Defining The Problems Of The Economy

(An Economic Solution Prelude)

Economies are the methods by which societies exists. They are the solutions by which all the members of society find society to be an advantage over facing Nature (and fate) as individuals. Again, the purpose of society is to provide survival for all its members through cooperative labor.

Governments were the solution through which society could achieve its purpose. In a democratic government, it ensures society’s existence as a whole, while still preserving individual freedoms.

At first, a free economy based on the ownership of private property, seems to be the ideal way for such a society to provide its sustenance. But soon very severe problems occur that actually turn this type of economy into a destructive practice that destroys its society. In this essay we will discuss the problems that the present “free market” economic system presents to its societies, as a prelude to finding solutions for these problems.

The leverage of ownership (wealth) is the principle upon which this economy works 1 . It must also have a society available upon which to practice this leverage. The needs of a society are the force that propels it, and the satisfaction of these needs through wealth (or ownership), and the labor or resources it buys, is the result. Through this force, providing this result, and in turn, growing itself (through the surplus profit generated and reinvested), the overall process grows, supposedly.

But there are problems. It is an entirely free process, and therefore may not (actually, usually does not) provide the satisfaction of ALL the needs of society, either through producing enough resources or enough labor (jobs) for society.

Also, instead of providing these “satisfactions” of society’s needs cooperatively, it provides them competitively. A contradiction of the very same purpose society was formed to fulfill. Now, instead of the cooperative effort society created to offset the competition of Mother Nature herself, the economy has created the very same competitive survival of Nature, within society itself. Thus society’s members are forced to compete with each other to survive.

In fact, even the society, which created this economy, may not be the same society it gives its “needs’ satisfactions” to. In today’s “global economy” we see this happening through the creation of one society that provides the labor, and another that consumes the resources 2 ; and a global class of capitalist Masters that owe allegiance to no one but themselves, while using societies as their means to enrich only themselves. The real problem is that societies must incorporate both these two “partial societies” together to survive; instead, these “partial societies” are both withering because of the parasitic growth of the Masters at their expense. The ‘partial society’ that provides the labor, can never afford the products they produce, because their wages are artificially low; the ‘partial society’ that buys the goods cannot find enough jobs to enable this ‘richer’ society to afford these goods. So the jobs continue to disappear in the ‘richer’ society and reappear in the poorer; and the wages to decrease in the ‘poorer’ society; thus a vicious cycle is propagated that causes both to collapse, as they feed off one another.

The overall result is two separate classes 3 , which are divided from each other. And not only divided from each other, but also divided from the societies which rely on them to survive. The Masters using society solely for their own advantage, instead of the reverse, which was to sustain their society; and the lower classes creating their own kind of “special interests” in groups that divide them, and increase the costs for society, so that only their own group can prosper. The result is the decrease of jobs, with the increase of costs for all societies.

But an even more important result is the further division of society into competitive camps literally at war with each other – the direct opposite of that purpose for which society was created; and the production of a deception 4 to perpetuate this condition, and its justification.

The outright deception practiced by the Masters, in producing the attitude that “those with little should support those with an overabundance” is made to appear the ‘normal’ and ‘just’ manner in which a society should function. For the Masters, too much is never enough; and for the poor, their condition is itself the proof that superiority through possession is the purpose of society; and that “survival of the fittest” is the manner to achieve this goal. Even religions have been roped into this mind-set, by emphasizing poverty as an inevitable condition, which can only be remedied by the other inevitable institution of charity; both having been sanctioned by God, Himself in the ‘dogmas’, which have now not only taken on religious relevance, but also social and governmental relevance 5 .

But in reality, the Masters have created their position through dividing the poor into different groups; and keeping all these groups at odds with one another, by dividing their purposes. Through religion, politics and its parties, and now even through the unions that once were the champions of the laborers; and finally, by imbuing economics with a moral purpose, (the venerated Horatio Alger Myth), the Masters have divided and constrained the poor into the heterogeneous masses that are forever in-fighting amongst themselves, while forever paying to keep the Masters in charge. Through the delusion that they too, can one day become Masters themselves, the Masters have not only kept the slaves, slaves, but have also kept them paying for their own servitude.

This unconscious deception that has changed “equality for all” into a perpetual servitude, where there is no equality, and the actual abandonment of all equality, has, in reality, become the dream of all – the same American Dream 6 that has become a lie.

Also capitalism is itself changing, because the difference between the criminal and the legitimate has often become blurred or nonexistent. The conduct of business within the law is gradually becoming a type of extortion, where the sale of scarce resources and services are sold at exorbitant prices with the object of “extorting the highest prices possible” through the control of supplies. Thus the society has now become a victim of rackets sanctioned by law under the guise of constitutional freedoms.

The use of freedom as the basis for extortion is the ultimate subterfuge to disguise crime as business dealings. In fact, crime itself is merely a type of capitalism, whose products are made scarce because they are illegal, and whose transactional process charges outrageous prices for these same scarce products – is this any different than the sale of oil and energy resources today, except that the products are legal? The gist of this is the “scarcity” of the product, not the legality of the product. Legal or illegal products still use an extortion to force the sale of their products on defenseless consumers who urgently need these services or resources for survival and can’t buy them from anyone else. Thus the real business transaction of capitalism is the transaction of a type of extortion, which ends in the growing disparity in wealth, between the extortionist capitalists and their victims, the so-called ‘consumers’ of societies.

The end result is the use of society to create a class of wealthy criminals, who use society as their victims, and use its government to make this criminal activity legal.

But even beyond this is the type of growth this system uses to grow. A type of growth that uses the creation of “parasitical chains” that grow on the essential basic transactions of society.

