"Capitalism - a threat to life on Earth"

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By Jay Janson

'Capitalism' Presents Itself as Unreformable by Definition, Marginalizing Ethics and Social Well-being.

A little kid, in the late 1930s and early 1940s, learned from overhearing comments and expletives in the street, in stores and even on the radio that a capitalist was a dangerous, despicable, dishonorable, greedy out of control individual bent on deceptively tricking innocent people out of their money, possessions, homes and the fruit of their own labor.

Of course this was not the opinion of the child, rather part of his education growing up in America. In his school history books the word capitalist never appeared to describe the fabulously wealthy and powerful 'captains' of American industry, though the question, "Were they robber barons?" was put forward in college texts for discussion.

So at a tender age, it was the word capitalist' not capitalism that entered one's vocabulary. It was only when that kid became an elderly person, that the term 'capitalism' began to be gingerly referred to by TV commentators and op-ed writers in conglomerate owned media, in recent years sanitized, justified as necessary, and its detractions forgiven in obvious propaganda that presumptuously credited most of modern human achievement and progress to ‘the capitalism system’.

Terms concocted by adding the suffix -ism are always far less easily defined and understood than their root word.

Dictionary.com defines cap i tal as "any form of wealth employed or capable of being employed in the production of more wealth" (a straightforward enough concept, clear in meaning, and usefully employed since ancient times without awakening much controversy.

Dictionary.com defines cap·i·tal·ism as "an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth."

American Heritage Dictionary, cap·i·tal·ism, "an economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market."

WordNet Dictionary, capitalism, "an economic system based on private ownership of capital."

First curiosity: since the world's cities and miraculous conveniences and artistic marvels are the result of cooperative effort, how does it make sense to have all this held in private ownership, and how did it arrive to be so on most of the inhabited areas of the planet in our time.

Second observation: why in the space age of interplanetary voyages, instant communication technologies and mind-boggling achievements in the biological sciences, does more than half of mankind live on less than two dollars a day, a billon of those on a dollar a day, half of whom suffer the pangs of hunger throughout their lives. And why do wars over energy resources and class conflicts take the lives of millions, while most of mankind is blocked from truthful education with cartels of corporate media actually mis and dis educating its audience pushing it toward a commercialized life style of selfish material consumption resulting in increasing mental disorders of anxiety and depression.

But our gloomy and challenging title Capitalism – a Threat to Life and Earth notwithstanding, life, both as presented in a natural setting and also even within trials and tribulations attributed to the vices of capitalism, remains in essence, at least ideally, so joyous and beautiful while looking into the eyes of each other’s children. We shall keep the wonder of life in mind as worth fighting to protect as we admit to our mentors dreary descriptions of a reality that has engendered the forming of an OpEdNews discussion group on capitalism.

David Korten, in When Corporations Rule the World wrote,

“Rule by financial capital- by money and those who have it-in disregard of all non-financial values, has triumphed over democracy, markets, justice, life, and spirit”

In One World Ready Or Not - The Manic Logic of Global Capitalism, William Greider writes,

“In short, if I am compelled to guess the future, I would estimate that the global system will, indeed, probably experience a series of terrible events - wrenching calamities that are economic or social or environmental in nature - before common sense can prevail”

From The Growing Power of Big Business, Duncan MacLaren and Ian Willmore:

“The world’s five largest companies together generate annual sales greater than the combined incomes of the 46 poorest countries in the world. Multinationals have gained such wealth and power because governments have systematically removed barriers to trade, while failing to balance these new market opportunities with global rules to prevent exploitation of the environment and local communities. This potent cocktail of greater power and weaker regulation is contributing to growing levels of environmental damage: Half of the world’s forests have now been completely destroyed. Half of the world’s rivers are seriously depleted and polluted. Over a third of the world’s fish stocks are either depleted or over-exploited. Meanwhile, two-thirds of the world’s population now survives on less than US$2 a day, 50,000 dying from malnutrition even in a good year.”

