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Wednesday, September 30, 2015

The End of Normal - Galbraith and a way forward

The book "The End of Normal" expresses part of James Galbraith's efforts to lay out his macroeconomic ideas clearly. He's building on the work of his father and of other Post Keynesians, to lay out a new way forward. The standard review of the book says:

"The years since the Great Crisis of 2008 have seen slow growth, high unemployment, falling home values, chronic deficits, a deepening disaster in Europe—and a stale argument between two false solutions, “austerity” on one side and “stimulus” on the other."[B&N]

Monday, September 28, 2015

Benjamin Franklin and Paper Money

Benjamin Franklin and Paper Money

Benjamin Franklin vigorously defended the right of the colonies to issue their own script but he never seems to have told Parliament, as Gary North Alleges the following may be apocryphal;

"In the Colonies, we issue our own paper money. It is called Colonial Scrip. We issue it to pay the government's approved expenses and charities. We make sure it is issued in proper proportions to make the goods pass easily from the producers to the consumers. . . . In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one. You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury. [Web of Debt, pp. 40-41]" []

A Case of Putting words in someone's mouth

North is probably right about the apocryphal nature of the quote, but what Franklin did say was about the reasons reasons for rebellion was that they owed:

"To a concurrence of causes: the restraints lately laid on their trade, by which the bringing of foreign gold and silver into the Colonies was prevented; the prohibition of making paper money among themselves, and then demanding a new and heavy tax by stamps; taking away, at the same time, trials by juries, and refusing to receive and hear their humble petitions." [bartleby]

In other words, the colonies were in rebellion because Parliament at the behest of the Bank of England and other Tory forces were seeking to starve the colonies of money. And Franklin says as much:

"The Stamp Act says we shall have no commerce, make no exchange of property with each other, neither purchase nor grant, nor recover debts; we shall neither marry nor make our wills, unless we pay such and such sums; and thus it is intended to extort our money from us or ruin us by the consequence of refusing to pay it." [bartleby]

Franklin Was Defying Parliament

Bad Banking can turn a loyal country into a disloyal one. This Gary North alleges that Franklin would never have defied Parliament's prohibition on printing money. But Franklin did exactly that:

"Q. Do you think the assemblies have a right to levy money on the subject there to grant to the Crown?"
"A. I certainly think so; they have always done it."
"Q. Are they acquainted with the Declaration of Rights? And do they know that, by that Statute, money is not to be raised on the subject but by consent of Parliament?"
"A. They are very well acquainted with it."
"Q. How, then, can they think they have a right to levy money for the Crown or for any other than local purposes?"
"A. They understand that clause to relate to subjects only within the realm; that no money can be levied on them for the Crown but by consent of Parliament. The Colonies are not supposed to be within the realm; they have assemblies of their own, which are their parliaments, and they are, in that respect, in the same situation with Ireland. When money is to be raised for the Crown upon the subject in Ireland, or in the Colonies, the consent is given in the Parliament of Ireland or in the assemblies of the Colonies. They think the Parliament of Great Britain can not properly give that consent till it has representatives from America, for the Petition of Right expressly says it is to be by common consent in Parliament, and the people of America have no representatives in Parliament to make a part of that common consent."

Franklin was outraged about the efforts to restrict the currency of the colonies. He might have said what Ellen Brown puts in his mouth, maybe in private. He might have actually said this to Parliament, but it didn't get into the published version. Even so she's filling in between the lines where there is no record. This outrages Gary North because he's a staunch defender of the modern privateering banking system and so any anachronisms from before we had reserve banking and extensive use of paper money raise his hackles. What Ellen Brown does is a kind of Exegesis that is probably only appropriate with mythical and legendary figures. But the longer words in what Franklin actually said say it much more clearly than the apocryphal quotes.

Franklin returned to the colonies after the Stamp act was repealed. And when later the colonies rebelled successfully, he was reviled as the "evil genius" of the American Revolution. This is true, except for the evil part. If Parliament had listened to him the USA would have remained a loyal colony. But he also touched nearly every one of the more capable leaders of the revolution. Including ones who were children when it started.

Between Paper money and the Postal System he was Postmaster of, he birthed the two major unifying forces of this country. A common currency and a networked Post Office.

Franklin on Money
This guy Gary North, claims that the famous franklin quote is bogus []
But Franklin's speech to Parliament refutes any idea that Franklin accepted Parliament's authority to prohibit paper money:
The Web Pages that have North's panties in a bunch:

Sunday, September 27, 2015

Taxation: Ability to Pay, Fee or taxing Privilege?

Review of the article "Edwin R.A. Seligman and the Beginnings of the U.S. Income Tax Ajay Mehrotra

The notion that taxation should be based on "ability to pay" is a bedrock of progressive principles. We owe our notions of "progressive taxation" to early economists like Edwin R.A. Seligman (1861-1939) who advanced the theory and popularized this notion. He pushed progressive taxation over more conservative and regressive principles:

Taxes as a duty versus solely as a payment for Benefits.
Taxes should be proportionate to the "faculty" or ability to pay of taxpayers.
Taxation as a duty of Citizenship

Progressive taxation is based on humanist, progressive, liberal and commonwealth notions. It pushes back against selfish (conservative) notions that

1. those who benefit from a thing should pay for it.
2. No one should pay for another person's benefits.
3. A person earns whatever he gains, however he gains.
4. The exception is the poor, who never deserve to keep what they earn.
5. Taxation is the government stealing from the privileged.
6. Taxation should be a "fee for service," and no more.

