PREFACE TO DECISION

Continued…

Take, for example, Patterns of Negro Segregation, by Charles S. Johnson,(1) professor of Sociology and Director of the department of Social Sciences at Fisk University.  The “patterns” are traced in bounteous detail, with due attention to all kinds of segregation and all variant practices; the “reactions” of the Negroes and the “rationalizations” of the whites are classified.  It is a study of very high competence, and it never falters until it reaches the difficult crux of Custom and Law.  Then the good sociologist becomes a bad historian and a partisan who will stop at nothing .

In his chapter, “The Evolution of Racial Legislation,” Dr. Johnson says that Law “exercises the vital function of ensuring the stability and uniformity of customary practices approved by the dominant society.”  Later he adds, with reference to the Reconstruction acts: “The attempt politically to force a legal framework of equality upon a customary order incompatible with it met with no success whatever.”  Nevertheless, even in this chapter, the various laws passed by the Southern states with the purpose of controlling race relations are represented as an attempt to support a tottering and weakened fabric of customary relations against the challenge posed by “freedom, with the implication of equality.”  The treatment of historical circumstances is sketchy, and an unwary reader, not in possession of the historical context, might suppose that “freedom, with the implication of equality,” represented a commendable rise of Custom, somehow miraculously engendered by the Thirteenth, Fourteenth, and Fifteenth Amendments, and that therefore the South, in devising legal restrictions for the Negro, was setting Law against Custom, rather than the contrary.

The conclusion of the book goes still further.  Urbanization and industrialization, we are told, are the forces now “eroding custom,” and they have made it necessary for the South to continue its restrictive laws.  The argument then proceeds by analogy.  Modern democratic theory is called upon to furnish the miraculous element formerly supplied by the Fourteenth Amendment.  We are informed that two fundamental principles have shaped American institutions: “free individualistic initiative, and racialism.”  “Free individualistic initiative” worked very well while we had a moving frontier and abundant natural resources.  But in the end the free play of individualism had to be checked, since it was endangering freedom.  The government had to step in with “rigid controls and regulations” to restore democracy.

So, likewise, for the principle of “racialism.”  The book ends with the following passage:

The effects of the unrestrained operation of the principle of racialism are conceivably as dangerous to American society as the unrestricted play of free competition in the economic sphere.

Logically, it would be appropriate for government to impose controls and regulations, as mandatory as those imposed on its economic life, to ensure to all its racial minorities not only free by equal participation in the economic and political life of the country.  In fact, before the present war is ended, such action may become a political necessity.

Thus the sociologist, after filling three hundred pages with his skeptical inquiry into segregation, abandons all skepticism when he seeks his remedy.  He does not engage in historical examination into the results of former applications of legislative remedy.  He does not ask whether legislation to end racial discrimination is really analogous to economic legislation, or whether it will work.  He does not ask whether the political theory involved is, as he infers, good democratic theory.  He is ready to accept, in a field outside his own, a magic which he would rigorously scrutinize if it appeared in his own field.

But this is the pit into which sociology, and, indeed, much of social science, is always falling.  With dismal unanimity, the fourteen Negro authors of the symposium, What the Negro Wants,(2) leap into the same golf.  The fourteen are prominent leaders of one branch or another of Negro opinion.  Most of them are learned men of proved ability.  The editor of the volume, Rayford W. Logan, is professor of history at Howard University.  Two of them are practicing sociologists.  One, Doxey A. Wilkerson, is a Communist.  The others are college presidents, labor leaders, editors, writers.  Most of them make passing reference to the historical context of the Negro problem, but, with only one or two doubtful exceptions, they assume the sociological abstraction of the problem from the historical context as legitimate, and then call for the extirpation of Custom by Law.

The most moderate are Leslie Pinckney Hill and Gordon B. Hancock, who enunciate a somewhat vague program of gradualism, tinged with religion.  But Dr. Hancock says, in pure sociological terms: “The color question is a social problem and, as such, is not essentially different from any other social problem….It responds to the same processes of adjustment or maladjustment.”

The most extreme, if we omit the Communist agitator, is satirical George S. Schuyler, who writes on “The Caucasian Problem.”  He proposes – not, I think, as part of his satire – that both white and colored people be re-conditioned to think of themselves as the same.  “It would probably be necessary,” he points out, “to have drastic laws against manifestations of color prejudice and discrimination, just as we have legislated against kidnaping, arson, and murder.”

Marxist tendencies appear here and there.  Charles H. Wesley speaks of racial discrimination as “fascist racism,’ and calls for united action by white and black workers.  A. Philip Randolph, organizer of the March on Washington Movement and head of Pullman Porter’s Union, views the American Civil War as a “liberal bourgeois democratic, socio-economic, political revolution{which
failed to complete its basic historic mission.”  Although he excludes Communists from the MOWM and advocates”non-violent” methods of Negro protest, it is clear that the technique of mass demonstration practiced by the MOWM owes much to Marxist procedures.  Langston Hughes, raging against Jim Crow laws, find Hitleristic tendencies in the South and in regular Communist style puts the liberal Mark Etheridge and the standpat Talmadge in the same bed.  He proposes to send W.E.B. Du Bois, Paul Robeson, Lillian Smith, and Erskine Caldwell to lecture the Southern people, with a guard of soldiers “to protect them from the fascist-minded among us.”  Sterling Brown says that certain Southern “intellectuals” (Allen Tate, F.L. Owsley, David Cohn, Mark Ethridge, John Temple Graves and others including myself) “do not talk very differently from Gerald L. K. Smith’ – whom he classifies as a “native fascist.”

