Debt based economy criticism, The birth of Economy

by Domenico De Simone

Lectures on debt based economy criticism. The birth of economy and power. From the gift society to the economic exchange society.

Part One

The word economy comes from the two Greek words: oikos e nomos. Oikos in Greek means house, not as we know it, but the great structure of the ancient society in which tens or hundreds of people were living, and nomos is a term that means law.

The economy is therefore the discipline that governs the operating rules of the house. The economy was therefore born after the creation of power.

In the previous society, the society of the matriarch, there was no power, and there was no accumulation and economic exchange:society was regulated from the glorious exchange, in which each person tried to excel for the greater glory of their own community.

The accumulation in the society of hunters had not sense: we hunted and gathered what was needed to survive since nature was always generous and gave sufficient means to all of us. The practice of exchange was dictated by the gift, which was a way to propitiate the favour of the Gods for their own community and for themselves.

At the end of the year, in coincidence with winter solstice, the great ritual celebrations were an opportunity to express all the richness of the community: and everybody generously gave to others and to the Gods so that they manifest their generosity even in the year ahead. These ritual celebrations were also an opportunity for fertilization, according to a tradition that even in historical time was represented by the Dionysian festivals,and on these occasions it were the women who chose the man by whom they were fertilized. In the matriarchal society, in fact, in the house together with the great Mother lived women and children, while men lived in other buildings: in short, the social organization was very different from that based on the family as we know it and that was born in this particular time.

But how and why was born in this particular time?

The problem was the fact that many women chose the same man, the most attractiveone, and the most fashionable at the time, and others were excluded from the reproduction of their own genes. In addition, community members had not consciousness of themselves, but only of belonging to the same community.

At a certain point, probably to ensure the reproduction of their genetic heritage, groups of men attacked the community to take women with violence.From this terrible fact, that we know about from stories like the “ratto delle sabine” in the Roman tradition, of which there is memory of similar events of many other populations, comes however an extremely positive fact: genetic types, up to that point very small in number, begin to multiply themselves and, above all, making violence against their own community men gain self-awareness and of their own individuality.

The mechanism is simple: turning a weapon against another separate him from me, from the community that we shared together so far. Not coincidentally, in the ancient society, the soul was only attributedto those who could contest a weapon, and therefore slaves and women were not, an idea that has governed our society until a few decades ago, and is still rooted in many developing societies.

If therefore the matriarchal society was based on the glorious gift of themselves too, the patriarchal society is based on ownership of others and their property.

In front of the danger of losing their assets, the wealth they earlier acquired, people begin to fear scarcity and simultaneously with the idea of accumulation comes the idea of time and the need to make war to increase their own power and remove the threat of scarcity.

At the same time, it reveals that the idea of scarcity is a valuable tool for power management. Since he who manages lacking resources has power, or rather the power lies in the management of resources that are presumed to lack.

Men begin to make war to increase their potency indefinitely and secure themselves against endless years of scarcity, and begin to see the world according to the new idea of scarcity, a world closed, flat and surrounded by an ocean that is the limit as the city walls are the limit of what was once the home town where hospitality was sacred and inviolable.

Food resources, information and energy, which in the ancient world was represented mainly by slaves, were kept short to increase the power of the prince and of the group that supported him.

Still today power is defined by scarcity of assets to be distributed, and to survive and increase its power, the Demon of Power, or rather the Spirit of Power, have to define some of these assets as scarce that in reality they are not at all, as in the case of water and food. Water cannot be low on a planet that is covered by it for more than two-thirds, and food cannot be poor in a system that destroys a substantial part of it systematically “to hold the price”.

The economy is today defined in all of the manuals, as the science that governs the production and distribution of resources considered scarce. The same manuals say that if there is a superabundance of goods there is no need for economy. A beautiful contradiction in a society that is covered by continuous crisis of overproduction!

Well, I want to show in this course that the resources are always sufficient and that scarcity is a cultural problem and not real. For example: if we were to close a person in a room and seal it, in the end it will die for lack of air. But that does not allow us to say that the air quantity is low, but only that certain cultural and environmental conditions have led to the shortage that has put to death the unfortunate object of our thought experiment.

The demonstration that resources are always enough, present some difficulties and we will deal with it later on. Now I’m going to make you observe that is difficult to reconcile scarcity with overproduction,and especially with the production of intangible assets: these, in fact, that today represent more than 80% of our GDP, is by definition unlimited: if to eat a cake we must divide it, to enjoy a movie or a music or software, we don’t need to make any division: each of us can enjoy the whole thing without taking anything from others. And you may have noticed I have not used the term consume a film, a software, a music that are impossible to consume as you can consume a plate of pasta or a piece of bread or a car.

I spoke about fruition, passive when it comes to television, and active in front of a computer, like what we are doing here now.

In conclusion, if two people share a tangible asset, they will end up with a piece of good each, but if they share an intangible asset they will end up with two pieces of goods each.

Power in our society is manifested mainly in the form of scarcity of money, because as we have seen, there are even too many goods. The economy of debt is the mechanism used to generate scarcity of money.

