This column is an attempt to aid in the understanding of the current financial crisis, using classic texts by Robert Anton Wilson that explain the difference between wealth (real wealth or real capital), illth, and money (money wealth or money capital). by Dan Clore
(libertarian)
Sunday, December 28, 2008
Wealth, Illth, Money, and the Financial Crisis
by Dan Clore
The current financial crisis has caused great perplexity as well as suffering across the globe. The following classic excerpt from The Illuminati Papers by RobertAntonWilson might help clarify how one should attempt to understand the problem (I highly advise readers to stop and attempt to think of further examples when asked to do so -- this will clarify the ideas involved far better than passively reading):
Dissociation of Ideas, 5
by Robert Anton Wilson
Distinguish between wealth, illth, and money.
Wealth is best conceived as all the changes in the "natural" (prehuman) environment that are to the benefit of humanity and/or other life forms. A bridge that gets you across the river without your having to stop and build a raft is wealth in this sense. So is an airport. So is the furniture in your house. Think of ten other examples.
Illth, a term coined by John Ruskin, can be conceived as all the changes in the environment that are detrimental to humanity and/or to life itself. Weaponry, then, should be classed as illth, not wealth. Think of ten other examples.
Money is neither wealth nor illth but merely tickets for the transfer of wealth or illth.
Proof: if all the money disappeared overnight, the national standard of living would not change (whatever happened to individuals in the interim); things would be back to normal as soon as the Treasury printed more tickets. But if all the real wealth and illths -- all the industrial plants, natural resources, roads, communications, and "real capital" generally -- were to disappear, we would be plunged back into the Stone Ages and no issue of currency would improve the situation.
Note also that for all the "real capital" to disappear, all the technical knowhow in human heads would have to vanish. No economist, to my knowledge, has tried to calculate how much of our "real capital" consists of ideas in human heads (brain power) and/or of canned ideas stored in libraries or on tape. A reasonable guess is that 90 per cent of our wealth and illth consists of such brain creations.
The distinction between Real Capital and Money Capital can be elucidated simply. If all the Real Capital (which includes things like maps and roads as well as factories) were to disappear overnight, we would be back in the Middle Ages. If all the Money Capital (cash, stocks, bonds, etc.) disappeared, there would be one hell of a fight over who "owned" what, but the world would be the same. All the hard, tangible, real wealth would still be there.
*****
Now, let us take the three in turn and see how they apply to the current financial woes:
(1) Real wealth (or real capital). The amount of real wealth, in the form of knowledge of the world, scientific research, and advances in technology, has continued to increase at an ever-accelerating rate. Experts such as Alfred Korzybski and Buckminster Fuller long since estimated that such real wealth approximately doubles every generation. There is no indication that it has slowed its pace. Indeed, the reader most likely would not have access to this column without some rather recent advances in real wealth in the form of technology.
So, while countless individuals now find themselves in control of less and less real wealth, this cannot be due to any decrease in the amount of real wealth.
(2) Illth. The overall amount of illth, in several forms, has displayed a noticeable increase in the period involved. This includes the invasions and occupations of Afghanistan and Iraq (also, the underreported Ethiopian proxy invasion/occupation of Somalia). It includes the large number of egregious violations against civil liberties and human rights commited by governments around the world in the name of the so-called "War on Terror", ranging from spying on their citizens to the notorious Guantánamo Gulag. It also includes environmental pollution, most notably that which causes global warming.
However, it is readily apparent that while these problems all need immediate attention to alleviate or end them, they are not responsible for the current financial crisis.
(3) Money wealth (or money capital). When one reads attempts to account for the financial ills, one encounters a bewildering labyrinth of material about housing bubbles, subprime lending, securities, derivatives, Ponzi schemes, etc. etc. etc.
But at least one thing is clear from this mass of confusing and contradictory material: The current crisis derives from the very nature of our monetary and financial system.
And that financial system was created by human beings. It should certainly not be identified with a "free-market" system, despite the claims of figures ranging from the "libertarian" Alan Greenspan to the progressive Naomi Klein. While this system does indeed include a market (as did that of the USSR), ruling elites use various authoritarian institutions including governments, corporations, and IFIs (international financial institutions) to create and control it.
One need only compare this system of state-corporate capitalism -- replete with gargantuan, hierarchical, authoritarian institutions -- with the truly free-market models of anarcho-individualists, mutualists, and agorists to discern the open fraud of identifying the current system with a truly free market.
No, the current system of money wealth was created intentionally by human beings in order to gain power and control over real wealth, and not by just any human beings, but by the state-corporate elite -- or more precisely, by many competing state-corporate elites, notably including those advocating vast increases in their power in order to "solve" the crisis.
Such moves should be resisted.
If the financial crisis is to be truly solved, this will only come about by individuals organizing from below to reduce or abolish altogether the power of governments, corporations, IFIs, etc., and shifting their own activity to voluntary, self-organized, non-hierarchical institutions. These may include (to name just a few that already exist): worker-owned-and-controlled businesses such as workers cooperatives and collectives; credit unions and cooperative banks; consumer cooperatives and buyers clubs; alternative currencies; fair trade and ethical purchasing; the "free" movement (freeganism, freecycling, really really free markets, etc.); free skools; etc. etc. etc.
One should never forget that the possibilities for institutions that "build the structure of the new society in the shell of the old" is limited only by human ingenuity.
The views expressed
in this article are those of Dan Clore only and
do not represent the views of Nolan Chart, LLC or its affiliates.
