MONEY HAS POWER ONLY BECAUSE WE AGREE TO TRADE IT FOR T.W.V.. WHEN ITS SYMBOLIC POWER EXCEEDS THE VALUE OF T.W.V., THE FAKE ECONOMY IS BORN.

Economies are nothing more ...

than sets of relationships between work, value, time and power. Resources and labor have value. Supply and demand are relationships. Power exists in many forms. Wealth represents accumulated power. Fuels generate power that we use to express our power in the world. Industry expresses the power to transform labor, materials and fuel into objects which have power in the culture. Government has the power to regulate the relationships, or to deregulate and let the power of wealth and industry operate more “freely.”

The relationships that define each economy express “organizing principles.” This is a way of saying they express values and ideals, or that they “organize” the economy toward principles like fairness, efficiency, speed, consumption, expansion and growth, the creation of wealth, or better standards of living for everyone. Capitalism and Socialism are two organizing principles in obvious conflict with each other. They can push and pull the economy in different directions.

THE RECKONING ...

... will recognize that unlimited growth on a finite planet was the recipe that brought us the destruction of the environment. It is an awakening to the fact that the "free market" has been structured to squeeze as much value out of the resources, the labor force and the waste that's produced, and to put as little value back in as possible. It is coming to terms with the reality that the U.S. model for the global economy is organized on principles of war, waste and deception.

We invented money to be a

tangible equivalent of the value created in the economy. Early economies, like subsistence hunter-gatherer societies and primitive agricultural communities didn’t use money. The relationships that defined their economies were the ones between people and the natural world. The only wealth that could be accumulated was in the form of objects like clothing and shelter, possessions like animals and tools, and valuable resources that could be stored, like water or grain. We will never choose to regress to that kind of economy. But we will either choose or be forced to reorganize our economies to be more in balance with nature. Because the ultimate power in any economy is the biosphere, and we’ve been ignoring its power for way too long.

During the early 20th century in Europe, and in the 80s and 90s in South America, hyperinflation made official national currencies worthless. In those situations barter economies emerged out of necessity. People actually exchanged chickens for doctor’s services and the like. But barter economies are extremely limited. so local economies created their own money, distinct from the state’s money, tied to the value of specific commodities like coffee or corn. They printed and used different forms of “scrip” to facilitate exchange, until the state currency stabilized.

Money only has value because we

agree that it does. We have confidence that the dollar, euro or yen is a reliable equivalent (a relationship) to specific values: work, time, material, food, objects. Like the stock market, the value of various currencies changes on the basis of confidence, good or bad “feelings” about how stable and strong the country behind the currency seems to be. For many years money was made of or tied to the value of precious metals. Now it’s just a precious idea. But its benefits are obvious. Saving, loaning and investing are powerful and creative uses of this form of stored power.

The problems with money are many.

“Money is the root of all evil.” Have you heard that expression? It’s not true. It’s not an accurate statement of the original quote, attributed to Jesus, by Paul in his first Epistle to Timothy. The original (subject to various translations) was “The love for (or desire of) money is the root of all evil.” This goes quite deep in the human psyche. Because money represents power. Money IS power in several different forms. It is also attached to an IMAGE of power, a sense of STATUS and a symbolic buffer against fear. The fear of starvation is offset by a storehouse of grain. But gigantic sums of dollars, registered as strings of zeros on a screen or a paper balance sheet: what fear does such wealth offset? What real power does it enable? Questions like these become critical when there are such vast sums at play, at many different levels of the economy, and when money has both real and symbolic power. Because symbolic power, it’s accumulation and its use, can influence and be influenced by unconscious forces, fear and dominance in particular.

As societies evolved and economies expanded, the relationships between money and the real values in the market - materials, work, time, energy - have become more complex, more layered and less direct, more confusing. Deny it if you can, but as we adapt to using plastic instead of paper money and coins, our attitude toward money also changes. Other factors like on-line shopping also change our use patterns and on the relationships between our psyches and our virtual accounts.

As the financial “industry” grew,

and as the levels of wealth that are accumulated and traded have expanded, the relationships between money and real value have become more detached from each other. We hear words thrown around as if we all understand what they mean. “Billions.” “Trillions.” We imagine money sifting through the stock market, or paid by lobbyist to political campaigns, or smuggled across borders in exchange for drugs or weapons. We hear about people in “under-developed” countries living on a dollar a day, or making a salary of $18. a month. There are now over a thousand billionaires on the planet.

