Wednesday, 26 October 2016

Blog 42 Do We Really Need Governments?

Blog 42  Do We Really Need Governments? - Some Tricky Musings

Let's just start with some background by establishing that there are different forms of government.

In alphabetical order. Asterisk* indicates a form of government defined by Aristotle about 2500 years ago. Nothing new there.

Anarchy*, aristocracy*, autocracy*, democracy 1 (mob rule)*, democracy 2 (representative government), dictatorship, "kleptocracy", monarchy*. oligarchy*, plutocracy, tyranny.* Wow, is that all?

Anarchy means "no government". Aristotle thought of it as "mob rule" He called it "democracy." (Literally, in Greek, "rule by the common people").

Aristocracy - means "rule of the best." Two perverted forms of it are are Oligarchy, which means "rule of the few" and Plutocracy - rule of the rich"  from Plutus, Roman god of riches(Now we're getting warm. )

Autocracy, Aristotle's "tyranny" (modern "dictatorship"). Means "myself-rule" a ruler who rules for his/her own benefit, by force, usually.

Democracy 2, representative government, of, by, and for the people - to quote Abe Lincoln.

Kleptocracy. modern rhetorical term based on the Greek word for thief. So government by thieves.

Monarchy - Rule by a king or queen. Can be autocratic or constitutional.

Note: At the present time, all these forms of government call themselves democratic.



Back to our question. Do we need governments?

Let's talk about modern "democracy".

We all know what the word means. It means rule by the people. So the theory is that the ultimate power lies with the people. But in a population of several million (or billion), different people have different views. So, in  practice elections are held, and a candidate with the most votes becomes the people's representative for a defined period.

However, in theory and, especially, in practice democracy works better in small states than in large ones.

So, fundamentally, what does a government do. Two main things, tax and spend.
In the process, money is taken from individuals and corporations, and spent to provide public goods and services, notably for people who can't provide for themselves. It's a kind of charity, but what else could you do? Keep 'em quiet, the Roman emperors said, and they won't revolt. It is a good thing. Really.

If you consider the return on investment, much of it is very good. Public health care keeps workers healthy, and reduces absenteeism in the work force. Education provides better workers, but, the flip side, also smarter voters. Roads, railways, canals, a justice system, benefit almost all classes.

Something else governments are spending large amounts of their tax money on today is paying the interest on government debt. Not much attention to paying down the debt itself, for some strange reason.

(So one way to get some of your taxes back is to save your money and buy your government's bonds.)

The fourth big expenditure - the military. Can't say much about the social value of that, but it does provide employment, and when the weapons are put to use, population reduction.

But - new point - governments all over the world are on the ropes. High debt levels mean higher taxes and/or lower public expenditure. So if you are against taxes, but not against privates banks creating all money, you can advocate that at least some of the big four expenditures be cut. If you could choose only one, which would it be? Health care, education,  transportation infrastructure, or military spending?

Why?

Think, now.

My choice would be debt repayment, just because I don't like interest payments. Debt reduction would be really hard on our banks, which have lent most of that money to governments. And some recent governments have tried paying it off  - by borrowing more money bank-created money. (????) Can't be done.
 But if governments were to resurrect their old sovereign practice of creating their own national interest-free money...

That, would be a real showdown between national states and banking corporations. On which side would you lay your bet - if you had any money left for betting, after your taxes and your mortgage payments?

Banks or governments?

 Couldn't we just maintain a beneficial balance between them?

Tuesday, 18 October 2016

Blog 41 The Money Scene (review)

41 The Money Scene (reprise) Where does money come from?

First, there are two distinct kinds of money. There is cash, actually printed or minted by governments . And there is credit money, created by banks and rented to us.

You probably use the rented money for almost all of your transactions if you pay by cheque, debit/credit card, or electronic transfers. Credit money does not come from a printing press. But you do have to rent it. (Hey, Doc, you mean pay interest. You can say it out loud.)

Okay. Now for the big mystery, the real secret. How do banks create the money we use>

It has been said by wiser accountants than me, "It is so simple it's hard to believe." 