In general, these writers accept the Fourteenth and Fifteenth Amendments as having unquestioned validity and merit.  One of them, the historian Logan, advocates enforcement of the second section of the Fourteenth Amendment, which would reduce Southern representation in Congress.  When they invoke “democracy,” as they all do, it is not the democracy of Jefferson or, for that matter, of Lincoln (whose name and fame curiously enough, receive no particular adoration in their discourses), but the democracy of the New Deal, with its strong leaning toward collectivism, its emphasis on economic rather than political government, its convenient notion that the state is the unique source of its citizen’s welfare.

Some would carry the race issue beyond national boundaries and use international politics as an instrument to benefit the Negro within the United States.  Others would work through the labor movement.  Still others would prefer a straight political attack.  But no matter what the route taken, the final instrument would be Federal legislation.

Among the fourteen, there are no important differences as to “what the Negro wants.”  All want equality – not the legal fiction of equality, but the substantial reality, in the South and everywhere else.  They want political equality, economic equality, and, yes, social equality, so far as social equality is obtainable by legal removal of the more obvious discriminations.  They would abolish “public segregation’ and probably would expect a good deal of private segregation to be abolished too.  Some openly advocate repeal of state laws prohibiting racial intermarriage – on the specious ground, accepted in no civilized or savage society, that marriage is an individual, private affair, not affected with the public interest.  They approve the Fair Employment Practices Committee.  One of them frankly affirms that this device is, as Southern critics have charged, an attack upon the “social fabric” of the South.

(1). Harper and Brothers.  New York. 160 pages. 1943 $2.50.

(2). University of North Carolina Press.  Chapel Hill. 176 pages. 1944 $3.50.

PREFACE TO DECISION

By Donald Davidson

For better or worse, the sociologist has become chief expert consultant on the Negro problem, at least to theat part of the American public which believes that the problem can be solved by legislative means.  The reasoning of this public can be briefly stated as follows: the cause of the problem is race prejudice, which is a kind of social disease afflicting white folks, especially in the South; the sociologist is a kind of doctor, who isolates and describes the disease, and then designates remedy and treatment; apply remedy and treatment through Federal legislation, and you have the cure.

The good sociologist may stand aghast at this highly simplified version of his large and serious studies.  I think he ought to stand aghast, but I wish it to be understood that, in what I am about to say, I intend no disrespect to sociological study as such, but rather would offer admiration.  It would be a pleasure to distinguish between good sociologists and bad ones if the occasion invited that.  but here it is the abuse of sociology that raises the question, and there is also the corollary question of whether there is some defect in the method of sociological study that renders it susceptible of abuse, particularly in such a difficult matter as the Negro problem.  At any rate the pressure of contemporary issues has dragged the whole question into the public forum.  It is certain that hardly any proposals relating to the Negro problem are now made that do not originate, or claim to originate, in sociological interpretations.  The sociologist, some quite unwillingly, others with obvious unction and high hope, have inherited the leadership formerly held by William Lloyd Garrison, Wendell Phillips, Charles Sumner, Thad Stevens, and Company.

Theis is the way sociology goes at the Negro problem.  The investigator, seeing a well-dressed white man, named John Smith, reading a newspaper in the white waiting room of a Southern railroad station, and an equally well-dressed Negro (whose name might easily be John Smith, too) reading his newspaper in the colored waiting room of the same railroad station, treats the difference of race and color as minor detail and classifies each of the John Smith as a man, American middle-class, in an urban environment.  Then he works out the patterns of group behavior, segregation, “caste and class,” and the like.  His record will make frequent use of such terms as status, taboo, prejudice, rationalization, racial etiquette, which, though intended to constitute an apparatus for objective study, are liable to much misinterpretation by lay readers.  He will also draw upon other social sciences: anthropology, economics, psychology – especially the Freudian psychology.

But he will not give much attention to history as a causal force, and therefore it will not matter much to him that the father or grandfather of the Negro John Smith was a slave who may have belonged to the father or grandfather or kin of the white John Smith in the other waiting room.  Yet it is odd that a prime cultural fact, like a name, should get left out.  The original name of the Negro John Smith’s slave ancestor may have been, in African, something like “Crocodile-killer” or “Spear-maker,’ a valiant and honorable name, but it was utterly lost when he was kidnapped into slavery or was sold to a slave-dealer by his own tribal chief.  He was given the first name, and eventually also got the Saxon patronymic, of a white master, and so the name came down to his free descendant.  It is a tragic business that the Negro John Smith cannot enjoy contemplating his own name in quite the same way the white man does, since there is hiatus or lurking humiliation where there ought to be a history.  Though he himself is not responsible for it, there has been a vital loss.  But the white John Smith can think back for many centuries without discomfort, or often with pride, if he cares to.  His history is with him wherever he goes.  He does not have to bother to remember it consciously all the time, since it permeates the customs and institutions that the John Smiths and their ilk established and still maintain.  But he will remember it instantly, from head to toe, if the Negro John Smith walks into the white waiting room and in any way seems to challenge the separate arrangements.  At such a moment the historical element becomes the most powerful element in the whole environment of the two men, indeed in their very being.  And white John Smith recalls that his grandfather before him, and his father and he afterwards, never at any time agreed to accept the Negro John Smith as a member of white society, save under such limitations as are symbolized by the separate waiting rooms and other much more intricate but carefully ordered customs.

