The Dominant Money System: We Are Fish Not Knowing the Very Water In Which We Swim
Most Americans would have a difficult time defining capitalism or the current dominant economic system in the United States. If you were to ask Noam Chomsky, he would say that capitalism, per se, hasn’t existed in the U.S. since the 1920s or 1930s. He calls today’s dominant economic system “state capitalism.” But let’s take a step back to first define what capitalism is. It is an economic system characterized by private or corporate ownership of capital goods via investments that are determined by private decisions, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market. Well, let’s break down that definition term by term to get a feel for where we are with today’s definition of capitalism.
According to the definition of capitalism above, it is an “economic system characterized by private or corporate ownership of capital goods.” Today, as most know, that private ownership is becoming more state-owned as bailout after bailout occurs. The term “capital” implies stock, holding capital, advantage or gain or, best definition, net worth—how much a company is worth. That capital in a true capitalist system is owned by private companies. But that has changed considerably even since the Great Depression of the 1930s, as capitalism has leaned more and more in the direction of state ownership. So according to Noam Chomsky’s definition, we are not a true capitalist country any more or one dominated by “free enterprise”: business not restricted by government interference, regulation or subsidy, but by the laws of supply and demand. And this “free market” spoken to in our above definition is no longer free, nor has it been so for many a decade, worsening mores so in recent years. There is less and less “private ownership” and “private decisions,” and “prices, production, and distribution of goods” are not as determined by “competition in a free market” as our definition of capitalism would want us to have. To a great degree, you can take that word “free” right out of the capitalist definition, thus Chomsky’s “state capitalism” term.
But there is more going on here than meets the eye. Shortly after the turn of the 20th century, the Federal Reserve Act was passed by government, setting up a private, non-government banking entity set for control and domination. In The Creature From Jekyll Island, the author, Rothbard, states that “the financial elites of this country, notably the Morgan, Rockefeller, Kuhn, and Loeb interests were responsible for putting through the Federal Reserve System, as a govern-mentally created and sanctioned cartel device to enable the nation’s banks to inflate the money supply in a coordinated fashion.” Those who control credit control the economy. The Fed is put in such a position to do so. And even though the Fed is beholden to Congress, technically, Congress knows who pays the bills. Big business.
The oddest thing about the current, dominant monetary system is its debt and growth based imperative, meaning that to stave off economic catastrophe we must keep growing the economy in a debt based fashion. The majority of the money in this country is on the books or in accounts, only a fraction of it represented in active bills and coins in circulation. The banks lend money for cars, homes, businesses, credit, and so forth at an increasing rate of interest or that which is more commonly known as compound interest. But while banks lend, the lendees run around competing for money that is never in enough supply, thus the failure-insured state of a fair percentage of the citizenry I spoke to earlier. Banks must continue to lend, lend, lend to stave off collapse of the global monetary and financial system. And one place it gets a lot of this accomplished is the government or big-ticket debt, as many are already too fully aware.
Here’s what Thomas H. Greco Jr. (The End of Money and the Future of Civilization) says about our current dominant money system: “The way in which money is created by the banking system today causes a debt imperative, which drives a growth imperative—this forces destructive competition for the available supply of money, which is never sufficient to enable all debtors to pay what they owe.” It also results in fewer and fewer with more and more money, the destruction of the middle class, martial law to control and restrict an uprising from the proletariat, and the potential for world-wide environmental and economic disaster resulting in a world-ending WWIII.
Now that I have your attention. This is, of course, a worst case scenario. It doesn’t have to be this way, and few are signing this off as the inevitable right now. But those awakening to the reality of the economic situation and those who have already awoke (see Occupy Wall Street)must put their best foot forward in taking the reality of this message to the world. For it is only through awareness that recovery and economic health can be restored. But many of those who advocate Occupy Wall Street don’t yet have the full picture. Some of those they attack are not directly responsible. For every American it is critical to understand not only what’s going on in the United States but globally, including in their understanding what has occurred over the last one-hundred years historically that has gotten us here. Here’s to a real capitalist society reigning again.