The Money Scene

You may have seen those TV ads where a young couple smile at each other, and a bank officer - well-dressed, good-looking and devoted to the young couple's best interests - has just told them what they want to hear. She will give them $25,000 for that new car, or for their daughter's school fees, or whatever.

What follows - not shown in the ad  - is a lot of document signing. Finally comes the critical moment. After you have signed the documents, the bank agent tells you that $25,000 has just been transferred to your account.

At that moment, at that very moment,  $25,000 in new money has entered into the world's economy.

It is certainly real money. You write the cheque and get your car. Or your daughter gets her school uniform.

The process is so simple: a bank willing to lend makes an agreement with a client willing to borrow. And it is same process, exactly, if General Motors or Exxon wants to borrow a billion dollars. It's not cash, but it is money, ready to be spent.

And it is new money. The bank does not take it from a stack of cash in its vault nor shave it from an ingot of gold in the basement. It just pops into existence! Really!

So, remembering the law: Money goes where money is, let's follow the trail. What was the key question you asked before signing (and signing, and signing) the papers to get the loan?  Of course, "What is the interest rate on the loan?"

The key word in the global monetary system has to be "interest". Sometimes called "rent".

So the couple, or you, can live in this $25,000 Loan Street dwelling as long as you pay the rent. Correct? But, no, you say. We have to pay back the principal of the loan.

No, no, and no!

Now this may be a little difficult to grasp, too. The bank really does not want you to pay back the principal, ever*  So long as you pay the rent they will rejoice to let you keep the credit money. (After all, they created it out of thin air.) For you, on the other hand, if you no longer had to pay the rent, that would be great. Right?

And for the bank? Well not so good. It would be a bad thing for the bank. When you pay back the principal of a loan, they have to write a profitable asset off their books. No loans on the books, no rent/interest coming in. No rent, no profit. No profit, no salaries for bank execs, and no dividends for shareholders. Not good.

You see how the system works? The expectation that you will pay off the principal is just window dressing.

Let me finish with a mind-expanding question. What if you had no government-created non-debt cash money? For the world's banks that is the great and glorious ultimate profitable goal. And they are getting closer to it! Just think, if banks controlled interest rates and fees, and you had no cash available to escape to...

*Next blog will face-off governments and banks. Tune in, I hope you may learn something else new.

Sunday, 18 September 2016

Blog 40 Three Points for Peace

Blog 40  Three Points for Peace    A 3-in-1 blog: not the short one we promised last blog.  Sorry. But you could read it in three separate coffee breaks.

1.  Police and the People

As policemen march to the funeral of a fallen police officer, what thoughts lie behind those grim faces? Could it ever be, "My job would be much less dangerous if we could somehow make friends of these people instead of provoking them."

It is challenging, scary thought, but the alternative is escalation, to everybody's peril.

The initiative must probably come from the police, but they should invite/welcome the people they fear to join the discussion.

2 Religious War.  Here's a secret recipe for peace between three religions. Get Christians, Muslims and Jews to start a program - preferably a mass program (no pun intended) -  of reading each others' holy books. Let the people read without guidance from their clergy, and search for the similarities. Most will be hugely surprised. Why exclude the priests, pastors, imams, mullahs and rabbis? Because they would be unable to look for anything but differences.

Maybe I can make that point with six almost random quotations from the Hebrew, Muslim and Christian scriptures. (Two each from  the Kuran, the Christian scriptures and the Hebrew scriptures.) 
Which is which?.
 (For the usual names - Jahweh, God, Allah - I have substituted "the Deity,"

Ready?

1 - Do not behave like those who slandered Moses. The Deity cleared him and he was exalted by the Deity.

2 - Make every effort to live in peace with all men and to be holy. 

3 - Fear the Deity and speak the truth. He will bless your works and forgive you your sins.

4 - To the Deity belong wisdom and power, counselling and understanding.

5 - He will save the children of the needy; he will crush the oppressor.

6 - Let your light shine before men, that they may see your good deeds and praise your Deity in heaven.

