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What is needed is to accurately translate their terms into language that most can understand and then to show it for what it is.  Showing if for what it is in today's context means clearly including the trans-national arrangements and the way the system has been manipulated to the benefit of the wealthy at the cost of everyone else.   An angered and aroused public will do the rest....  I hope. :-)

I agree and that's the challenge.  

But, part of the reasoning has nothing to do with the masses.  It has to do with presenting an argument that is largely contained to academia, but gives scholars simple tools to fight the invasion of econo-think into the study of social phenomenon. Once we put them on the run there, we can carry on the fight to the public.

We have to demystify what's going on.  And I tend to think of pies or pizzas.  It's an easy metaphor for the whole thing.

So let's say that we have the way that the pie is divided up to start with, but one of the parties wants to increase the size of their slice of the pie.  But in doing this, they reduce the size of the pie. Why?

Your wife was right to think immediately, well what about the CEOs, because that's what's happening.  And I think that in part it shows just how counter-intuitive the argument that it's workers shrinking the pie.  Making them look ridiculous forces them to defend their arguments in real terms, and stop hiding behind the veil of academic authority.  

Now, why has the pie shrunk?

That's actually really simple, and it's tied up in the Anglo Disease.

Put money in the hands of people who are living at or near the margin of existence, I'm talking about people who are barely paying their bills, and they will spend the money.  Put money in the hands of people who own several homes, and they are going to "invest" it.

In the first case,additional money sets off a whole slew of economic activity. So let's say that the guy working at the factory sees his wages increase at the same time as his productivity does.  So his wage goes from $12/hour to $13/hour.  He has more money in his pocket, and he feels that he can afford to take his family out to eat, and he leaves a nice tip.  So now the waitress who's making $7/hr has more money in her pocket, so she decides that she can afford to buy milk for her kids instead of making them drink kool-aid.  So now that money has circulated again, and that's the key of it.

Put money into the hands of people who very little of it, and they will spend it on things that make their live much better.  It will circulate multiple times, and each circulation creates value that adds to the value of things being produced by a society.

Now put that money in the hands of someone who's already got a great deal of it, and they will put it away into an investment.  And the money does not circulate, the waiter gets no extra tips, the store no increase in milk sales. Instead it takes money from the real economy.  It takes more wages from the guy working in the factory, so he hardly ever goes out to eat, and the waitress's kids are going to be drinking kool-aid.

I'm hoping that that places in less academic terms.

I see two goals here.

  1. Attack the proponents of neo-liberalism in academia, where people grasp the technical terms.

  2. Once you've denied them the veil of authority that academia carries, the neo-libs are revealed as charlatans and selfish bastards.  You've got them on the run, carry the fight to the court of public opinion. Shame them, and force them to explain how their self serving ideology is anything else than greed.

First, you have to drive them out from their strongholds, that's why the academic argument comes first.

Then when you've denied them refuge in academic authority, you cut the bastards to bits for the whole world to see.  And once you've revealed them for what they are, it's not going to be a few discontents calling their bullshit for what it is, it will the masses prepared for the creation of another world.


And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sat Jan 10th, 2009 at 06:11:37 PM EST
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I think there is something deeper as well, and it lies in the fundamental emptiness of financial capital. There is a vacuum or Black Hole at the heart of the system because we attribute "Value" to something that is in fact its antithesis - a claim over Value or IOU asserted ex nihilo by credit intermediaries.

But my approach these days is no longer to attack the existing system - there's no need, it's doing a wonderful job of discrediting itself.

Instead, my strategy is to point out and facilitate as best I can the emerging new alternatives to conventional wisdom and allow people to make their own comparisons.  

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sat Jan 10th, 2009 at 06:37:06 PM EST
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I certainly think that there's something of the distinction that Marx makes between money and capital.

Money, despite what Pink Floyd had to say on the subject, is not the root of all evil today.  Capital is. It's that distinction that Marx makes between industrial and and financial capitalism.

Money simply facilitates transactions, capital requires a return.

I understand what you are saying about the system discrediting itself, but I think that there among the people at the top in the United States, neo-liberalism has become nothing short of a religion.

You have to break their gods, in order from them to get it, because their beliefs are based in faith not reason.

Even people who spout the rhetoric of change, aka the incoming president, are agents of the status quo. Obama is talking about cutting public pensions and healthcare, that hardly strikes me as the sort of change that we need.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sat Jan 10th, 2009 at 06:46:45 PM EST
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ManfromMiddletown:
Money simply facilitates transactions, capital requires a return.

I would say firstly that unsecured credit facilitates transactions, and has a cost consisting of shared system costs and defaults.

Secured credit and conventional Equity in a Corporation are the conflicting financial claims (financial capital) over productive assets (industrial capital) which require a return.

However, this return is paid for from the sale of production/ use value of the relevant productive assets.

Ther is nothing wrong with a cost of credit or a return on capital per se.

The key problem lies in the fact that interest-bearing credit currently is money.  The increasing inequalities in access to this credit combine with exclusive ownership of productive assets - and particularly the Commons of land, non-renewable resources and knowledge - to create a continuing and finally unsustainable transfer of wealth.  

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sat Jan 10th, 2009 at 07:19:05 PM EST
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Add to that that a vast pool of capital, much of it backed with claims on real assets, was betrayed into hopelessly unproductive uses and the present system starts to come into focus.  What is needed is an intelligent and highly selective repudiation of such debt.  Let the losses, where appropriate, be recouped from the personal assets and estates of the perpetrators.  The biggest obstacle to this is lack of will.  When a better understanding of what has happened begins to spread I suspect that the will will appear.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Jan 10th, 2009 at 11:07:19 PM EST
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ARGeezer:
What is needed is an intelligent and highly selective repudiation of such debt.

I think it is possible to transform the vast pools of unrepayable property-backed debt to a form of finance which does not have to be repaid ie Equity - just "not Equity as we know it, Jim".

We may achieve this Unitisation within a framework based upon Partnership law (%age shares or "nth's"), rather than Trust law (Units in Unit Trusts) or Company law (conventional shares).

The result is not so much repudiation as transformation.

The holder of distressed (ie unrepayable) debt exchanges his bonds for Units. He has no right to get his capital back from the user of the capital (the Occupier) but he can get some or all of his Capital back from other investors by selling to them his Units in the resulting "Rental Pool".

The amount he gets back depends on the rate of return on Capital investors require.

Since we index-link the Occupier's rental a rate of 2 to 3% is good in the current climate. The crucial point is that because the resulting rental is genuinely "affordable" (in large part because the obligation torepay Capital has been removed) it is therefore more likely it will be paid and the lower risk justifies the lower rate of return.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Jan 11th, 2009 at 07:14:02 AM EST
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This may well be the best way out of the mortgage backed security fiasco.  But such a solution will only come after the market has capitulated to the decline and there still seems to be no solution in sight.  That will probably take at least a year.  Right now many probably still think or hope that they will get most of their money back.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jan 12th, 2009 at 04:43:10 PM EST
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D'accord!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Jan 10th, 2009 at 11:01:39 PM EST
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