Dan Clore is solely responsible for the contents
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Fantastic article Dan! The only thing I might dissagree on is about Naomi. She knows the score, on the other hand I think Greenspan would "believe" we have a free market as means to his own ends. But, again, great article.
The one that linked seemed to be somewhat out of context. it seems she was referring to the "use" of libertarian ideals as spin for government sponsored corporate capitalism. this is very common among neo-conservatives as i am sure you know. With her referral to the socailist failures, i believe she was showing the great gap between ideologies and reality. i don't think she was attacking libertarians per se but others who use the ideas to cover their wrong actions. i certainly think she is intelligent enough to know real libertarians don't even recognize the legitamacy of corporations let alone what they are doing to the world. what do you think?
I was beginning to wonder if I was the only "physical economists" (as opposed to metaphysical) out here...
"The things [material resources] are there. Mankind, individually or collectively, can do with them as they please. They can place them at the disposal of whomever they please, and on whatever terms...Even what a person has produced by his individual toil, unaided by anyone, he cannot keep, unless by the permission of society...The distribution of wealth, therefore, depends on the laws and customs of society. The rules by which it is determined are what the opinions and feelings of the [true] ruling portion of the community make them, and are very different in different ages and countries and might be still more different if mankind so choose..."
John Stuart Mills
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"...exploitation of the weak by the powerful, organized for the purpose of economic gain, buttressed by imposing systems of law, and screened by decorous draperies of virtuous sentiment and resounding rhetoric, has been a permanent feature in the life of most communities the world has yet seen."
R.H. Tawney
Religion and the Rise of Capitalism
1926
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"Civilization is what happens in cities and the city is dependent on there being a surplus from the food producer [i.e. the "Farmer"] and on some existing organization which can take it way from him...With this food surplus, the political organization feeds kings, priests, armies, architects and builders, and the city comes into being. Political Science in its earliest form is the knowledge of how to take the food surplus from the food producer without giving him very much in return.
Prof. Kenneth Boulding
Â
"If productive industry could cut the intervening profit of the middlemen and trade direct with the individual consumers of their products, there would follow an immediate demand throughout the country for a much greater production , necessitating an increased employment of labor and therefore an eventual reduction in taxation. These middlemen, these agents, these brokers and jobbers, money and metal exchange operators, moneylenders, issuing houses, banks and insurance companies these ENTREPRENEURS create nothing at all. They are the drones of the national beehive and live and are dependant upon the honey that others collect. Like the unemployed, they are supported at the cost of the nation."
Vincent C. Vickers
Â
"Once upon a time the nobles of Europe believed they had accomplished the physical impossibility of perpetual interest simply by owning all the land and raking in tribute from the peasantry, and when death finally pulled down an economic maggot, then there was always the heir. The historical showdown arrived, of course, and the "new nobles" were forced to invent a more subtle form of tribute taking. It came on as debt, interest, compound interest and all the institutional arrangements required to make the producing community share its income with the creditor."
Dr. Charles Walters, Jr.
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"Now, the "non-crisis" factor in all of this will put the economics and finance of reality into perspective for all. There has been no interruption in our ability to produce physical wealth. There are still ores being mined. There are still trees standing to be harvested for lumber. There is still oil and natural gas being extracted from the Earth. There was a harvest of grain and food crops this year. There are still cattle on the hills grazing upon the grass; cows being milked and birthing calves, etc., etc... There has been no large scale drought, famine or pestilence; no catastrophic disaster(s) which have halted our ability to produce physical wealth from the naturally existing resources of our planet; no earthquakes, volcanoes, hurricanes or asteroid strikes upon the surface of the Earth...We, the common folk, are still here, ready and willing to offer our Labor to be invested upon these resources that are still readily available in order to convert them into the useful products that satisfy our needs and fulfill our wants...Nothing stands in the way of this production except the spurious, artificial superimposition of the illegitimate monetization and distribution of this true wealth and this, of course, by design. It is no longer a "national" pond for the big fish but rather it is now a "global" pond and the big fish get bigger by swallowing up the small fish to the degree that the big fish--the true ruling portion of a now global society--are swallowing up sovereign nations by employing carefully and previously laid legal tenets and entanglements that allow them to seize control of the assets of sovereign nations. In other words, they've rode them for broke--it has been unscrupulous entrapment and the nations have been tempted into a position that they have subsequently assumed and which think they cannot [legally] escape..."
"The mechanisms whereby money/currency can reproduce itself (exponentially), apart and divorced from any actual increase in the amount of the production of the Physical Wealth that it represents, must be removed--I speak here of the credit/debt/interest/compound interest based systems--these are, after all, only just contrivances, however ingenious and complex they might be, that allow the Parasites to have a claim on what the Producers have labored to produce...
Conversely, mechanisms must be put into place whereby any expansion in the amount of money/currency put into circulation can be verified by an equivalent expansion of Physical Production. The production of money/currency must occur in tandem with the production of the real, Physical Wealth that it represents...
This would be the only degree of regulation; i.e. safeguard mechanisms that prevent money/currency from outrunning the actual production of the Physical Wealth that it represents and those that keep it from unduly influencing the value of the Physical Wealth that it represents...
...in determining these factors, the Congress of the US should exercise its Constitutionally defined obligation to issue currency and determine the value thereof..."
Posted By: Jason Nichols
Date: 2010-01-10 18:20:49
America's victory in the Iraq War moved 26 million people from a dictatorship to a democratic society, one of the greatest creations of wealth since the fall of the Berlin wall. Just as every medical invention is not 'wealth', every military action or weapon is not 'illth'.
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