The path to war

War seems perpetual. Countries have been doing it, tribes have been doing, hell, even neighbors have been doing it ever since monkeys threw nuts at each other in the trees.Since before we became modern humans. Its in our genes to compete and to fight. Indeed, Darwin said its the survival of the fittest. Those creatures most able to adapt and evolve, to take advantage of new opportunities that go on to reproduce, thrive, and who pass on their genes.

But isn’t it time we thought about the suffering and pain caused in the world due to conflict?

And noted the fact that we produce enough for everyone if we shared it sensibly?

We already produce enough food for 10 billion people (This study shows more here http://www.nature.com/nature/journal/vaop/ncurrent/full/nature11069.html). The problem isn’t scarcity, but rather, greed and sharing resources. Ok, I’m not calling for a “love in” or communism, I do think we need to work for our food,shelter and comforts; there is no such thing as a free ride anymore. But too many people think that they are better than others simply because they have more money. This is a new kind of  “ism”, like racism or sexism or ageism; I’ll call it richism,or poorism. Rich people have to stop thinking they are better because they have more bits of paper than poor people; and poor people need to stop waiting for rich people to dig them out of the poverty. They have to work. So work has to pay. Rich people tend to employ poor people, so it iss for rich people to pay a living decent wage to their staff. Because its thanks to them the company makes a profit. Companies who look to maximise profits at the cost of society, by say for example, transferring labour costs to lower costs countries are , by their very actions,doing two things. They are paying the market rate to their staff in poorer countries, and so giving valuable jobs and income to poorer people. But they also make the people in high costs countries unemployed, making them poorer too. The people in the high cost countries are still relatively better off than poorer ones, but now we see the start of soup kitchens  in developed countries and all the trappings of economic depression.

I read recently that the richest 100 people have more than the poorest 3 billion.(read more from Oxfam here in this long but excellent report http://www.oxfam.org/sites/www.oxfam.org/files/bp-working-for-few-political-capture-economic-inequality-200114-en.pdf)  This is unsustainable and uneconomical , not ecological unfair, unjust and must change. Poor people work just as hard as rich people. Poor  may not have the fancy qualifications or the diplomas or the contacts or networks,the know how or friends in high places offered to the rich by the ‘old boy network’. Jobs and positions should be on merit, not on race,sex, colour, or contacts, or wealth. Money which makes money which makes money isn’t a good economic model. If we don’t stop this grab by the few at the cost of the many, we risk more than throwing nuts at each other.

Money isn’t the property of anyone, but a tool for exchange. It’s designed to be spent, shared and redistributed; if its being hoarded, then it isn’t being used correctly. Ok, I don’t want everyone to hand over their life savings, (So Granny’s life savings or hard pressed families can save for projects and rainy days, that’s important ) just for those 83 people to be less greedy and to share the  money more.

One could argue that ‘Well they deserve the money , they worked hard for it’ but the same argument holds true for the have nots.

However we do have some positives to add to the argument. Due to globalisation, the poverty rate has fallen by 80% since 1970, when I was born. So in my lifetime, poverty has fallen.

But the top 1% of the rich people captured 95% of the growth in wealth.So the poor are just as poor as they have ever been.Indeed, they actually lost wealth according to the Oxfam report. Yes, the poorest became poorer and the richest got richer at the expense of the poor.

Here is a graph which shows which countries are the greediest

I live in France,where redistribution is part of everyday life and people don’t flaunt wealth so openly. In USA however, its blatant.

So what is wealth? Wealth isn’t income. Salary is income. But investments—stocks, houses, or equity in a business—build wealth. Wealth comes from the money you don’t immediately spend. Since poor people spend more of their income immediately, and rich people save/invest more of their income immediately, it’s predictable that wealth inequality be much worse than income inequality.

What we need then is a way to get the rich to cough up their share and take responsibility. Some do, like Bill Gates with the Gates Foundation. But, cynic that I am, I ask myself if this isn’t just spin and greedwashing. Indeed, it seems that it could well be just that, and that any good the foundation does is more than outweighed by the profits he enjoys. Indeed, the blog http://www.hangthebankers.com/the-bill-melinda-gates-foundation-exposed/ paints a very bleak picture of Gates and his efforts, but its not exactly  a balanced view.

M-pesa and cashless societies, bit coins and other ideas have all been used to try to move away from the fiat economies doomed to crash. But they don’t really work , as the bankers are too powerful (and always have been) now. Banks are only now being brought to heel for their misdemeanors, and its the tip of the iceberg

When people die because of failure to share it is not a tribute to our liberty. Its a tribute to our selfishness.

Rich people are not rich because they deserve it, or because they work hard, but because they manipulated it .

War then, is when people fight to get more, from those they see as having too much. The politics of envy replaces the politics of greed.

Let me outline my ideas with a view from history.

WW1 was fought because Germany had a stated aim to push the Russian boarders back and establish satellite states (Poland, Latvia,Norway, even Ukraine) but they lost the war, and then fought the second world war because they were fed the lie(by Hitler) that they had been sold out by Jewish bankers and stabbed in the back, and the only way was to do it with radical means, and WW2 was born, with its holocaust and atrocities.Since then The European union has been formed.This has evolved from a six nation club to a 28 (and counting) nation monster, with ensuing riots in Ukraine as I type. Germany’s WW1 dream of pushing back Russia’s boundaries is now true.It took a hundred years. And millions of lives.

The situation in Europe is as unstable as it has ever been. The richer nations laugh at the poorer nations , refusing them access to jobs and expect them to accept poverty. Richism or poorism at its worst.

