societies always try to sneak out into capitalist societies. No one
in South Korea is trying to sneak into North Korea. The Berlin Wall
was not built to keep West Germans from sneaking into East Germany's
collective farms. Cubans in Florida do not steal boats to seek asylum
in Cuban collective farms.
Yes, Bob, that is correct,
but one is only marginally better than the other and it is all
related to their money. Meanwhile anyone living in a
Capitalist system is just a free range slave of that system. It's
easier and more attractive to the powers that be to run than was
Socialism. Neither of them is the correct course for the future and
they are both based on the same fraud -usury- and two sides of the
same coin -statism.
and yet...i dont
feel like a slave...mmmmm guess its a state of mind when ya get down
to it....
If
you are in any debt or pay taxes then you certainly are a slave. In
fact if you do anything against your will because of the fear of
FORCE then you are a slave.
taxes
& death are the two facts of life....i don't mind taxes long as
my government uses them to protect my way of life.......and sadly i
have no fear...concern yes but no fear...thats no way to live....
But
you ASSUME that your taxes are for something they are not. You do not
know what your taxes go for, and nobody does. If they bothered to
look they'd discover things like that their taxes are paid back to
the Federal Reserve before they are ever given back to the
government(s) and why? Because that money goes to pay the INTEREST on
money that those governments borrowed from the Fed. The actual "loan"
is designed never to be paid off. Why? So THEY can have power over
those governments as their debt slaves. Just look around you and see
what's happening without anyone's consent. Also having people go
around in actual fear is not the best way to get anything out of
anyone else. They'd much rather have you feel "free" so
they can continue their very long old scam. There's a LOT more to
this and yes these ARE genuine conspiracies so anyone saying that I
or anyone else are "theorists" is a lying scum! Hope you
and yours get it and at least wake up.
I
know my taxes go places they shouldn't ..but that's every where
around the world......its a given.....but as far as my country goes,
its the best place I've been.. I've been to a communist country and
witnessed first hand people all dressing the same,all working the
fields, all working for the governments elites......all slaves....we
are far from slaves...... i dare say if you live in America and
consider yourself a slave i would suggest breaking those chains that
bind you and find a place that would be more of your liking...you're
free to do that.....you're free to do that in this country whereas
others places you wouldn't be.....denouncing ones citizenship is just
some paper work to do.....
All
that is so, and I've been halfway around the world to far worse
places too, and certainly want to kiss this ground when I get home,
but that does not make this place perfect and it does help them keep
us in their slavery.
Then you know where
I'm coming from..now just get that slavery thing out of your head and
you''ll have more positive things in your life...i cant imagine
thinking i was a slave.....live in the state ...of
mind.....peace.....
I hope everyone gets the direction
this conversation took. This explains better than I could any other
way just what we face today. If free range slavery is just a state
of mind to most people, then the powers that be can just slowly and
surely turn their knobs and have things their way. That slow and
steady march - it's called Fabian (cautious) Socialism - is visible
around us everywhere as if there is no other possible solution. It
was begun over a century ago in England and remains their solution to
the problems concerned with governing “the masses.”
Nevertheless, the Emperor (and the Empire) has no clothes; it's their
money, stupid!]