Hint:  The first quotation is from the Kuran, which has lots of other praises for Moses, Joseph, Abraham, Jesus, Mary, Jonah, and other characters well-known to  Jews and Christians.



3. Narrowing the Wealth Gap.   This is the big one; you might want to save it for tomorrow.

Corporations are arguably the chief institutional means by which the rich get richer and the poor get poorer; especially the banking corporations, which create money for buying up assets, but are not  much interested in the poor.

The war between nation states and global corporations is about the world's wealth. At present the corporations are winning the war: wealth- and corporate-friendly governments are in power in most of the world. Need I quote examples? Democratic governments, weighted with debt, are definitely in decline.

The corporate propaganda has done a great job of deceiving people into believing that all their troubles stem from taxation by greedy governments. Not true.

But corporations are not invulnerable.

So, in 250 words, or less, CogsBlogger, how do we reduce the power of corporations over governments?

You can never go back, of course, but try your imagination on this scenario:

On the first Tuesday of every month the names of two corporations are posted, world-wide on social media, with a call to boycott their products, on the understanding that as soon as the corporations change, the boycott will be lifted.

The change required of the named firm would be to surrender the company's charter (which was issued by some government) and replace it with a new charter that contained:

     i  An over-riding social responsibility clause to replace the current exclusive responsibility to shareholders.
   ii.  A clause making all shareholders liable for the corporation's social violations (think BP oil spill, or Bhopal chemical spill), up to 10% of the market value of their share-holdings.
    iii  The issuing of 10% of the corporation's outstanding shares to the national government which issued the charter.  The government, as 10% shareholder, is then to entitled to 10% of the firm's dividends. Just  think, it might be possible for some national governments to abandon corporate taxation altogether. (Wow!)

This is a rough proposal. Lots of improvements and implementation details needed. Not to mention, secrecy at its hatching. Please don't say you saw it first on CogsBlog 40.






Friday, 9 September 2016

Blog 39 Of Divided Families, Part 2 The Wealth Gap

Blog 39 Of Divided Families: the Wealth Gap


Power 










Money   

History knows that human societies rise and fall.  Often the fall stage is signalled by wide, bitter, irrational divisions. In 2016 the hopeful word there is "irrational" - because that can be corrected; I'll get to that in Blog 40.

As we have seen (Blog 38) religion can divide, and
Law and Order efforts can divide.

This blog argues that the law of money creates the "wealth gap" which underlies most other divides. So let's go there, now.

       Money goes where money is.

That means that those who have the most money will amass even more; and those with the least money are doomed to have less. 

Are we there yet, Mommy? We're getting there.

In modern times (call that the last 300 years) we have seen the rise of Britain, and the rise of America, (to say nothing of the rise of capitalism, the rise of social democracy, and the rise of technology). 

Then comes the fall. Why? Let me suggest that the wealth gap is often the trigger. Here's the pattern.

Step 1.  The law of money leads to a point where a few people own most of the wealth in a community In 2016 it was calculated that, in the community we know as Planet Earth, 1% of the people have achieved ownership of 50% of the planets human-held wealth. Earth's population is about 8 billion (8,000,000,000). That means that 80 million (80,000,000) persons own half the world's capital and resources. and the other half is divided among 7.2 billion (7,200,000,000).

Now 80 million is about the size of a medium size nation, say Germany, Turkey or Thailand. By global standards, then, it is not a big group at risk if the 7.2 billion were to turn on them.

History suggests they will. Current events suggest they already have!

In 1770, when the British Empire seemed irresistible as it spread around the globe ("The sun never sets on the Union Jack." they said), Oliver Goldsmith said:

     Ill fares the land, to hastening ills a prey,
     Where wealth accumulates and men decay.

Or, as my grandfather - a wise old man - expressed it:
"Shirtsleeves to shirtsleeves in four generations."

