The Federal Reserve and the Global Fracture

Posted on March 16, 2016 by Reid Mukai

An Interview with Finnish Journalist Antti J. Ronkainen

Michael Hudson

Antti J. Ronkainen: The Federal Reserve is the most significant central bank in the world. How does it contribute to the domestic policy of the United States?

Michael Hudson: The Federal Reserve supports the status quo. It would not want to create a crisis before the election. Today it is part of the Democratic Party’s re-election campaign, and its job is to serve Hillary Clinton’s campaign contributors on Wall Street. It is trying to spur recovery by resuming its Bubble Economy subsidy for Wall Street, not by supporting the industrial economy. What the economy needs is a debt writedown, not more debt leveraging such as Quantitative Easing has aimed to promote. But the Fed is in a state of denial that the U.S. and European economies are plagued by debt deflation.

The Fed uses only one policy: influencing interest rates by creating bank reserves at low give-away charges. It enables banks too make easy gains simply by borrowing from it and leaving the money on deposit to earn interest (which has been paid since the 2008 crisis to help subsidize the banks, mainly the largest ones). The effect is to fund the asset markets – bonds, stocks and real estate – not the economy at large. Banks also are heavy arbitrage players in foreign exchange markets. But this doesn’t help the economy recover, any more than the ZIRP (Zero Interest-Rate Policy) since 2001 has done for Japan. Financial markets are the liabilities side of the economy’s balance sheet, not the asset side.

The last thing either U.S. party wants is for the election to focus on this policy failure. The Fed, Treasury and Justice Department will be just as pro-Wall Street under Hillary. There would be no prosecutions of bank fraud, there would be another bank-friendly Attorney General, and a willingness to subsidize banks now that the Dodd-Frank bank reform has been diluted from what it originally promised to be.

So let’s go back to beginning. When the Great Financial Crisis escalated in 2008 the Fed’s response was to lower its main interest rate to nearly zero. Why?

The aim of lowering interest rates was to provide banks with cheap credit. The pretense was that banks might lend to help the economy get going again. But the Fed’s idea was simply to re-inflate the Bubble Economy. It aimed at restoring the value of the mortgages that banks had in their loan portfolios. The hope was that easy credit would spur new mortgage lending to bid housing prices back up – as if this would help the economy rather than simply raising the price of home ownership.

But banks weren’t going to make mortgage loans to a housing market that already was over-lent. Instead, homeowners had to start paying down the mortgages they had taken out. Banks also reduced their credit-card exposure by a few hundred billion dollars. So instead of receiving new credit, the economy was saddled with having to repay debts.

Banks did make money, but not by lending into the “real” production and consumption economy. They mainly engaged in arbitrage and speculation, and lending to hedge funds and companies to buy their own stocks yielding higher dividend returns than the low interest rates that were available.

In addition to the near zero interest rates, the Fed bought US Treasury bonds and mortgage backed securities (MBS) with almost $4 trillion during three rounds of Quantitative Easing stimulus. How have these measures affected the real economy and financial markets?

In 2008 the Federal Reserve had a choice: It could save the economy, or it could save the banks. It might have used a fraction of what became the vast QE credit – for example $1 trillion – to pay off the bad mortgages and write them down. That would have helped save the economy from debt deflation. Instead, the Fed simply wanted to re-inflate the bubble, to save banks from having to suffer losses on their junk mortgages and other bad loans.

Keeping these debts on the books, in full, let banks foreclose on defaulting homeowners. This intensified the debt-deflation, pushing the economy into its present post-2008 depression. The debt overhead is keeping it depressed.

One therefore can speak of a financial war waged by Wall Street against the economy. The Fed is a major weapon in this war. Its constituency is Wall Street. Like the Justice and Treasury Departments, it has been captured and taken hostage.

Federal Reserve chairwoman Janet Yellen’s husband, George Akerlof, has written a good article about looting and fraud as ways to make money. But instead of saying that looting and fraud are bad, the Fed has refused to regulate or move against such activities. It evidently recognizes that looting and fraud are what Wall Street is all about – or at least that the financial system would come crashing down if an attempt were made to clean it up!

So neither the Fed nor the Justice Department or other U.S. Government agencies has sanctioned or arrested a single banker for the trillions of dollars of financial fraud. Just the opposite: The big banks where the fraud was concentrated have been made even larger and more dominant. The effect has been to drive out of business the smaller banks not so involved in derivative bets and other speculation.

The bottom line is that banks made much more by getting Alan Greenspan and the Clinton-Bush Treasury officials to deregulate fraud than they could have made by traditional safe lending. But their gains have increased the economy’s overhead.

Do you believe Mike Whitney’s argument that QE was about a tradeoff between the Fed and the government: the Fed pumped the new bubble and saved the banks that the government didn’t need to bail out more banks. The government’s role was to impose austerity so that inflation and employment didn’t rise – which would have forced the Fed to raise interest rates, ending its QE program? source: http://www.counterpunch.org/2016/01/15/the-chart-that-explains-everything/]

That was a great chart that Mike put up from Richard Koo, and you should reproduce it here. It shows that the Fed’s enormous credit creation had zero effect on raising commodity prices or wages. But stock market prices doubled in just six years, 2008-15, and bond prices rose to new peaks. Banks left much of the QE credit on deposit with the Fed, earning an interest giveaway premium.

(Richard Koo: “The struggle between markets and central banks has only just begun,”

http://www.businessinsider.com/richard-koo-struggle-between-markets-and-central-banks-has-only-just-begun-2015-9?r=UK&IR=T

The important point is that the Fed (backed by the Obama Administration) refused to use this $4 trillion to revive the production-and-consumption economy. It claimed that such a policy would be “inflationary,” by which it meant raising employment and wage levels. The Fed thus accepted the neoliberal junk economics proposing austerity as the answer to any problem – austerity for the industrial economy, not the Fed’s own Wall Street constituency.

According to a Fed staff report, QE would lower the exchange rate of dollar to the other currencies causing competitiveness boost for the U.S. firms. Former finance minister of Brazil Guido Mantega, as well as the chairman of Central Bank of India Raghuram Rajan, have described the Fed’s QE as a “currency war.” What’s your take?

The Fed’s aim was simply to provide banks with low-interest credit. Banks lent to hedge funds to buy securities or make financial bets that yielded more than 0.1 percent. They also lent to companies to buy their own stock, and to corporate raiders for debt-financed mergers and acquisitions. But banks didn’t lend to the economy at large, because it already was “loaned up,” and indeed, overburdened with debt.

Lower interest rates did spur the “carry trade,” as they had done in Japan after 1990. Banks and hedge funds bought foreign bonds paying higher rates. The dollar drifted down as bank arbitrageurs could borrow from the Fed at 0.1 percent to lend to Brazil at 9 percent. Buying these foreign bonds pushed up foreign exchange rates against the dollar. That was a side effect of the Fed’s attempt to help Wall Street make financial gains. It simply didn’t give much consideration to how its QE flooding the global economy with surplus dollars would affect U.S. exports – or foreign countries.

Exchange rate shifts don’t affect export trends as much as textbook models claim. U.S. arms exports to the Near East, and many technology exports are non-competitive. However, a looming problem for most countries is what may happen when ending QE increases the dollar’s exchange rate. If U.S. interest rates go back up, the dollar will strengthen. That would increase the cost to foreign countries of paying dollar-denominated debts. Countries that borrowed all dollars at low interest will need to pay more in their own currencies to service these debts. Imagine what would happen if the Federal Reserve let interest rates rise back to a normal level of 4 or 5 percent. The soaring dollar would push debtor economies toward depression on capital account much more than it would help their exports on trade account.

You have said that QE is fracturing the global economy. What do you mean by that?

Part of the flood of dollar credit is used to buy shares of foreign companies yielding 15 to 20 percent, and foreign bonds. These dollars are turned over to foreign central banks for domestic currency. But central banks are only able to use these dollars to buy U.S. Treasury securities, yielding about 1 percent. When the People’s Bank of China buys U.S. Treasury bonds, it’s financing America’s dual budget and balance-of-payment deficits, both of which stem largely from military encirclement of Eurasia – while letting U.S. investors and the U.S. economy get a free ride.

Instead of buying U.S. Treasury securities, China would prefer to buy American companies, just like U.S. investors are buying Chinese industry. But America’s government won’t permit China even to buy gas station companies. The result is a double standard. Americans feel insecure having Chinese ownership in their companies. It is the same attitude that was directed against Japan in the late 1980s.

I wrote about this financial warfare and America’s free lunch via the dollar standard in Super Imperialism (2002) and The Bubble and Beyond (2012), and about how today’s New Cold War is being waged financially in Killing the Host (2015).

The Democrats loudly criticized the Bush administration’s $700 billion TARP-program, but backed the Fed’s QE purchases worth of almost $4 trillion during the Obama administration. How does this relate to the fact that officially, QE purchases were intended to support economic recovery?

I think you’ve got the history wrong. My Killing the Host describes how the Democrats supported TARP, while the Republican Congress opposed it on populist grounds. Republican Treasury Secretary Hank Paulson offered to use some of the money to aid over-indebted homeowners, but President-elect Obama blocked that – and then appointed Tim Geithner as Treasury Secretary. FDIC head Sheila Bair and by SIGTARP head Neil Barofsky have written good books about Geithner’s support for Wall Street (and especially for Citigroup and Goldman Sachs) against the interests of the economy at large.

If you are going to serve Wall Street – your major campaign contributors – you are going to need a cover story pretending that this will help the economy. Politicians start with “Column A”: their agenda to reimburse their campaign contributors – Wall Street and other special interests. Their public relations team and speechwriters then draw up “Column B”: what public voters want. To get votes, a rhetorical cover story is crafted. I describe this in my forthcoming J is for Junk Economics, to be published in March. It’s a dictionary of Orwellian doublethink, political and economic euphemisms to turn the vocabulary around and mean the opposite of what actually is meant.

How do TARP and QE relate to the Federal Reserve’s mandate about price stability?

There are two sets of prices: asset prices and commodity prices and wages. By “price stability” the Fed means keeping wages and commodity prices down. Calling depressed wage levels “price stability” diverts attention from the phenomenon of debt deflation – and also from the asset-price inflation that has increased the advantages of the One Percent over the 99 Percent. From 1980 to the present, the Fed has inflated the largest bond rally in history as a result of driving down interest rates from 20 percent in 1980 to nearly zero today, as you have noted.

