PUBLIC BANKING SYSTEM AS LONG KNOWN BUT REPRESSED IMPERATIVE OF ECONOMIC WELL-BEING
The most difficult fact for the normal mind to comprehend is how the legal tender any of us must have to buy in the real market is not necessary for private banks. As we have seen, it is effectively counterfeited by private-bank issue of debts, debt servicing, buyouts, speculations with money the banks don’t have. When the Ponzi scheme collapses, trillions of dollars of public revenues of near bankrupt societies continue to pour out free to these very banks with no life or life-capital function. How can governments continue to transfer thousands of billions of public dollars to the private bank system that dispossesses them at the same time?
Private bank control of credit and money supply without constitutional right or legal tender even multiplies behind NATO bombings and special forces. Countries with oilfields and once-public banks are the prime target. Consider Libya before it was bombed in 2011. It had a public banking system which, lawyer Ellen Brown reports from the US Public Banking Institute before its bombing (I quote), ‘issues and regulates banknotes and coins in Libya’ and ‘manages and issues all state loans’ – reducing loan costs on public projects by an estimated 50 per cent, with 144 million tons of public gold from publicly controlled natural resources to back international purchases. It worked very well before NATO forces invaded, international verification shows, in providing free health care, higher education abroad, $60,000 as a home fund for new married couples, no taxes for agriculture, and a world-leading aquifer works programme supplying free water in a water-starved nation. Its problem for the West was not despotic rule, which is a norm for US allies, especially in the Middle East. The real problem was its decision to stop accepting US dollars for oil, and leading the rest of Africa to the ‘gold dinar’ as its international currency with most of Africa on board.
Then the blanket propaganda for bombing eliminated the alternative. One of the first acts of the NATO-installed ‘government’ amidst the ruins was a brand new Libyan bank.
In the background, Latin America has broken free of the private money tyranny with rising democratic support since 1998. What was unspeakable and death-squadded before now widely governs. With US armed forces occupied in Iraq and Afghanistan for the bigger prize of Middle East and Central Asia oilfields and growing financial collapse, Latin America has been able to develop. Yet even in the newly democratic and self-governing Latin American transformation featuring public oil and public investment, US-backed coups and coup attempts have occurred one after another as reported in prior pages.
The system-deciding facts are as usual suppressed, in particular public capital investment with no private bank bleeding. It has been successful in virtually every modern economic success – from the prosperous ‘colonial scrip’ of the US before the City outlawed it (what Benjamin Franklin reported as the primary cause of the Revolution) to the public banking system of the 1939–45 war to, more peacefully, North Dakota, Canada from 1939 to 1974, and Norway, German Landesbankes (under attack as ‘unfair competition’ because of no waste on private profits and executive skimming), India and China today.
China is perhaps most interesting because despite the central control image, most of its capital investment is by self-directed local governments whose investment resources far exceed central government and foreign corporations put together. The latter account for under 4 per cent of investment. Private capital markets are marginal. China’s spectacular economic growth has been overwhelmingly led by local governments in capital investment. By 2008, over 83 per cent of the total was under local jurisdiction with independent fiscal powers to tax, allocate capital, lease, hire and fire, and grow. These ‘rural township and village enterprises’ (TVEs) are the capital bases of China’s economy (now including co-operatives) and all are invested in by a public financial system from bottom to top.1 The results speak for themselves.
You don’t hear about debt and deficit crises in any country with a public banking system. None – whether a capitalist economy or not. In addition to the lead countries just cited, consider Japan’s productive take-off by public financial investment, and huge bad debts managed since by the public Bank of Japan. No national debt or deficit crisis erupts although at 220 per cent of the GDP. Compare to Europe’s 3 per cent rule with the bloodletting to the private banks still growing. Or consider the public financial and investment turn of most of Latin America. It includes even a new Bank of the South to invest at no interest in social infrastructures, not liquidate them to pay private bank debt-service as in Europe and Africa today.
The struggle has been centuries long, still unnameable in Western media. Observe that public enemy Muammar Gaddafi was leading the foundation of a new international currency for Africa free of the private bank empire centred in Wall Street before NATO bombing of his country and his murder. Note that ‘dictator’ Hugo Chavez long led the Bank of the South for Latin America despite coup attempts, a mysteriously contracted cancer, and media hate campaigns. In background punctuation, recall that President Lincoln, whose public money saved the Union rather than pay 17–27 per cent charges to Wall Street during the Civil War, was assassinated in 1865 before a public banking system could be used in peacetime.
Today the bedrock basis of economic success and social recovery across continents is public control of public resources and public jurisdictions, including most fundamentally the issue of public money credit for public investment. This has been the key to effective productive government again and again in peace and war, but has been curiously erased from the public mind. Not even left parties in opposition or government raise the issue, although it is firmly based in modern constitutions. Under law, currency and coinage, issue of paper money, bills of exchange and promissory notes, interest charges and legal tender – in short, all forms of money – have been under sovereign peoples’ constitutional jurisdiction from the beginning. But the public power has been usurped – as with the founding of the US Federal Reserve as a private bank system on Jekyll Island in 1913. From then on, every US government gives the private bankers the money notes which taxpayers borrow back on compounding interest terms (as explained in Chapter 1, note 8). The Kafkaesque absurdity of this instituted defrauding of the public in endless trillions over time to debt-service private banks without the money to lend is difficult to believe, but still growing.
The break from the private-bank black hole has already been made in Canada under law, but has been the country’s most repressed civil power, Even the progressive New Democratic Party fears to raise the issue. Yet the 1935 Bank of Canada Act still entitles public loans to government through the public Bank of Canada whose sole shareholder is the sovereign Government of Canada – up to 35 per cent of total federal debt and 25 per cent of provincial and municipal debt at no interest, or at whatever interest best serves public investment for the public good. Specific direction under the Act (italics added) is to ‘regulate currency and credit in the best interests of the economic life of the nation’, to ‘mitigate by its influence fluctuations in … unemployment’, and ‘to promote the economic and financial welfare of the nation’.
In the 1980s especially, however, this substantial linkage to the real economy of employment, social security and health care, and freedom of the citizenry from foreign bank debt was effectively severed by escalating foreign loans, privatizing the debt, increasing interest rates to 22.5 per cent prime to compound the drain on all social programmes, abolishing cash-reserve requirements for private banks, and trying to reverse the Bank of Canada Act itself to make the preservation of the value of money the sole goal.2 No corporate media during or since, however, has published on these issues. Meanwhile Canada’s social programme infrastructures continue to be relentlessly savaged ‘to pay down the debt’; up to 30 per cent of the budget has gone to pay bank debt-service charges at hundreds of millions of dollars a week; and the tirelessly raised problem of ‘government debt/deficit’ paralyses public investment.