Step 2.  Rebellion/revolution. Revolutions almost always start with the middle class. (The poor are too occupied procuring their daily bread. It is the middle class, educated, but staring down a narrowing tunnel to insecurity and poverty, who look up searching for some one to blame. Occasionally, they even correctly identify the culprits ("Occupy Wall Street", for example). More often they take aim first at their established politicians or rulers. 

Foreigners - in language, race, or religion - are often innocent targets.

Step 3.  Once the middle class revolution has begun to take off, the poor get involved. They start out accepting the middle class leadership, but then, being more numerous, take over the revolution!!

And while the middle class have grievances to be remedied,

the poorer classes have a bitter history of injuries to be revenged!!

They often latch on to a radical leader who promises them what want to be promised.

That's when the really nasty stuff happens. That's when the policeman - decent, trained civil servant, a family breadwinner on a modest income - becomes a target, and huddles deeper into his, or her, cruiser and body armor, thinking, "A policeman's lot is not a happy one"  So they upgrade their weaponry and strike back. And  stupid violence escalates in the neighborhood. So much for law and order.

 As for religious divisions, they are sharpened by leaders who favour restraint and even poverty. Others favour the "prosperity gospel" ("God wants you to be rich.") Some pump up the violent passages of their scriptures. Things are getting very bad.

But the wealthy ruling few have the most to lose. And  since money buys power, they use it. They direct their politicians to "beef up" security, and to drum up wars.

Wars - a tried and true device for diverting dissent. And wars are good for business. Every bomb that explodes, every tank that erupts in flames, every plane that crashes, every building flattened, every coffin buried, requires work to replace it. Work means wages; wages cost money. So governments (encouraged by their masters) create or borrow money. Workers are happy to get it and spend it. The economy booms. (Shareholders, large and small, are ecstatic.) And it takes a few years for all the new money to work its way to the top.

Also, in a war the troublesome discontented from the working class can be persuaded to join the army on the promise of good pay. The troublesome discontented from the middle class - revolutionary leaders, intellectuals, journalists - can be jailed as unpatriotic, or spies or threats to public safety. It is claimed to be win-win-win, all round. And who remains to deny it? 

Well, I'll leave with this over-long guide to the real daily news in 2016. So keep your eye on that TV  and be questioning and critical. For instance, is China's sabre-rattling in the China Seas a device to divert middle-class unrest at home?  And what is fuelling ISIS?

Your humble blogger is just reflecting on history. But Blog 40 will be upbeat, practical - and shorter. It will have practical advice and hope for the survival of us all.



                                                                                                                                                                 

Thursday, 25 August 2016

Of Divided Families: in two parts

Blog 38  Of Divided Families

Religion divides.

It was a terrorist episode. It happened in Northern Ireland in 1976.

The terrorist was shot and killed by police, but then crashed his car over the curb, killing three young children. Their mother, Anne Maguire, survived, but later committed suicide. Who suffered most from this stupid violence?

When the children's aunt, Mairead Corrigan, spoke on television that evening, another Irish woman, Betty Williams, who had witnessed the episode, began collecting signatures to stop this stupid violence.

What was it all about? Briefly, certain patriotic Catholic Irishmen lived for the day they would see North and South united into "One Ireland".

On the other hand, certain Northern Island, Protestant, Irishmen feared that their own particular version of Christian worship would be swamped by the Catholic majority version if "One Ireland, ever came to be. (As history, that is grossly oversimplified. Forgive me.) I will conclude only that I think "Jesus wept" at this stupid violence.)

So Williams' and Corrigan's work to stop the stupid violence in Ireland by organizing Mothers' Marches resulted first in their being co-recipients of the Nobel Peace Prize, and, recently, being credited in this blog (#37), as the sharpeners of the turning-point that ended the stupid violence of the Northern Ireland "Troubles."

Do you detect a theme in those last six paragraphs? Good! Let's carry that to the next topic.

"Law and Order" Divides.

It should not be so. Law and order - to be a little more subtle, let's call it the ideal of justice - this ideal is one of the great inventions of the human brain. Every sensible body is in favor of it. In practice, it usually requires a force to thwart or apprehend clearly defined disturbers of the peace. Ideally, a clear definition of what is disturbing can be found in a written law. One mark of a democratic society is that most of the people have agreed to these written laws. Peace, law, public agreement.

