Adonis Diaries

Posts Tagged ‘capitalist system

Can Capitalism be reformed? Part 2

Posted on September 25, 2010

This part will discuss ownership of private land properties in capitalist systems and the practical political and legal reforms needed if change is to be effective.  

In the first part I wrote:

One:  Capitalism is based on four  foundations:

1. Private property of means of production;

2. free exchange (products, services…);

3.  open free market for commerce; and

4. availability of a vast pool of people willing to work for slave salary.

The main driving force is that the owner of the means of production (the bank, the partners, the shareholder, or the family)  should earn as much as the total salary that all workers receive in the business.

Consequently, an employee is hired when the owner can generate profit, at least as equal to the total salary of the hired worker.

Two:  The foundations of capitalism have proven Not to function except within strong State institutions, which are almost totally controlled by the capitalist elite classes, especially the Old Money classes that generated the wealth in previous slave working system.

The judicial system obeys laws decreed by parliaments that are dominated by the richest and political “aristocracy” classes, and the executive branch is intrinsically dominated by these classes, directly and indirectly.  

This whole political system is called “capitalist democracy” where people have the illusion of electing their representatives for a duration.  

After election, people are to behave as spectators:  Any serious disturbances are crushed in the name of Law and Order.

Three:  The previous article described Communist economic systems (Russia and China) and then, capitalism in Western European social-democratic States.

Four:  The one foundation that all economic systems of developed States share is free global trade; which means the liberty to exploiting the developing countries in natural resources and cheap labor.

The developed States are allowed to subsidize their agriculture, but the developing nations are not to do it and they cannot, even if they witness the need to do it .  

The developed States are to flood the markets of developing countries with affordable products with No “legal rights” for the developing nations to increasing import taxes in order to safeguarding their own meager means of productions.

The developed States (colonial powers) can find financial resources at low-interest rates (at 3%, even if they accumulated far higher sovereign debts than the poorer States), but not the developing nations( at least over 7% interest rates on loans

In return for blatant exploitation, the developed States agree “voluntarily” to setting aside a small fraction of their GNP to developing the infrastructures in the poorer States; mainly, self-serving their interests to improving and facilitating exploitation and transport of raw materials efficiently.

Five:  All “international” institutions such as World Bank, International Monetary Fund, Commerce Trades are dominated by the US, China, and a few European States. Thus, transparency and access to timely information and intelligence are practically denied the developing nations.

Six:  Financial institutions (banks, insurance companies…) are the real owner of means of production in capitalist systems.  They own 30% of the total wealth of a nation and represent only 1% of the population.  This is NOT acceptable.

Fact is, financial institutions generate three times more money than the combined tax collected by the government.  This is NOT acceptable. 

Any reforms should first target the level of profit that financial institutions are permitted to generate.  “Effective” interest rates should be lowered accordingly and tougher regulations imposed of these behemoths.

Small community banks with excellent transparency in decision process and lending policies should be the norm. 

The current status of multinational financial institutions is generating abnormal profit with no risks whatsoever.  

The aristocratic political family class (representing less than 10% of the population and hoarding more than 20% of the nation’s wealth or what is called “Old Money”) is the main beneficiary of the current capitalist system dominated by the financial barons.

Seven:  If capitalism needs salaried people, it must secure the fundamental right to work, a wide range of jobs that satisfy varied opportunity, access to affordable education, safe workplace, universal health coverage, caring for the elderly, and justice for people who worked most of their life for a comfortable retreat.  

Has capitalism satisfied the basic needs of its workforce?

Eight:  States should start taxing according to the number of employees hired and net revenue (not based on financial sheet profit):  These two criteria are the most objective representative of net profit and easy to investigate. 

This gimmick of taxing on “net profit” is an accounting fraud that is not objective or fair.

Companies relocating their factories or main business for cheaper workers must be taxed according to the original “national wages” of the workers. 

Companies substituting workers for robots should be taxed according to the number of workers substituted. 

States will be able to subsidize unemployed people until they find jobs and be imaginative enough to opening up newer job opportunities.