Sadly Progressive notions of taxation are gradually being shoved aside and replaced with the older and regressive notion that reformers like Seligman were pushing against. taxation should be like a fee for service, based on "benefits received". This notion that taxes should be paid to pay for the benefits we receive from government, as parsed by modern (anti) reformers, tends to favor the wealthy and connected over labor and what is left of the middle class. It's return provides a theoretical tool that is degrading the middle class and subjugating labor -- because "benefits" theory essentially says "if you can't pay you can't benefit." From the debit side of taxation benefits theory thus seems a justification for oppression.

Convergence of Benefits and Faculty Theory

However, when one factors in the fact that most of the "benefits" that are the basis for "benefits" theory are a common heritage and the less explicit fact that much of such benefits are based on privatized government privileges or even usurped properties, then the choice between "benefits theory and ability to pay is revealed as a false choice; The money privilege, land privilege, private ownership of nature's bounty, commodification of labor, and corporate privilege, etc... are all privileges associate with either duties to provide a public benefit or the duty to pay for those privileges. Thus the notion of taxes being on "benefits received", especially unearned benefits, is also part of progressive taxation. Privilege is a grant of temporary ownership so that property can be turned into public goods. Taxing unearned privilege thus is is not only based on "ability to pay" but is also the stick required to ensure that those given privilege do the duties associated with grants of privilege from the rest of us; that they either do a duty or pay a duty.

Friday, September 25, 2015

Tory (or Privateering) Economics

The Innocent Fraud Dogma of the Phillips Curve Versus Reality

The economics of the Federal Reserve is backwards and has been since it's creation. Probably everyone working there knows this. But they still use the rhetoric of controlling inflation to justify interest rate rises and falls. They think that raising interest rates will prevent bubble economies to this very day. The Wall Street Journal Reports:

"Janet Yellen Expects Interest Rate Increase This Year"

Somehow it is important to her to control the economy by raising the interest rates charged banks. Somehow the whole world thinks that the way to prosperity and economic survival is:

"Fed chief says ‘gradual pace of tightening’ expected to follow first rate hike." [Yellen]

But she repeats the old chestnut anyway. It's now dogma:

"Central to the argument she set out to establish is a belief that slack in the economy has diminished to a point where inflation pressures should start to gradually build in the coming years. Ms. Yellen argued those pressures aren’t asserting themselves yet, because a strong dollar and falling oil and import prices are placing temporary downward pressure on consumer prices. As those headwinds diminish, she predicted, inflation will gradually rise." [Yellen]

But raising interest rates doesn't control inflation. Interest is what drives inflation!

Thursday, September 24, 2015

Guelfs and Tories, Wolves and Plunderers

I traced the term "Guelf" to the German word "Wolf". There are two moods of government. In one government needs it's citizens and serves them, paying attention to such terms as commonwealth, fairness, justice, duty, honor and virtue. But in the other you have government as Predator State1. In his article in Mother Jones Galbraith refers to the characteristics of the Predator state:
"Predation has become the dominant feature—a system wherein the rich have come to feast on decaying systems built for the middle class."...."in a predatory regime, nothing is done for public reasons. Indeed, the men in charge do not recognize that “public purposes” exist. They have friends, and enemies, and as for the rest—we’re the prey. Hurricane Katrina illustrated this perfectly, as Halliburton scooped up contracts and Bush hamstrung Kathleen Blanco, the Democratic governor of Louisiana. The population of New Orleans was, at best, an afterthought; once dispersed, it was quickly forgotten." [Mother Jones Article]

Wednesday, September 23, 2015

Whigs and Tories, Guelphs and Ghibellines, partisanship and war

Guelphs and Ghibellines

Before there ever were Whigs or Tories, the first political parties tore apart the misnamed Holy Roman Empire. Our founders feared "faction", and when they thought of faction they thought of Tories and Whigs, but they also were thinking of Guelphs and Ghibellines, the two parties who tore up Italy from 1075 until at least the 15th century. Our Country's founders feared such "faction".


Gibelline: Definition
a member of one of the two great political factions in Italian medieval politics, traditionally supporting the Holy Roman Emperor against the Pope and his supporters, the Guelphs.

The southern Ghibellines (at least initially) loved the idea of Democracy -- but thought of it as an orderly system where ordinary folks listened to their wealthy elders and elected them to office. They watched in horror as common folks tarred and feathered tax collectors or asked them pesky questions. The Northern Elites felt much the same and that is why they were astounded when minor (only untitled because the constitution says they can't be) "gentry"; lords and masters like Jefferson, Madison and others preached democracy. Their idea of Republicanism was designed to reign in folks who might one day drive them out of office with pitchforks. Their fears were not totally unfounded. Robert Morris was attacked by a mob after he bilked thousands of investors out of their funds in real estate speculation. He wound up in Debtor Prison. One good thing came out of that. His gentry admirers passed our first bankruptcy law, in part, to get him out of debtor's prison. It probably helped his political enemy Thomas Jefferson too. Not all our founders were good at managing financial affairs.

The Federalists weren't saints

The "Federalists" were a party like the Ghibellines or Guelphs. Their enemies were "anti-Federalists. Their partisanship sounded very "Jacobin" -- about "democracy" and "freedom" but as I've noticed elsewhere those were banners and flags. Partisanship is about power and how to divide the wealth pie. The ideology is important, but it is often secondary to the real aims of the Partisans.

Factions grows out of conflicts that usually start with a genuine partisan or ideology basis. Eventually the movements tend to lose focus and it sometimes gets hard to tell what they were originally fighting about. That is because for the officers of the conflict the real issues of their followers aren't their own real issues. We should remember that as we look further.

Forgetting the Principles

Sometimes the original issues get so lost they get reduced to mindlessly chanted slogans, chanted by borderline people, whose definition of good or evil has become so corrupted it's completely tribal, partisan and dictated by authorities; as depicted in this Star Trek Episode called the "Omega Glory". In that episode, William Shatner, playing Captain Kirk had to read the Constitution back to the wild men "Yangs", who treated it as a sacred document but couldn't read it. Partisanship might start out with firm principles, but the fighting can last for years beyond the original issues.