Together with scarcity and money, comes the idea of time: the matriarchal societies lived in an eternal present, we live projected into the future: we sacrifice today to secure the future, to exorcise the fear of scarcity.

Well, you should agree with me before the demonstration, that scarcity is really a cultural fact and that resources are always enough, even better, excessive by definition: which tool is more powerful than the fear of dying for the management of power?

Projecting our existence in the future, in an eternal future, we renounce to live the present. For this reason money, which created the very idea of time,represent our guarantee for the future, and ultimately, the assurance of our immortality. In this sense, money is God, because it ensures immortality towhom owns it.

Part Two

The economy, the economy of scarcity, makes sense because it alienates us from the fear of death.

Do I need to tell you how illusory is this logic of money?
I tell you a story, which I wrote in one of my book
sin 2001, but sounds much like a story of our days.

Imagine that someone proposes you a job, a house and even money to eat and entertainment. You would be very happy, I think. Then you discover that the money that you are given for your work are less than that you need to live, so every month you are indebted a bit more and on this debt you also pay interest which increase your debt. Is it reasonableto believe that your happiness would disappear at once?
A film of the seventies brought a similar theme, set in a plantation in the south of the United States. The protagonist, a widower with two young children, is looking for a job and a decent accommodation.
He happens to find a farm where they are looking for workers. They offer him a salary of one thousand dollars a month (incredibly high), a house, food, a car, amusements and schooling for his children.He is extremely satisfied with the conditions and gets straight to work.

As a matter of fact, the house is an unbearable cabin, the car is a wreck and impossible to drive,the food is terrible and the amusements non-existent, but one can’t be too picky in his situation. The surprise comes at the end of the month. That’s right, because when he goes to collect his salary after a hard month’s work, they tell him that they have to detract 600 dollars from his one thousand dollar salary for his accommodation, 400 dollars for food, and another 400 dollars for the car, drinks and amusements (the whiskey was a tad expensive).
Basically, after a hard month’s work, not only had he earned nothing, but he was in debt for a total of 400 dollars. In the film, as one could predict, the whole affair ended up in gun-shots. It’s really a horrific story of exploitation and usury.

The thing is, in the world exactly the same thing is happening, but strangely no one complains. It might be because this abomination is done in a legal manner and because it is practiced by the banks?

That, as Brecht said, insistently offering you money when you do not need it and ask it urgently back when you do need it?

The banks have made hundreds of millions of people into debt slaves, just as the bandits in the film.Only in recent days we are starting to perceive a climate of revolt and awareness on the part of debtors.

But what can we do to rebel against this destructive power? I want to show that we can build now, instantly, a company founded on the abundance and not on scarcity, where values are those of each human being, not of things or much less of money.

I want to demonstrate that society founded on power is coming to an end, as this economic crisis we are living is the final crisis of financial capitalism. I want to demonstrate that the accumulation is a concept devoid of meaning and totally unnecessary to adjust a society founded on human values.

And speaking of the crisis I’m going to read some passage from my book of 2001,where I described the crisis as it is happening now and why it would be as it is. The book I’m talking about is “Where is the Economy of the Rich Going?”, published in March 2001.

An excerpt in English can be found on my websites, on Scribd or on Google Books absolutely free and downloadable.

This financial growth is happening at the expense of economic output that is burdened by a growing debt from which it cannot free itself, if not by destroying a good part of the financial statement. […] As in 1929, when the world experienced the delights of the crisis of overproduction, even today we are faced with the same danger. Then, as now, the distribution of financial resources was unequal Then, as now, the technological innovations led the production to levels never reached before.. It was followed by a sudden drop in demand, and a deep crisis from which the West came out of only after the war. […]

There is a tale about the derivates that they are a zero sum game, meaning that the Clearing Houses always open positions equivalent but in the opposite sign. This is, indeed, a story tale, because, as everybody knows, the opening of positions is done on margin and not on the underlying,and therefore in the case of strong directionality in one way or another, the leverage effect generates serious imbalances in the accounts.The forced closure of positions would probably induce panic crisis not dissimilar to those experienced by the banks until 1932. […] At the end this mountain of paper will collapse by itself by burning all of a sudden the whole virtual wealth. […]

What is the risk in this situation? That suddenly, the inability to grow forwards our economy into debt, so the difficulties of ordinary people and businesses and the States, to enter into other debt will lead to a sharp fall in demand, just when the system, pushed to new levels of productivity from the new economy, needs it the most.

Why I could write these comments on the crisis of today eight years in advance? I am not a soothsayer, indeed. But I equipped myself with the necessary philosophical tools to understand the economics of debt and this is its inevitable fate.

We can build a new society, and we have a duty to do so. Now is the propitious time to do so. And if we fail, we or others, if humanity fails to leave the logic of debt, it is highly likely that we will leave years if not centuries of dark decadence and misery, as well as enormous destruction.

The crisis has just begun and we have not yet seen anything of its devastating effects.Fortunately, the economy of abundance is simple and mainly depends on us, because the richness is in all of us.

And next time we will talk of what is richness, how it is born and how we can multiply it in a society founded on human values. See you soon, then!

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