In the wider world, the causal mechanism behind the dehumanizing oppression of debtor countries – far worse in effects than the poor imprisoned for debt in past centuries – is silenced. Third World states may pay the principal of their debts six times over but still owe four times more to the big private banks than when they started.3 Still the transnational private bank system bleeding peoples into malnutrition, illiteracy, and disease while bankrupting their life-capital infrastructures causes no stop or even recognition.
Private banks issuing enslaving debts to people and governments with money they do not have is the first level of the malignant disorder. But if Wall Street and the big private bank system did not issue credit, they reply, governments, business and people ‘could not get credit’. This was the big lie Wall Street and its revolving-door Treasury Secretary, Henry Paulson, propounded with full media collaboration in 2008 to get $747 billion of public money off the top from government to ‘keep credit going’. Decoded, this meant to keep getting the debt-service payments coming from peoples around the world.
No-one pointed out that banks multiply debt-issues and services without the legal-tender money to back them, nor that governments with a public banking system have no debt and deficit crises. A public banking system ‘keeps the credit flowing’ without private banks since the American Revolution. No coherent counterargument exists. The strategy is rather to gag the truth. A public bank and investment base is as primary a requirement for responsible government as income taxes, and requires similar exactitude of financial records, due payments and non-corruptible process. Consider the economic meaning of the known working reform:
- accountable credit allocation in the common life-interest,
- at real economic cost,
- as opposed to the multiplication of private bank money-sequences draining the economy,
- with no productive or life-function,
- to continually ruin governments and individuals,
- while reversing public investment in society’s life-capital development by debt-servicing demands.
But no such change can be trusted to ‘government’, assumes the master dogma. In fact, democratically accountable public authority already allocates immense real capital to public departments and institutions for specified productive purposes – public education, health, transportation, environment/parks, natural resources, and so on. The difference is that government no longer borrows from private agents who merely fabricate the money demand with compound-interest terms to issue endless debts, with governments still liable for citizens’ deposits and for bailouts when this private money-multiplying scheme collapses.
Responsible government is reclaimed when it enlists its own far deeper financial resources to keep the public loop of revenues intact under publicly accountable direction without the ruinous costs of (3), (4), (5) and (6) – the epitome of waste and dyseconomy. The days of taxpayer revenues being bled off in massive volumes to private money-sequencers for no public purpose and squeezing public sectors dry of public investment capacities is thereby prevented, just as it is in productively successful economies today from Norway to Brazil to China. Public money paid to private banks in trillions for nothing but transnational debt slavery, stock-casino diversions, and obscene money-takes stops at last. Societies and peoples deprived of their investment lifeblood for no function regain their lives.
The public investment figure reliably reported by, among others, the US Public Banking Institute, is that the costs of public projects are ‘reduced by 30 to 50%’ by cutting out the private bank debt-servicing. The incredible fact is the private-bank control of public finances has been so long allowed to go on so long bleeding peoples into economic crises, public investment inertia and destitution. The mind-lock of inaction now built into elites is the failed social immune system.
For-Profit Money Creation by Private Debt-Issue Already Rejected by Sound Economics
Depression-experienced economists recognized the nature of the problem long ago. Milton Friedman and his mentors at the University of Chicago, including Irving Fisher and Henry Simons, recognized the necessity of a public banking system. They reasoned that private banks had failed in leading the Depression and should be confined to lending money they actually had, not what they created by issuing debt for money they created at will. They were concerned about debt-cycle destabilization and wealth accumulation by private banks. Government, concluded Professor Simons, should ‘leave as the chief monetary function of the [private] banking system the provision of depository facilities, facilities for check clearance, and the like’.4 But Friedman turned coat when he later argued in typical neo-economic algebraic disconnection from economic fact that it was government money in the economy causing inflation. He pleased the money party with that, gave the justification for social spending cutback, and became the toast of the rich, the press, and life-blind neo-economics. In fact never bothered with, over 95 per cent of the money supply has long been generated by private banks issuing grinding debt and money bets with money created out of thin air.
Even when the wheels have come off with the 2008 Wall Street meltdown caused by the private bank debt and casino system, the monetarist fraud is still not exposed. It goes back a long way. The private-bank occupation of society’s currency and credit system originally hatched in royalty-restored England in 1666 – what eventually caused the American Revolution in 1776, as explained ahead. This currency privatization reversed an historical liberation going back to Solon of Athens who cancelled debts, restored lands seized for them, and issued debt-free state coinage. Rome later studied his historic policy advance and issued their own public currency to throw off the yoke of the money-party oligarchy always behind the ruinous debt system by private control of currency and credit. Rome’s decline arguably began when the money party usurped control by a silver-based private money supply backed as always by legislative lobby, oligarch faction and public invisibility. It is an old game, but never as vile and widespread as now.
History repeats until clearly understood. The US instituted its own private bank system by the1913 US Federal Reserve Bank System masquerading as government. But now after the private-bank / Wall Street 2008 Crash, even IMF higher research is waking up to the problem and its solution. As we have seen, a 2012 paper from the IMF by Jaromir Benes and Michael Kumhof entitled ‘The Chicago Plan Revisited’ has awakened to the Fisher-Simons school of 100 per cent reserves. It recognizes that in a rational banking system, private ‘banks would no longer be able, as they are today, to generate their own funding deposits [coin money demand they do not have for debt servicing] in the act of lending, an extraordinary privilege that is not enjoyed by any other type of business’. They recommend 100 per cent legal tender to back loans by private banks which are returned to banking functions rather than fabricating currency and debts ‘ex nihilo’.5
What is not fully registered by this sober line of economic reason that goes back to Aristotle is the criminal element of the whole enterprise. It is effectively money hijacking backed by armed force to multiply private money demand with no property right. No crime syndicate has ever eaten individuals and societies alive like Wall Street. While statesmen over centuries have understood that the private money party cannot be allowed to control society’s money supply without ruinous effects, the money-fabricating faction keeps getting away with it in ever more monstrous expropriations.6 Today there may be no bankrupted society, military invasion, crushing public debt, unneeded mega project, currency speculation, foreign takeover, unwanted merger, pollutive technology, or other corruption of the real economy which does not depend on this pathway of invading and occupying life-hosts. The carcinogenic circuits go, however, only so far as the fabricated bank-money is allowed to go.
America itself was founded to stop the private Bank of England from overthrowing the successful public money and credit supply system of the Colonies. As its Ambassador to Europe, Benjamin Franklin, has reported, this was the main reason (silenced since) for the American Revolution itself. Before this private bank suppression of public currency and credit, Franklin explains, the colonial scrip was ‘issued in proper proportions to the demands of trade and industry’, and brought prosperity until usurped. The suppression of public banking dried up the money supply and brought ‘streets full of the unemployed’, he reports. This is the revealingly lost reason for the revolution of American independence from British rule, decoded, from the private banking power now ruling even more ruinously across borders.7 The private money power of Britain then reacted in the age-old way – invasion of the superior public alternative. The former colonies were flooded with counterfeit notes which criminally undermined the public banking option.