Nine:  There is a trend for owners with strong ethics and moral values to including employees as shareholders and participating in management decisions:  These companies are doing very well and not suffering from financial crashes. 

Institutions and companies for profit are amoral and do not deal in ethical conducts.  Ethics and morality are individual characteristics:  the more such individuals gather in groups to reclaim fairness and justice in actions the more institutions will be reminded of what is best for society.

Land and private property are the basis for the emergence of the “bourgeois and merchant” classes and which initiated the major leap forward into creating wealth.  

This system of private ownership lead to the abolition of feudalism and absolute monarchical powers that were backed by the clergy.

The structure of private ownership of land and properties materially weakened nobility and clergy and eventually displaced them.

Private ownership of land and properties are Not currently economically essential for capitalist system to function properly:  Enterprises can lease properties and resume their business as usual.  

It is the political ideology behind private properties that is the culprit.  Private property ownership remains as a reminder that aristocracy image of power must not vanish in order to retain political power in “democratic” political system.

Ownership of land and real estates must be legally abolished in order to have a serious chance for political reforms.  Land should be owned by communities and regulated by community councils.

Land and real estates should only be leased and never owned by individuals or enterprises.  Why?

First, inheritance of private real estates and money is the main reason for the existence of aristocratic lineage in wealth and politics.  The inheritance mentality encourages sustaining ancient beliefs that the aristocratic class is better fit to rule, guide, and lead simply because this class created the system that perpetuates its interests and egoistic power.

Second, land and properties leasing laws prevent inheritance problems and its successions of hate, suffering, and legal procedures.  

Land and real estates should be leased for a period No longer than 30 years and never renewed for any member of the family in order to dissuade political inheritance of images and statuses.  

Leases can be extended for three years under particular circumstances. For example, father, mother, and grandparents have the right to die in their property and not experience humiliation and exacerbation at old age.  I guess children will make sure that their folks remain at home and not be sent to specialized rest homes in order to enjoying a free location.

Third, leases on unused properties or uninhabited could be canceled.  Consequently, homes will be properly maintained and the homeless people will have the availability of shelter in unoccupied properties.  Families with crippled or handicapped children will have priority for occupying uninhabited properties.

Fourth, leased land and real estates offer greater opportunities for the newer generations to different life-style in habitat, sustainable energy, and better community life.

Fifth, enterprises may be allowed to renew the lease for specific duration as long as the nature of the business did not change or will not change after the renewal. For example, transforming from a manufacturer to real estates development is Not acceptable.

The third part of this series of articles will develop on election processes and laws reforms that would shift the odds for the middle class and lower classes to acceded to legislative and executive positions.

Note:  You may read about the Real Estates bubble that won’t burst and is converging to another financial crisis in https://adonis49.wordpress.com/2010/10/24/obama-praying-mantra-next-f-crash-not-on-my-watch/

Tidbits and notes posted on FB and Twitter. Part 175

Note: I take notes of books I read and comment on events and edit sentences that fit my style. I pa attention to researched documentaries and serious links I receive. The page is long and growing like crazy, and the sections I post contains a month-old events that are worth refreshing your memory.

The confessional and religious divisions embedded in Lebanon’s system (since its creation) along with political familism[3] contribute to restrain the effective participation and emergence of new actors, notably women, thus limiting political turnover.

Next country the US is planning to destabilize is Pakistan. A decade of troubles to China and Russia?

Classifying biological weapons according to effects on specific races is the ultimate racist mentality.

Can we stop this masquerade? All businesses dealt with Germany and the USA, without exception, before, during and after WWI and WWII

If WWI was a colonial war, WWII was for disseminating USA hegemony. Dropping 2 atomic bombs on Japan was the Message. It alienated many allies, first of all, Stalin of the Soviet Union. We are still succumbing to this strategy.

Tu dois etre une coquette madame. Ta petite fille t’ observe and fais comme toi.

After WWII, businessmen sided with USA and most scientists defected to Soviet Union.

Growth in a capitalist system is a total nonsense: transactions in paper money increase, but the productivity of the society is in a free fall.