According to Rajesh Makwana in Economic Sharing: A Shift In Global Values,

“Whilst financial wealth soars to new heights for the few, the majority world are growing relatively poorer in the face of unfair trade, debt-based finance and grossly insufficient international aid. At the same time, developing countries have to endure the harsh environmental consequences of the industrial growth that fuels the skewed generation of wealth. Instead of being given the tools to end poverty they find themselves forced to systematically abdicate democratic control over their economies and resources to economically dominant countries and corporations.

This all rests within a corrupt and unstable global financial architecture based largely on speculation and bearing no relevance to the lives of most people. Within this structure, multinational corporations have thrived and shaped the thwarted ideals of consumer society, ensuring grave environmental neglect through over consumption. In the meantime, the scourge of mass poverty has been neglected and left to commerce and damaging export-oriented trade and agricultural practices that prioritize profit over food security.

With climate change, financial instability and political and economic competition between nations, humanity finds itself at the edge of a dark abyss.

An effective and uniting global framework for economic and political activity must supersede the restrictive and often divisive prescriptions of socialism, communism and capitalism.”

But rather than quote the words of critics, let us quote John Maynard Keynes, credited with molding the techniques of government intervention that saved the capitalist system after the Second World War. In his retirement he expected,

“in a more enlightened future, a return to some of the most sure and certain principles of religion and traditional value – that avarice is a vice, that the exaction of usury is a misdemeanor, and the detestable love of money as a possession – as distinguished from love of money as a means to the enjoyments realities of life – will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to specialists in mental disease.”

A most devastating indictment of the capitalist system Keynes promoted all his working life from a wiser and more honest perspective of his maturity.

From another of establishment’s powerful insiders, William O. Douglas, former U.S. Supreme Court Justice,

"Our upside down welfare state is "socialism for the rich, free enterprise for the poor." The great welfare scandal of the age concerns the dole we give rich people."

From George Soros, that creator and manipulator of multi-billion dollar hedge funds credited with sinking the currencies of Asian nations and earlier even those of Sweden and Great Britain,

“Perhaps the greatest threat to freedom and democracy in the world today comes from the formation of unholy alliances between government and business. This is not a new phenomenon. It used to be called fascism...The outward appearances of the democratic process are observed, but the powers of the state are diverted to the benefit of private interests.

And from the highest of technical bureaucrats, an elucidating in depth 1937 warning from Lord Josiah Stamp, Director, Bank of England,

“The modern banking system manufactures money out of nothing. The most astounding piece of sleight of hand ever invented. If you want to be slaves of bankers, and pay the costs of your own slavery, let the banks create money. Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money."

Apropos the January 25th announced $7.2 billion ‘magic fraud’ discovery by the giant French bank Société Générale, we can open for critical discussion and meaningful investigation appropriate to study and understand how fictitious money in the form of fiduciary inventions function to shift, slide, slip, and top off various complex forms of physical wealth representations and ‘documentations’ into the accounts of the power hungry unethical trading elite who control much of life on earth.

French Bank Says Rogue Trader Lost $7 Billion, New York Times, Jan.

25, ‘08

"PARIS — A French bank announced Thursday that it had lost $7.2 billion, not because of complex sub prime loans, but the old-fashioned

way — because a 31-year-old rogue trader made bad bets on stocks and hen, in trying to cover up those losses, dug himself deeper into a

hole.

Davos Diary: L’Affaire Kerviel Is the Topic du Jour (January 24,

2008) Managing Globalization Blog, The Fraud Keeps Getting Bigger

One unanswered question that authorities will investigate is why it

took so long for the bank to uncover the fraud.

Christian Noyer, governor of the Bank of France, the nation’s central

bank, said that the losses had put Société Générale in “a very

dangerous situation,” but that the bank’s plan to seek 5.5 billion

euros ($8 billion) in fresh capital from shareholders would return it

to financial health. [?]

In 1995, Nick Leeson, a Singapore-based trader, incurred the

equivalent of $1.4 billion in losses over $27 billion in bad bets on

Japanese markets. (Similarly, Mr. Kerviel bet on European stock

indexes.)