In modern times, the credit for creating a body of civil servants whose job is to maintain law and order, usually goes to Sir Robert Peel, a British politician. In 1829 Peel established the London Metropolitan Constabulary of 1000 men. The English called them "bobbies" or "peelers", after Sir Robert. The idea was copied around the world.

The bobbies walked their beats in the city wearing high hard hats with chin straps, and enforcing the agreed-upon laws with their billy-clubs. They looked the law-breakers in the eye, and only if necessary bopped them. Policeman and suspect sometimes knew each other by name. Today, in certain places, they prefer to know only the colour of the skin.

We don't see the bobbies walking the streets much anymore. Where do you look for bobbies now? Pat your back with both hands if you said, "In cop cars," and blame Henry Ford for some of the increase in stupid violence in our cities today. It's always so satisfying to find some one to blame, isn't it?

The automobile has always been a marker of social division. Now it separates the police from the people. Armed with their automobiles instead of billy-clubs, urban policemen have lost touch with their people. That's not to deny other factors to explain the citizen/policeman fatality stories crowding the good news out of our media. But it a good point to start looking for a process to get them both back peaceably on the same side of the street.


To be continued... with a return to the law of money.


Friday, 22 July 2016

Blog 37 A Little Blob of Black History

Blog 37 A Little Blob of Black History ...

In the streets of our town there are dozens of pickup trucks. By a rough count, 4 out of 10 are black. So I wonder, what's the big deal with black in 2016?

Most of the trucks are driven by men. Is that significant? Maybe it's the daily news that drives buyers to black. Draped caskets, it seems, day after day, and worse - on the streets of nations that are not at war

In the "war" zones - Syria, South Sudan, Yemen, just to start the list - there may be a shortage of caskets. Bring in more bulldozers.

What's the meaning of black in 2016. Any connection with 1916? my  historical persona asks. It was certainly black then. Europe a witless killing stalemate. Weapons equal on both sides: rifles with bayonets and a man attached to each one; machine guns and cannons, equal on either side of no-man's-land.

In 1916, another war was raging in Ireland. The enemy was England. Ireland was finally subdivided in 1921; the South became an Independent republic. But the war between North and South continued. For the Irish, the period came to be referred to as "The Troubles". The most prominent Protestant cleric in Ulster (Northern Ireland) was preaching that "Ulster will fight, and Ulster will be right." You don't need to be too bright to note that that sounds illogical. "Ulster will be right. Therefore Ulster will fight." I'll grant that as logic. But put backward, the Rev. Ian Paisley's words are a marvellously appropriate symbol for the perverse insanity of that whole period in Irish history.

In the divided Irelands. Republicans continued killing Protestant Ulstermen, and women and children. And Ulstermen killed Catholic men, and women and children. And ranted and raved as they did so.

But they're not doing it anymore. How come?

Well, in short, one woman saw that nobody wins in a war. Let me say that again. Nobody wins in a war. There are only losses for humanity. So in 1976 one woman decided to do something to stop the killing.

One woman began organizing what came to be called the "March of Mothers" - a whole series of demonstrations by women, Catholic and Protestant, who said, in effect, Stop the Stupidity.

Now it has always seemed to me that the Marches of the Mothers were the turning-point in the "Troubles". Common sense re-asserting itself, from, maybe, where it ultimately resides, the common people, initiated by one sensible, brave, individual woman.

Fast forward again to 2016. But I'll save that for the next blog, tentatively titled  Of Divided Families.


But let me conclude with some glad tidings - from Iceland. No, not Ireland, Iceland. though a lot of Irish folk have migrated to that cool island over the centuries since the first settlement.