Decoding the Beast: The Carcinogenic Takeover of the World Economy in Motion
The money-sequence party has no end of fraudulent schemes to grow itself. The 2008 financial collapse was a watershed moment. Governments created trillions of dollars of public money without Wall Street banks to lend it – but then give it to Wall Street to continue debt-bleeding publics and wasting its vast economic demand on casino speculations for new riches.
The vast public credit could have been invested in the youth employment, social programmes, needed infrastructures, human life-capital development, and protection of the natural capital bases on which all real economy depends. If the many hundreds of billions going trillions of dollars had been allocated to life-capital requirements and employment to grow real economic bases, the public investment might have achieved an even greater needed economic reform than the New Deal. The long-overdue turn to responsible economic government could have been led out of cumulative ruin with Wall Street now down and out.
The opening for world history, recovery of the real economy and public banking to manage housing mortgages and essential public investment was finally there. The malignant marrow of the Great Sickness had collapsed when no-one would but its fraudulent notes. Control of the credit and money issue had passed to accountable government who could have stood for what all longed for – the public interest free of money-party chains and responsible economic government.
But the reverse happened. Wall Street’s man is always at the head of the US Treasury and so its collapse became instead the mother of all private takeovers of public financial capacities. What was not seen was the metastasis of Wall Street into a now open door to limitless public money backing not there before. Two vast territories for new dominion emerged. A Europe financially felled by the crisis and trillions of fraudulent Wall Street ‘securities’ poisoning economies and pension funds lay wide open for jacked-up debt demands on victim societies, and non-stop raids on sovereign bonds to raise bank bailouts higher and pry open the EU financial system, now competing as a peg currency. With European central bank control of public wealth to keep the new public money going private, there is no limit. Wall Street graduates and methods are now in charge all over Europe from the IMF to heads of state to the new ECB mechanism explained above.
The second great opening beyond privatization of public financial capacities was to get out of credit, mortgages and real investment into full-bore global derivatives betting towards ever advancing control of stock futures including world food supply and water. This territory has already expanded into spiking food prices from 2008 on by tides of leveraged price manipulations upwards for ‘investors’ leading to the malnutrition and starvation of tens of millions of people unable to afford to buy enough at the rising prices. With climate destabilization and pollution credits already big business in Wall Street trading, and a water consortium forming with the big players to make the killing on water next, the parallel channels of financial takeover for perpetual profits were opened wide. For there is no provision of any good – food, water, weather stability, or any other universal human life-necessity outside the reach of private bank-money demand to manipulate price futures. ‘Making a killing in the stock-market’ takes on a system-wide meaning.
Betting the price chain to control and sell for maximally more is the system decider. At the microlevel, Romney-type ‘equity investors’ focus on buying and stripping particular companies in financial need – for example, buying a firm with 90 per cent bank-money, loading it up with debt, and extracting vast fees from it to strip it for multiplying profit. The more systemic scheme is enlisting greater tides of leveraged bank-money buying and selling without legal tender in such massive quantities that producers and consumers do not in fact set prices. Financial syndicates including the biggest corporations dominate the prices to maximally profit in manipulated price play – a serious offence before ‘deregulated free capital flows’.
Thus a law of carcinogenic advance rules. The more any priced good cannot be done without, like homes, food and water, the more buying rights to its futures enables price bets for perpetual profits on rising-falling demand ensured by private financial buyers, hoarders and sellers. Even a few cents on a scale of billions or hundreds of billions of dollars in exponentially multiplied margins can mean fortunes overnight. Symptoms range from king’s ransom bonuses to fixing of municipal bond-rates. Not even the death of the world matters because it can panic governments and people into buying into more private financial schemes. If the reader wonders – how could it be so ultimately irrational and self-defeating in the end? – the answer is that is how a cancer system behaves.
The long-term move to ‘green pricing’ is itself a grand new opportunity. Prices moving onto the stock market for derivatives betting enable new financial control, leverages, fees, and profits. It is no accident that a Wall Street investment banker led the Rio+20 preparation document – to build new financial opportunities within the global environmental movement itself. The unspoken strategy is to control the world’s necessities of life and life-support systems by futures betting on land, food, water, carbon credits, or whatever is needed whose price can be spiked up for financial takes. This is the mutant meaning of ‘letting the market decide’.
When the big private banks have got trillions of public money to tap by the established ‘bailout’ guarantees now given to them across the US and the EU, while state leaders and pundits wonder why the economy does not kick in with all the stimulus, why real investment is still so low, and why Wall Street and corporate profits still report record highs, we see the transnational money-sequence disorder has overwhelmed the ability to think past it.
Recovering from Financial Coma by Connection
When Wall Street demanded from the first day of its collapse floods of new public money from Congress with no questions asked, the plan was publicly unseen. The revolving-door Goldman Sachs Treasury Secretary Henry Paulson commanded and got unilateral and unaccountable control of US $747,000,000,000 to begin while Republican Congress demanded more trillions out of social security to pay down the debt. Both succeeded, and both fitted to the carcinogenic pattern. Ever more to private money-sequences at the top and ever less to life-needs of the economy is its visible outcome. But the new metastasis remains undeciphered – hijacking public financial resources before any claim for life and life-capital could be made, multiplying derivative tentacles into global futures of every means of life, keeping public finances pouring into debt servicing, and staying unaccountable to life-necessity at any level.
Consider then the symptoms confirming the diagnosis at the macro level – fleeing and vulture capital moving across indebted economies in ravenous waves, casino betting instead of economy becoming ever more aggressive, bond attacks on victim societies with public money itself leveraged underneath detection, Goldman Sachs alumni appointed as Presidents of ancient European societies, endless huge bailouts by EU public money going to private banks, workers’ jobs and wages driven lower and lower to pay the banks more, public sectors and treasures stripped and sold without limit, the corporate media blaming the victims with no notice of the common cause, and wars against vulnerable societies at the margins.
The Paradigm Shift that Cannot be Coherently Denied
The general law of the macro-economic disorder may be defined as follows:
As the demand power over lending and credit to government and productive enterprise in the economy becomes private money-sequencing overriding life-productive function, well-being and security for human life and life-capital bases decline at every level.
The ‘degenerate trends’ defined in Chapter 1 all confirm this law, as does the EU debt crisis and ‘the Great Recession’. But before 2008, the public creation of public money without the private big banks to lend it from had not been shown in plain view. The vast outflows of money created by sovereign government went to the private financial system causing the collapse, but the roles of lending money had now been reversed – with no debt-service charges on the public money. Why not then public investment free of debt servicing for public investment?