In the end, Mr. Leeson brought down the venerable British bank

Barings. After spending four years in prison and writing a book, he

is on the lecture circuit. [!]

…

While Société Générale will survive — in contrast to Barings, which

was broken up and sold — the loss is an embarrassment to a venerable

French institution. It was founded in 1864 under Napoleon III, and

today has 120,000 employees and 22.5 million customers worldwide.

When the fraud was unveiled, Mr. Bouton said, it was “imperative that

the enormous position that he had built, and hidden, be closed out as

rapidly as possible.” [?]

…

The scandal brought more scrutiny to European banks, which have been riticized for their lack of transparency. … SocGen, as it is widely known, as been criticized for a reluctance to be more forthcoming about its subprime xposure, [?] but the bank was generally well regarded in the financial world.

This month Risk Magazine, a British publication, named SocGen

“the equity derivatives house of the year,” praising its ability to manage its risks.

[note: the word 'Risk', also the name of a gambling board game]

The bombshell for the bank came as mounting losses from

subprime-related investments have raised questions about risk

management at institutions, and must have influence the U.S. Federal

Reserve’s decision of how much to lower the prime rate.

Howard W. Lutnick, chief executive of Cantor Fitzgerald,

“One person could engineer it — but how could one person finance it?”

Mr. Lutnick said on the sidelines of the World Economic Forum. “The

question for the risk management department is, how was this kind of

fraud financed? Where did that money come from?”

Howard Davies, former chairman of the Financial Services Authority of

Britain and now director of the London School of Economics, said the

bank’s explanation of events seemed incomplete. “I don’t think we’ve

had the full story,”

C. Ricardo Esteves, executive director of Banco Hipotecario of

Argentina, was more blunt: “It is not credible. One person

responsible for this? I just don’t believe it.”

The OpEdNews discussion group Capitalism – a Threat to Life on Earth might seek to understand:

How does this mega-enormous ‘loss’, theft or ‘transfer’ affect the lives of ordinary citizens? Banks are public corporations, albeit of ‘Limited’ responsibility.

What is the method of raising the ‘replacement’ funds from shareholders? Are ordinary people not hurt in the sale of such debt? To what degree with the taxpaying citizens pay for a government replenishing SocGen?

Where is the $7.2 billion now? It must be in accounts of those banks, funds, institutions or individuals who bet and hedged in the opposite direction than Société Générale. No one speaks of this, nor mentions that if the market had performed other than it did, then SocGen would have 'gained' and others 'lost'. If an employee's betting success were discovered, would SocGen have made a similar announcement of the employee's hacking and fraud? Or is its existence of these monies trading on the margin intended to me somehow ephemeral and tricky?

A week later, the NY Times coverage continued, “When there is an event of this nature, it cannot remain without consequences as far as responsibilities are concerned,” the French president, Nicolas Sarkozy, told reporters while on a visit to a University of Paris campus.

Henri Guaino, a top adviser to Mr. Sarkozy, went further, warning that the government would intervene if any company made a hostile move against Société Générale. “I don’t think the state would remain with its arms crossed if someone, whoever the predator, tried to take advantage of the situation,” he said Sunday night on French television.

France has a long record of protecting its landmark companies, or national champions, from takeovers and bankruptcy.

These fixtures of the French political landscape — “economic patriotism,” as it is known here — have included the bailout of another large bank, Crédit Lyonnais, at a cost of $20 billion to taxpayers in the 1990s and a series of defensive industrial mergers to stave off foreign bids in recent years.

As an arbitrageur, Mr. Kerviel was entrusted to purchase one portfolio of stock index futures and at the same time sell a similar mixture of index futures with a slightly different value, as a hedge. But while Mr. Kerviel, according to the bank, put sizable, real purchases in one portfolio, he created fictitious sales transactions in the second, offsetting portfolio. This gave the impression to risk managers that the risks in the first portfolio had been hedged when in fact they had not been.

Mr. Kerviel said he made his first fictitious transactions at Société Générale late in 2005, not long after moving to the trading desk from the risk-management department.