Omega Glory URL: []

Tuesday, September 22, 2015

Evil Mother

To the Tune of "Evil Woman:"
E-evil Mother! E-evil mother....
He's going to hell, No matter what you do.
Spare the rod, and your fears will come true.
Hate the crime, whether he's done it or not.
Never mind that you've become a drunken sot.
E-evil Mother, E-evil Mother....
He's already in Hell. That Hell is you.
Your child needs your love lady, not your hate.
Spare the rod, or you'll make your fears come true.
Get yourself sober woman! It's not too late.
Get off your high horse. Stand on your feet.
Hate is a crime, love will transform you.
If you read your bible, you'll see my words are true.
Christopher H. Holte, 9/22/2015

Inspired by an ugly story of a Woman who sees a 4 year old as evil because he's left handed.
& Electric Light Orchestra!
Electric Light Orchestra: []

Rewrite the rules!

The Post Keynesians have coalesced! They are groping towards notions of Sovereign money but are still in reform mode. Joseph Stiglitz Speaks out! If we follow their policy recommendations we can put an end to the self inflicted suffering of "austerity" and the Bull Hocky excuses for punishing common folks for the high crimes and misdemeanors by our ruling elements.

Monday, September 21, 2015

Why Social Programs are Investment and Not a Burden

The Grand Old Party (GOP) put out a shill article in their no longer integral rag "The Wall Street Journal" on Bernie's Sander's economic proposals that make it sound like we can't afford any improvements. And given the other propaganda they put out, if they had their way they'd be cutting current programs even more. But there are many reasons why their arguments are bogus on their face. They claim that the price Tag of Bernie Sanders’s Proposals is $18 Trillion. Other pundits weighed in with all sorts of excuses to agree with the Wall Street Journal. For example the now corrupt Washington Post piled on with this gem:

"Sanders identifies significant challenges, and we support higher taxes to meet some of them. But the political barriers even to modest new spending are formidable. A true progressive agenda would seek to dismantle those barriers, not create new entitlements for the upper middle class." [Wa-Po]

Investment Pays for Itself!

However, Robert Reich explains why the Wall Street's math is not only bogus but Bull Hockey. It ought to be common sense that we need to invest in public programs to generate common-wealth so that we can all be more productive and pursue happiness.

As Reich notes:

“Bernie’s proposals would cost less than what we’d spend without them.” [Reich]
  1. “Most of the “cost” the Journal comes up with—$15 trillion—would pay for opening Medicare to everyone.” [Reich]

And he notes that the cost of doing this is more than offset by the savings:

“This would be cheaper than relying on our current system of for-profit private health insurers that charge you and me huge administrative costs, advertising, marketing, bloated executive salaries, and high pharmaceutical prices.” [Reich]

In fact going to a medicare for all would probably save billions of dollars. And Reich next notes this as he quotes Gerald Friedman:

“(Gerald Friedman, an economist at the University of Massachusetts at Amherst, whom the Journal relies on for some of its data, actually estimates a Medicare-for-all system would actually save all of us $10 trillion over 10 years).” [Reich]

Our current system depends on privateering for profit providers, private banks, private hospitals, private clinics, Health Care Organizations, Drug companies and Insurance Companies. So, lo and behold:

  1. “The savings from Medicare-for-all would more than cover the costs of the rest of Bernie’s agenda—tuition-free education at public colleges, expanded Social Security benefits, improved infrastructure, and a fund to help cover paid family leave – and still leave us $2 trillion to cut federal deficits for the next ten years.” [Reich]

This is funny, and if we can explain this to our fellow citizens we can defeat these privateers. The only people Bernie's proposals threaten at all are folks who don't work for their living and who draw unearned income and have unearned privilege. We are suffering deficits because The Government doesn't bear those costs. They are passed on to the suffering and to those who can't afford them -- and then the public pays the jacked up costs of people who are more ill than necessary and a burden on the taxpayer. Robert Reich's next point thus points to the moral argument for doing this:

  1. “Many of these other “costs" would also otherwise be paid by individuals and families – for example, in college tuition and private insurance. So they shouldn’t be considered added costs for the country as a whole, and may well save us money.” [Reich]

Investment is where Capital comes from!

The trouble with conservative economic arguments is that the financial health of the country is the balance of payments and debts of the entire population of the country.

  1. “Finally, Bernie’s proposed spending on education and infrastructure aren’t really “spending” at all, but investments in the nation’s future productivity. If we don’t make them, we’re all poorer.” [Reich]

When we take care of our own we are doing investment. Henry George's definition of capital is wealth that is reinvested in the economy to further production. Investing in people is a sort of capital. We people are wealth, and wealth has no meaning without sentient beings to enjoy it.

So yes Bernie isn't as radical as those with unearned wealth and privilege would paint him. Indeed his proposals are OUR proposals. They've been on the progressive wish list since FDR was President. The only ones who might be impacted by his proposals are people who leach of the rest of us. And it turns out that they've been leaching on us using bogus economic theories all this time.

It gets even better

But it gets even better. A case can be made that not only can we afford all our social programs but we do not need to be listening to the "nattering nabobs of negativity" who are treating our country the way their predecessor Nabobs treated India as heads of the East India Company. If we end unearned privilege and take control of our money supply we need not worry about the carrying costs of carrying these people forever because we can make our own money!

For more either read my next post or read the writer/economist John T. Harvey, article, "Can America Afford Bernie Sanders' Agenda?"