Yet even as every public cries out as never before for public investment in productive youth employment, for environmental clean-up and pollution-control mechanisms, and for failing life-capital infrastructures of every kind, the political coma continues. Recall how monetarist dogma choked public spending by the claim that it created too much money. Now the private banking system creates over 95 per cent of society’s money supply by effectively counterfeit notes and there is no concern. As long as the majority keep losing money demand to live to keep the money value for money-sequencers, all is well. Thus the private banking system debt-enslaves people and governments while speculating ever more on their means of life with fictionalized money – sucking the lifeblood out of the real economy as life and life-capital bases degrade and slowly collapse across domains.
The solution is life-capital investment led by a publicly co-ordinated banking system with the carcinogenic circuits out of society’s productive loop of recovery and advance.8 This is how governments from the original colonial scrip to contemporary China have advanced without debt servitude and wide-mouth siphoning of public wealth into financial bubbles and deepening recession, disemployment, and life-system degeneration.
Just as tax revenues are decided and supervised by accountable public authority, so too public borrowing. Public credit is issued through a central public bank or treasury accountable for the public purposes it is to be spent on as now, only without the private money-creating party blocking the investment required and endlessly surcharging nations into deficit and debt. Public investment funds already finance government policies in the public interest in working economies, and public credit systems lend to small industry, co-operatives and other productive enterprises across the world. The public alternative has already worked in Germany, Latin America, Scandinavia, Japan, China, India, Malaysia, Korea, and once upon a time the US itself. The more publics regain public investment power including at the local level, the more they are liberated from the carcinogenic disorder and the better their economies can become – as Latin America has shown since 2000, and as public banking has shown for nearly a century from North Dakota to Norway.
THE ULTIMATE DETERMINER OF ECONOMIC LIBERATION: PUBLIC POLICY AND SECURE FUNDING FOR COMMON LIFE-CAPITAL ADVANCE
We have seen why three system shifts are required for social recovery – progressive taxation, reclamation of sovereign public resources and domains, and a public banking system for government and individual credit and repayment. We have seen that have long been successful across modern societies and distinguish the economies not in debt-deficit crisis. The cognitive problem is the taboo against recognition.
Facts reveal instituted delusions. They show these policy shifts have worked across time and place. But the steering life-purpose is not defined. China, for example, may have public ownership of public resources and a public banking system. But it has not met the ultimate problem of structural impoverishment of its people and their environment. It has uprooted and impoverished 200 million people as migrants by denying them all prior life-benefits of secure jobs, free school for children, public health care and work-unit support – the reason for hundreds of protests a day still going on 15 years after they started being thrown off the bus.
More deadly in the long run are industrially devastated environments whose large-scale ruin China leads to produce mass cheap commodities serving no life-need. Ever more monumentally life-blind cycles have dwarfed Western industrialization and inequality in scale. The Three Gorges defining China’s wondrous natural beauty have been destroyed, its largest freshwater lake turned to mud and dust, Tibet is looted and overrun, one can hardly breathe or see through the megopolis air, corruption is far more rampant, and hundreds of millions of poor are more life-means deprived than before the U-turn.
Yet the great metaphysical derangement of the era, that money-demand is the ultimate value, rules on. Ruinous disconnect from human and ecological life-grounds has been built in.
The Long Pull Beyond the Great Sickness: Overcome the Impoverishment of Mothers and Children First
Prior analysis has shown how life-capital in selves, societies or nature is the life-wealth that produces more life-wealth without loss. It is what grounds and produces universal human life-goods through generational time – from ecological life-bases to developed producers and tools to knowledge stocks. The civil commons which enable citizens universal access to life-goods are at the same time the historical subject of this life-capital development through generational time – the evolving commonwealth not seen.
The rising recognition that money and markets cannot provide all that we need, that market values have expanded into spheres they don’t belong, and that democracy requires that citizens‘ share a common life’ is now recognized even at Harvard. The argument of Michael Sandals’ 2012 work What Money Can’t Buy: The Moral Limits of Markets expresses the movement towards recognizing this ‘common life’. It lies deeper than market selves ‘where everything is up for sale’. It is ‘what money cannot buy’.
But without the life-capital bases of economic comprehension, we remain at sea in facing the deepening crisis of human and natural life-systems. Despite recognition growing, we have little exactly principled policy to steer by towards the life-recovery and flourishing of the world being destroyed now. We have seen how even the best critiques fail to provide the life-capital grounding and policy frame required. In the first edition of this book, I wrote that ‘the emerging liberative agent in the majority world is the unwaged force of women who are not yet disconnected from the life-economy by their work. They serve the life of their families and communities, not priced commodity production for external profit. They are the hidden underpinnings of the world economy, and the wage equivalent of their life-serving work is estimated at $16 trillion.’9 Since this was written, a civil commons initiative from and affecting unwaged women and mothers has been Brazil’s national programme, the Bolsa Familia (family grant) system. It is exactly planned, financed and implemented at an increasing level with signal success in solving the number-one problem of poverty reduction identified by the Latin American Revolution. It has been outspent by Argentina along the same path, and other nations go a similar route. But the unprecedented success is predictably unspoken in the Western press.
No wonder. The larger picture is that ‘America of the South’ has repudiated control of foreign banks, resource looting, de-taxation of the corporate rich, and private financial control of the economy while keeping market processes intact and used private property as a given of the economy. It began in Venezuela, but the largest and most populous country of over 190 million people, Brazil, has been the smoothest turn. The 2002 national elections were won by a union steelworker followed by his woman-economist successor in 2011. Bear in mind that democratic self-organization in Latin America was once effectively tortured, murdered and terrorized by US-trained and financed armed forces across borders.
The Case of Brazil’s Bolsa Familia as Global Lesson
The Bolsa Familia (Family Programme) in Brazil has been at the forefront of reducing structural impoverishment by public means with no reliance on private finance or market forces. This same family programme (and its like elsewhere) has achieved the life-capital advance of nations by developing healthier and more literate life-capacities of all citizens, along with a massively increased minimum wage and publicly funded employment in building social infrastructures and co-operative industries. Poverty has been halved or more in Brazil, Argentina and Venezuela, and extreme poverty reduced towards elimination before 2020.
The Bolsa Familia programme of Brazil is a standard bearer. Essentially the federal government has supported the country’s unwaged mothers and families in poverty with a guaranteed income (about $55 now being increased and extended to poor farmers). The families automatically receive the income on verified condition that their children go to school and visit clinics. Mothers are required to attend pre-natal and post-natal clinics for an additional grant. Together with an escalated national minimum wage law – raised by 60 per cent – Brazil has reduced extreme poverty in the country towards complete elimination as its 2014 policy goal. As emulation across borders indicates, Brazil offers a generalizable resolution of the extreme poverty, illiteracy and health disorder of the financialization catastrophe.