In general, the sociologist does not see the affair in that way.  In his account the Negro will seem to have leaped the gap between a very backward and a very advanced stage of civilization; and the white man, with his “taboos” and “prejudices,’ will appear to be a backward member of society; his traditions, his laws, his historical consciousness will somehow be transformed into absurd caricatures of the reality.  The next step will be for somebody to argue – and it may be the sociologist himself – that the two waiting-rooms are uneconomic and ridiculous; that the white John Smith ought to move over and make room for Negro John Smith on that bench; and finally that if the white man will not move over of his own accord, a law must be passed to make him do so.

In order to study the Negro problem the sociologist must abstract it.  That is always the first act of a science.  But in omitting the history of the problem or in treating the history negligently – he always does one or the other  – the sociologist throws out of consideration the very data which are of primary importance to the members of the society that he is studying.  To the conservative white man such a study will seem horribly distorted and partial.  But to all who would like for various reasons to avoid and ignore the lessons of history – the Marxist, who needs to assume discontinuity; the Negro elite and their highly sophisticated leaders; the imperiously sentimental reformer – to all these, the sociological study is a boon from Heaven, which they are much pleased to accept uncritically and to exploit without limit.  Even them, the abstraction would not be so dangerous, if the final step were not always to advocate remedial legislation.  At theat point we realize that the sociologist has become involved in a strange contradiction, the last one, we would think of which a sociologist would be guilty.  For if anybody would be an advocate of Custom or at least of the organic growth of culture through Custom, it ought to be the sociologist.  But in dealing with the Negro problem he steps forth as the depreciator of Custom and becomes the advocate of Law – Law intended to thwart and destroy Custom; or he raises up disciples wh do this.  To see how unabashedly the great contradiction exhibits itself, and with what innocent disregard of consequences, one need only turen to certain recent books.

From Trad…

traducteur said,

June 24, 2011 at 4:49 pm  · Edit

I’ve just found this at Good Squad’s blog.  Seems like your sort of thing:

President Abraham Lincoln, during the Civil War, refused to pay usurious interest rates to the international banksters’ gangsters and instead, followed the Supreme law of the land, the U.S. Constitution and let the federal government print its own money, called ‘greenbacks.’

The bankers went to work to start the Civil War. Otto von Bismark, the Chancellor of Germany, who united the German states had this to say:
“The division of the United States into federations of equal force was decided long before the Civil War by the high financial powers of Europe. These bankers were afraid that the United States if they remained as one block would attain economic and financial independence which would upset their financial domination over the world.”

Why was Abraham Lincoln assassinated?

There have been many theories. British bankers were against his protectionist policies. Some people in Britain believed that British Free Trade, Industrial Monopoly and human slavery traveled together. Lincoln’s policies after the Civil War would have destroyed Jewish commodity speculations.

After the war Lincoln planned a mild reconstruction policy which would enable a resumption of agricultural production. The bankers however were betting the other way on high prices plus a tough reconstruction policy towards the South.

Lincoln was seen as a threat to the established order of things.

Undoubtedly his greatest transgression stemmed from his reaction to the need for money to pay for the war in 186l. When he approached the Secretary of the Treasury, Solomon P. Chase, he was offered loans at 24 to 36 per cent interest, which Lincoln refused. He called on his friend, Colonel Dick Taylor, to help him figure out how to finance the war. Dick replied: “Get Congress to pass a Bill authorising the printing of full legal tender Treasury Notes. Pay your soldiers with them and go ahead and win your war.”

In 1862 and 1863 he printed 400,000,000 dollars in interest free “Greenbacks”. An editorial in the London Times revealed the bankers’ attitude:
“If this mischievous financial policy which had its origin in North America shall become a fixture that government would furnish its own money without cost. It would pay off debts and be without debt, it would have all the money necessary to carry on its commerce. It would become prosperous without precedent in the history of the world. That country must be destroyed or it will destroy.”

Shortly before he was assassinated, Lincoln made the following statement:

“The Money Power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy.”

On Lincoln’s death Otto von Bismark commented:
“The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it systematically to corrupt modern civilisation. They will not hesitate to plunge the whole of Christendom into wars and chaos in order that the earth should become their inheritance.”

After Lincoln’s assassination Congress revoked the “Greenback” law and enacted in its place the National Banking Act. The national banks were to be privately owned and the national bank notes they issued were to be interest bearing. The act also provided that the “Greenbacks” should be retired from circulation as soon as they came back to the Treasury in payment of taxes.