Chicago School monetarism ignores asset prices. It pretends that when you increase the money supply, this increases consumer prices, commodity prices and wages proportionally. But that’s not what happens. When banks created credit (money), they don’t lend much to people to buy goods and services or for companies to make capital investments to employ more workers. They lend money mainly to transfer ownership of assets already in place. About 80 percent of bank loans are mortgages, and the rest are largely for stocks and bond purchases, including corporate takeovers and stock buybacks or debt-leveraged purchases. The effect is to bid up asset prices, while loading down the economy with debt in the process. This pushes up the break-even cost of doing business, while imposing debt deflation on the economy at large.

Wall Street isn’t so interested in exploiting wage labour by hiring it to produce goods for sale, as was the case under industrial capitalism in its heyday. It makes its gains by riding the wave of asset inflation. Banks also gain by making labour pay more interest, fees and penalties on mortgages, and for student loans, credit cards and auto loans. That’s the postindustrial financial mode of exploiting labor and the overall economy. The Fed’s QE program increases the price at which stocks, bonds and real estate exchange for labour, and also promotes debt leverage throughout the economy.

Why don’t economists distinguish between asset-price and commodity price inflation?

The economics curriculum has been turned into an exercise for students to pretend that a hypothetical parallel universe exists in which the rentier classes are job creators, necessary to help economies recover. The reality is that financial modes of getting rich by debt leveraging creates a Bubble Economy – a Ponzi scheme leading to austerity and shrinking markets, which always ends in a convulsion of bankruptcy.

The explanation for why this is not central to today’s economic theory is that the discipline has been captured by this neoliberal tunnel vision that overlooks the financial sector’s maneuvering to make quick trading profits in stocks, bonds, mortgages and derivatives, not to take the time and effort to develop long-term markets. Rentiers seek to throw a cloak of invisibility around how they make money. They know that if economists don’t measure their wealth and the public does not see it, voters will be less likely to bring pressure to regulate and tax it.

Today’s central economic problem is that inflating asset prices by debt leveraging extracts more interest and financial charges. When the resulting debt deflation ends up hollowing out the economy, creditors try to blame labour, or government spending (except for bailouts and QE to help Wall Street). It is as if debtors are exploiting their creditors.

If there is a new class war, what is the current growth model?

It’s an austerity model, as you can see from the eurozone and from the neoliberal consensus that cites Latvia as a success story rather than a disaster leading to de-industrialization and emigration. In real democracies, if economies polarize like they are doing today, you would expect the 99 Percent to fight back by electing representatives to enact progressive taxation, regulate finance and monopolies, and make public investment to raise wages and living standards. In the 19^th century this drive led parliaments to rewrite the tax rules to fall more on landlords and monopolists.

Industrial capitalism plowed profits back into new means of production to expand the economy. But today’s rentier model is based on austerity and privatization. The main way the financial sector always has obtained wealth has been by privatizing it from the public domain by insider dealing and indebting governments.

The ultimate financial business plan also is to lend with an eye to end up with the debtor’s property, from governments to companies and families. In Greece the European Central Bank, European Commission and IMF demanded that if the nation’s elected representatives did not sell off the nation’s ports, land, islands, roads, schools, sewer systems, water systems, television stations and even museums to reimburse the dreaded austerity troika for its bailout of bondholders and bankers, the country would be isolated from Europe and faced with a crash. That forced Greece to capitulate.

What seems at first glance to be democracy has been hijacked by politicians who accept the financial class war ideology that the way for an economy to get rich is by austerity. That means lowering wages, unemployment, and dismantling government by turning the public domain over to the financial sector.

By supporting the banking sector even in its predatory and outright fraudulent behavior, U.S. and European governments are reversing the trajectory along which 19^th-century progressive industrial capitalism and socialism were moving. Today’s rentier class is not concerned with long-term tangible investment to earn profits by hiring workers to produce goods. Under finance capitalism, an emerging financial over-class makes money by stripping income and assets from economies driven deeper into debt. Attacking “big government” when it is democratic, the wealthy are all in favor of government when it is oligarchic and serves their interests by rolling back the past two centuries of democratic reforms.

Does the Fed realize global turbulences what its unconventional policies have caused?

Sure. But the Fed has painted itself in a corner: If it raises interest rates, this will cause the stock and bond markets to go down. That would reverse the debt leveraging that has kept these markets up. Higher interest rates also would bankrupt Third World debtors, which will not be able to pay their dollar debts if dollars become more expensive in their currencies.

But if the Fed keeps interest rates low, pension funds and insurance companies will have difficulty making the paper gains that their plans imagined could continue exponentially ad infinitum. So whatever it does, it will destabilize the global economy.

China’s stock market has crashed, western markets are very volatile, and George Soros has said that the current financial environment reminds him of the 2008 crash. Should we be worried?

News reports make it sound as if debt-ridden capitalist economies will face collapse if the socialist countries don’t rescue them from their shrinking domestic markets. I think Soros means that the current financial environment is fragile and highly debt-leveraged, with heavy losses on bad loans, junk bonds and derivatives about to be recognized. Regulators may permit banks to “extend and pretend” that bad loans will turn good someday. But it is clear that most government reports and central bankers are whistling in the dark. Changes in any direction may pull down derivatives. That will cause a break in the chain of payments when losers can’t pay. The break may spread and this time public opinion is more organized against 2008-type bailouts.

The moral is that debts that can’t be paid, won’t be. The question is, how won’t they be paid? By writing down debts, or by foreclosures and distress sell-offs turning the financial class into a ruling oligarchy? That is the political fight being waged today – and as Warren Buffet has said, his billionaire class is winning it.

That’s all for now. Thank you Michael!

Why Are We Still Working?

Posted on March 10, 2016 by Reid Mukai

intcap2

By Mike Dowson

Source: NewMatilda.com

This may be an opportune moment to consider the question. Especially if you’re not actually working.

You may have retired. Perhaps you’ve just left university, considering your options. Perhaps you’re taking a welcome break.

Maybe you have no choice but to take a break. Did you retire early because your job was axed? Has the casual work you depend on dried up? Have you been unable to find a job, despite your qualifications?

Perhaps, as you read this, you’re at work, filling in time, forgoing a holiday. Or at the beach, while the kids play in the surf, watching for emails on your phone.

Of course, it’s obvious why we work. Money. You don’t get something for nothing. And everything is so expensive these days.

If anything, most of us need to work more. Both spouses, extra hours, second jobs. Would anyone, except an idiot, seriously suggest we should all be working less?

Well, actually, yes.

As long ago as 1930, the economist John Maynard Keynes predicted that, by now, people in technologically advanced societies wouldn’t need to work much at all. When Keynes said this, advances in technology were yielding extraordinary increases in productivity. The implications seemed obvious. If it took less time to produce what we needed, surely we’d work less.

It turns out that for much of the 20^th Century average working hours in developed countries steadily fell. Then, around the 1970s, the trend plateaued. In some countries, it reversed and working hours began to climb again. This occurred at the same time women were entering the workforce in great numbers so total workforce participation also increased.

In Australia, by the new millennium, many full time employees were working more than their grandparents had.

What happened? Did technology fail to deliver the gains Keynes expected?

On the contrary. Technological advancement outstripped even the giddy imaginations of futurists from a century ago. We can grow food, dig up minerals, make fridges and bridges, move things and ourselves around the planet and share knowledge and information much faster with a fraction of the workforce it once took.

But if staggering productivity gains haven’t manifested as lower working hours, where did they go?

Some prominent economists, including some Nobel laureates, have grappled with this question.

Gary Becker observed that our appetite for material goods has expanded along with our ability to produce them. Instead of working less hours, we opted for bigger houses with more gadgets, which we replace more often.

This process has been fuelled by a deluge of marketing, which persuades us to consume things we previously didn’t recognise a need for.

Does that explain it? Anthropologist David Graeber doesn’t think so. If it continually takes fewer human hours to produce these things, shouldn’t we be able to afford them without working more? What are all these working hours producing?

Graeber argues that, although productive jobs have, in fact, been steadily automated away just as predicted, we have also seen a vast proliferation of new jobs that only seem to exist to keep people working.

Consider this. Productivity growth has stalled in Australia. How can this be? Technology hasn’t stopped advancing. The time we should be winning back through productivity gains must be getting reabsorbed.

Productivity returns are highest in capital-intensive industries like mining and manufacturing. As those jobs disappear, either replaced by technology, or lost altogether, the workforce moves into labour-intensive industries like hospitality and professional services. This dilutes the gains in the other industries.

At the same time, unemployment has been trending up since 2008. Young people especially, are out of work. The number of underemployed people, who would work more if they could, is also high. More jobs are casual.

There’s a downward trend in job prospects for new graduates. Some of them settle for part-time work or a free internship. Many find work which is unrelated to primary qualification. That’s now more likely to be in a job without benefits, or multiple such jobs.

There’s another factor. Our lives are now longer relative to our working lives. We tend to start full-time work later, after years of study, and more of life is spent in retirement. Many jobless older people are struggling with the cost of living. Many would work more if they could.

Instead of everyone working less, what seems to be happening is that experienced workers, in professions which are still in demand, are working more, while the young, the old, and those with skills which no longer attract investment have difficulty finding work.

MIT academics Andrew McAfee and Erik Brynjolfsson refer to this as the great decoupling. For many years, real GDP per capita and median income rose in tandem. Since the 1970s, wages as a percentage of GDP have fallen dramatically, while corporate profits as a percentage of GDP are now at their highest level, despite recurring economic shocks.

To put it simply, labour isn’t as important to growth as it used to be.

There is nothing in the economic outlook or current government policy settings which suggests this trend is going to change.

Automation, artificial intelligence and robotics are encroaching on more human occupations. The Committee for Economic Development of Australia (CEDA) has estimated that as many as 40 per cent of the jobs that are left are vulnerable to replacement by technology over the next decade.

No matter how many politicians chant the jobs mantra for the media, more productive jobs are going to disappear.

The terrible irony in this situation is that there is so much that needs to be done.

Among the underemployed graduates I personally know of, there is a psychologist, a soil chemist and a biodiversity specialist. Have we run out of things to do in the areas of mental health, agriculture and the environment?

Mental illness is widespread. Our food bowl is under threat from climate change. We have a mass extinction on our hands.

What we don’t have, apparently, is sufficient money to invest in making full use of the talent that is available to face these challenges.

Why? What failure of collective enterprise could result in this absurd incongruity?

Capital, like technology, is largely blind to human need. Capital goes where the profit is. If there was profit in healing minds and saving species, some of it would go there. While there is more profit in alcohol, gambling and deforestation, more of it will go there.

People don’t register their desire for a healthy society by shopping for it. Capital doesn’t get that signal through the market. The argument that consumers somehow direct the course of civilisation by choosing dolphin-friendly tuna and “eco” cleaning products is stupid and facile. The factors that most affect our destiny are not options in the supermarket.