Sources and Further Reading

The Bogus Wall Street Article "Price Tag of Bernie Sanders’s Proposals: $18 Trillion":
Derivative Business Insider Article:
Robert Reich's Article:
Forbes: Can America Afford Sanders' Agenda? by John T. Harvey:
Quantum of Power by Arslan Ibrahim

Sunday, September 20, 2015

Basic Principles of Taxation and Law

Restoring Progressivity to the Tax System

We must restore progressivity to our tax system. But before we can do that without getting conned and distracted by the faux libertarian and other Con arguments we have to understand what the word "progressivity" in taxation means and what the issues are and are not.

What is and what is not fairness

To some wealthy, "fairness" means preserving (conserving) wealth and passing wealth and power to their progeny. Which happens to be the definition of hereditary aristocracy. Such people call themselves conservatives because they are trying to conserve their wealth and power. Because such people are often in positions of trust, we tend to trust them. But their idea of "fairness" is not always very fair.

To the rest of us, unless we've been conned by such people, fairness means preserving one's wage income from excessive rents and taxes and saving enough surplus (individually or collectively) to be able to survive illness, disaster and live a dignified old age. To the young it means eating, having shelter and affording a decent education, clothes and transportation so they can pursue happiness through productive employment. A person is poor if these abilities are burdened through excessive charges by those with power and privilege -- or by folks locking the gates to productive opportunity. Our concerns emerge from the "pursuit of happiness" which is a basic right. Theirs emerge from power and privilege and the need to justify it. It's not a natural state, a "common-wealth" system is win/win for everyone.

Friday, September 18, 2015

Origins of the East India Company -- Pirates

The British created a corporation called the "East India Company" as an extension of their privateering against the rest of Europe and their piracy across the globe. The East India company was according to Paul Rittman's sanitized history:

"The British East India Company was formed to share in the East Indian spice trade. This trade had been a near monopoly of Spain and Portugal until the Dutch moved into the region in the 1600s; after which they maintained the same control by trying to keep out other nations. The British were relative latecomers to the East Indies trade; the first British pilot to sail to India via the Cape of Good Hope (near the southern tip of South Africa), did so in 1582—almost a century after Vasco da Gama made the journey for Portugal." [Paul Rittman: R&F]

Rittman's narrative strips out context. There is always a motive for doing that. So let's resupply it. The context of the creation of the East India Company was the Protestant Reformation, the internal struggle between authoritarian absolutism and commonwealth and Piracy.

The Search for Loot

The East India Company was the outgrowth of not just any kind of commerce but of Privateering. Privateering is legal piracy. The British wars with France, Spain and other countries gave license to british Merchants such as the Hawkins family, to loot and steal on the high seas. The protestant reformation gave them license to directly challenge Spain and Portugal, who had been granted a monopoly over most of the world by the Pope. So when Rittman notes:

"One thing that motivated the British to trade in the East, was seeing the immense wealth of the ships that made the trip there, and back. In 1593, a captured Portuguese ship was hauled into a British port —1,500 tons burden, 700 men and 36 brass canon. This was the largest vessel that had ever been seen in Britain, her hull full of eastern cargo: gold, spices, calicos, silks, pearls, porcelain, and ivory." [Paul Rittman: R&F]

He is leaving out that the British were already up to their hips in a worldwide struggle against the Spanish and Portuguese. By 1600, Intrepid Pirates like Sir Francis Drake and is mentor the Hawkins family had been challenging the Spanish and Portuguese, and before them the French, for years. For example Sir Francis Drake cut his teeth privateering against the French:

"Francis was apprenticed to a merchant who sailed coastal waters trading goods between England and France. He took to navigation well and was soon enlisted by his relatives, the Hawkinses." [Drake]

A Privateer was an armed Merchant who saw a merchant ship from an enemy country and had a license to attack it. Privateering and piracy were alternative ways for "Sea Dogs" or ocean going merchants to make money. As illustrated by the Portuguese example a captured ship could be sold at auction for an immense fortune, and everyone from Captain on down would usually share in the prize money. Privateering, smuggling and legitimate enterprise were seen as a single profession by such merchants. A pirate was an outlaw who didn't have a license to steal.

Piracy and Slaving

That was really the only difference other than the virtual slavery of sailors aboard privateers and their "outlaw freedom" on pirate ships. So for example the slave trade involved (illegal) British sailors pretty much from it's inception. This biography of Sir Francis Drake notes that one of his earliest expeditions was to Africa and "New Spain" as a slaver. It also notes that Drake was employed by the Hawkins family and that they were slavers. It was a hazardous occupation. Especially during wartime.

"By the 1560s, Francis Drake was given command of his own ship, the Judith. With a small fleet, Drake and his cousin, John Hawkins, sailed to Africa to engage in the slave trade. They then sailed to New Spain to sell their captives to settlers, an action that was against Spanish law. In 1568, Drake and Hawkins were trapped in the Mexican port of San Juan de Ulua. The two escaped, but many of their men were killed. The incident instilled in Drake a deep hatred of the Spanish crown." [Drake]

King James and East India company Entrepreneurship

The only real difference between the earlier privateers and the East India Company was that this private warfare had been successful enough so that the British could dare to challenge that monopoly. By 1600 the British were secure enough to constitute companies to manage that trade:

"The East India Company (EIC) was incorporated by royal charter in 1600. The charter granted a monopoly of all English trade in all lands washed by the Indian Ocean (from the southern tip of Africa, to Indonesia in the South Pacific). Unauthorized (British) interlopers were liable to forfeiture of ships and cargo. The company was managed by a governor and 24 directors chosen from its stockholders." [Paul Rittman: R&F]

Initially the East India company was focused on the lucrative Spice Trade, centered on what is now Indonesia. But in 1608 East India company Ships:

"first arrived in India, at the port of Surat, in 1608. In 1615, Thomas Roe reached the court of the Mughal Emperor, as the emissary of King James I, and gained for the British the right to establish a factory at Surat. Gradually the British eclipsed the Portuguese and over the years they saw a massive expansion of their trading operations in India. Numerous trading posts were established along the east and west coasts of India, and considerable English communities developed around the three main towns of Calcutta, Bombay, and Madras, with each of these three roughly equidistant from each other, along the coast of the Indian Ocean." [Paul Rittman: R&F]

Not equally of course. The Merchants who invested in these ships made the lions share of the loot. Even so for ordinary people and gentry (the little brothers of the nobility) becoming a Sea Dog could be a path to riches. But it could also be a path to death for ordinary seamen and their officers alike.