  • helvena said,

    June 24, 2011 at 6:01 pm  · Edit

    Perfect. Yes this is right up my alley in fact I’ve just been reading about reconstruction and have a bit to add.

    (1868) The Democrats were embarrassed by the money question and threatened to divide on sectional lines.  In 1867, there had been much hot discussion as to whether the five-twenty bonds had to be redeemed in coin or ‘money.’  The law made no stipulation as to coin, and Thad Stevens, in charge of the bill, had explained that the bonds could be redeemed in money.  Disregarding the law, Jay Cooke, in charge of the sale, advertised that the redemption would be in coin; and a functionary of the Treasury, when asked, had said that, since all other bonds had been so redeemed, he supposed the same policy would be followed in the case of the five-twenties.  When this assumption of Cooke’s that he could supplement or change the law was bitterly challenged, he haughtily wrote that ‘the pledge of my advertisements… was equivalent in equity and honor to any one of the loan laws.’  In other words, he insisted on the right’ in equity and honor’ to misrepresent the law in his advertisements and thus commit the nation.  These bonds had been sold to bankers at a discount of sixty and seventy per cent, and if paid in gold and silver the interest would be nearly trebled.  Butler contended that this would be ‘an enormous robbery of the people for the benefit of the bankers, without justice or reason.’  Even John Sherman was momentarily shocked at Cooke’s point of view.  He had said the law made no provision for payment in gold; that ‘soldiers and sailors who shed their blood and saved the Union were paid with greenbacks’; that pensions to their widows were thus paid; that all our people were forced by law to accept greenbacks; and he could not understand why the money-lenders, who had taken the bonds at a cut-throat discount during the war, should be singled out from other creditors, and paid par in gold…. pg. 225 THE TRAGIC ERA by Claude G. Bowers

    Now the Democratic Chairman of that time was August Belmont (alias August Schönberg, born in Germany and apprentice to the Rothschilds back in Frankfurt), originally Belmont backed Chase because Chase would support payment in gold, but then Chase in a private letter to Belmont said he was against proscription of Southern whites.  Horatio Seymour end up with the nomination, Seymour being *correct* on all issues.  Ben Butler (politician who represented Massachusetts and administered ruthlessly occupied New Orleans) was certain the convention was dominated by August Belmont in the interest of the bondholders i.e. the banksters.  General Grant a Republican ended up winning the presidency and the banksters were paid in gold:
    http://query.nytimes.com/gst/abstract.html?res=F30915FC3A5A1B7493C3A91782D85F458784F9

Government MONEY – B. Heath

The government credit alone, based upon the powers of its
sovereignty and the combined credit, consent and mutual interest of society,
can supply a safe, reliable, ample and uniform currency to effect all the
necessary exchanges of commerce, and do away with the class of vampires,
cormorants and middle-men, who now monopolize the supply, that they may reap
the lion’s share of labor’s productions.

The value of money is its purchasing power, which is
governed by its volume, or the relation which the total volume sustains to the
total volume of the exchangeable commodities of a country.  The larger the money volume in proportion to
the exchangeable commodity volume of a country, the less is the purchasing power
of the former, and the higher are the prices of the latter.  Hence, the value of money can be regulated
only by regulating its volume, and as this sovereign power has been delegated
to Congress in trust for the benefit of all the people, that body has no
warrant in the constitution to delegate this important trust to individuals or
corporations for their private benefit.  Neither the people nor Congress has power to regulate the intrinsic value of money or
anything else; it is only its exchange value that they can regulate.  Whenever the intrinsic value of money rises
above its exchange value (gold price for instance H.), it ceases to serve the
purposes of money, and goes to speculating on its commodity merits.

Labor and Finance Revolution pg. 65-66

THE DEMON TASK MASTER

The Demon Task Master.

LUCIUS GOSS.

Why this universal wailing,
Over all this land prevailing,
This entreaty unavailing ? Why this gloom and dark despair ?
See the sun of hope is setting !
Man his brother is forgetting.
And a curse is slowly falling
On this land of promise rare;
And the faces are appalling,
That were once so briglit and fair –
Want and misery everywhere !

Mark the toiler, sowing, reaping,
And the golden sheaves upheaping.
What a hidden monster, sweeping for his own insatiate maw.
Gathers fast and faster, faster.
Though privations and disaster
Smite the weary, sweating toiler
Till the pangs of hunger gnaw;
Never does the fierce despoiler
His rapacious grasp withdraw;
Greed so cruel knows no law.

Hear the workshop’s ceaseless clatter,
Hear the workmen’s footsteps putter.
When they join or quickly scatter, when to each a task is shown;
Each a burden carries, double,
Load of toil, and load of trouble;
For an iron master watches
From a secret door unknown;
From each mouth he quickly snatches
Every word and meaning tone–
He is master, here, alone.

How the pistons heave and tumble.
How the wheels do drum and rumble ?
How obedient–not a grumble when those brawny arms control.
Strange, that while such puny muscle
Rules so surely all this bustle,
A more potent power, uncanny.
Rules still surer brain and soul ;
Strange, indeed, the brawny many
Let a baleful power control
Wealth of brawn and brain and soul.