During the Ottoman Empire, Aleppo was the second most important city after Istanbul. Erdogan plan was to take over this city. Failing this, he stole all the industrial equipment and machinery and tried to destroy the city. Aleppo is back competing with the most industrial cities in Turkey

Absolute Monarchic Jordan counting the number of bread loafs consumed by Syrian refugees. Why it does Not emulate Angelina Jolie who focused on the dignity of the Syrian people?

Iza al Souri bi Sutchi ettabak 3ala Doustour, UN wa Vienna bit sour warana

Hezbollah ghannaj Nabih Berry kteer 7atta rekeb 3ala ktafhon wa baltaj bi esmihem. Ma te dakhlo majaaless mazhabiyyat “shar3iyyat” bi moumarassat al baltajat 

Urgent: ta3yyeen mas2oul fi Hezbollah la temsse7 joukh Nabih. Khallo al Sayyed yehtam bil mashakel al kharijiyyat. Ma 7ada fi ye la7e2 3ala dala3 wa terdayyet khawater Nabih

In 2002, Bush Junior reduced the tax rate on the richest class in America.  The tax rate is due to be reviewed and revised at the end of this year to come up as it was during the Clinton Administration (or 3% tax increase on the revenue):  The richest 1% of the Old Money (hoarding 30% of the GNP) are up in arm and claiming that they are not about to relinquish the rights and privileges they secured for over a century under this capitalist system.   Politicians are empathizing with the plight of those multimillionaires:  The politicians meet regularly with the representatives of the 1% richest (most probably to supplement their puny salary and extensive privileges?)  Those pocketing half a million per year are very vocal:  They say earning half a million does not signify being rich!  That the US government bailed the richest class first with trillion does not count as an argument:  The government is planning to rob them from their legitimate money!  It is probable that the capitalist judicial system would view the claim of the richest as valid legally based on tradition and customs?  Maybe the President should have run under a clear platform of drastic reforms to the capitalist system with clear programs on how to deliver his promises?

You would believe that it is the downtrodden and the millions who lost their jobs and homes who are growling.  There are differences in growling decibel: the growls of the richest with monopoly on power are dangerous, ominous, and have this incoming missile whistling frightening sound.  The US citizens will be hearing loads of crap in the coming two months.

There is another class of new billionaires who made fortune when Ronald Reagan declassified military basic research and application to private enterprises:  Instead of applying the GPS technology to locating Soviet submarines, private enterprises permitted locating the closest espresso cafe.  This additional 1% of new billionaires is more lenient and understanding of the need to supplementing the budget deficit with $700 billion over the next decade to be invested in infrastructure and education. 

Garret Gruener is one of those new billionaires; he currently directs Nanomix (a nanotechnology society) and the capital-risk corporation Alta Partners.  Gruener made fortune participating in the foundation of the research engine Internet Ask.com and created and sold many new enterprises.  Gruener said: “None of my investments were determined by tax rate on revenue.  As usual, the Republicans claim that the “trickle-down” strategy for wealth distribution works best in the capitalist system; which means, the richer are the richest classes the more enterprises are created and the more jobs are available.  The contrary happened in the last decade:  job market was the worst ever, salary stagnated, and wealth inequalities among the classes increased.  There is this inevitable trend:  the periods of the vaster inequality among the classes witness financial crashes such as in 1929 and 2008.  So far, the US economic performance is very poor and joblessness is increasing.  Congress has to understand that more largess in gifts and privileges to the rich classes will drive this capitalist system into a serious impasse.”

There is another emerging giant in the Americas: Brazil.  The capitalist system in Brazil produced 1% of the richest class hoarding more than 30% of the GNP; but the problems will not take effect in this decade for two reasons: First, the economic structure of Brazil did not reach a steady-state; and second, Brazil has vast natural resources to compensate budget deficit in the short-term.  How the richest financial classes make their wealth?