If a healthy society is something we want, we have to act collectively. Since few people are active major shareholders, for the time being that task tends to fall to governments.

Whether enacted via direct spending, or by creating incentives for private investment, government initiatives are funded from collective surplus – in other words, tax revenue or borrowing against future earnings increases. Despite political spin to the contrary, our tax is low compared to the OECD as a proportion of GDP.

The great decoupling has coincided with rising inequality. Those with money to invest get rich. Those with only labour to sell miss out. Capital doesn’t like to pay for labour, and it doesn’t like to pay tax either.

But why, if our labour isn’t needed for profit, are we still working?

Faced with a looming crisis in social services, but committed ideologically to low taxation, successive Australian governments used tax concessions to turn superannuation and real estate – where most Australians keep their wealth – into a mini-capitalist alternative to social security.

Of course, this only works while people have jobs that provide super and sufficient income to buy housing. And it doesn’t help the real economy, the place where we apply technological innovation to produce things of real value, especially things we can export.

Nevertheless, one group of people enriched themselves through property investment, pushing up the value of real estate around the country in the process. Another group of people became affluent with nothing more than a job that paid super and a home in a good location.

With commodity revenue pouring in from overseas, it was easy to believe we had discovered some kind of magic prosperity formula. But the surplus generated from commodities mostly wasn’t invested back into productive activity. Instead it was turned into tax cuts and other benefits. These had broad electoral appeal but favoured the wealthy, and encouraged further speculation.

The real estate boom didn’t make the country richer. Nor did it make housing more accessible. It simply transferred wealth from one group of people to another. In the process, it put a basic need out of reach of many, including young people, and diverted investment from the productive economy. It also lured a huge number of Australians into precarious debt.

Contrary to popular opinion, encouraged by unscrupulous politics, we have relatively low government debt, but we now have the largest per capita private debt in the world.

So why are we still working? Because we’re in debt.

Middle-aged people are the ones working long hours. They’re also the ones buying houses. And they’re the ones with the most credit card debt as well.

The generation before them had affordable housing, job security and a real social safety net. They’re not so fortunate, but for the ones after them, a steady job with enough for a deposit has become a kind of Holy Grail, and social security is survival at best.

The current trend points to a time when a young graduate might start adult life with a HECS debt, go into credit card debt on a part-time job and a free internship, and eventually get into massive debt to own a flat her grandparents could have bought with ease.

She might even find a job in financial services, if they haven’t all been automated. It’s the sector that helps wealthy people turn their money into more money. It’s also where ordinary people go to borrow money for a house.

Debt is profitable. Even during the great decoupling, as productive jobs disappear, and real wages fall, it’s proven possible to harness the aspirations of ordinary people for profit, without any of the effort or intelligence required for developing new productive capacity, by simply enticing a greater proportion of personal income into servicing debt.

The mining boom is over. Not that it was ever as important as the miners like to claim. Manufacturing continues its long decline. The banks have been warned they are overexposed.

Whatever combination of policy levers is applied, we need to create the conditions that direct investment into producing things that we and the world need, while caring for our environment and our population. We don’t need to direct it in into unearned private wealth at the expense of our neighbours, our country and future generations.

Our current class of politicians has so far failed to even acknowledge our present circumstances, let alone articulate a credible vision for change. Many of them became rich from property investment. Our Prime Minister is a former banker.

Naturally, the people who’ve done well for themselves are reluctant to sacrifice their advantage. Nevertheless, we have to change the narrative around “wealth creation” from one which is essentially about personal enrichment from gaming the system, to one which is about mutual benefit through innovation and productivity.

Change has come, whether we like it or not. If we respond intelligently, taking advantage of the potential we have developed through our education system, we may very well end up working less, but not in a divided society, with many of us struggling to survive.

The Fine Edge Between Comedy and Horror: The Millions Interviews Margaret Atwood

Posted on February 21, 2016 by Reid Mukai

By Claire Cameron

Source: The Millions

The Heart Goes Last — Margaret Atwood’s first standalone novel since The Blind Assassin, which won the Man Booker in 2000 — is a novel that teeters on the fine edge between comedy and horror. The writing is full of Atwood’s wry humor, but the dystopian world in which the characters live, whether they are a sleeping in a car and fleeing thugs or under surveillance in a tightly controlled community, is an alternate world that is full of horror.

The novel tells the story of Stan and Charmaine. After a great financial crash, their home is repossessed, their credit is frozen, and they are left to eek out a meager life living in their cramped Honda for shelter. Stan sleeps in the driver’s seat so they can flee quickly during the night if need be. With only Charmaine’s money from a bartending job, they dumpster dive, eat day old doughnuts, and have no viable prospects for their future. When Charmaine sees an ad on TV for Consilience, a suburban utopia and a ‘social experiment,’ she signs them up to take a look. Participants are given a home of their own in exchange for going to prison every other month.

The idea behind Consilience is that a full prison creates full employment and all prosper. While Charmaine and Stan do their month in jail, they swap places with an alternate couple who live their life, drive their scooters, and sleep in their bed until the month is up and they trade places again. In a set up that recalls a Midsummer’s Night Dream-like mix up, unknown to each other both Stan and Charmaine have chance encounters with their alternates. Confusion, obsession, and mistrust turn into revelations about the truth about Consilience.

The more I read, the more I questioned whether I could describe the community of Consilience and the chaos outside its gates as taking place in an alternate world. So much of what happens in this novel, from foreclosed houses to private prisons, is already part of our world. The world of The Heart Goes Last feels more like a twisted version of our current reality. Only small changes would be needed to make it all ‘true.’ Just as Charmaine and Stan’s lives contort when they seek out their alternates, utopian turns dystopian and comedy bends into horror with, as Atwood says, “one small turn of the wrench.”

I interviewed Atwood over the phone from her hotel room in New York. We spoke about not having sex with furniture, Pepper the greeting robot, themes in Victorian literature, and quotas in private prisons.

The Millions: The Heart Goes Last has your trademark humor, but the circumstances that Stan and Charmaine find themselves in are horrifying.

Margaret Atwood: A lot of things are funny to those watching them, but not to the person undergoing them. The person who slips on the banana peel doesn’t think it’s funny as a rule.

TM: Charmaine says near the beginning of the book that, “comedy is so cold and heartless, it makes fun of people’s sadness.”

MA: It does, unfortunately. Sometimes people make fun of themselves, but if you dig down there’s a bit of that too. On the other hand, where would we be if we couldn’t laugh? I think they’ve always been joined at the hip.

TM: At the beginning of the novel, you quote Ovid, William Shakespeare, and a blog post by writer Adam Frucci[1] — who sets out to test an ottoman with a fake vagina. I have to ask: Did you have sex with furniture to research this novel?

MA: I think that piece of furniture is intended only for men?

TM: Frucci warned that it was, “no Kleenex clean up, my friends.” Actually, what he endured to test the ottoman is a good example of something that is funny for the reader, but not so for the person going through the experience.

MA: One of the headlines of that post is “I did this so you don’t have to.” Frucci has probably woken to find himself strangely famous. A lot of people are reading that blog post.

The other thing that has to trouble your mind is — who had this idea for this piece of furniture? And would you have this in your living room? I have many questions.

TM: Maybe you’ve given the ottoman maker a little sales bump?

MA: I have a feeling that a piece of furniture with a sex thing built into it came and went fairly swiftly. If that blog post was written in 2009, the furniture has fairly quickly been superseded by the advances in robotics.

Do you know about Pepper the robot? Pepper is not a sex robot. In fact, Pepper comes with instructions that say explicitly that you are not supposed to use it for sex, though I don’t know how you could.

Pepper is a greeting robot, like one that Stan, the main character in The Heart Goes Last, is working on before he gets fired at Dimple Robotics. Except that Stan’s is a grocery bagging robot. It is supposed to smile at you.

Pepper is supposed to be able to read your emotions. They were installing Pepper as a greeting robot in Japan where greeting is a social custom. And then they put him/her on for private sale and he/she sold out very quickly. Apparently we want someone who can read our emotions.

TM: At Dimple Robotics, Stan’s job, before he looses it, was working on the empathy module of his robot.

MA: Personally, I don’t want someone who can read my emotions, because then you can’t dissimulate, can you? If somebody asks if you are having a nice day and you say yes, but you’re actually not…it spoils your act.

TM: It’s the white lies that get us through.

MA: I’m afraid that’s correct. They do. “That’s a lovely dress! You look wonderful!”

TM: The novel is filled with this kind of joke — your humor is always close to hand. I love a line on writing from Sheila Heti’s How Should a Person Be?: “You have to know where the funny is, and if you know where the funny is, you know everything.” Do you agree?

MA: No, but it’s a good hint. You don’t know everything if you know that, but you know some things. It’s true in a negative way. If something is unintentionally funny, you ought to know. If you intended it to be very serious and dramatic, but actually it’s funny, then you are in trouble.

There is a wonderful book called The Stuffed Owl. It’s an anthology of good, but bad, verse. It’s well worth reading. It is full of writers who were aiming for the heights and tripped on the banana peel.

TM: As I was reading The Heart Goes Last, I kept thinking back to Survival, your thematic guide to Canadian literature that was published in 1972. In it you said: “I read then primarily to be entertained.” Do you still?

MA: Go back to what the ancients used to say, that art should entertain and instruct. They didn’t say to what degree. If it doesn’t entertain, and by entertain I don’t mean just frivolous, I mean engage your attention and keep you going. If that doesn’t happen, you’re not going to turn the page. So there has to be something engaging enough to keep you reading.

That is why first chapters are so important. If you can’t get the reader through the first chapter, they are never going to get to your pithy piece of wisdom on page 85.

On the other hand, if there is nothing serious in it, you may be entertained on a superficial level and it’s a one time read. Or it’s what we call a “beach read.” Or what I sometimes call a “hotel room drawer read.” I leave them there for others to enjoy. I did that in Hong Kong once and they were so screamingly honest that they collected the books and mailed them back to me. I thought that was so sweet.

TM: The Heart Goes Last is about characters who give up their freedom for comfort. When Stan and Charmaine tour Consilience for the first time they both feel reason to worry about how it runs. However, after experiencing the discomfort and fright of life in a car, they opt for comfort, “the bath towels clinched the deal.”

MA: Yes. It’s also about how circumstances cause people to do things that they would otherwise not do. That is a human universal truth. Stan and Charmaine give up their freedom, but of what does their freedom consist? They don’t have a lot of money, they are living in their car, they are subject to every thug and criminal that stumbles across them, so that is maybe “freedom,” but of a very limited kind.

TM: Can we expect a scared or thirsty human to make good decisions?