"Although the Spanish and Portuguese controlled the East Indies trade in the 1500s, the Dutch took it over from them in the 1600s. The Dutch were every bit as jealous about preserving these trade goods for themselves as the Spaniards and Portuguese were. The British were virtually excluded from the Dutch East Indies (Indonesia) after the Amboina Massacre in 1623. That year, the Dutch Governor beheaded ten Englishmen, another ten Japanese mercenaries and a Portuguese merchant, at Amboyna on a charge of conspiring to seize the fort. Not able to defend itself against the Dutch, the company conceded that region to them, and focused instead on what must have been considered a consolation prize, India." [Paul Rittman: R&F]

Again the context is missing. James the 1st was already the King of Scotland. But he came to power during a Tory Resurgence. The English and their frenemies and new friends the Scots were joining together:

"In the early hours of 24 March 1603, Elizabeth I died at Richmond. The 'Virgin Queen' made no explicit provision for an heir, fearing that she might encourage faction within her kingdom. Yet James VI of Scotland was smoothly proclaimed as the new king. There was no opposition, but equally no immediate celebration. The London diarist John Manningham slyly noted that the proclamation was met with 'silent joye, noe great shouting', although there were bonfires and bell-ringing that evening as the announcement sank in. Three days later in Edinburgh, the king himself received the news with exultation." []

Queen Elizabeth fought the Spanish and Portuguese because she had to. King James was not afraid of a Spanish invasion. When the now united Scots and English "Brits" fought; it was for "God, King, Country and loot.

To be Continued with "A History of Loot" - Next Chapter

Rise and Fall of the British East India Company
Francis Drake Biography Explorer (c. 1540–1596)
James and Elizabeth
Privateering and Piracy
Many Kinds of Privateering
An Ideology of Privateering
Many forms of Freebooting
Pirates and Privateers/Privatizing History
Origins of the East India Company
Bretton Woods, NeoColonialism and the "Money Men."
Origins of the East India Company
Corrupt Court and Undue Influence
East India Company and Islamic Jihad
Utility Versus the Pirates
Tribunals Admiralty Courts & Privateers

Thursday, September 10, 2015

The only thing we need to fear is fear itself

FDR Said it, not so long ago:
The only thing we need to fear is fear itself!
Fear isn't good for anyone's health.
Fear is like a cancer,
it can be acute, or spread with stealth.
Scientists have shown that fear and anger
Are evil twins that shut down the brain.
The fearful respond with anger
They circle wagons,
or march the door to war.
But there is one enemy the dark twins can't handle
One enemy that releases their victims
That enemy is the power of laughter
To join with former enemies, and let go of fear.
The Fearful and Angry can't deal with laughter
They don't know how to take a good old Joke.
They may know all about stoking hate and fear
But they can't deal with a sympathetic joke.
So to defeat the fearful
All we need to do is to see the joke
to see through the oppressing illusion
And throw off the miserable yoke!
Then we need not even fear, fear
For seeing the absurdity of it all
When our bellies are full of laughter
We don't even notice it if we fall
So all we can do is laugh at them
Or even find a way to get them join in the fun
Because if they are too busy laughing
They won't have time to push anyone around.
So share a sympathetic joke
And a belly laugh for all of us who have survived.
And permit yourself a sympathetic tear
At all of the victims of fear
who have suffered on down through the years.
If you do, then fear and anger,
no longer have hold of you.

Christopher H. Holte 9/10/2015

Wednesday, September 9, 2015

Tories and Whigs

Two of the most misused words in English come from English speaking history. These words are "Tory" and "Whig". I refer to them a lot, and so I've spent a long time learning what they mean. Both of them are names for groups of people, to the behaviors and attributes of that group, and are labels for the people engaging in those behaviors. They also historically have been labels adopted to disguise efforts and misdirect people. As George Orwell noted in reviewing his own book, "Newspeak" wasn't a term he invented to cover a fictional future, but is a feature of the english language.

Our Revolution was against Toryism

There are specific attributes that are "tory" and "whig" and although they overlap the traditions associated with each other, the spirit of toryism and whiggery is alive and well. Once you know the attributes you can identify Tory behavior even when the person calls themselves a "Whig" member of the "labor party", a Democrat or a Republican. Our forefathers understood these terms. The people we were fighting during our revolution were Tories.

Tuesday, September 8, 2015

The Target of progressive taxation and LVT is unearned land rents/income

This blog is a follow on to the Posts; Common Property and the Commons and Locke Talked of the Importance of the Collective. It also is one of a series looking at what Henry George actually had to say about taxation, what modern Georgists say about the subject and what non Georgists have taken from the unsound arguments they've picked up from the Georgists!

I run into libertarians who claim to be followers of Henry George. Some talk about the "single tax" as a special property tax that exempts capital investments and helps developers efficiently use property by kicking "speculators" out and preventing farmers from squatting on land that properly should be redeveloped. But Henry George is one of my heroes. He would never be for taking property from old people or the poor. Yet that is what our current property taxes do. So why would anyone want to merely reform property taxes?