The regulating principle of the Family Programme is one of life-capital development. The destitute receive public money demand to spend on life-necessities. The next generation is enabled to a better life and a contributing capacity to society by universal education and clinical attention as well as mothers’ upgraded capacities for care by pre-and post-natal learning. What unifies all of these new public investments is development of the human life-capital of the population on an inclusionary basis – the essence of the civil commons as economic. It is neither a market-led nor a managerial solution, misnamed ‘capacity building’. It is public investment in workers and self-directing mothers empowered by secure living income.
The project of a minimum guaranteed income has long been in play. What has distinguished the Brazilian family and minimum-wage programmes are the direct cash transfer to families in known need with no mediation by official or political discretion chains, but conditional on productive work in the minimum-wage case, and children being educated and receiving clinical attention to enable their lives and others’ at once.
Structural Poverty Reduction Across Borders: Defined and Funded Public Policy Determination Decides the Economic Liberation
While Brazil’s Bolsa Familia expresses civil commons and life-capital principles in an integrated way, other societies have had similar dramatic success in reducing extreme poverty and advancing the common human capital bases of society by the same logic – public investment in the life-capacities of all citizens and their life-capital bases. This is the civil commons principle and the organizing idea of the Latin American Revolution with or without the name.
Even Canada, now sliding into corporate market despotism, had a minimum-income policy trial in the 1970s before abdicating its success. The Mincome programme in Canada is worth noting as another variation on the successful path of public income security for all – the opposite of the ruling private money-sequence system. Mincome provided a direct and unconditional income for 1,000 citizens over four years in the town of Dauphin with no intermediating banks or bureaucracy. Students stayed longer in school, more students graduated, more mothers stayed at home with their children, hospital visits dropped by 8.5 per cent (generalized, a saving of billions a year), domestic abuse incidents declined, and work participation did not decrease except for single and new mothers. It was called ‘The Town Without Poverty’.
A reasonable conclusion follows. Guaranteed income works to reduce impoverishment in all respects when it goes directly to citizens. It does not cause work withdrawal except where time is needed for children. It enables educational and health advances of parents and the young. It develops human life-capital, the ultimate basis of all real development. Little or no unemployment insurance, social assistance, and welfare policing are required and – where investigated – there are lower hospital costs and violence. More generally, we can see a concrete way beyond the structural impoverishment of humanity.
Recovery By Life-Capital Investment: The Lesson of Public Spending that Works
As we have seen, recovery from the Great Sickness requires three major policy turns to ensure the public financial base to enable the needed funds and free policy space to invest them in the common life-interest. Instead of corporate-rich private money-sequencing through every life-system in life-blind growth, sovereign states move to responsible economic government by investing public revenues directly for the public interest. High progressive taxation, reclamation of publicly owned resources and their public revenues, and a public banking system provably ensure the financial means.
Argentina under the presidency of Nestor Kirchner (and his wife successor, Cristina) pursued all policy turns with poverty reduction a primary goal. Between 2003 and 2007, extreme poverty had been reduced from 27.6 per cent to 5.1 per cent of the population, and non-extreme poverty had been reduced from 54 per cent to 17.8 per cent (UNDP figures) – that is, a reduction by over 80 per cent of extreme poverty and a reduction of almost 70 per cent in poverty overall. This result of the ‘four policy horsemen’ may be compared to rule by the opposite official policies of foreign and oligarchy money-sequencing which brought Argentina into chaos and destitution in the first place. Recall that Argentina began its recovery by repudiating the standard IMF programme for more social destitution and richer private banks. Argentina’s spectacular success by reversing this programme has, however, made no difference to the same carcinogenic round invading southern Europe. The IMF is again at the centre, Wall Street behind, and the public alternative is again blocked out.
Argentina learned. UNDP figures show that infant mortality was halved; maternal mortality cut by two-thirds; ‘universal basic education’ advanced towards 100 per cent; safe drinking water increased from 66 per cent of the population to 90 per cent; and sewerage systems more than doubled in under eight years. As always, the secret of recovery lies in common life-capital bases which can only recover by public investment in them. Thus, following the Brazilian policy, a state cash transfer goes to the households of millions of poor children, a larger grant in terms of percentage of national income than Brazil’s, and more so, publicly supported co-operatives, agricultural investments, and workers’ industries recover and advance the productive base. As Argentina’s GDP has increased by 96 per cent over eight years as social investment has risen 200 per cent in real terms, the correlations are clear. GDP and social spending increases go together as they did with the US, Canada and Europe before 1980. With social transfers towards the poor, Latin America has gone largely unscathed by the Wall Street-driven depression. The income-receiving poor sustain aggregate demand and real economy better than any Keynesian government spending because they spend all of their new income from government into the economy for life-means with no waste.
Public money is not spent to paying workers to ‘dig holes in the sand’ (Keynes’ phrase), or manufacture armaments (‘military Keynesianism’), or build unneeded polluting cars and highways. Least of all is the public wealth given to big private banks, the post-2008 black-hole policy still hollowing out Europe. Nor is public money kept flowing upwards to the corporate rich in de-taxed, deregulated and subsidized tides. Liberated Latin American states have recognized the real economy only recovers when public investment and tax money go to life-serving public purposes – the reverse of what has happened over 30 years in what are called ‘advanced capitalist systems’.
Throughout, the underpinning law of success is to spend reclaimed public control over credit and currency to achieve human capital development by reducing poverty in all realms.
BEYOND EQUALITY AND INEQUALITY AS SYSTEM SYMPTOMS: PUBLIC SPENDING TO ENABLE PEOPLE’S LIVES AS SUPREME ECONOMIC GOAL
Equality is an appealing goal. But it is called ‘crude levelling’ by Marx and, conversely, ‘envy’ by the rich. The problem is that it is a reverse panacea to the private money-sequencing that multiplies inequality.
The real issue is that people’s lives are deprived of life-goods without which their human capacities are stunted. The real cure is to ensure meaningful employment with enough to live on towards sufficiency for full life-capacity flourishing. Inequality that matters is thus overcome. On the other hand, if it is equality that is the goal, it overrides individual differences of life-capacities. The solution is the bottom line of maximally enabling life capacities themselves with the life-capital bases to do so – the argument of this work.
Today the problem is an economic disorder whose extremes of inequality are symptoms of the system, not its cause. For example, in the US, inequality has exponentially multiplied between the top and bottom tiers by the out-of-control growth of this disorder. In contrast, inequality has not multiplied but been reduced in South America by immense new public investment directly enabling people’s lives. In consequence (all figures in the public domain), Brazil’s top 10 per cent has had negative income growth from 2001 to 2005, while the income of the bottom 10 per cent of the population has increased by 8 per cent. Argentina’s top 5 per cent of incomes has almost halved, from 32 times the income of those in the bottom 5 per cent to 17 times between 2001 and 2011. The same pattern towards less income inequality grew in the West before the 1980 turn. In all cases, the reason has been progressive steering public investment and regulators to enable deprived citizen’s lives by responsible economic ordering.