MA: You can’t. Self-preservation kicks in. A person will make the decision that you think gives him or her the best chance of getting through.

TM: In that way, is The Heart Goes Last a survival story?

MA: A lot of people lived that, or something close to it, when the 2008 crash happened. They were thrown out onto their front lawn or living in their cars. That is ongoing.

There’s a movie that just came out that I must go and see called 99 Homes — it’s the story of a man who evicts people from their houses because they couldn’t pay their mortgages. As I said, the situation is ongoing.

I was listening to the radio in London, England, and there was a show about people who had moved back into their parents’ houses, or parents who have had their kids move back in, because they could not afford to either rent or buy in London. It was too expensive.

TM: The set up of your novel felt so real.

MA: It is real.

TM: But it’s not necessarily your reality. David Mitchell wrote about how he imagines the far past or the far future, that to get in the right mindset he thinks about the things that the characters might take for granted in life.

MA: We did a lot of car travel when I was a child. We also did a lot of camping out. So that wasn’t under duress, but I know what it’s like to sleep in a car.

TM: There are other parts of the book that could be taken as speculative fiction, but aren’t, like private prisons.

MA: There are private prisons in the U.S. The Atlantic just did a huge piece on this. There is nothing in the U.S. constitution that says you can’t make people do enforced labor if they are convicted criminals.

There’s a history of that kind of prison as enterprise. The Australian penal colony was one of them. They would send people to work off their sentence. Someone was making money out of it.

TM: I also read that in Arizona there are three private prisons that require 100 percent inmate occupancy.

MA: You have to keep them full to make them profitable and that is a recipe for creating more prisoners.

TM: In 2008, when you published Payback, a book of non-fiction about the nature of debt, it almost felt like the world of finance had collapsed at your feet. The timing was quite something. Tell me about your crystal ball?

MA: I don’t actually have a crystal ball, but I do read advertisements when I’m sitting on the subway. I was seeing a lot of them that said “let us help you get out of debt.” I thought, boy, if there are all these enterprises doing that, there must be an awful lot of people in debt.

The other thing is that, if you are a student of Victorian literature, as once I was, debt is a big theme. Not only with Dickens, but a number of other writers as well. So is the prison system.

TM: In Survival you wrote, “Literature is not only a mirror; it is also a map.” Can The Heart Goes Last be read as a map?

MA: Maybe a map, but also a door. Open the door and what’s inside? Stan and Charmaine are in a planned prison system, a for-profit enterprise. What they don’t know when they go in is how the enterprise is making its money. The thing to ask about private prisons is who is making the profit? And how much are they making. Maybe it’s time to rethink. What should we have instead?

[1] I contacted Adam Frucci, author of “I Had Sex with Furniture: The Shameful (NSFW) Fleshlight Motion Review,” to comment about the honor of becoming an Atwood epigraph: “I didn’t really believe it at first — Ovid, Shakespeare, and my goofy blog post from 2009. I can’t say that of all of the things I’ve ever written that this is the one I want people to remember and attach to my name, but what can you do? All I can really do is be honored and assume that Margaret Atwood is a huge fan of all of my work and looks to me for inspiration all the time. That’s about accurate, right?”

Economic grace of ‘Social Credit’: national dividend with compensated retail prices for consumer goods distribution in an age of technology

Posted on January 6, 2016 by Reid Mukai

By Wallace Klinck

Source: The Daily Censored

“The unacknowledged, but obvious, truth is that unnecessary work, imposed by either edict or contrived financial legerdemain, is slavery and servitude—totally irrational and immoral. Every engineer worthy of the name is trying to eliminate the need for human effort as a factor of production while every witless or hypocritical politician, pressured by the financial powers above and an insecure and uncomprehending population below, is professing, at least, to promote policies designed to ‘put people back to work.’” (from the below article)

Five minute video of Major C.H. Douglas, founder of Social Credit (1934):

Because of its deleterious impact on personal freedom and initiative, centralization of both economic and political power is the critical issue facing society. The primary obstacle to reversing this growing concentration of power is an almost universal ignorance of the manner in which the existing financial system renders the price-system increasingly non-self-liquidating, making impossible the recovery of industrial production costs through sales. Institutions and individuals attempt to resolve this problem by resorting to bank debt, thereby obtaining access to the products of industry by the self-defeating expedient of mortgaging our future–i.e., transferring these costs as an exponentially growing debt charge against future cycles of production–and by engaging in an orgy of wasteful and destructive activities, effectively culminating in continuous war.

Their monopolistic proclivities disincline both Finance-Capitalism operating under the Monopoly of Credit and every form of collectivist organization (e.g., socialism, communism or fascism) from grappling with this problem. The solution must entail an appropriate modification of the existing financial-credit and price system so as to properly facilitate distribution of the immense output of modern technology-based industry, in the context of expanding leisure.

Nearly a century ago this emergent challenge was studied in depth by the British engineer Clifford Hugh Douglas, who not only analyzed the defects of the existing price system as it functions under present financial and industrial cost-accounting conventions, but also put forward realistic remedial proposals. Between and for a period after the World Wars, Douglas’s ideas, which he named “Social Credit”, attracted large numbers of adherents and spawned many political movements in countries around the world.

Douglas recognized that life is more than bread alone and that in order to attain his full stature man must be released from unnecessary material concerns in order to make time for matters of the Mind and Spirit. This clearly was inherent in certain much-neglected aspects of the message of Jesus, who explicitly stated that lack of faith is the reason for our obsession with toiling our own way to material survival. Jesus asked how we could doubt that God, who provides for the fish and birds and the beasts, knows our needs and will provide even better for us. On more than one occasion Jesus unconditionally distributed loaves and fishes to crowds that had gathered to hear him. To indicate how reality operates outside of puritanical human notions of morality, Jesus pointed out that his heavenly Father causes the sun to rise on the evil and the good, and lets rain fall on both the just and the unjust.

An aspect of this divine caring is the ability we have been given to accumulate understanding of natural laws, which has resulted in an endless extension of “mechanical advantage”—termed by Social Crediters the Unearned Increment of Association—from which has emerged our amazing modern technology with its outflow of material abundance. Through learning how to associate effectively in the areas of both human endeavours and material resources, we have multiplied our productive capacity many thousands, if not millions, of times over. The historical aggregation of Unearned Increments has provided the vast Cultural Heritage upon which we all so greatly, if unconsciously, depend.

This is the background of why Social Credit came to be perceived by its leading thinkers as “practical Christianity”. Although Douglas did not set out to design it as such, ongoing development of Social Credit thought has revealed it to be uniquely consonant with and revelatory of the assurances given by the founder of the Christian faith.

This realistic perception of our situation is absent from the major ideologies of our time. For example, Libertarians promote the notion that the individual must “make it on his/her own”. No one today (apart maybe from individuals lost in the wilderness) is doing this; all have the benefit of the Cultural Heritage, which ties us in a web of dependencies not only with our contemporaries but also with previous generations.

Socialism, which calls for State ownership and administration of the means of production—the central planning of the economy and of human activity—similarly endeavors to alienate people from their heritage. Besides specifically attacking the very principle of inheritance, Socialists force the energies of the members of society into mandatory employment in projects prescribed by the State. Suppression of individual initiative is an inevitable result of this constraint of access to the possibilities afforded by the richness of the Cultural heritage. This observation applies to all forms of “socialism”, whether national or international in nature.

Social Credit is the inverse of socialism and a negation of finance capitalism. Many persons have it in their minds that a sharing society necessarily is socialistic; i.e., power centralizing. Presumably they think this way on the erroneous assumption that the sharing will be accomplished by redistributing existing wealth by means of various confiscatory forms of taxation. However, Social Credit, uniquely, stands not for redistribution of earned incomes, but rather for distribution of consumer goods at source as they emerge from the production line.

Douglas enunciated and stressed the truism that production without consumption is sheer futility and waste.

The fundamental task of economic policy is to match and balance the cycles of consumption and production. Producers’ costs cannot be recovered without money received from consumers, whose incomes alone provide business its means to liquidate all financial costs of production.

In order to effect this balance, Douglas recommended that National (Consumer) Dividends and Compensated (lowered) Prices at point of retail sale must be provided and financed by a Government Agency (created or existing, whatever is most efficient and convenient) with funds not derived from taxation but drawn down from a properly constructed National Credit Account. This would be a continuously updated actuarial accounting of the nation’s real credit, being an inventory of all those resources which are available to be used for production and which, if so used, may result in the making of financial prices.

Unfortunately, the public are conditioned to reason from the false assumption that the economic “pie” is limited to the financial incomes paid out in production, and hence they perceive this as the only possible source of funding. This assumption includes the erroneous corollary that the price-system is self-liquidating; i.e., that incomes paid out as wages, salaries and dividends are not only equal to, but available to meet, the total financial costs of production. That this is a major fallacy is readily proved by the enormous accumulation of inflationary private and public debt created as loans by the banking system, which allows goods to be purchased after a fashion but does not liquidate their financial costs of production in a synchronized fashion. As a kind of stop-gap expedient, these loans merely transfer these costs into the future, to be liquidated with income derived from later cycles of production unrelated to the cycles in which they were incurred.

The physical (i.e., real) costs of production are met as production takes place. Obviously, if this were not the case, production could not proceed. This is self-evident and axiomatic. When goods are produced in finished form they are meant to be used and should be immediately available to the overall consuming public in toto and without entailing any residual financial debt.

This universal piling-up of debt is bogus and is required only because price increasingly includes, as real capital replaces labor as a factor of production, allocated charges in respect of real capital which are not distributed as income in the same cycle of production. Consumer income is cancelled prematurely, leaving a growing deficiency of income relative to the total prices of goods awaiting purchase. In other words, the flow of final prices increasingly exceeds the flow of effective financial purchasing-power. Purchasing-power is prematurely cancelled in respect of still existing real capital, whereas it should be cancelled only at the rate of actual physical consumption or depletion. Money should be issued at the rate of production and cancelled at the rate of consumption

In the face of this predicament, we can simply forgo acquisition of these goods, leaving the producer no option but to warehouse or destroy them and go bankrupt—making his endeavors a mindless exercise in futility. Or we can ensure that, while required remaining actual “workers” (i.e., recipients of remuneration from others for services rendered) continue to have the benefit of their earnings, all citizens, workers included, have access to the full output of industry by being provided adequate aggregate purchasing-power to make this possible.

Besides being a practical necessity, such an arrangement recognizes the share all have in the almost fantastic Cultural Heritage of Civilization. In a Social Credit dispensation, Inheritance would be generalized.

In stark contrast is the socialist attitude, which is that inheritance is evil and should be abolished.