The numbers cannot have meaning.

The statistics no longer have any connection to our understanding of quantities. People trapped in the sub prime mortgage scam, like Enron employees who had all their retirement invested in company stock, saw their life savings vanish. Where did that money go?

The financial “markets” have grown to the point they have little relationship to the “real” economy, except to suck out value and put little back in. They have become abstract, virtual, as if existing on another planet. Huge sums have been extracted from the “real” economy ... the one in which you and I buy food and pay rent ... and now exist in some matrix of “fake” economies. Profits and investments and speculation and gambling and crime operate in relationships that are opaque to us, hidden from view. We can’t get access to them, or understand them, but we are subject to their fluctuations, booms and crashes.

There is no clear edge or boundary between the real and fake economies. It is impossible here, and really difficult in any situation, to understand how the “fake” economy, in all its scale and complexity, grew out of the real economy. But it is possible to name parts of the “fake” economy. And it is possible to imagine in “big picture” scenario, the impact of the “fake” economies on the real, on you and me, and on the planet. And it may be possible, in spite of the incomprehensible numbers, to see how the imbalance has contributed to the many global crises, and even to imagine how the imbalance can be corrected.

It’s no coincidence that we are in an “energy crisis,”

... that we have become “addicted to oil,” that we are in a life and death struggle to create renewable ways to generate .... power. Our strongest unconscious drives have led us to create a society in which the accumulation and expression of power, in many different forms, has become an addiction that threatens the health and future of the planet and the species. The love of money is like the need for gasoline power. They both trigger our basest fears and desires. And they have expanded to distort the entire U.S. economy, the global market, and most important, the condition of the natural environment.

 

WHEN T.W.V. STOP MATTERING, GREED, THE UNCONSCIOUS NEED FOR EGO POWER, TAKES OVER.
WAR AND WASTE BECOME GOOD BUSINESS AND DECEPTION SELLS.

For every $1. that changes hands,

in the "real" economy, every day, over $100. moves through the stock market, in derivatives, futures and other kinds of speculation.

The amount of money that moves through the stock market every day is greater than the annual budgets of most industrialized nations.

The first steps away from the real

... to the fake economy are saving and lending, charging and paying interest, insurance and taxation. Each of these represents taking money out of the real economy to create some value or power at some other place and time. At a more distant relationship. Saving and lending extend the power of money through time. If I save this money it will be worth a little more in the future. If I pay interest on this loan, I get something of value now and pay for it later, or I invest it and it increases in value. I buy insurance to hedge a bet. I don’t think I’ll get in an accident or get sick, but if I do, and if it’s really costly, it’s worth it for me to pay into a fund that will help me in the worst case scenario. The government takes some of my money so they can provide services: water and sewer, police and firefighters, roads and schools. It’s never clear exactly when these transactions are fair, whether the exchange of value is more or less equitable.

Inflation, deflation and recessions

... result from imbalances in the markets that cause the value of money to change without apparent reason. They can occasionally be predicted or avoided. They can also throw an economy completely out of whack for a decade and longer. It’s hard to track how and why these are side-effects of the fake economy, but they contribute to its “fakeness.”

We’ll try to track the levels of the fake economy, and we’ll look at a couple simple economic principles. It’s a complex matrix, but it’s important to try to see the patterns, the way the relationships change between the different components: time, work, value and power, and the way these changes shift and distort the “organizing principles.”

THE BIG RECKONING ...

... will come to terms with the "ZERO SUM" equation: the total accumulated wealth in the world is more or less equal to the total damage to the working class (including the legacy of slavery), plus the value of resources depleted, plus the costs of toxic waste.

The settling of accounts has already begun. It will mean the restructuring the economy on a different set of principles. It will mean rewriting global corporate charters. And it will mean turning the cancerous growth of the fake economy into a new, "healthy investment" pool. Total Global Reparation.

We will all gradually come to the understanding that the wealth, which really belongs to us all, must be reinvested directly into a sustainable industrial revolution. And before anyone's head explodes over the "redistribution of wealth," we must all understand how the wealth got "distributed" in the first place; i.e. through slavery and cheap labor, imperialism and exploitation.