In sum, growing inequality expresses deeper economic disorder, and solution to this disorder is deeper too – universally enabling the lives and life-capital of citizens in life-capacity measurable ways. In generic formula, money demand is restored to serving life-needs at all levels. Going in the opposite direction, as we have seen, lies behind every degenerate trend today. Falling or rising inequality results from this system-deciding choice.
Venezuela was first off the mark in 1998 in reclaiming the sovereign resource wealth of society, progressively taxing the corporate rich, initiating public credit and banking policies including a Bank of the South for Latin America, and tackling structural impoverishment as a policy priority. In contrast, the US-led West continues to waste public wealth in floods of tax and other subsidies to grow private fortunes at the top while blinkering out the real economy, life-capital bases, and structural impoverishment.
The categories of the ruling paradigm cannot recognize the problem. So as formerly developed societies have reduced publicly funded social investment year after year, Latin America has more than doubled it as a share of national income in the same period. A primary life-result in Venezuela is that Standard Oil’s destitute backyard has reduced the 29.6 per cent living in extreme poverty in 2003 to 6.8 per cent in 2011 (a reduction of 77 per cent), while the overall poverty index has been halved from 55 per cent to 28 per cent. Government-subsidized nourishing food networks cover half the population, while food production has increased by 44 per cent by reducing large estates and equipping and training small producers and co-operatives. UNESCO has declared Venezuela as ‘free of illiteracy’, and has ranked it in the top five worldwide for access to university education (with more women now enrolled than men). The under-fives mortality rate, also targeted by funded public policy and social investment, has been reduced by 28 per cent, and the proportion of people with access to safe drinking water has increased from 68 per cent to 92 per cent.10
The fact patterns and steering collective life-purpose are unreported in Western media. But the underlying moral logic at work across domains and borders is undeniable – to better advance the life-capacities of all by meeting the life-needs of those most structurally deprived by public programmes. The same underlying logic once governed the European Union and welfare states across the world, and they were much more productive at the same time. This is responsible economic government. Yet try to find any such life-coherent policy and public-money allocation in US or Canadian, IMF or EU government spending today. The more people are impoverished by the transnational money-sequence system, the more is demanded to pay debts to private banks, the more unregulated private capital goes elsewhere, the more the 99 per cent are told they must ‘compete harder’ with less.
This is the vicious circle down, and it is carcinogenic in nature. Conversely, human life and society invariably improve by public investment in life-capital regulated by life-standards. The market magic of an invisible hand helping the poor by enriching the rich is a system superstition. It is worth reporting international economist Mark Weisbrot who confirms the first big move of taking back public control for a dynamic and life-coherent economy. ‘The current economic expansion began when the government [of Venezuela] got control over the national oil company in the first quarter of 2003. Since then real (inflation-adjusted) GDP has nearly doubled, growing 94.7% in 5.25 years, or 13.5% annually’ (again similar to Argentina’s growth after recovering vast public wealth formerly going to foreign banks).11
Expressing the real economic advance are disparate but consistent facts in the face of Western denunciation and opposition venom, and transmitted drug-gang violence from Colombia. Over 100,000 worker-owned co-operatives have been formed with public credit and technical training. Production of soybeans has increased by eight times and milk by a half, while exit of food for higher foreign prices has been prohibited (as in Argentina), and instead provided at-cost in food outlets across the country. Throughout, the transformation has been dependent on direct life-serving policies backed by women, workers, the poor and the young gaining better real lives.
The Carcinogenic Investment Cycle in Reprise
The ruling system of Wall Street, NATO, and client states is opposite in steering purpose. Tax, financial, natural resource and investment policies are structured to ignore the erosion of social and natural life-capital bases to grow private profit and commodities instead.
We have studied the carcinogenic loops – private bank compound-interest loans which bleed public sectors dry, destabilizing speculations in sovereign currencies and bonds, asset-stripping buyouts and disemploying mergers, predatory repossessions, loan-shark rates on poor debtors and trust stripping, endless takeovers of productive firms by foreign multinationals with only banknotes, ecologically devastating mega-projects and loot-mining with no environmental or social criteria, lethal armaments manufacture led by bribery for sales to despots, financially intermediations of every large transaction from public privatizations to vulture-capital lawsuits, and stock market derivatives to ride and exploit money-sequence tides and futures (with hundreds of millions more people going hungry as volumes of price-index fund speculation multiply).12
The direction is one way and life-disabling. What is called ‘investment capital’ is increasingly leveraging high ratios of demand to legal tender, and private pricing all that exists to more financial extractions and degraded life-means. While no structure of impoverishment has been ever improved by these ‘investments’, they are still proclaimed as ‘the capital which societies must attract to survive’.
Conversely, if any society resists the plans to put its valuable resources into transnational money-sequence growth, armed invasion may follow – what US General Wesley Clark has reported has been planned for Iraq, Libya, Sudan, Somalia, Iran, and Syria since November 2001.
The Unspoken War
Trade, capital and central bank mechanisms to subjugate economies to the transnational money-sequence disorder has been continuous since before the fall of the Soviet Union. But the most relentless war of attrition has been against domestic welfare states, and it is waged by a four-pronged assault:
- tax-cuts to make life-serving social programmes unaffordable in the long term, pre-empting them financially from any future development;
- thereby depriving workforces of prior social security to ensure submission to increasingly insecure, poorly paid jobs with no benefit and pensions;
- while further opening multi-trillion dollar public government social infrastructures and services to privatization for national and transnational corporate profits;
- even if actual economic growth and social well-being is achieved by higher-growth welfare states before 1980 and today in Latin America and Scandanavia.
Is it for the benefit of the Third World getting more of the jobs and investment, as many believe? ‘Emerging markets’ are ‘cannibalized’, Brazil’s President Dilma Rousseff reported at the June 2012 BRICS Summit.
The Reclamation of Society by Democratic Methods and Public Investment
The Latin American Revolution is a reversal of the neo-liberal counter-revolution. Progressive taxation is restored, and regressive taxation reduced. Publicly owned resources are not given away, but reclaimed in high public shares in profits and public control. The Wall Street-led financing and banking system is repelled, and replaced by massive public investment of recovered revenues. Structures of impoverishment are not deepened, but are a policy priority to overcome.
Capitalist private property is not overthrown. Rather, public rights and property are reclaimed for public benefit with personal property rights remaining secure. Nationalization is not sweeping, and normally goes with market-value compensation. The transnational corporate invasion and occupation is reversed by constitutional rights and means. Throughout, methods have been lawful and civilized rather than lawless and barbarous as in the preceding capitalist disorder. Elected governments do not torture and kill. Policies and practices do not select for the money rich becoming richer at the cost of the majority’s lives, but for better lives for all in responsible economics.