How this leads to distortions of what LVT is all about

Worse this apparent confusion about the meaning and purpose of Land value taxes leads to misappropriation and misunderstandings of what the tax is about in Left and Right circles alike:

For example the writer Peter Orzag writing at Bloomberg shares a garbled version of Land Value Taxation ideas in his article: "To Fight inequality Tax Land" []. In that article he notes that the largest increment of wealth increases [he calls them capital increases] takes the form of Land value increases and then referring to Joseph Stiglitz notes that:

"Stiglitz also argues for imposing a land value tax, to directly address this source of increasing wealth inequality. Economists have long favored such a tax, because it does little or nothing to distort incentives: Since land is roughly fixed in supply, there's little one can do to escape a land tax. Indeed, from the perspective of economic efficiency, a land value tax scores higher than even a value-added tax, which is typically seen as the most efficient form of taxation." "Tax Land Article" [fight-inequality-tax-land]]

Stiglitz is either directly or indirectly echoing Henry George here. And knowing how brilliant he is I suspect he's read Henry George at some time and understood him.

Economic Efficiency versus the Efficiency with which wealth can be looted

But in the hands of Peter Orzag LVT becomes about "Economic efficiency," which is "A broad term that implies an economic state in which every resource is optimally allocated to serve each person in the best way while minimizing waste and inefficiency. When an economy is economically efficient, any changes made to assist one person would harm another." I'm not sure what measures Orzag is using for "economic efficiency" but I have to assume he's fine with the kind of economic efficiency where one person's gain is another's loss. He like some other LVT enthusiasts have seem to have no trouble with this, or it's intended consequences such as illustrated in this Washington Post Article from 2013 about the vicissitudes of ordinary Property Taxes:

LVT as a Direct Tax

If that is economic efficiency we are all in trouble. But the notion of LVT as an "efficient Tax on land" isn't just the interpretation of Peter Orzag or hucksters for whom LVT is both a social panacea and a "Single Tax" yet somehow is primarily a tool for efficient land development. I guess if everyone is a renter then the economy is optimized for the rentiers. Many people translate Henry George's "Single Tax" proposal into something like the way Milton Friedman represents it:

“In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago” (Mark Blaug. Economica, New Series, 47, no. 188 [1980] p. 472). Econ Library Bio:[]

Because of understandings and statements like these, LVT is actually pretty popular in the developer community and they advertize the benefits. For example this page here explicitly touts the benefits of "Land Value Taxation as follows:

Source: Benefits of Land Value Taxation, taken 3/4/2015 []
"LVT would encourage new capital investment rather than sterile land speculation as it would encourage a shift of private investment from land speculation (which creates no extra land but only higher land prices) to productive enterprises. "
"LVT would encourage the use of empty sites zoned for development, creating more job opportunities and wealth. "
"LVT would help avoid urban sprawl. As brown field sites would be developed within towns and cities it would be unnecessary to permit urban sprawl. Compact towns are also more efficient in their use of resources for transport and other services."

But then:

"LVT [cannot] be avoided. (Unlike income tax and business taxes where tax avoidance experts are in great demand and the ‘shadow economy’ flourishes to evade taxes.) Every landowner would be required to register their land and to pay LVT on all their land holdings. With LVT any site with no registered owner would be sold by auction for the benefit of the Government."

But that is not Henry George's Tax!

This sounds good until you realize the ads are targeting the poor, the widow, the laborer, the retiree, all potentially to be dispossessed by LVT when it's used as a tool for development. If they can't avoid the tax, they'll be evicted. Thus too many LVT enthusiasts are offering a bait and switch proposition. They think of LVT as a direct tax. But as my friend;

"All direct taxes on property ownership are abusive and prone to tax tyranny"

And Land Value Taxes are not supposed to be tax tyranny! Indeed all these other BS reasons for LVT are things that Henry George warned about:

"Nothing is to be gained by having the Single Tax advocated for wrong reasons. Men brought over by erroneous arguments can never be relied on in a cause that rests on truth."

Indeed Henry George feared folks advocating LVT for the wrong reasons more than he feared outside enemies:

"The unsound supporter is, in fact, more dangerous than an opponent."

And George was right to fear the consequences of misunderstanding as demonstrated a few short years (1893) after his stroke rendered him weakened:

"Unless he sees that taxes on Land Values or economic rent which is what we mean by the Single Tax must be borne by the owners of the valuable land from which it is collected, and that it cannot fall on users of land as users, and cannot add to the cost of production or increase prices, no one can appreciate the moral side of our argument or the full weight of the fiscal side."

My friend includes wages in the definition of "property", which only makes sense because what makes our 'income tax' so unjust is that it is figured on and taken from Net Incomes that are often far less than the expenses and survival needs of workers -- and is thus equally unfair to what the authorities are doing to property owners in DC, Md & Virginia (and around the country).

Which is why the constitution forbids the Federal Government to levy direct taxes! Moreover, if you are going to levy direct taxes there is no reason to be punishing people for being elderly, poor, or not privileged. As my Friend notes:

"The government could easily have waited till these elderly people passed away, or voluntarily sold their property, before collecting any unearned income gains generated by the parcel, but apparently some vultures wanted the land right away."

Property taxes may be "efficient" but without humanity they are efficiently abusive. The rights we need to enshrine in our law are the rights to "home" and "livelihood" because "efficient taxation" is often a euphemism for ruthless taxation.