In the gloomy mine descending,
Where the flickering lights are blending ;
Note liow close is death impending–foul his breath upon the air.
Careless is the warning spoken,
Scarce the delvers heed the token,

For a monster, darker, grimmer,
Makes them madly, rashly dare.
And, through lamplight’s glare and glimmer,
Holds them fiercely, surely, there,
With the bravery of despair.

Go to yonder lonely garret.
If your heart is strong to bear it,
Mark the half-bent shadow where it darks the black wall scarcely more ;

There a famished woman sitting,
Works. with patience unremitting.
With her weary, ceaseless stitching,
Keeps the wolf just out the door;
While a demon still enriching
Self with stealing from her store,
Robs her pittance lower and lower.

Is this the land where hands of labor
Clasp the hands of toiling neighbor,
And the plowshare–not the saber–is the scepter held supreme ?
Is it here where honest toilers
Need not fear of strong despoilers,
Since all men are free and equal ?
Ah ! If things are what they seem,
This is but the bitter sequel,
Waking of a century’s dream,–
A turning back of progress’ stream.

Shall this demon reign eternal
O’er this blessed land fraternal ?
Shall enchantment so internal hold us ever ‘neath its spell ?

No ! By all the powers of heaven
From this land he shall be driven.
Usury be hurled, unshriven.
To the lowest depths of hell ;
Then a mighty shout be given.
Hear the hosts their voices swell,
” Labor conquers–all is well !”

Taken from LABOR AND FINANCE REVOLUTION by Benjamin S. Heath (1821 – 1887)

More Chesterton…

THE CHURCH OF THE SERVILE STATE

I confess I cannot see why mere blasphemy by itself should be an excuse for tyranny and treason; or how the mere isolated fact of a man not believing in God should be a reason for my believing in Him.

But the rather spinsterish flutter among some of the old Freethinkers has put one tiny ripple of truth in it; and that affects the idea which I wish to emphasise even to monotony in these pages.  I mean the idea that the new community which the capitalists are now constructing will be a very complete and absolute community; and one which will tolerate nothing really independent of itself.  Now, it is true that any positive creed, true or false, would tend to be independent of itself.  It might be Roman Catholicism or Mahomedanism or Materialism; but, if strongly held, it would be a thorn in the side of the Servile State.  The Moslem thinks all men immortal: the Materialist thinks all men mortal.  But the Moslem does not think the rich Sinbad will live forever; but the poor Sinbad will die on his deathbed.  The Materialist does not think that Mr. Haeckel will go to heaven, while all the peasants will go to pot, like their chickens. In every serious doctrine of the destiny of men, there is some trace of the doctrine of the equality of men.  But the capitalist really depends on some religion of inequality.  The capitalist must somehow distinguish himself from human kind; he must be obviously above it—or he would be obviously below it.  Take even the least attractive and popular side of the larger religions to-day; take the mere vetoes imposed by Islam on Atheism or Catholicism.  The Moslem veto upon intoxicants cuts across all classes.  But it is absolutely necessary for the capitalist (who presides at a Licensing Committee, and also at a large dinner), it is absolutely necessary for him, to make a distinction between gin and champagne.  The Atheist veto upon all miracles cuts across all classes.  But it is absolutely necessary for the capitalist to make a distinction between his wife (who is an aristocrat and consults crystal gazers and star gazers in the West End), and vulgar miracles claimed by gipsies or travelling showmen.  The Catholic veto upon usury, as defined in dogmatic councils, cuts across all classes.  But it is absolutely necessary to the capitalist to distinguish more delicately between two kinds of usury; the kind he finds useful and the kind he does not find useful.  The religion of the Servile State must have no dogmas or definitions.  It cannot afford to have any definitions.  For definitions are very dreadful things: they do the two things that most men, especially comfortable men, cannot endure. They fight; and they fight fair.

Every religion, apart from open devil worship, must appeal to a virtue or the pretence of a virtue.  But a virtue, generally speaking, does some good to everybody.  It is therefore necessary to distinguish among the people it was meant to benefit those whom it does benefit.  Modern broad-mindedness benefits the rich; and benefits nobody else.  It was meant to benefit the rich; and meant to benefit nobody else.  And if you think this unwarranted, I will put before you one plain question.  There are some pleasures of the poor that may also mean profits for the rich: there are other pleasures of the poor which cannot mean profits for the rich?  Watch this one contrast, and you will watch the whole creation of a careful slavery. (my emphasis H.)

In the last resort the two things called Beer and Soap end only in a froth. They are both below the high notice of a real religion.  But there is just this difference: that the soap makes the factory more satisfactory, while the beer only makes the workman more satisfied.  Wait and see if the Soap does not increase and the Beer decrease.  Wait and see whether the religion of the Servile State is not in every case what I say: the encouragement of small virtues supporting capitalism, the discouragement of the huge virtues that defy it.  Many great religions, Pagan and Christian, have insisted on wine.  Only one, I think, has insisted on Soap. You will find it in the New Testament attributed to the Pharisees. (my emphasis H.)