Yet as Latin America overcomes the Great Sickness, it grows worse elsewhere. The once universalizing life-protective state is dismantled and profitized. Growing majorities go jobless or poorer. The planetary biosphere is pillaged and polluted on almost every plane that science can determine.
What the Occupy Arab Spring and Occupy Wall Street Movements have Lacked
The ‘owl of Minerva’, Hegel famously says, ‘only takes flight when the shades of twilight have fallen’. He meant that we cannot understand what is going on until it has happened. But we can. The inner logic of social recovery has been spelled out. Yet the life-grounded policy structure that always works has been unrecognized in the ‘Arab Spring’ and ‘Occupy Wall Street’ Movements. This is not only because the mass media are advertising vehicles hostile by nature to what does not serve private advertisers and owners. Historical amnesia of the real economy goes deeper. The transcultural form of recovery from social devastation has not been pursued – organization around people’s universal human life-needs led by public investment in life-capital development. ‘By their policies you will know them.’
Nothing stops responsible economic government – as the rise out of ashes of every developed society after 1945 has shown. Even armed invasion becomes unviable if the people are organized around clear public policies whose life-capital base has become sound. The reverse projections of the ancien regime are unable to take hold in a people whose life-capacities are developing. This is what Latin America has shown and what the Occupy Wall Street Movement and the Arab Spring have not deciphered. The best of these brave movements has been confined to the immediate present of cooperative community, until beaten down. Exemplary behaviour cannot defeat a system which multiplies its disorder as its meaning – as mace-spray into the faces of helpless pacifists by American police, the mauling of young women by Islamic state armed forces, and full-spectrum armed sweeps show while the old policies of dispossession continue.
The rules and laws must be reset to protect and enable the lives and life-bases of the people. The Arab Spring did not even manage to repeal the emergency-law right to cage citizens at will, or declare a policy. The Occupy Wall Street Movement revelled in not having any policy position at all. At the same time, the ‘President of hope’ was electorally funded by and promised to protect Wall Street against the people.13
The Grammar of Democratic Recovery: Transformation by Life-Capital Policy-Deciders
In the America of the South, a legal and constitutional programme for recovery was formed and moved swiftly across borders – the underlying life-capital policy framework laid bare in the last 30 pages. Yet the rising of tens of millions of people across borders into this working form might as well not have happened for the ‘free press’. Even Marxists without a life-ground beneath the mode of production do not decode the life-capital base. But the turn has happened. It has transformed Argentina, Brazil and Venezuela. It has moved through Bolivia, Uruguay, Ecuador, Honduras, Peru, and Paraguay and into Central America with Nicaragua and El Salvador to Caribbean islands – Dominica, St Vincent, and Antigua-Barbuda.
Throughout US-supported armed force and palace coups against democratically elected presidents have sought to turn the tide – 2002 against Chavez by armed-force kidnapping reversed by popular forces and mass support; Honduras by armed kidnapping and coup d’état in 2009 and return to death-squad rule ever since; Ecuador by armed-force kidnapping in 2010 stopped by loyal forces; Peru still locked into resource-mining corporate rule despite a left-president election; and Paraguay in 2011 where the legendary ex-bishop president has been impeached without due process and with armed-force and US support.14
But the rising tide of democratic and life-grounded transformation has not been turned back. It seemed very close to reversal in Venezuela in the October election of 2012 as I completed this study. But ‘free press’ reports only confirmed the depth of the ruling disorder. Even the ‘left’ Guardian headlined ‘Fear of defeat’ and ‘strongman’s last stand’, ‘climate of fear’ and ‘voter suppression’ while not reporting scientific polls and the on-the-ground monitoring by president Jimmy Carter who concluded ‘the election process in Venezuela is the best in the world’.15 Everywhere the repetition of Chavez as ‘dictator’ was the invalidating predicate against facts. The Washington Post reported that ‘Chavez controls most television channels’ when only 5 per cent are owned by the government. It warned that all must be ‘ready to react if Chavez attempts to remain in power’ against the election results. He won in a landslide predicted by impartial polls.
The New Yorker reported that ‘Venezuela leads Latin America in homicides’ – true of Honduras where the US-supported armed overthrow of elected President Zelaya began death-squad dictatorship again. The New York Times headlined ‘How Hugo Chavez became Irrelevant’ in op-ed praise of Guatemala’s president Otto Molina, an ex-death-squad officer under the Rios Montt dictatorship which murdered tens of thousands of people. It lauded him as, unlike Chavez, one of Latin America’s leaders who do not ‘turn their backs on democratic institutions’.
We see here a synecdoche of the Great Sickness reaching into the highest quarters of public record. Yet the unspeakable social alternative has worked not only in Latin America since 2000, but in every working economy after 1945. What drives success is real economy to provide life-goods otherwise in short supply – including jobs for youth and the unemployed, literacy and arts, free health care in need, and all without which life-capacities are lost. The means to do so are ensured by public control of public resources and finances including taxation of the corporate rich and, most deeply, large-scale public money allocation to life-capital protection and development across domains.
Latin America has expressed this policy syntax of economic success. Its nations have cored in on reclaimed public revenues for investment in life-capital, most of all productive jobs and liveable income for the young, mothers and families, and the unemployed. It has led beyond the post-1945 Reconstruction by immense public investment into self-governing co-operatives not controlled by the central state or profit-first corporations. It has led in unused land and factory reclamation by disemployed workers, participatory political structures, and enabling the lives of the poor as first priority. We see here the civil commons evolving.
Beyond Keynes and Marx to Public Investment in Life-Capital
The great problem for humankind which Keynes perceived was ‘to combine economic efficiency with social justice and individual liberty’. But how? The vital conjuncture occurs only with publicly accountable investment in people’s lives, productive work, and universal life-support systems.
Life-coherent economy moves beyond the American Dream of everyone wanting to be privately rich. Public policies and investments are structured to mutual benefit beginning with the most life-deprived. Transnational money profit for ‘investors’ as ultimately regulating value is rejected for real economy. The underlying life-capital logic and civil community become one.
Consider the historical expressions. The Bolivarian Alliance for the Americas (ALBA) builds economic integration on the basis of ‘social welfare, barter and mutual assistance’ with its own unity of currency, the ‘sucre’, in place of transnational corporate ‘free trade’ to protect money ‘profit opportunity’ alone. The Bank of the South joins richer nations in lending money to other nations at low or nil interest for building social programmes and infrastructures. The Community of Latin American and Caribbean States (CELAC) seeks political organization across 33 countries of 600 million people outside private money-capital control by the US, Canada and the Organization of American States (OAS). The Union Petro America connects societies with state oil companies in one organization whose members exchange oil for life-goods of countries without oil. The Union of South American Nations (UNASUR) aims at the direct elimination of poverty and illiteracy across borders as opposed to belief in an supra-human invisible hand. The World Federation of Unions joins 84 countries is a response to global de-unionization by the transnational money-sequence disorder.