Land Value Tax is after unearned rents and gains from speculation

But fortunately for my estimation of Henry George, he didn't actually teach Land Value Taxes as a Direct tax, nor as a property tax. He wanted it to be on "unearned rent." He wanted it to be a tool to protect workers, and producers, the elderly and ordinary families:

As this biography notes that his LVT proposal was found on the reality that:

"rent tends to increase not only with increase of population but with all improvements that increase productive power, Mr. George finds the cause of the well-known tendency to the increase of land values and to the decrease of the proportion of the produce of wealth that goes to labor and capital, while in the speculative holding of land thus engendered he traces the tendency to force wages to a minimum and the primary cause of paroxysms of industrial depression." H. george Bio: []

His tax was NOT intended to evict small farmers or householders from farm and livelihood.

"The remedy for these he declares to be the appropriation of rent by the community, thus making land virtually common property, while giving the user secure possession and leaving to the producer the full advantage of his exertion and investment." H. george Bio: []

Henry George was after "unearned rents" and was talking about progressive taxation:

"the single tax is NOT a tax on land. It is a tax on what in the terminology of political economy is styled rent---that value, which . . . attaches to SOME land with the growth of population and social development; that premium which the user must pay to the owner as owner in one payment (purchase money) or in annual payments (rent), for permission to use land of superior excellence."

Thus the people that think of LVT as a tool for real estate development or have no regard for labor, or are confused about what Capital is are what Henry George Called "Unsound Followers."

Originally published 3/3/2015

More reading:

Bio of Henry George:
H. george Bio: []


H. george Bio: []

More on Henry George

Spencer Versus Locke and Henry George []
The Death of Henry George: Rerum Novarum, campaign for Mayor, etc...
Review of article "A Tale of Two Cities":
More on Locke:
Common Property and the Commons []
Related Articles Locke (and some Henry George References"
Commonwealth according to Locke []
Locke on the importance of the Collective []
Progressive Taxation principles and Picketty []
Postal Banking, Stamp Scripts and fixing our economic system []
Scan of the article the HG quotes come from:
Single Tax[]
You can see an image here:
And don't forget:

This was originally one slightly rambling long post. I've split it into two.

Monday, September 7, 2015

Pandora's Dream

A dream can't be killed
Only turned into a nightmare
She dreamed of a world of gifts and love
Anesidora bringing to fruit seeds grown from the ground.
And she was given an urn as a gift.
She opened that urn in all innocence
And furies flew out and all around.
The spirits of hates and thefts and war
Flew into the world once more.
Denying even the hopes she'd longed to give.
She saw them fly away and closed the lid.
But stubborn hope resurrects
And lurks patient and kind beneath the lid
For when the furies have passed.
Don't fear to open that box again!
When it grows quiet at last.
That dream we mortals have
Of a world that is fair and just.
Call it hope, the "American Dream" or just common sense.
They put it in a funeral urn,
But it won't stay there.

Sunday, September 6, 2015

The Quixotic campaign of Lawrence Lessig

Those of us who are looking at the wreck of the corrupt Con known as Reaganomics and it's half sister parasite that tried to take over the Keynesian movement (Neo or New Keynesianism) know that for 40+ year a multiplicty cons have nearly wrecked the world as well as the economics field. Part of this election's task is to dump the con economic arguments out of our party and restore some sanity to the political debate. The other part is to dump the overt corruption that has taken over much of our political process; the return of yellow journalism, monopolies owning whole networks and corrupt politics as a result of the influence of the monopolists. Lawrence Lessig is a middle tier wealthy lawyer who threw his hat in the race for what he says:

"I'm a ‪#‎winteriscoming‬ sort. I believe, in the words of Tom Mann and Norm Ornstein, that "the country is squandering its economic future and putting itself at risk because of an inability to govern effectively." I believe, moreover, that our "inability to govern" is tied fundamentally to the way we've permitted our representative democracy to be corrupted. It is, in my view, the vast political inequality that we have allowed to creep within our system that produces the systemic failure of our government to be responsive to Americans. (And for the data about that gap, begin with the extraordinary work of Martin Gilens and Ben Page. We will only have a government that works if we address that fundamental political inequality." [HuffPost]

Friday, September 4, 2015

Some History of our Corrupt Supreme Court of the United States (SCOTUS)

I suppose some Lawyers in training, have to memorize the names of all the SCOTUS Chief Justices who have ever served. If a Professor were to require people to do that I'm sure even the most brilliant lawyer would fail the test unless he had a facility for arcania. On the other hand it is important, to understanding the court, to know that these Justices have never been Saints. Some have been memorable for awful decisions, some for execreable decisions and a few for brilliant ones. In some cases, partisans of arbitrary reasoning have celebrated those decisions for a period of time, only for society to realize years later they were dreck.

Establishing a Timeline Helps sort the dreck from the jewels

I was trying to figure out how SCOTUS could be all over the place, and so in a systematic matter I started fashioning a timeline. Sometimes the court changes when the majority of judges changes, but the SCOTUS always reflects the life and times of it's chief Justice no matter how it's constitution changes who is on it.

Thursday, September 3, 2015

Georgist Definitions of Labor, Capital and Land


In trying to figure out what Henry George was talking versus what his many followers say he was saying. I have to look at his definitions, because that is where he starts. He wasn't really using new definitions. But in some cases he was unspinning what most folks were pedalling. In this little exercise I'm going to focus on his three major terms; Land, Labor & Capital In that order.


He defines Land:

"The term land does not simply mean the surface of the earth as distinguished from air and water—it includes all natural materials, forces, and opportunities. It is the whole material universe outside of humans themselves. Only by access to land, from which their very bodies are drawn, can people use or come in contact with nature." [Page 20]


George pretty much dispenses with most of the Bull and defines Labor as such:

"Wages are the portion of production that goes to labor. Therefore, the term wages includes all rewards for such exertion." [Page 18 paragraph 3]

Then he defines wages:

"Wages, in the economic sense, simply means the return for the exertion of labor."