Case In Point…Big Shops and Uber Rich People

Ira Rennert:

Ira Rennert

http://blogs.forbes.com/clareoconnor/2011/06/17/what-americas-most-expensive-home-worth-200-million-looks-like-from-the-air/

http://nymag.com/nymetro/realestate/features/1718/

Ira Leon Rennert (born 1934, Brooklyn, New York) is a American investor and businessman. Using junk bonds to finance his acquisitions of companies, often in bankruptcy, Rennert has amassed significant holdings in basic, cyclical industries, such as mining and metals, including lead smelters, coal mines, magnesium producers and vehicle assembly lines. Today he controls one of the nation’s largest privately held industrial empires, and his personal fortune is estimated to be $20.3 billion.[1]

C.K. Chesterton:

The fairy tales we were all taught did not, like the history we were all taught, consist entirely of lies.  Parts of the tale of “Puss in Boots” or “Jack and the Beanstalk” may strike the realistic eye as a little unlikely and out of the common way, so to speak; but they contain some very solid and very practical truths.  For instance, it may be noted that both in “Puss in Boots” and “Jack and the Beanstalk” if I remember aright, the ogre was not only an ogre but also a magician.  And it will generally be found that in all such popular narratives, the king, if he is a wicked king, is generally also a wizard.  Now there is a very vital human truth enshrined in this.  Bad government, like good government, is a spiritual thing.  Even the tyrant never rules by force alone; but mostly by fairy tales.  And so it is with the modern tyrant, the great employer.  The sight of a millionaire is seldom, in the ordinary sense, an enchanting sight: nevertheless, he is in his way an enchanter.  As they say in the gushing articles about him in the magazines, he is a fascinating personality.  So is a snake.  At least he is fascinating to rabbits; and so is the millionaire to the rabbit-witted sort of people that ladies and gentlemen have allowed themselves to become.  He does, in a manner, cast a spell, such as that which imprisoned princes and princesses under the shapes of falcons or stags.  He has truly turned men into sheep, as Circe turned them into swine.

Now, the chief of the fairy tales, by which he gains this glory and glamour, is a certain hazy association he has managed to create between the idea of bigness and the idea of practicality.  Numbers of the rabbit-witted ladies and gentlemen do really think, in spite of themselves and their experience, that so long as a shop has hundreds of different doors and a great many hot and unhealthy underground departments (they must be hot; this is very important), and more people than would be needed for a man-of-war, or crowded cathedral, to say: “This way, madam,” and “The next article, sir,” it follows that the goods are good.  In short, they hold that the big businesses are businesslike.  They are not.  Any housekeeper in a truthful mood, that is to say, any housekeeper in a bad temper, will tell you that they are not.  But housekeepers, too, are human, and therefore inconsistent and complex; and they do not always stick to truth and bad temper.  They are also affected by this queer idolatry of the enormous and elaborate; and cannot help feeling that anything so complicated must go like clockwork.  But complexity is no guarantee of accuracy—in clockwork or in anything else.  A clock can be as wrong as the human head; and a clock can stop, as suddenly as the human heart.

But this strange poetry of plutocracy prevails over people against their very senses.  You write to one of the great London stores or emporia, asking, let us say, for an umbrella.  A month or two afterwards you receive a very elaborately constructed parcel, containing a broken parasol. You are very pleased.  You are gratified to reflect on what a vast number of assistants and employees had combined to break that parasol. You luxuriate in the memory of all those long rooms and departments and wonder in which of them the parasol that you never ordered was broken.  Or you want a toy elephant for your child on Christmas Day; as children, like all nice and healthy people, are very ritualistic.  Some week or so after Twelfth Night, let us say, you have the pleasure of removing three layers of pasteboards, five layers of brown paper, and fifteen layers of tissue paper and discovering the fragments of an artificial crocodile.  You smile in an expansive spirit.  You feel that your soul has been broadened by the vision of incompetence conducted on so large a scale.  You admire all the more the colossal and Omnipresent Brain of the Organiser of Industry, who amid all his multitudinous cares did not disdain to remember his duty of smashing even the smallest toy of the smallest child.  Or, supposing you have asked him to send you some two rolls of cocoa-nut matting: and supposing (after a due interval for reflection) he duly delivers to you the five rolls of wire netting.  You take pleasure in the consideration of a mystery: which coarse minds might have called a mistake.  It consoles you to know how big the business is: and what an enormous number of people were needed to make such a mistake.

That is the romance that has been told about the big shops; in the literature and art which they have bought, and which (as I said in my recent articles) will soon be quite indistinguishable from their ordinary advertisements.  The literature is commercial; and it is only fair to say that the commerce is often really literary.  It is no romance, but only rubbish.

Marx Never Questioned Money…

We need in economics: 1. simplification of terminology; 2. articulation of terminology (“distinguish the root from the branch”).

We need 3. less intolerance towards converging movements; 4. to hammer on root ideas.

Prosperity comes of exchange; a high standard of living comes of exchange of goods; a monetary system, a banking system which sabotages exchange, and impedes it, is evil.  Its sustainers are enemies of the people.