At the moment, one could argue that the world functions ona purely open economy, that is to say when we need money we simply create it fro thin air and print more or sell more bonds regardless of the economic consequences. Our modern economy isn’t like that of the past, which was based on selling services or goods for money, but on producing money from electronic switches, and not basing it on any collateral.Indeed, the past showed us that printing money simply leads to inflation. However, we haven’t seen any inflation this time, rather, parts of Europe look like they may well suffer from deflation . The mistakes of the Wiemar republic, when people carried their wages home in wheelbarrows have been repeated, but without the consequences….. YET.

$2.3 trillion of quantitative easing since 2008, in the US alone and the core inflation rate has actually fallen over the past year from about 2.25% to 1.7% as of May 2013 but more than 80% of the hundreds of billions of dollars that the Fed created supposedly to stimulate the U.S. economy never made it to the U.S. economy.

This is why some critics have derided QE3 as “pushing on a string.”

The big banks are simply sitting on the QE money – not lending it out or using it in any way that would promote economic activity. They’re happy to sit on the deposits because the Fed is paying them to do it.

Last year, the Fed paid out about $4 billion in interest to the big banks on their reserves. That’s money for nothing. Bloomberg News has estimated that the annual payments to the banks could soar as high as $77 billion a year by 2015, depending on how much interest rates rise by then. This not only helps explain why there’s so little inflation, but also why the U.S. economy continues to struggle.

The dollar is having a little boost, because there are less of them being pumped into the economy, and tapering of QE will increase that.

Remember  The Weimer Republic? In 1919, one loaf of bread cost 1 mark; by 1923, the same loaf of bread cost 100 billion marks. WHY, because to pay for the Versailles Treaty repayments, instead of using  tax, the German government borrowed money. Just like the American government today. Instead of taxing those rich people, it borrows money.And multinationals all use methods to avoid taxation today. Here is an infographic

http://visualeconomics.creditloan.com/wp-content/uploads/sites/4/2013/03/double-irish-taxes.jpg

Very nice! So lets sum it all up then.

Banks lent money to people who couldn’t pay it back, and then governments bailed out the banks, and lent them money which they were supposed to pass on to the economy; they didn’t pass it on, as they needed the money to boost capital, and they get interest on the money from the people who lent it to them (that’s right, they got the money and they get interest on it too).So the government intervened, buying bankrupt banks and doing more QE, which was used to buy debt, leading to speculation. other countries bought the debt, meaning that the countries issuing the debts lost sovereignty.Those buyers wanted a return on their investments, which increased instability in the markets, and led to ‘haircuts’ in Greece and Cyprus. because banks weren’t lending as they were supposed to,there was an increase in inflation and a stagnation in the economy. wage demands increased, and industrial action resulted. Governments reduced public spending in an attempt to head of the worst of the crisis and optimism decreased, and more speculation, and with it instability followed.Consumers stopped spending, fearing harder times ahead. Money circulation slowed, and the rich kept the money in the banks. No redistributional taxation policy was carried out(or not enough) and so everyone was chasing less money, and inflation followed.

M1 Money Supply

Money supply in us and then Weimar below.

Hyperinflation Weimar Republic

from http://www.zerohedge.com/news/2013-09-23/qe-worked-weimar-republic-little-while-too.

the London Ultimatum  (http://en.wikipedia.org/wiki/London_ultimatum) cased the downfall of Germany. Perhaps we will see a “Beijing Ultimatum” in a while. China’s been telling fibs about its economic performance, and banging the war drums with Japan, so we will see. If the dollar isn’t used to buy oil (and those who tried this trick died(Saddam  Hussain  tried to use euros and Gadaffi tried to use gold to buy oil) then its status as a reserve currency will fall. And reserve status isn’t forever.

This instability leads to extreme politics and war.

Advertisements

4 thoughts on “The path to war

  1. Interesting explanations, I especially like how every point is illustrated with facts and precise sources.
    The worst about all of this is, in my opinion, the fact that these flawed systems are so deeply rooted in the economics and politics of the countries in which the situation is the most obviously “crooked”, that it will take a very long time to even slightly improve the whole thing.

  2. The Path To War is in my opinion a great article.
    It reminds us the reality we would like to forget.
    I think it shows a clear and intelligent approach that goes toward a better world with a human consciousness that those persons handling such large amounts of money have forgotten.
    I liked the graphs which permit to bring out what was important.

  3. Interesting viewpoint! But I am left questioning some items. First off, I feel as if “greediness” can not be measured by how much it is “flaunted”. How can flaunting wealth be measure? Also, how could it be measured by stocks or how much wealth there is? I would also attribute bias to the graph, but since the source is not there, I cannot ascertain what the bias would be. Second, the statement “Rich people are not rich because they deserve it, or because they work hard, but because they manipulated it” is not true. While there are those who inherit their wealth and do not have to work for it, this is a generalization of the rich. I could point out many individuals who have worked extremely hard for what they have. The statement, “Poor people work just as hard as rich people” is also a generalization. Some poor people work just as hard, or even harder, but there are those who don’t try at all. If you think all individuals who are poor work just as hard as a person with more income, I suggest you step outside this fantasy and into the line for welfare checks. Also, if the poor person were to become rich through his hard work, does this mean he too manipulated it?
    I feel as if this was a very complicated group of topics lumped together and involved a lot of blaming. I also feel like this was mainly opinion an there was not enough fact to back it up. Good start, but perhaps focusing on one item and expanding on it could help this piece.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s