Social Credit stands most definitely, unashamedly and unabashedly, for a sharing society—and as labor is increasingly reduced by technology it would become more sharing with the passage of time. Unlike Socialism, which in reality has always been more about centralized control than about sharing, Social Credit does not involve State ownership, planning or administration of the economy or of social organization as such. By giving people as individuals full access to the ever-increasing abundance made possible by technology and to concomitant economic independence, it is in fact highly decentralizing.

The rational purpose of technology is to eliminate inefficiency, and “jobs” concocted merely for the sake of distributing incomes are precisely that—mere wasted energy and materials. The solution to the problem of economic insecurity in the modern age of super-production does not lie primarily in “making” work, but increasingly in facilitating

distribution. Those who clamor for “jobs” actually visualize a model along the lines of fascist and communist states, which give and demand of everyone endless work throughout their lifetime, in accordance with the rather suspect dictum that “work will make you free”—but not until you die.

The unacknowledged, but obvious, truth is that unnecessary work, imposed by either edict or contrived financial legerdemain, is slavery and servitude—totally irrational and immoral. Every engineer worthy of the name is trying to eliminate the need for human effort as a factor of production while every witless or hypocritical politician, pressured by the financial powers above and an insecure and uncomprehending population below, is professing, at least, to promote policies designed to “put people back to work.”

Frankly, if I desire “work”, then I want to do it by my own choice and at my own leisure, increasingly freed from the enforced conformity and servitude of the existing system.

We should not be striving to provide more, and more, human work but rather more technological productive efficiency with augmented effective consumer purchasing-power capable of eliminating consumer debt and liquidating industrial costs in a timely manner. Let robots do the work. Tirelessly and without complaint, they perform the vast majority of it better than people can.

You want more work? Then let’s have another war—or, better yet, continuous wars until we end up destroying the whole planet or all life upon it.

Indeed, the flaws in the current financial system provide a constant incentive for military war, which normally is just an extension of economic war. Unbalanced international trade is driven by the increasing inherent orthodox need to export—not to receive an equivalent of real wealth in return, but to capture financial credits from other nations to compensate for the internal intrinsic deficiency of consumer purchasing-power that exists in the domestic price-system of every nation.

Anyone who does not understand this compulsive destructive dynamic of the modern financial-economic system is totally unqualified even to comment on our economic position.

The abundance that technology makes possible should set men and women free from physical want, increasingly enabling them to choose independently and without duress their preferred activities in life. As opposed to the ubiquitous Keynesian, cognitively dissonant, counterfeit socialist concept of “economic democracy” as a centralized administrative proletarian Work-State, Social Credit gives real meaning to the concept of economic democracy by favoring a consumer-motivated system of production.

C. H. Douglas stressed the importance of understanding policy by tracing its pedigree. From a metaphysical standpoint, Social Credit would be a practical, physical incarnation of the Christian Doctrine of Salvation by Unearned Grace—in contradistinction to the prevailing Judaic conception, and system, of Salvation through Works. The current financial system is predicated upon a materialist philosophy characterizable as do ut des, meaning “this for that”—in other words, that nothing can be obtained except it be earned, that, as the saying goes, “There is no free lunch”. It is the underlying principle of the madness-inducing doctrine of “Salvation through Works”.

Hence, the existing financial system issues money only as debt for production and never for consumption, except in the latter case as debt which must be acquitted by future work This policy of issuing money only for work might have had some basis in equity in the primitive economy where production was primarily due to human effort. It makes no rational or moral sense whatever in the modern highly technological economy where non-human factors of production predominate and human intervention becomes increasingly a mere, although essential, catalyst within a vast productive complex.

Social Credit coheres profoundly with the Christian philosophy of Salvation through Unearned Grace–Grace being an outright gift from God. Spiritual Grace has, or should have, a physical counterpart, or incarnation, in the economic or material realm. Thus, from this philosophical standpoint access to consumer goods and services should increasingly be justified not by work alone but rather by the individual’s share in an inalienable inheritance of the communal capital that has accumulated over the ages. The effect of growth of our historic Cultural Heritage has always been to advance the potential for faster, more diversified and less wasteful productivity, with an accompanying potential for enhanced human leisure.

Christian philosophy holds that it is a major sin to make an end of a means. The rational purpose and end of production is consumption, not to create work (a means). An economic system should provide goods and services for mankind as efficiently as possible with minimal trouble and effort for all concerned.

One might ask how it is possible for a nation such as the United States of America, professedly predicated upon Christian principles, to base its entire economy and social structure upon a financial system that is a total inversion of those principles. A clue to this strange contradiction may be found in Douglas’s observation that Finance and the Established Media are concentric. As a result, he said, society has been hypnotized, with the consequence that only a drastic de-hypnotization can save it.

If society can pursue a continuous, destructive, malevolent and malignant policy of devastating the continents and populations of foreign nations, then surely we can easily pursue instead the civilized alternative of providing (Consumer) Dividends and Compensated (lowered) Retail Prices to support a secure and leisured life for our citizens. Under the existing iniquitous financial system we are driven to deliver those potential Dividends to other nations in the form of bombs. This would appear to be insanity by any rational criterion, but it satisfies the overarching irrational one of providing plenty of “jobs” and “incomes” (not to mention “profits”)—albeit at the additional cost of stupendous physical waste, human suffering and a massive, exponentially expanding financial mortgage burdening our future. This too would appear to be insanity, but apparently not to members of the banking fraternity, which finances it all with conspicuously detached equanimity.

Surely the time is long past when individuals and nations should have stopped “fighting” amongst themselves and instead concentrated their intelligence, energies and talents on demanding reality-grounded financial and economic policies.

I hope that the above commentary may help to clarify some of the major questions and issues often raised about Social Credit.

Dr. Oliver Heydorn has recently published a major informative book, comprehensively incorporating C. H. Douglas’s essential ideas. Refer: http://www.socred.org

Breaking the chains: precarity in the Age of Anxiety

Posted on January 5, 2016 by Reid Mukai

By Joseph Todd

Source: RoarMag.org

In our Age of Anxiety, society assaults us from every possible angle with an avalanche of uncertainty. How do we fight back under conditions of precarity?

An Age of Anxiety is upon us, one where society assaults us from every possible angle with an avalanche of uncertainty, fear and alienation. We live with neither liberty nor security but instead precariousness. Our housing, our income and our play are temporary and contingent, forever at the whim of the landlord, policeman, bureaucrat or market. The only constant is that of insecurity itself. We are gifted the guarantee of perpetual flux, the knowledge that we will forever be flailing from one abyss to another, that true relaxation is a bourgeois luxury beyond our means.

Our very beings come to absorb this anxiety. We internalize society’s cruelty and contradiction and transform them into a problem of brain chemistry, one that is diagnosed and medicated away instead of being obliterated at root. All hope is blotted out. Authentic experience, unmediated conversation, distraction-free affection and truly relaxed association feel like relics of a bygone era, a sepia dream that perhaps never existed.

Instead we have the frenetic social arenas of late capitalism: the commodified hedonism of clubs and festivals, express lunches, binge culture and the escapist, dislocating experience of online video games, all underlined by either our desperate need to numb our anxieties or to create effective, time-efficient units of fun so we are available for work and worry.

This is assuming we have work, of course. Many of us are unemployed, or are instead held in constant precarity. Stuck on zero-hour contracts or wading through as jobbing freelancers in industries that used to employ but don’t anymore, we are unable to plan our lives any further than next week’s rota, unable to ever switch off as the search for work is sprawling and continuous.

And if we do have traditional employment, what then? We are imprisoned and surveilled in the office, coffee shop or back room, subject to constant assessment, re-assessment and self-assessment, tracked, monitored and looped in a perpetual performance review, one which even our managers think is worthless, but has to be done anyway because, hey, company policy.

Continuous is the effective probationary period and we are forever teetering on the edge of unemployment. We internalize the implications of our constant assessment, the knowledge that we’re always potentially being surveilled. We censor ourselves. We second-guess ourselves. We quash ourselves.

And thanks to the effective abolition of the traditional working day, work becomes unbearable and endless. The security of having delineated time — at work and then at play — has been eradicated. Often this is because individuals have to supplement their atrocious wages with work on the side. But it is also because traditional 9-to-5 jobs have suffered a continuous extension of working hours into out-of-office time, enabled and mediated by our laptops and smartphones. These gadgets demand immediacy and, when coupled with the knowledge that you are always reachable and thus available, they instill in us a frantic need to forever reply in the now.

And with this expectation comes obligation. Hyper-networked technologies gift our bosses the ability to demand action from us at any moment. Things that had to wait before become doable — and thus are done — in the now. If you are unwilling, then someone is ready to take your place. You must always be at their beck and call. From this, our only refuge is sleep, perhaps the last bastion of delineated time against frenetic capitalism, and one that is being gradually eroded and replaced.

For those that are out of work the situation is no better. They face the cruel bureaucracy of the Job Centre or the Atos assessment, institutions that have no interest in linking up job seekers with fulfilling employment but instead attempt only to lower the benefits bill through punitive, arbitrary sanctions and forcing the sick back to work. Insider accounts of these programs betray the mix of anxiety inducing micro-assessment and surveillance they employ.

Disabled claimants — always claimants, never patients, insists Atos — are assessed from the moment they enter the waiting room, noted as to whether they arrive alone, whether they can stand unassisted and whether they can hear their name when called. Compounding this is the hegemonic demonization of those that society has failed: if you are out of work, you are a scrounger, a benefit cheat and a liar. Utterly guilty of your failure, a situation individualized in its totality and attributable to no system, institution or individual but yourself.

We are surveilled, monitored and assessed from cradle to grave, fashioned by the demand that we must be empirical, computable and trackable, our souls transformed into a series of ones and zeros. This happens in the workplace, on the street and in various government institutions. But its ideological groundwork is laid in the nursery and the school.

These institutions bracket our imaginations while still in formation, normalizing a regime of continuous surveillance and assessment that is to last for the rest of our lives. Staff are increasingly taken away from educating and nurturing and instead are made to roam nurseries taking pictures and recording quotes, all to be computed and amalgamated so authorities can track, assess and predict a child’s trajectory.

It is true that this does not trouble the child in the same way traditional high intensity rote examination does. But what it instead achieves is the internalization of the surveillance/assessment nexus in our minds; laying the groundwork for an acquiescence to panoptical monitoring, a resignation to a private-less life and a buckling to regimes of continuous assessment.

Britain is particularly bad in this respect. Not only does our government have a fetish for closed-circuit television like no other, but also, GCHQ was at the heart of the Snowden revelations. Revelation, however, is slightly misleading — as what was most telling about the leaks wasn’t the brazen overstep by government institutions, but that few people were surprised. Although we didn’t know the details, we suspected such activity was going on. We acted as if we were being watched, tracked and monitored anyhow.