No day passes without my coming on pages that are foolish from lack of simple dissociations, already cleared in my ABC.*

Four things are necessary in any modern or civilized economic system:

1. the labourer; 2. the product; 3. the means of transport; and 4. the monetary carrier.

Inadequate monetization has made “inaccessable islands” of fields lying adjacent one with the other; it has created barriers between garden and factory.

Two men have ended the Marxist era.  Douglas in conceiving that the cultural heritage, the increment of association with all pass inventiveness, is the great and chief fountain of value.  Gesell in seeing that “Marx never questioned money.  He just took it for granted.”

It is the devil capital, sheltering himself behind property, that has played hell with the world.  Capital is a lien on other men’s services.

To reward another man for needed help, we must give him something more useful than a noose round his neck.  And when we give help to our neighbour we must show more intelligence than to stick our own head through a halter.

You cannot monetize land, but only its deliverable products.  All the errors regarding land have parallels in industry.  Many men have been land poor; they can now be factory poor, “plant poor.”

The nature of property is radically (at the root, in the root), different from the nature of capital.  The inherited terminology of false economics has served both fools and devils.  All such phrases as “capital in the form of” are misleading.  Properly understood capital is liquid.  The great division is between whatever is a lien on the other men’s services, and what is either completely neutral and passive, or constitutes a potential responsibility, whereof the weight leans on the owner.  Land can lie fallow, houses decay at various speeds, industrial plants depreciate both from decay and standing still while invention goes past them.  The increment of association is not usury.  To see clearly one must divide capital from everything that is not capital.  The moment money is spent, what ever thing is purchased is no longer capital, it is property; it has but three possibilities: you may keep it, use it, or lose it.  Many vast and heavy books have ended in muddle from failure to see that property and capital are radically different.  Property does not imply the enslavement of others.

There is a difference between durable and perishable goods, in fact there are all degrees of durability, from that of fresh plucked fruit to that of the art works of Chaldea.

The reason for growing food is to feed the people.  The reason for weaving cloth is to clothe them.  The function of a monetary system is to get the goods from where they are to the people that need them.  (my emphasis – H)

A man’s understanding of any subject should be like a city with enough cross-streets.  He should be able to get about it in any direction, and without traffic blocks.

Economics are like Euclid or like physics in that if you don’t understand a few simple principles you will fall into error after error, but if you have a few very simple perceptions you can construct soundly without any very great learning.

Money has been treated not only as if it were goods, but it has been given privileges above all other goods.  This was flagrant injustice.  Free men will not tolerate it for one hour after they understand it.

Men living under the domination of catchwords live in a hell of their own making.  Terms like “fiat money” scare people blue.  If the printed paper means “let there be wheat or goods where there is none,” it is a bluff and unsound.  The Este “mandati” were of a different nature, as I have emphasised in my Cantos.  These slips of paper were orders; give to a man something that exists and is there in charge of the agents.

If the American government-owned crops sufficiently to order their destruction, it owned them quite enough to order their delivery.

Free coffee too dear for Vienna.  Brazil would have given the coffee for the Viennese poor.  Because of brute habit, Austria saw no way to get it without paying IMPORT tax.  – IMPACT essays on ignorance and the decline of American civilization by Ezra Pound pg. 152-154

*ABC of Economics by Ezra Pound, 1933.

Bravo Jesse

Inflation, Deflation, and Stagflation, Japan
and the US

Here is a question from a reader
which I found to be well stated and probably of a more general interest.

“I was thinking about your general forecast which you posted a while
ago, and I wanted to see if my understanding of it was correct.

You had
said that your forecast for the US was stagflation because the US is a net
importer, unlike Japan which is a net exporter, despite both countries pursuing
a policy of ZIRP + QE.

Is the reason for Japan’s deflation that all the
excess liquidity leaves Japan in search of a yield (due to ZIRP + QE), and not
into tangible goods (due to Japan being a net exporter/net producer)? This would
be in contrast with the US, where much of the excess liquidity from ZIRP + QE
flies into tangible goods due to the imbalance caused by the US being a net
importer/net consumer (though undoubtedly much of this excess liquidity leaves
the US in search of a yield as well). Is this correct?”

This is
a very nice summation of a portion the effects, but misattributes the causes.
And like most summations it crushes many of the key points of a slightly more
complex theory and overstates the importance of current trade balance.

In
a fiat currency not constrained by external standards or other exogenous
constraints, monetary inflation and deflation are always and everywhere a
policy decision. As latitude on the monetary supply is constrained, so
obviously the freedom to decide (choose if you will) is obviously constrained to
a similar degree.

If you are Greece and under some contraints
imposed by the ECB that controls your currency, you have fewer choices and
greater prices to pay in making them. If one controls their own currency and is
large and ‘important’ enough to make their decisions stick it is another matter
altogether.  The Wall Street banks understand this all too well.

The US
is a democratic republic and a huge net debtor, in both current and future
obligations. The choice of genuine deflation as such would therefore be a
national economic and political suicide favoring foreign holders of its debt. I
cannot think of a reasonable scenario for such a choice except for coercion such
as war reparations and under heavy constraint. But it is a possible
choice.