Crime is one level or category of

the fake economy. It siphons money out of the real economy, hides it, and creates distortions when it feeds back into the real economy and it does bad stuff along the way. From drugs to organized crime to human trafficking and child labor, to graft and corruption in business and politics. The “black market” creates an economy parallel to a legal one, but distorting the relationships and values. The impact of crime on the economy is hard to measure but significant, both in the way it pushes and pulls money that could be moving in the real, legal market, and in the negative impacts it has on society.

Profit is a legitimate aspect of real economies, but in excess, profits become a “gateway” intoxicant that create huge distortions of values. In the 50s businesses started to shift, to reverse their priorities. My uncles and granddad were in specific businesses: appliances, newspapers, engineering. They had expertise in their fields. They used their knowledge to sell products, or information, or services that made enough money to stay in business, made enough profit to invest in improvement and a little expansion.

In gearing up for World War II,

the U.S. manufacturing capacity, and its general economic production doubled several years in a row. After the war, without the demand for war materials, the economy threatened to collapse. Businessmen realized, consciously and unconsciously that new markets had to be created to keep the economy functioning at the high level created by the war. And so the “consumer economy” was created. Images of social status and quality were advertised. Newer, bigger, better and more of everything were no longer luxuries but were seen as essential to maintain a certain “lifestyle” - a word created to stimulate fake markets. So now the “strength and stability” of the U.S. economy rely on two markets: we still use military spending as a broad based support for manufacturing, and we rely on “consumer spending” to drive a very large chunk of the “real” economy.

So, in attempting to distinguish the real and fake economies, we will sooner or later have to decide whether military and consumer spending are “natural,” sustainable, real and necessary, or unnecessarily wasteful and destructive.

A few business schools today are starting to tilt toward offering “green” or sustainable curricula, in which they re-arrange the dynamics of businesses to be sustainable, healthy workplaces that produce, again, something for the public good.

But in the intervening 50 years,

the soul of individual business were sold to the dictatorship of profit above all else. Businessmen were not skilled or interested in the physical product or the actual service, but only in making money. In the 80s and 90s, market trends began to demand that profits, in percentages and net dollars, increased regularly. Growth was no longer seen as a natural, gradual trend, but rather a necessary competitive edge that every business had to maintain.

An artificially high demand for profits, for stock dividends and high stock prices, seems a natural outcome of the efficiencies, investment and reward strategies for a “real” economy. But, examined from a different point of view, they promote waste and war, and they require intentional deception to continue, in the form of advertising, and in the smoke and mirrors that conceal the gigantic “financial industry” that has inflated and distorted the real economy until its actual values are lost.

Some organizing principles are built into the economy. Some evolve willy nilly. Some turn gradually from rational and constructive to insane and destructive. One of the worst outcomes of the deception needed to keep the fake economy protected from examination and criticism, is the confusion created by associating “free market” with “democracy.” In reality, and in real economies, deregulated free markets are the most powerful forces against the formation of real democracies.

One fake economy is created by advertising.

There’s a fake economy embedded in the stock market in the form of options, futures, speculation in “derivatives,” obscene salaries and bonuses for the fat cats at the top of the financial pyramid scheme. This seems to be where all the enormous imbalance in accumulated wealth goes to play, to gamble, to spend and consume conspicuously, to manipulate what remains of the real economy, which has now become subservient if not slave to the financial industry.

The enormous wealth extracted ...

from cheap labor, cheap or stolen resources and the widespread degradation of the environment, rather than working as investment toward the real expansion and development of a sustainable economy, has become a symbolic power among the super rich, now completely disconnected from any constructive role in public life.

The fake economy starts with lending and simple interest, and ends up crashing the entire real estate market. Pretending to foster home ownership, brokers skim most of the real value out of the market, then let the market collapse under the fake values that the speculation created.

Profit and wealth metastasize

to the point they are incapable of pragmatic investment and are only symbolic forms of status and power, as if any human being could “earn” or deserve to own more wealth and waste more resources than the poorest 40% of the population.

For a startling graphic representation of the gap between rich and poor, google "the L curve."

Vast amounts of corporate profits

are invested in the purchase of the politicians who we have elected to protect us from the corporations. Millions must be spent on political campaigns so that non-millionaires are not eligible to run. The real qualities of life, air, water, decent food, fulfilling work have been stolen from us, marked up, repackaged, stripped of their real value and sold back to us in a fake market, the first priority of which is to pile the wealth higher.

And eventually, the real organizing principles of the fake economy may be revealed: war, waste and deception, exploitation and greed, conspicuous consumption in the face of global poverty and a planet depleted and despoiled.