To complete the all-fronts alternative to recover from the malignant growth system, the New Television of the South (Telesur) seeks to institute alternative to US private corporate media and the killing of independent journalists (22 killed in Honduras since the 2009 coup). Revealingly the US registered a formal complaint against Telesur saying it was against ‘democratic and accountable governance’ – as always, the reverse projection. Telesur remains blocked across the Americas. An electronic public communication system across homes free of private money-sequence control is the missing link. It explains how the disorder has spread so far and deep without notice.
Figures are gleaned from http://www.americanprogressaction.org/issues/economy/report/2012/02/15/11069/chinese-state-owned-and-state-controlled-enterprises/, retrieved October 12.
The best narrative account of this legislation is given by Linda McQuaig in her Shooting The Hippo, Toronto: Penguin Viking, 1995. For direct observation of its continuous violation by giveaways of federal debt to commercial banks, removal of reserve requirements, unnecessary foreign borrowing and repression of alternative policies, see William Krehm, A Law Unto Itself: The Bank of Canada, Toronto: Stoddart, 1993.
See Ellen Brown, ‘The Global Debt Crisis: How We Got Into It and How We Get Out’, for these last figures and for a superb short history of the private-bank system as shell-game, http://www.globalresearch.ca/index.php?context=va&aid=25154.
Milton Friedman, ‘A Monetary and Fiscal Framework for Economic Stability’, American Economic Review, Vol. 38 (1948), 245–64. See also John H. Hotson, ‘Ending the Debt Money System’, Challenge (March–April 1985), 48–50, and ‘Professor Friedman’s Goals Applauded, His Means Questioned’, Challenge (September–October 1985), 59–61. This is apparently a position that the politically opportunistic Friedman has thought better to remain silent on in the present circumstances of the rule over societies of private corporate debt-holders and banks.
The 2012 IMF paper is available at http://www.imf.org/external/pubs/ft/wp12202.pdf.
‘The colonies’, said Franklin, ‘would have gladly borne a little tax on tea and other matters, had it not been that England took away from the Colonies their money, which created unemployment and dissatisfaction’ (cited by Patrick S.J. Carmack, ‘The Money Masters’, Monetary Reform Magazine (Fall 1997), 33). It was in this light that US President Thomas Jefferson later warned, ‘I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs’ (cited in William Hickson, Triumph of the Bankers: Money and Banking in the Eighteenth and Nineteenth Centuries, Westport, CT: Praeger, 1993, p. 94). About 170 years later, Canada’s Prime Minister William Lyon Mackenzie King declared, ‘Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile … Once a nation parts with control of its credit, it matters not who makes the nation’s laws … Usury once in control will wreck any nation’ (cited in Monetary Reform (Summer 1996), 16).
While African nations are bled at the average rate of four times their total health and education budgets by debt services to foreign moneylenders, it is little known that the creation of money by government at low interest rates for private and public enterprises whose interest payments revert to public ownership is a long-established device of prosperous growth. We have seen that the success of the pre-revolutionary American colonies depended on this device, and that its prohibition by the British government precipitated the revolution. (See also John Kenneth Galbraith, Money, Boston: Houghton-Mifflin, 1975, pp. 45–89, on this hidden dimension of American politics.) It was also the means whereby the Canadian government after the Second World War paid back twice as high a debt as a percentage of GDP than is permitted by the European Union and maintained a robust growth rate at the same time. In exact contrast to the stripping of social sectors which governments across the world have collaborated with to ‘pay back debts’, central bank policies reduced foreign debt from 30.4 per cent of GNP to 6.3 per cent in seven years, and simultaneously reduced overall debt from 140 per cent of GDP to 26 per cent of GNP over a longer period, all the while increasing government expenditures on health, education, social security and other civil commons infrastructure (William Krehm, ‘Let’s Talk Bonds’, Economic Reform (May 1996), 4).
Theorists of the life-economy are distinctively illuminating in their exposures of the insanity of the money-sequence paradigm. Some authors of this evolving leadership of the civil commons who have made an international written contribution are Susan George, Hazel Henderson, Maria Mies, Vandana Shiva, Terisa Turner and Marilyn Waring. A classic work in the area is Mies and Shiva, Ecofeminism. The $16 trillion figure is from Hazel Henderson, ‘The Price of Everything: The Value of Nothing’, Economic Reform (June 1988), 3.
Figures are reported in http://venezuelanalysis.com/analysis/6646, retrieved August 8, 2012.
Cited by http://www.cepr.net/documents/publications/venezuela_update_2008_02.pdf, retrieved August 9, 2012.
President Obama not only told Wall Street banking executives ‘I am protecting you’ as the people roiled in the streets against Wall Street – the very activist waves that voted him into power. He told the bankers as they were unprecedentedly on the mat to be replaced by a responsible public banking system, ‘My administration is the only thing between you and the pitchforks.’ We may recall the words cited earlier in this chapter of Republican candidate for President, Patrick Buchanan, that unless there was a change in the ‘cancer eating away at the economy’, the people would be ‘coming with pitchforks after [you]’. Gary Younge reports Obama’s direct words in ‘sometimes you must insist upon the pitchforks’, Guardian Weekly, July 20, 2012, p. 19. We may note that Obama’s opponent in the 2012 contest for President – ‘America’s free elections’ – was George Romney, a vulture capitalist.
Few know much of Paraguay except that it has long been a Latin American centre for Nazi leaders like Joseph Mengele and a long fascist rule by Joseph Stroessner. The 61-year rule of the extreme right Colorado Party ended at the top when the liberation theology leader and former bishop President Fernando Luogo was elected in 2008 in another step forward for the Latin American democratic reconstruction. Paraguay provides another paradigm example of the overrunning forces of transnational money-sequence destruction backed by corporate state treason and armed force. Foreign mining corporations – especially Rio Tinto – abhorred the President’s blocking of a multi-million aluminum plant likely to despoil the environment and suck public money and resources (for example, demanding not only as much electric power as 9.6 million people, but at heavily subsidized rates not available to citizens). As soon as the ruling-party coup backed as usual by the military and the US was over, all these plans went ahead along with open doors to Monsanto cotton GMOs and the giant Cargill food oligopoly’s demands – all given large tracts of land for mono-crop plantations – and the opposition to US Southern Command deployments and a new military base in Paraguay was reversed. See, for example, Asis Asmi, ‘Canadian Company Linked to the Right-Wing Coup in Paraguay’, CCPA Monitor (October 2012), 28–9.
The dated media reports and headlines cited in this paragraph and the next are cited from Kheanne Bheatt, North American Congress on Latin America, October 10, 2012, http://truth-out.org/news/item/12034-a-hall-of-shame-for-venezuelan-elections-coverageitem/, retrieved October 11.