It is today a marvellous place to visit, especially if you stretch for the nine-day tour of the whole island. Take in waterfalls, lots of 'em, and some more impressive than Niagara Falls (not just because they are not lined on both sides of the rivers with dense tourist traps.) They are located out in sparsely settled beautiful countryside, and you have to walk to get to see them. You can also bathe in hot springs, boat around among icebergs which have fallen off glaciers, watch cavorting whales (even more impressive are the life-size models in the Whale Museum in Reykjavik. And if it is not the time of year for the best display of northern lights, the modest entry fee to the Aurora museum will give you a spectacular very-wide wide-screen movie of them for as long as you want to watch.

If you book a bus tour with Guthmundur Jonasson Travel,  try to get Bjorn ("Call me 'Erik'.") as on-board guide. He is something different - knowledgeable on geology, history, art, botany - and genuinely interested, flexible, and patiently careful to leave no one behind.

Or you could rent a small camper or car, please not black, and travel the same roads. Iceland drivers drive on the left side of the road. Usually.


Monday, 4 July 2016

Blog 36 Tipping Point

Blog 36  Tipping Point

The practice of "tipping", or to use its more grandiloquent format, leaving a "gratuity", is it worth a blog comment? Well, you judge.

In Iceland (of recent soccer fame. Note they spell it "Island"), and in Australia and New Zealand I have encountered a resistance to tipping. An Australian friend put it to me this way. "Employers ought to be paying a decent regular wage. Tipping encourages them to pay lower wages.

In North America, however, some of the hotel chains, when quoting for a conference or wedding reception will include the phrase, ("Gratuity included," or even "15% gratuity included.")

I have two questions about that. First, what is the intended message 
in that little tag?
   "You won't have to worry about how much to tip."
   Or "You won't have to worry that you will face hidden costs."
   Or "You don't have to make a donation of satisfaction to our staff. We take care of everything for you"?
   Or all of the above?

Second question. Does all (or any) of that 15% go to the employees who perform the actual customer service? There would certainly be a corporate cost to calculating and handing out the appropriate tip to each employee. So does the employer levy a "handling fee"? In a well-run company the chief accountant could easily calculate the approximate cost of that "service to their employees". 
But then there is the less measurable question: does the employer decide what is the "appropriate" amount to be handed on to each employee?

Why do I not like the answers to these questions?

What does it matter how the employees are paid - all salary, or a mix of salary and tips, or all tips? I hear a company CFO saying, "It's the bottom line that counts for the employee. So what's your beef?"

Well, let me change disciplines and point to another factor at work here, a factor which would be hard to capture with econometrics.

Tipping has been, and still is, 
                        a mark of class distinction.

Tipping says, I am richer. (and therefore better), than you. Or in a more modern phrase, "It sucks to be you." That message is conveyed in the act of tipping, no matter how philanthropic the intent of the tipper. ("Philanthropic," by the way, is a Greek-based word meaning something like "love of one's fellow man.")

So, to history. Many of the first English settlers in New Zealand and, especially, in Australia, had good reason to be resent class distinctions. English prison sentences supplied the first immigrant of many Australian families. Some at least of the new New Zealanders must have risked the long sea voyage and the hazards of their faraway destination because they wanted to escape being in the "sucks to be you" class in England. 

These were people who knew what it was to be a member of the underclass in a rigidly stratified society. So their new home was to be a different kind of country. It was not by chance that Australia is credited with the invention of the secret ballot. Note, too, that in an Australian election, failure to vote has been illegal and carries a penalty.

And what about Iceland? That country got its independence in 1944. But it had been a part of the Kingdom of Denmark for a century, during the time when European colonialism operated on the principle that "Colonies exist to enrich the motherland." 
Since independence, its small population has developed an extremely democratic society. Tipping - sign of class distinction -  seems to have had no part in it.

Let me finish with a little anecdote from R. L. Stevenson's novel, Kidnapped. I summarize from memory:

A Scottish lord, who was without two shillings to spare was honoured for his military service by an audience with the King of England. The King also gave him a little bag of gold coins. As he left the palace the Scot threw the bag of money to the doorman, and strode on, head high. Pride? Yes. Or self-respect? 
So here's a question for you, dear readers. How is the Scottish lord's act relevant to our topic of tipping?