In this we see the paranoid fugitive of countless films, books and television dramas extrapolated to society writ large. We are all, to some extent, that person. Our growing distrust of governments, the knowledge that our technologically-integrated lives leave a heavy trace and the collection of “big” data for both commercial and authoritarian purposes contributes to our destabilized, anxious existence. An existence that impels us towards self-policing and control. One where we do the authority’s job for them.

Many individuals offer the amount of choice we have, or the amount of knowledge we can access at the click of a button, as the glorious consequences of late capitalist society. But our rampant choice society, one where we have to make an overwhelming number of choices — about the cereal we eat, the beer we drink, or the clothes we wear — is entirely one sided. While we have an incredible amount of choice over issues of little importance, we are utterly excluded from any choice about the things that matter; what we do with the majority of our time, how we relate to others or how society functions as a whole. Nearly always these choices are constricted by the market, the necessity of work, cultures of overwork and neoliberal ideology.

Again we find this ideology laid down in primary education. Over the years more and more “continuous” learning has been introduced whereby children, over a two week period or so, have to complete a set of tasks for which they can choose the order. This is an almost perfect example of how choice functions in our society, ubiquitous when insignificant but absent when important. The children can choose when they do an activity, which matters little as they will have to do it at some point anyway, but cannot choose not to do it, or to substitute one kind of activity with another.

Why does this matter? Because meaningful choices about our lives give us a sense of certainty and control. Avalanches of bullshit choices that still have to be made, as study after study has shown, make us incredibly anxious. Each of them takes mental effort. Each contains, implicitly, the multitude of choices that we didn’t make; all those denied experiences for every actual experience. This is fine if there are only one or two. But if there are hundreds, every act is riddled with disappointment, every decision shot with anxiety.

Compounding this orgy of choice, and in itself another root cause of anxiety, is the staggering amount of information that assaults us every day. Social media, 24-hour news, the encroachment of advertising into every crack — both spatially and temporally — and our cultures of efficiency that advocate consuming or working at every possible moment all combine to cause intense sensory overload. This world, for many, is just too much.

Although we’ve talked mostly about work, surveillance, assessment and choice, there are a multitude of factors one could add. The desolation of community due to the geographical dislocation of work, the increased transiency of populations and the growing privatization of previously public acts — drinking, eating and consuming entertainment are increasingly consigned to the home — shrinks our world to just our immediate families.

Camaraderie, extended community and solidarity are eroded in favor of mistrust, suspicion and competition. Outside of work our lives become little more than a series of privatized moments, tending to our property and ourselves rather than each other, flitting between the television shows, video games, home DIY and an incredible fetish for gardening with no hint towards the thought that perhaps these experiences would be better if they were held in common, if they appealed to the social and looked outward rather than in.

In the same way we could mention the ubiquity of debt — be it the mortgage, the credit card or the student loans — and the implicit moral judgment suffered by the debtor coupled with the anxiety-inducing knowledge that they could lose everything at any moment. Or we could consider the near-existential crises humanity faces, be it climate change, ISIS or the death throes of capitalism; all too abstract and total to comprehend, all contributing to a sense that there is no future, only a grainy, distant image of lawless brutality, flickering resolutely in our heads.

But the crux, and the reason anxiety could become a revolutionary battleground, is that neoliberal ideology has individualized our suffering, attributing it to imbalances in our brain chemistry, constructing it as a problem of the self, rather than an understandable human reaction to a myriad of cruel systemic causes. Instead of changing society the problem is medicalized and we change ourselves, popping pills to mold our subjectivities to late-capitalist structures, accepting the primacy of capitalism over humanity.

This is why “We Are All Very Anxious”, a pamphlet released by the Institute of Precarious Consciousness, is so explosively brilliant. Not only does it narrate the systemic causes of anxiety, but it situates the struggle within a revolutionary strategy, constructing a theory that is at once broad and personal, incorporating one’s own subjective experience into an explanatory framework, positing anxiety as a novel, contemporary revolutionary battleground, ripe for occupation.

It is, they claim, one of three eras spanning the last two-hundred years where we have progressed between different dominant societal affects. Until the postwar settlement we suffered from misery. The dominant narrative was that capitalism benefited everybody; while at the same time overcrowding, malnourishment and slum dwelling were rife. In response to this appropriate tactics such as strikes, mutual aid, cooperatives and formal political organization were adopted.

After the postwar settlement, until around the 1980s, a period of Fordist boredom ensued. Compared to the last era, most people had stable jobs, guaranteed welfare and access to mass consumerism and culture. But much of the work was boring, simple and repetitive. Life in the suburbs was beige and predictable. Capitalism, as they put it, “gave everything needed for survival, but no opportunities for life.” Again movements arose in opposition, positioned specifically against the boredom of the age. The Situationists and radical feminism can be mentioned, but also the counter-culture surrounding the anti-war movement in America and the flourishing DIY punk scene in the UK.

This period is now finished. Capitalism has co-opted the demand for excitement and stimulation both by appropriating formerly subversive avenues of entertainment — the festival, club and rave — while dramatically increasing both the amount and intensity of distractions and amusements.

In one sense we live in an age of sprawling consumerism that avoids superficial conformity by allowing you to ornament and construct your identity via hyper-customized, but still mass-produced products. But technological development also mean that entertainment is now more total, immersive and interactive; be it the video game or the full-color film watched on a widescreen, high-definition television.

Key to this linear conception is the idea of the public secret, the notion that anxiety, misery or boredom in these periods are ubiquitous but also hidden, excluded from public discourse, individualized and transformed into something unmentionable, a condition believed to be isolated and few because nobody really talked about it. Thus to even broach the subject in a public, systematic manner becomes not just an individual revelation but also a collective revolutionary act.

I’ve seen this first-hand when running workshops on the topic. Sessions, which were often argumentative and confrontational, became, when the subject was capitalism and anxiety, genuinely inquisitive and exploratory. Groups endeavored to broaden their knowledge of the subject, make theoretical links and root out its kernel rather than manning their usual academic ramparts and launching argument after rebuttal back and forth across the battlefield.

But more than this, there was a distinct edge of excitement, the feeling that we were onto something, a theory ripe with explosive newness, one that managed to combine our subjective experiences and situate them in a coherent theoretical framework.

However, we must be critical. To posit anxiety as a specifically modern affect, unique to our age, is contentious. What about the 1950s housewife, someone mentioned in one of the sessions, with her subjectivity rigidly dictated by the misogyny and overbearing cultural norms of the time? Didn’t this make her feel anxious?

Well, perhaps. But if we take anxiety to mean a general feeling of nervousness or unease about an uncertain outcome — with chronic anxiety being an actively debilitating form — then we can draw distinct differences. Although the housewife was oppressed, her oppression was codified and linear, her life depressingly mapped out with little room for choice or maneuver. Similarly with the slave — surely the universal symbol of oppression — hierarchies aren’t nebulous but explicit, domination is ensured by the whip and the gun, the master individualized and present.

This is in stark contrast to the current moment. While it is obvious that oppressions are distinct and incomparable, we can nevertheless see that the fug of the 21st century youth is of a different nature. Our only certainty is that of uncertainty. Our oppressor is not an individual but a diffuse and multiplicitous network of bureaucrats, institutions and global capital, hidden in its omnipotence and impossible to grasp.

We aren’t depressed by the inevitability of our oppression, but instead are baffled by its apparent (but unreal) absence, forever teetering on the brink, not knowing why, nor knowing who we should blame.

Similarly it is bold to claim that anxiety is the dominant affect of Western capitalism, tantamount to pitching it as the revolutionary issue of our age. Yet if we analyze the popular struggles of our time — housing, wages, work/life balance and welfare — they are often geared, in one way or another, towards promoting security over anxiety.

Housing for many is not about having a roof over their heads, but about security of tenure, be it via longer fixed-term tenancies or the guarantee that they won’t be priced out by rent rises that their precarious employment can’t possibly cover. In the same way struggles over welfare are often about material conditions, but what particularly strikes a chord is the cruel insecurity of a life on benefits, forever at the whim of sanction-wielding bureaucrats who are mandated to use any possible excuse to remove your only means of support.

Anxiety is also a struggle that unites diverse social strata, emanating from institutions such as the job center, loan shark, university, job market, landlord and mortgage lender, affecting the unemployed, precariously employed, office worker, indebted student and even the comparatively well-off. Again we find this unification in the near-universal adoption of the smartphone and other hyper-networked technologies. All of us, and especially our children, are beholden to a myriad of glowing screens, flitting between one identity and another, alienated and disconnected from our surroundings and each other.

This is not to say a movement against anxiety itself will ever arise. Such a rallying cry would be too abstract and fail to inspire. Instead, anxiety must be conceptualized both as an affect which underlies various different struggles, and a schema within which they can be assembled into a revolutionary strategy.

So, what is our tangible aim here? In part it must be to reduce the level of general anxiety so as to increase quality of life. Yet if we are to take a revolutionary rather than a mere humanitarian approach, this drop in anxiety must in some way translate into a rise in revolutionary disposition. In certain ways it obviously will. If there is a public realization that large swathes of the mentally ill are not as such because of their unfortunate brain chemistry but instead because of a misconfiguration of society, people are already thinking on an inherently challenging, systemic level.

Similarly, conflict with the state or capital — be it on the street, in the workplace or inside one’s own head — tends to be high-impact and anxiety-inducing. A drop in general anxiety will make it more likely that individuals will engage in such moments of conflict and, crucially, experience the intense radicalization and realization of hegemonic power that can only be achieved through such visceral moments. But a second part to this, hinted at already and integral to giving the struggle a revolutionary edge, is to emphasize that there is a public secret to be aired. As well as combating the sources of anxiety, we must say we are doing so; we must situate these struggles within larger frameworks and provide education on its systemic nature.

Thus, any strategy would need to be both abstract and practical. On one hand we must explode the public secret by raising consciousness. This would require a general onslaught of education, including, but not limited to, consciousness-raising sessions, participatory workshops, articles, books, pamphlets, leaflets, posters, YouTube videos and “subvertised” adverts. The emphasis would be to educate but also to listen, to intermingle theoretical understanding with subjective experience.

The second part would be to strategically support campaigns and make demands of politicians that specifically combat anxiety in its various different guises. When it comes to work, the abolition of zero-hour contracts, the raising of the minimum wage in line with the actual cost of living, and the tightening of laws on overwork as part of a broader campaign to assert the primacy of life over work, of love over pay, would be a good start.