In Brazil, the 1% richest generated 52 of the GNP while the economy based on real work generated just 42%.  When the government of Lula spent over $7 billion on a program to support the 13 million lower middle class families the financial institutions reaped 23 times that amount or 36% of the budget.  How?  The lower middle class (earning over $600 per month; the minimum wage having increased $250) currently hold 80% of the credit cards issued and represents 76% of the consumption of higher life-style.  This class is heavily indebted:  For every dollar received from the program the financial institutions generate $23 in form of interest and other expenses.

Brazil has also to deal with two critical problems:  First, 75% of the population are practically illiterate (they cannot understand an article published in dailies); and second, private land owners of vast areas are powerful force who will not relinquish a custom going as far as 200 years.  Those private agricultural lands are focused on monoculture like sugar cane and whatever multinational agro-corporations demands to be grown.

What the US is currently experiencing will catch up soon with Brazil if the capitalist system is not reformed with the coming President that will facilitate the task of the succeeding President 4 years later.

Baku of 1901: Paris of the Orient Gate?

By 1900, Baku (Capital of Azerbaijan on the Black Sea) was the center of oil production and it supplied half the world’s demands.

The Swedish Alfred Nobel (inventor of dynamite) and his brother ran the first oil tanker named “Zarathustra”; a fitting name since Baku was then the main religious city of the Yazd sect that worshiped the sun and fire since antiquity.

Oil was known for thousands of years in this region, and Baku was the religious capital of the Zarathustra sect after Islam invaded Iran in around 650 AC.   And Azerbaijan became the main Islam Chiaa sect region before Iran adopted that sect in the 18th century.  Actually, many Persian monarchs and dynasties were originated from Azeri khans or tribal leaders in Azerbaijan.

For thousands of years, Baku was lighted at night from the burning oil on the surface of the Black Sea.  Burning waves lighted the night and hit the shores.  After kerosene was distilled in the 20th century, using kerosene lamps were common household appliances in Baku, Russia, and the neighboring regions of the Caucasus.

Baku was the richest city in the Caucasus and rivaled New York, London, and Paris in attracting immigrants and investors.

Baku became an Oriental city competing in its modernity with Paris: elegance in residences and fashion were widespread among all ethnic and religious minorities living in the ultimate of capitalist system of “laissez fair” mind of doing business.  It was a typical “frontier” city where millionaires and the poorest classes of oil workers cohabited.

Baku is a terrible windy city all year round and its soil is muddy black, soaked with oil; but wealth overcomes many climatic disadvantages.

In 1905, widespread revolts swept all over Russia to the borders with Korea.  Everyday, hundreds of politicians and civil servants were assassinated and pogroms were common.

Tsar Nicolas II decided on giving war to Japan in order to appease the revolts.  The Tsar imagined that a quick victory over “these tiny monkeys with short tails” will galvanize the Russian citizens into patriotic zeal.  Russia was quickly defeated; the entire Russian Pacific Navy sunk and hundreds of thousand of Russian soldiers were annihilated by Japanese machine guns in Mongolia.

The Russian revolts intensified.  The only remaining Russian Navy in the Black Sea was overrun my sailors and their officers slaughtered (the Potemkin debacle).  Tsar Nicolas promised a Constitution.  The Cossack cavalry understood Constitution to mean total freedom of doing what they pleased.  Hundreds of pogroms were daily occurrences in Belorussia and Ukraine (formerly belonging to the Catholic Polish Kingdom before 1772.)

The pogroms reached Baku.

The first minority victims were the Armenians who were well established and lived comfortably out of commerce and lending money.  For days, thousands of Armenians were massacred before the Cossacks managed to restore a semblance of security.

Between 1905 and 1917, Baku was kidnapped by a multitude of revolutionary groups that robbed banks, and asked for ransoms.  Joseph Stalin, under the code name of Koba and who was 28 years old, was leading the Bolshevik groups that asked ransoms in order to provide protection for minority ethnic groups.

The Communist Revolution of 1917 ruined Baku in 1920 as a prosperous city; mass transfers of population and assassinations were systematically applied.

Note:  Topic extracted from “The Orientalist” by Tom Reiss


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