Further complicating the decision is the inescapable fact that
the US holds what is still the world’s reserve currency despite a movement to
alternatives. A stronger dollar and monetary deflation would crush the world
economy by destroying the interconnected global banking system as it is now
constituted, in addition to devastating its own domestic economy.  Deflation
does favor the ends of a powerful few, however, so it cannot be said to be off
the table.

Further complicating matters is that the people of the US are
more independently minded, educated, and well armed than is normal around the
world, despite a more recent program of cororatist propaganda that seems to have
co-opted  their news media.  They are more like the Swiss in some regards.  I
know this comes as a surprise to most of them, but it is how it is.  The US is a
beacon of liberty to the world for good reasons, although that beacon
occasionally flickers and suffers abuses, sometimes seemingly
irrecoverable.

Their increasingly predatory financial system, together
with the ownership of the world’s reserve currency, probably dictated the
accumulation of that large debt, significantly held by foreigners, if one
subscribes to the theory of Triffin’s
Dilemma,
which I do.   The US had to print more than it consumed to supply
currency for growth in the developing world,  which was unfortunately engaged in
currency manipulation and state mercantilism, and the financial system turned
this into debt which it owned.

So the obvious choice is for a monetary
inflation to soften the blow of what is going to be at least a de facto
default on what is now a mathematically unpayable debt. Let’s be clear about
this. The US is facing a default and the bulk of the discussion now is about how
to distribute the pain, and not fix the problems which caused the crisis in the
first place.

The mercantilists who hold dollars, as a result of their
gaming the global trade and fiat regimges, wish the US to suck it up and take it
all.  This is preferable to growing their own domestic economy and allowing
their people to become more independently powerful, thereby threatening them.
And the domestic monied interests wish the pain to fall largely on the weak and
the many, the elderly and the poor. All of these actors are in a power position
because they were the greatest beneficiaries of those structural distortions
that have led the world to this crisis in the first place.

And yet the
monetary inflation will not be able to have its usual effect, the magic that
fiat has worked in the post WWII environment. This is because the economy is
distorted, and organic growth of jobs and the median wage has been rendered
untenable without significant reform in the domestic economy and global trade.

And the powers that be and the thought leaders are stuck in a
credibility trap, through which they cannot effect the required
reforms without indicting themselves, or at the least, dismantling the
socioeconomic structure to which they own their ascendancy, whether it was
through sheer luck and positioning in one of the bubbles, or in service to the
monied interests by dismantling the regulations and promoting the
frauds.

So the most likely course is an ineffective attempt to maintain
the status quo, which cannot possibly become self-sustaining. And this
is stagflation, which will continue until some crisis is large enough to change
it.

It is tempting to use Japan as an experimental counterpoint to the
US, but highly misleading and the cause of much misunderstanding.

Japan
is most unlike the US, although the Yanks like to think of the rest of the world
as little Americas, yearning to evolve into their image. The political structure
is that of a one party government that was imposed on a military oligarchy which
in turn had evolved from a relatively recent system of feudalism. There was no
popular revolution in Japan that created their system of government.  It was
imposed.  And the people have adopted it to suit their own preferences.  There
is nothing wrong with that.  Nations should be able to have the type of society
that suits their national character within some reasonable degrees of freedom of
choice.  One size does not necessarily fit all.

The Japanese economy is
highly controlled and centrally planned, following an industrial policy formed
by an entrench bureaucracy in MITI and the handful of kereitsus that
essentially run the country like feudal lords of old.

It is a closed
society, an island, with a largely homogeneous population and limited
immigration. The oligarchy has a sense of national honor and responsibility. The
social mores would not permit the type of personalities of the ‘greed is good’
world view, at least not explicitly.

Deflation suited them, and that is
what they obtained. But it is important to realize that the people did not
suffer deprivation because of the social contract between rulers and people, the
lords and serfs. This social contract is essential to understanding the
situation. And of course the fact that the people continue to have a decent, if
somewhat constrained by western standards, style of living that has been
consistently acceptable to them for many years.

Lower prices yes, but
the losses and deprivations were not visited on the people, at least not yet.
There is not the same cult of selfishness and greed, and denigration of
obligation as there is in the states. Contrast CEO pay in Japan and the US.  The
losses were exported around the world and finessed by an increasing government
debt, much of it wasted on the keiretsu’s pet projects, despite the ongoing
trade surpluses. But Japan appears to be heading for a change as the corruption
and mismanagement of the oligarchy continues to peak through the studied
facade.

So this is more the basis of my forecast, and I do not see a
change in this until the US changes its financial system, and reforms its
political system in a meaningful way, to diminish the influence of wealth and
power and restore a balance with the voting public.  There are no such things as
free trade or free markets, just as there is no free lunch.  All is subject to
imperfection and abuse, and requires diligent effort, frank discussion,
transparency, and conscious intentions.  Opening your markets to slave labor
makes everyone a slave.

The world economy is a very complex system, and
those who think they understand it with slight effort are probably wrong and
sometimes tragically so.  Unfortunately they are also easily led, and in the
pursuit of simple solutions may choose power over wisdom, to their own
destruction.
(my bold – H.)

P.S. I like Jesse’s sense of humor:

Madame-Le-Moderateur