For those out of work, underpaid or precarious, the introduction of a basic citizen’s income would represent a revolutionizing of the job market. In one move it would alleviate the cultural and practical anxieties of worklessness — ending the bureaucratic cruelty of the job center while removing the anxiety-inducing stigma associated with claiming benefits — while simultaneously allowing individuals to pursue culturally important and revolutionary activities such as art, music, writing or (dare I say it?) activism, without the crushing impossibility of trying to make them pay. When we look to housing obvious solutions include mandatory, secured five-year tenancies, capped rent increases and a guarantee of stable, suitable social housing for those who need it.

There are many more reforms I could list. You will notice, however, that these are indeed reforms; bread and butter social democracy. Does that mean such a program is counter-revolutionary? A mere placatory settlement between capital and the working class? No, it does not. Revolution does not emerge from the systematic subjection of individuals to increased misery, anxiety and hardship as accelerationist logic demands. Instead it flourishes when populations become aware of their chains, are given radical visions for the future and the means to achieve them. It is when leftists critique but also offer hope. It is when the population writ large are included in and are masters of their own liberation; not when they are viewed as a lumpen, otherly mass, of only instrumental importance in achieving the glorious revolution.

Look at the practicalities and this becomes obvious. How can we expect individuals to launch themselves into high-tension anxiety-inducing conflicts if the mere thought of such a situation causes them to have a panic attack? How can individuals, in the face of near panoptical surveillance and monitoring, combat the overwhelming desire to conform if they aren’t awarded some freedom from the practical anxieties of life? How are we to think and act in a revolutionary, and often abstract, manner if the very real and immediate anxieties of work, home and play fog our minds so totally?

This is not to say freedom will be given to us. It must always be taken, and we must not rely on electoral politics to hand us the revolution down from above. Nor will true struggle ever be an anxiety-free leisure pursuit. Genuine conflict with the state and capital will always entail danger, stress and the possibility of intensified precariousness.

Nevertheless, the dismissal of electoral politics in its totality represents abysmal revolutionary theory. The pursuit of reforms by progressive governments being bitten at the heels by sharp, vibrant social movements can produce real, tangible change.

It was what should have happened with Syriza, and it is what will hopefully happen with the new Labour leadership in the UK. And if, as individuals and communities, we are to puncture the distress, precariousness and general sense of cruel unknowing so particular to the moment in which we live, if we are to overcome the avalanche of bullshit and reclaim our confidence, if we to construct and disseminate a distinctly communal, hopeful revolutionary fervor, such changes are imminently needed.

Joseph Todd is a writer and an activist. Find more of his writings here or follow him on twitter.

Bank Crimes Pay: Under the Thumb of the Global Financial Mafiocracy

Posted on December 7, 2015 by Reid Mukai

By Andrew Gavin Marshall

Source: Occupy.com

On Nov. 13, the United Kingdom’s Serious Fraud Office (SFO) announced it was charging 10 individual bankers, working for two separate banks, Deutsche Bank and Barclays, with fraud over their rigging of the Euribor rates. The latest announcement shines the spotlight once again on the scandals and criminal behavior that have come to define the world of global banking.

To date, only a handful of the world’s largest banks have been repeatedly investigated, charged, fined or settled in relation to a succession of large financial scams, starting with mortgage fraud and the Libor scandal in 2012, the Euribor scandal and the Forex (foreign exchange) rate rigging. At the heart of these scandals, which involve the manipulation of interest rates on trillions of dollars in transactions, lie a handful of banks that collectively form a cartel in control of global financial markets – and the source of worldwide economic and financial crises.

Banks such as HSBC, JPMorgan Chase, Barclays, Bank of America, Citigroup, Deutsche Bank, Royal Bank of Scotland and UBS anchor the global financial power we have come to recognize as fraud. The two, after all, are not mutually exclusive. In more explicit terms, this cartel of banks functions as a type of global financial Mafia, manipulating markets and defrauding investors, consumers and countries while demanding their pound of flesh in the form of interest payments. The banks force nations to impose austerity measures and structural reforms under the threat of cutting off funding; meanwhile they launder drug money for other cartels and organized crime syndicates.

Call them the global Mafiocracy.

In May, six major global banks were fined nearly $6 billion for manipulation of the foreign exchange market, which handles over $5 trillion in daily transactions. Four of the six banks pleaded guilty to charges of “conspiring to manipulate the price of U.S. dollars and euros exchanged.” Those banks were Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland, while two additional banks, UBS and Bank of America, were fined but did not plead guilty to the specific charges. Forex traders at Citigroup, JPMorgan Chase and other banks conspired to manipulate currency prices through chat room groups they established, where they arrogantly used names like “The Mafia” and “The Cartel.”

The FBI said the investigations and charges against the big banks revealed criminal behavior “on a massive scale.” The British bank Barclays paid the largest individual fine at around $2.3 billion. But as one trader at the bank wrote in a chat room conversation back in 2010, “If you aint cheating, you aint trying.” The total fines, while numerically large, were but a small fraction of the overall market capitalization of each bank – though the fine on Barclays amounted to some 3.4% of the bank’s market capitalization, the highest percentage by far among the group.

Despite the criminal conspiracy charges covering the years 2007 through 2013, the banks and their top officials continue to lay the blame squarely at the feet of individual traders. Axel Weber, the former president of the German Bundesbank (the central bank of Germany), who is now chairman of Switzerland’s largest bank, UBS, commented that “the conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary actions.”

Looking at the larger scale of bank fines and fraud in the roughly eight years since the global financial crisis, the numbers increase substantially. In addition to a 2012 settlement for mortgage-related fraud in the U.S. housing market, which amounted to some $25 billion, several large banks paid individual fines related to mortgage and foreclosure fraud – including a $16 billion fine for Bank of America, and $13 billion for JPMorgan Chase. Added to these are fines related to the rigging of the Libor rate (the interest rate at which banks lend to each other) and the Forex rigging, as well as money laundering, violating sanctions, manipulating the price of gold, manipulating the U.S. electricity market and assisting tax evasion, among other crimes.

According to a research paper published in June, the total cost of litigation (fines, penalties, settlements, etc.) paid by 16 major global banks since 2010 has reached more than $300 billion. Bank of America paid the most, amounting to more than $66 billion, followed by JPMorgan Chase, Lloyds, Citigroup, Barclays, RBS, Deutsche Bank, HSBC, BNP Paribas, Santander, Goldman Sachs, Credit Suisse, UBS, National Australia Bank, Standard Chartered and Société Générale.

Virtually all of these banks also appear on a list of data, compiled through 2007, revealing them to be among the most interconnected and powerful financial institutions in the world. This core group of corporations forms part of a network of 147 financial institutions that Swiss scientists refer to as the “super-entity,” which, through their various shareholdings, collectively controland own each other and roughly 40% of the world’s 43,000 largest transnational corporations.

In other words, the big banks – along with large insurance companies and asset management firms – do not simply act as a cartel in terms of engaging in criminal activities, but they form a functionally interdependent network of global financial and corporate control. Further, the banks work together in various industry associations and lobbying groups where they officially represent their collective interests.

The largest European banks and financial institutions are represented by the European Financial Services Round Table (EFR), whose membership consists of the CEOs or Chairmen of roughly 25 of the top financial institutions on the continent, including Deutsche Bank, AXA, HSBC, Allianz, RBS, ING, Barclays, BNP Paribas, UBS, and Credit Suisse, among others.

In the United States, the Financial Services Forum (FSF) represents the largest American along with some European banks and financial institutions. The Forum’s membership consists of less than 20 executives, including the CEOs or Chairmen of such firms as Bank of America, Morgan Stanley, JPMorgan Chase, Goldman Sachs, Citigroup, UBS, HSBC, AIG, Bank of New York Mellon, State Street Corporation, Deutsche Bank and Wells Fargo, among others.

And on a truly global scale, there is the Institute of International Finance (IIF), the premier global association representing the financial industry, with a membership of nearly 500 different institutions from more than 70 countries around the world, including banks, insurance companies, asset management firms, sovereign wealth funds, central banks, credit ratings agencies, hedge funds and development banks.

In addition to these various groups and associations, many of the same large banks and their top executives also serve as members, leaders or participants in much more secretive groups and forums – for example, the International Monetary Conference (IMC), a yearly meeting of hundreds of the world’s top bankers hosted by the American Bankers Association, which invites selected politicians, central bankers and finance ministers to attend their off-the-record discussions. In addition, there is the Institut International d’Etudes Bancaires (International Institute of Banking Studies), or IIEB, which brings together the top officials from dozens of Europe’s major financial institutions for discussions with central bankers, presidents and prime ministers in “closed sessions” with virtually no coverage in the media.

These financial institutions are major owners of government debt, which gives them even greater leverage over the policies and priorities of governments. Exercising this power, they typically demand the same thing: austerity measures and “structural reforms” designed to advance a neoliberal market economy that ultimately benefits those same banks and corporations. The banks in turn create the very crises that require governments to bail them out, racking up large debts that banks turn into further crises, pressuring economic reforms in return for further loans. The cycle of crisis and control continues, and all the while, the big banks and financial institutions engage in criminal conspiracies, fraud, manipulation and money-laundering on a massive scale, including acting as the financial services arm of the world’s largest drug cartels and terrorists organizations.

Welcome to the world governed by the global financial Mafiocracy – because if you’re not concerned, you’re not paying attention.

The Reason You Work So Hard to Participate in the Rat Race

Posted on November 15, 2015 by Reid Mukai

By M.J. Higby

Source: Waking Times

Ralph Waldo Emerson once said, “A man in debt is so far a slave.” Money has no intrinsic value yet we spend our days damaging our health and spirit in order to obtain it. Why do we sacrifice our well-being for it? Is it the cliché that “we just want to provide a better life for our kids than we had?” Is it just way of the civilized world? The most important question to ask, however, is what power do we have to change this way of thinking and living? The reality is simple: money is a vehicle for social control. Debt makes us good, obedient workers and citizens.

The traditional workweek started in 1908 at The New England Cotton Mill in order to allow followers of the Jewish religion to adhere to Sabbath. With the passage of The Fair Labor Standards Act in 1938, the 40-hour workweek became the norm. Data from the 2013 American Community Survey showed that the average commute time in America is about 26 minutes each way. According to a Gallup poll, the average workweek in America is 34.4 hours, however, when only taking into account full time workers, that average shoots up to 47, or 9.4 hours per day during a 5-day workweek. Keeping averages in mind then, between commuting, working and figuring in an hour for lunch (usually less), that puts us at approximately 11 hours and 40 minutes for the average full time worker. If you have a family with young kids, just add in another few hours for homework, baths, etc.