In this way the growth is itself a type of parasitism on these transactions, breaking them into further sub-transactions that make their own profit on the original transaction… the result is continued inflation of prices, as the chains grow endlessly from the original transaction that fed them. We have seen this in the continuing rise in Health Care costs, as the Health Care industry, and all the other industries and sub-industries that grow from it, all demand profits from the original simple Doctor-Patient transaction. Also, Higher Education has developed this same pattern, working on the need of Higher Education to fill the basic need of citizens to obtain the skill sets needed for jobs 7 . The parasitism of this endless “third party” transactional multiplication, will eventually destroy the basic transaction through causing it to become so expensive, no one can afford it. And passing this on to government through entitlements will only eventually cause a subsequent rise in taxes to the point the society will collapse, as we are now seeing in the European crisis.

Is all of this in line with the original aim society was formed to further? Of course not, society was created to give an equal chance to prosper to all its members. And the management of the economy was given to government to ensure that the economy did not become the criminal racket it has now become; or the growth of an economy that feeds on itself till it collapses; or even worse the division of society into economic groups competing with each other for survival.

Thus the problems of the present capitalist economy are as follows:

  1. Full employment for the supporting societies does not exist.
  2. The creation of classes in society according to wealth, and the resulting disparity this causes.
  3. Aberrant business practices which are harmful to society:
    1. Business transactions that have become extortions, causing the extreme inflation of prices of necessary resources.
    2. A parasitical economic growth that ensures an endless spiraling of costs for society to the point of collapse. [Three areas are most important here: Health Care costs, educational costs and pension fund costs.]
  4. The economy not supporting its own society.
    1. The mingling of investment banking with depository banking, and the resultant increased risks to the public (especially in 401k’s and pension funds).
    2. The use of outsourcing, off-shoring and visa workers by businesses. Also the rise of a migrant (or guest) worker class, subsisting on substandard wages is also of concern.
    3. The existence of bond and monetary markets, because of the many monies now in existence, resulting in the control of these markets by speculators and the moneyed class.
  5. The purchasing of government by the wealthy class, for the benefit of that class, and the resultant cutting of entitlement programs to the elderly, disabled and poor. The subsidizing of War as a means to benefit the businesses profiting from it (the Military Industrial Complex).

The problems designated above are showing themselves regardless of the type of classical economics used (i.e.: pure capitalist, socialist, or even communist, for that matter). They are present because none of these systems can function ideally, because free market economics now really underlie all of them, in today’s “global” economic environment. Once more the ideological, must give way to the practical; and both must subordinate themselves to the survival purposes that societies were formed to achieve for all their citizens. Economies are customary solutions societies create to allow their continued existence; they are defined and created solely by these societies themselves. It is their success or failure which allows them to exist as the solutions they are, or be replaced by other methods to achieve the overall goal of permitting societies to exist. They have no ideology or moral purpose, except as a means to continue societies’ existences.

Human group motivations, and dogmatisms must be forgotten; and the purely practical “issue oriented” approach must be taken in the quest to find solutions to these problems. The only motivations represented here must be the motivations that create no losers, which was the original purpose of society itself. Society was conceived as a cooperative way to deal with the hardships all will eventually undergo during life, through a mutually shared responsibility. The failures of the present system are real, and threaten all of us, to the point of complete collapse of all societies throughout the world. We must find equitable solutions that will allow societies to grow, and sustain all their peoples on this earth. This is not a dream or aspiration, but a reality we must achieve, because all our survivals depend on it.

We have ourselves created the problems by creating a faulty system, that caters only to a minority, instead of the all, which is society. That system is collapsing – we can only fix it by allowing all to share the responsibility according to their means – the very same method that created the idea of society itself. Society was created to eliminate risk from the human condition, and ensure all, the longest prosperous life possible. It is our job to ensure this trust, we all mutually share, does not fall to the same chance that greed has reintroduced into the system, so that a few can prosper at the expense of many.


To return to note's origin click the footnote number at left

1 The economy spoken of here is what we now call ‘capitalism’.

2 See my essays, “Economics, And Questions Without Answers” and “A Step Toward Fiscal Sanity”

3 ‘Two’ classes because the middle classes are dwindling as they merge with the poorer. And the few that make it to the Master class are so few as to be negligible.

4 In most cases this is not a conscious deception or true conspiracy against society, but a mind-set that makes this Master class believe it is doing what it deems as morally right for society. This is the same mind-set caused by greed that has, in fact, produced a whole discipline with moral and scientific underpinnings in the higher educational system, which is called the science of economics. But some how, this science, whose whole purpose is to serve society, has forgotten that this service is actually now a method for destroying societies, and creating the same old Master slave dichotomy that it was created to do away with. The tyranny of ownership by a few, which the cause of “free enterprise” was ordained to eradicate, has now been once again resurrected from the ashes of tyranny, to become the very same thing disguised in the cloak of freedom! And the word people, always touted so loudly by these same advocates of this new ‘freedom’, has changed its meaning from the ALL it is, into the FEW it has now been clandestinely changed into (See my essay: “What The Word ‘People’ Really Means”).

5 See my essay: “The New Dirty Word: IMMIGRATION”, footnote *, last paragraph.

6 See my essay, “American Dream… Or American Lie”

7 It is ironic that these same schools that are perpetually raising their tuitions, and contain schools that train people to produce successful businesses, cannot themselves survive without the help of donations from wealthy donors, and charity from alumni associations – in other words, these same business principles they teach cannot make them successful, even though their tuitions are so high they are bankrupting their students! They have fallen into the same trap that Health Care has fallen into.



Originally Published:

October 14, 2011


July 4, 2014