Mr. Kerviel also said it was “not exceptional” for traders at the bank to exceed their authorized trading limits. Mr. Marin emphasized that this did not imply that other bank

employees engaged"

$7.2 billion left SocGen, but the total of bets made was $70 billion. Why is all this mega- speculation and massive betting of forms of money representing the wealth of the world considered ethical and/or useful? Why is it still legal, despite the many proposals to make at least hedge funds and marginal trading in currencies illegal?

Why are not more people incredulous of the rigged nature of the collaboration between special powerful interests, certain grand private investments and government bailouts and profits protections?

When will post-fraud admissions of lack of transparency finally spread to include a wide confession that the present international banking system is among other things a perfectly respectable public accepted conspiracy of the wealthy, their family members and their invited-in cronies abetted by well paid hired financial hit men, government agencies, militaries, and secret services like the U.S. CIA.

In Small Is Beautiful - Economics as if People Mattered, E. F. Schumacher wrote that Americans must take heart,

“we are not blind! We are men and women with eyes and brains...and we don't have to be driven hither and thither by the blind workings of The Market, or of History, or of Progress, or of any other abstraction."

We can observe events unfolding all around the world keeping our discussion group theme in mind. The post-election violence in Kenya, for example, is portrayed by capitalist media as tribal in nature, with little reference to neo-colonialist success in setting up a capitalist economy upon Kenya's liberation from direct colonial rule, occupation and a colonial-capitalist exploitive economy. A success widely attributed to using one tribe and its associates to govern in the interests of Great Britain and transnational corporations based in Europe. Our discussion group's reading list should include World on Fire: How Exporting FreeMarket Democracy Breeds Ethnic Hatred and Global Instability by Amy Chua

From yet another recommended book, For the Common Good by Herman E. Daly and John B. Cobb Jr.

";A political community cannot be healthy, if it cannot exercise a significant measure of control over its economic life."

Returning to the kid in the opening paragraph that came to hear about capitalists and later capitalism; he grew into a young musician extremely busy practicing his scales, captivated by the beauty of music, and had little time to try to understand political economy. When he did ask questions, older students would advise him to “Just practice Man - n’ stick to your horn!”

Though he sympathized with the poor, who were suffering from what he observed to be the ignorant anti-social selfishness of a stiff and antipathetic to their fellow man, effete white racist basically Anglo-Saxon wealthy upper classes oblivious to natural ethical behavior and decent humanity, he decided since it appeared to be all about money, he didn’t mind living under such a skewed economic system as long as people were not being killed over it, like during the violent union busting at the time of his birth.

The army draft and a million dead Koreans made him less accepting of a murderous immorality of mass life-taking lies put out by the power brokers of the status quo. (To be continued),

Margaret Mead encourages, "Never doubt that a small group of thoughtful committed citizens can change the world. Indeed, it is the only thing that ever has."

And Anne Frank, "How wonderful it is that nobody need wait a single minute before starting to improve the world."

Let us enjoy our camaraderie while discussing the serious theme before us.

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Bibliography:

When Corporations Rule the World, David Korten, 2001

One World Ready Or Not - The Manic Logic of Global Capitalism, William Greider, 1997

The Growing Power of Big Business, Duncan MacLaren and Ian Willmore openDemocracy February 20, 2003

Economic Sharing: A Shift In Global Values, Rajesh Makwana, Copyright 2007 Share The World's Resources (www.stwr.net)

Small Is Beautiful - Economics as if People Mattered, E. F. Schumacher, 1973

World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability" by Amy Chua, 2004

Capitalism – a threat to life on Earth Discussion Group,

Capitalism as the Engine of Global Crisis by Richard Mynich, Jan. 28, 2008,

Why I Say Capitalism is the Problem, by Cameron James, Jan. 28, 2008

Authors Bio: Musician and writer, who has lived and worked on all the continents and whose articles on media have been published in China, Italy, England and the US, and now resides in New York City.

OpEdNews

Posted: 1/30/08

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