When the day is done, how much time do you have for yourself? To exercise, meditate or otherwise unwind the way that all the healthy living gurus preach? And how much of yourself, your presence of mind, is left to devote to family? We give the company the heat of our most intense mental fire while our families get the smoke. Yet Jeb Bush, the 2016 GOP presidential hopeful, says we need to work more.

The answer to why we put ourselves through this daily grind is multifaceted. The most pervasive reason is workplace and societal pressures. We are raised in a matrix of sorts. The cycle starts around the age of five when we are expected to adhere to a regimented 8-hour day of school. At this age, we don’t have the intellect to question why, so we mechanistically follow the path that’s laid out. This daily path becomes engraved in our minds and becomes as automatic as the sun’s daily journey. Our school system is adept at churning out working class individuals en masse. We are taught along the way not to question authority, again adhering to the working class mentality.

On the opposite end of the spectrum are those in power. They are the ones that like to color outside the lines. Many books abound with titles such as The Wisdom of Psychopaths that illustrate how people with psychopathic traits, ones who don’t tend to follow rules, are often found in managerial roles such as CEOs all the way up to presidents of countries. With these rare manipulative, coldhearted personalities in place and the rest of us following like good sheeple without questioning, the stage is set for compliance.

If you have been in the working world long enough, then the following statement should ring true: if you work extra hours, you are a great worker; if you decline, you’re useless and apathetic. In the work world, there’s typically no in between. The pressure to succeed for the pride and benefit of the company unfortunately supersedes that of the pressure to be a good parent, sibling, son or daughter. According to a study done by the economic policy institute, between 1948 and 2013, productivity has grown 240% while income for non-managerial workers has grown by 108%. To make up for this discordance, pride of doing what’s best for the company has been employed as a motivational tactic. This tactic has been used as a sharp IV needle that’s been inserted into our veins and we have willingly ingested the contents that are injected through it. Pressure to conform toward achieving the company’s goals has overcome our will to be compensated accordingly.

The other side of this pressure comes from society as a whole outside the education/workplace. A close friend of mine works for a state court and makes about $40K/year. He is also a self-employed business owner on the off hours. I estimate that he works about 70-80 hours a week. He owns a home in a well-to do neighborhood and he drives a seventy thousand dollar luxury car. This crystallizes the saying ‘big hat, no cattle.’ But when a lie is told over and over, the lie becomes the truth.

When we look at someone who drives a luxury car and lives in an upscale part of town, we see this as success because of how often that visual of it has been pounded tirelessly into our minds. We fail to see that these are nothing but symbols of success and false ones at that. They appear real because as a society, we have been conditioned to see them this way by the advertising industry. In the book, The Millionaire Next Door, the authors annihilate this illusion. Numbers don’t lie and the statistics show that most true millionaires, those with a net worth of over one million dollars, do not own those luxuries that we typically associate with success and wealth. They view them as the reality of what they are: a depreciating liability. According to the book, the typical millionaire owns a home in the two to three hundred thousand dollar-range and a non-luxury automobile. If something goes wrong with either, they have the cash reserves to fix it. On the other hand, the commonplace owner of the luxury home and car can’t afford the roof and the tires respectively without going deeper into debt if they should need replacing.

Ownership of these symbols of wealth becomes a self-perpetuating illusion to satisfy the psychological need for acceptance. Unfortunately, human behavior dictates that emotional needs often override logical thinking. It’s been said that the borrower is slave to the debt-owner and with luxury items, debt is the rule, not the exception. Debt is healthy for those in power and contributes to a needy and thus obligated worker.

The current wisdom of slave, spend and save for retirement has only one destiny. That destiny can be summed up in three sentences. Spend your healthiest and most productive years working to support a life of materials and thus illusions of success while elevated stress damage your health. During this time, be sure to save enough money for retirement so you can enjoy those years of the subsequent poor health. And lastly, do it in the name of pride for your company and country.

I take pride in being American, as I’m sure most Americans do, however, if you’re reading this you’re likely smart enough to see the holes in the daily grind. It saps our creative potential and our physical, as well as our spiritual energy. We don’t need any studies to tell us how stressed we are and subsequently, how unhealthy we are. The physical manifestations of stress such as obesity, hypertension, heart disease, increased risk of cancer, depression, anxiety and many others tell us all we need to know. They tell us that we need a better work/life balance. They tell us that the pendulum has swung too much in the direction of work and away from life. Fortunately, there’s a way that we can take it back.

The most important way to restore this balance is to realize the power that we, as consumers, hold. Tyler Durden, the protagonist in the film, Fight Club said it best…

“…advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.”

The marketing and advertising industry know, more than anyone else, what motivates the human mind and how to tap into those instinctual drives. To defend against this industries seductiveness, we need to journey within ourselves and bring to light what’s really important to us. What most of us will find is that experiences and time well spent, not materials, are what makes us happy. In the book, aptly titled Well Being, the authors Tom Rath and Jim Harter discuss how experiences have been proven to make us happier than material posessions.

We revel in the anticipation of the experience, we enjoy the experience itself and we look back on it fondly for as long as we live. We do this while the expensive car or house that we borrowed money long ago to obtain falls apart causing us to borrow more money. If we live according to the rule that everything we purchase, with the exception of a home, is acquired by cash, then we fail to become slaves to debt and by extension, work. We no longer relinquish our power to creditors.

Oscar Wilde was famously quoted as saying that anyone who lives within their means suffers from a lack of imagination. Materialistically speaking, living by this notion will bind us with shackles to a life of debt servitude. When we rip those shackles of debt from our wrists, our minds become clear and we see what truly makes us happy. We spend more time with friends and family. We focus on our passions and hobbies. In essence, we get back to the foundation of what it means to be human. After all, none of us will ever arrive upon the mountain of our last moments of existence wishing we spent more time at the office. We will instead arrive wishing we completed that book, that painting or that experience with those we love most. For those can be purchased not with debt, but with time. And there is no more cunning, covert and deceitful thief of time as that villain we call debt.

About the Author

M.J. Higby practices medicine in Phoenix, AZ. He is passionate about martial arts, most notably Brazilian Jiu Jitsu. He enjoys writing about mental, spiritual and physical well being and questioning the methods by which we attain it. You can reach him on Facebook and Twitter @MJHigby

The true value of money

Posted on October 22, 2015 by Reid Mukai

Economics needs a revolution.

By David Orrell

Source: Adbusters

This sentiment has been expressed by people from the physicist turned hedge-fund manager Jean-Philippe Bouchaud (in a 2008 paper), to the Bank of England’s Andrew Haldane (in a 2014 foreword for Manchester’s student-run Post-Crash Economics), to activist groups such as Kick It Over. So what would such a revolution look like?

Perhaps the archetypal model for a scientific revolution is the quantum revolution that shocked the world at the turn of the last century. In the space of a few short years, almost everything that was known about the nature of matter was overturned. The Newtonian view of the world as a predictable machine crumbled with it.

Except, that is, in economics – which continues to base its models on quasi-Newtonian economic laws.

A peculiar feature of orthodox economics is that money is treated as an inert medium of exchange, with no special properties of its own. As a result, money is largely excluded from macroeconomic models, which is one reason the financial crisis of 2007/8 was not predicted (it involved money). In many respects, when viewed through the lens of quantum physics, money behaves a lot like matter – and acknowledging that behavior promises to do to economics what quanta did for physics.

The main insight of quantum physics is that matter is composed of entities which behave in some ways as waves and in other ways as particles. This novel insight countered the Newtonian view that billiard ball-like atoms behaved independently of each other. A beam of light, for example, is an electromagnetic wave but it is also a stream of particles known as photons. At a quantum level, matter is fundamentally dualistic: neither the particle nor the wave description is complete by itself.

The same can be said of money, which turns out to have quantum properties of its own. Money is strange stuff, when you think about it – but because it has been around for millennia we rarely do. Consider for example a U.S. dollar bill. On the one hand it represents a number – in this case the number one. On the other hand it is a physical thing which can be possessed, exchanged and above all valued (even lusted after, if there are enough of them). It therefore lives partly in the abstract world of numbers and mathematics and partly in the real world of things, people and value.

The same is true of any money object that we use for payment. Here “object” could refer either to a physical object – such as a coin – or a virtual object, such as 1.2107 bitcoin (BTC) sent from a phone. What makes such objects special is that they have a fixed, defined value in currency units.

While seeing money objects as things with a fixed monetary value might appear trivial, it turns out to have complex and contradictory properties that feed into the economy as a whole. In particular, they combine two aspects, abstract number and real world value, which are as different as waves and particles.

For example numbers are subject to mathematical laws – such as compound interest – and can grow without limits, while in the real world natural processes tend to be subject to bounds. In 1850 an American lawyer did the math and calculated that five English pennies invested at 5 percent compound interest since 0 AD would have accumulated to 32 billion spheres of pure gold, each equal in size to the Earth. This is a useful exercise for anyone who thinks that gross domestic product (GDP) can grow forever.

Numbers can be negative, as in debts, but (as the English physicist-turned-economist Frederick Soddy pointed out) there is no such thing as a negative number of objects. You might be underwater on your mortgage but you can’t own a negative house. Throughout history the frightening ability of negative debt to grow without bounds has been responsible for forcing people into economic slavery.

Numbers are hard and precise, like the particle aspect of matter. Real-world concepts such as value are diffuse and fuzzy, like the wave aspect of matter. By combining these two aspects in a single package, money objects are our contribution to the quantum universe.

The dualistic nature of money explains its frequently paradoxical behavior. In the early 2000s, cheap credit in the United States meant that even low-income people could afford their own homes. Some cashed in and sold their houses at the top of the market. For them the money was real – they could go to the bank and withdraw dollar bills. But when the credit crunch kicked in most of the new money disappeared into the ether, as if it had never existed. Money seemed to be both real and unreal at the same time – a sensation familiar to anyone who has studied quantum physics.

Just as quantum physics overturned Newtonian physics, so a reexamination of money promises to disrupt economics. The reason that critics are calling for fundamental change is that neoclassical economics has failed to provide answers to problems such as wealth inequality, financial crises and environmental degradation – which is unsurprising if it treats money as nothing more than an inert, Newtonian medium of exchange. The tendency of money to clump and accumulate with a small group of creditors, or for financial markets to be inherently unstable, or for GDP growth to be valued over the environment, becomes clearer when we acknowledge the vital, active role of money and the tension and discrepancy between numbers and the real world that drives it.

Of course, one should not underestimate the resistance of economists to adopting new ideas, however the worldwide student movement calling for change is unlikely to go away. Economics is primed for a quantum revolution of its own.

— David Orrell is a mathematician and author. His latest book, Truth or Beauty: Science and The Quest for Order, explores the role of aesthetics in science. He is currently working on a book about money.

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Tag Archives: Debt

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