"Whatever is received as the result or reward of exertion is 'wages.'" Henry also had to explain what Labor and wages are not:

"Wages are not drawn from capital. On the contrary, wages are drawn from the product of the labor for which they are paid." [page 18 Wages and Capital]

Wages are drawn from production.

Wealth and Capital

And part of the argument for why wages are drawn from labor, hinges on what Capital is not:

"they claim, without reservation, that capital limits labor. Then they state that capital is stored up or accumulated labor. If we substitute this definition for the word capital, the proposition refutes itself."

If Capital were a store of labor then labor can't come from Capital. The fact that these folks argue this way just shows they were fascists then. The fact they still argue this nonsense in some circles is evidence they are just conning us. But as Henry George notes, the economists and folks advertising for Capitalism aren't precise. He notes:

"The idea of capital, on the other hand, is so beset with ambiguities that it is difficult to determine a precise use of the term." [page 19]

Therefore he starts by saying what Capital is not, drawing on the writings of Adam Smith and other economists.

"nothing properly included as either land or labor can be called capital."

In order to define Capital he has to define "wealth":

"Wealth, then, may be defined as natural products that have been secured, moved, combined, separated, or in other ways modified by human exertion to fit them for the gratification of human desires." [P & P Ch2]

This leads to an economic definition of capital:

"Capital is ... [that] part of wealth—that [is] devoted to aid production." [P & P Ch2]

He further refines that definition to be:

Capital is "wealth in the course of exchange."

That is, it is wealth derived from some sort of production, transformation, etc... that is being used to help produce more wealth.


The reason for these definitions is to help when differentiating between the rules for his Land Value Taxation. If Wages and Capital are to be excluded from taxation -- then we have to be clear what is meant by those terms.

Further Readings

For this essay I'm using mostly "Progress and Poverty" as a source

I tried to reference the following Online version of Progress and Poverty, but I find it's totally different from the book version I have. The below version seems to try to clarify things, but actually obfuscates.

Schalkenbach version:
Related Articles:
Henry George on the Income Tax and Monopoly:
Henry George would have been for Social Security! [funded by LVT]
The Target of progressive taxation and LVT is unearned land rents/income
The Death of Henry George
Spencer versus Locke & Henry George
Review of "A Tale of Two Cities" [in 1886, and Events That Shaped a State]
Virtue and Vice: An Ethical system based on Justice
The 1893 revolt of the Georgists Against Henry George
Economic Rents are private Taxes
The Georgist Constitution
The Following were posts related to Henry George, John Locke and the so-called "libertarians:
Holte's Law applied to Rothbard on LVT
Common Property and the Commons
Commonwealth according to Locke
Libertarians versus Henry George and Marx

I just realized I have enough stuff for a book on Henry George

When the Media is Hostile to the Truth

I've been reading about the 19th century a lot as I continued my delving into our countries actual history in order to un-spin the narrative that I learned in High School and College. In the 1890's reformers had to create their own alternative media because most newspapers were intensely partisan and most were, like Faux news is today, completely unprofessional. If anything the experience has sensitized me to parallels from today. We are facing a hostile media that cannot report anything on progressive issues honestly or without giving "equal" time to RW propaganda.

Kerry gave an excellent speech yesterday. But it wasn't reported well. CNN and CSPAN reported it. NBC spun it. and I'm not sure what the other channels did. But I doubt Fox even mentioned it. The media are playing "Hearst Newspapers" with Iran. In the 1890's when the Hearst family wanted a war -- they and allied papers would hype up what they wanted people to know -- and they'd get their war. The media conglomerates are doing something equally irresponsible now by hyping faulty information about the Iran deal (both here and in Israel) while not covering, or poorly covering information to the contrary.

Media Matters

Media Matters is covering this skewed coverage and notes:

"Media outlets are playing up" a faulty poll "that found a majority of Americans opposed to a deal recently signed by the U.S. and major world powers with Iran, believing it will make the world "less safe." But that poll gave respondents no information about the deal, while other more comprehensive polls have found that when respondents are actually informed about the terms of the deal, a majority support it."

They are doing their best to ensure that nobody, especially the Jewish community in both countries, finds out the real details of the treaty until after the vote.

Wednesday, September 2, 2015

Mephistopheles and Human Rights

The arguments about what to do in the Middle East are nuanced. Do the wrong thing and this is what you see. Do nothing, the same. The fact our system is corrupt doesn't negate the duty to try to help, or diminish the virtue of when better strategies actually work. But it's hard. Foreign policy requires being Goethe's Dr. Faustus to Mephistopheles. And fundamental darkness is as matched as the power of enlightened thinking. Even when we do the right thing - this is what we might see anyway. But when we do the wrong thing, we are partly culpable in the deaths.

Tuesday, September 1, 2015

Joseph Stiglitz Slams Bad Economic Models

In a paper by Joseph E. Stiglitz titled; "Towards a General Theory of Deep Downturns" [GenTheory], Joseph Stiglitz lays out what is right and what is wrong about most of current Neo-liberal (Friedmanista) and Neo-Keynesian (he calls it "New" Keynesian) thinking about current economics.

Enormous Hubris!!!

he writes:

"deep downturns have marked capitalist economies since the beginning. It took enormous hubris to believe that the economic forces which had given rise to crises in the past were either not present, or had been tamed, through sound monetary and fiscal policy."


"Those who attempted to defend the failed economic models and the policies which were derived from them suggested that no model could (or should) predict well a “once in a hundred year flood.” But it was not just a hundred year flood—crises have become common. It was not just something that had happened to the economy. The crisis was man‐made—created by the economic system. Clearly, something is wrong with the models." [Stiglitz GT]

Tribunals, Admiralty Courts, Privateers versus Common Pirates

The thing you learn when working with bureaucratic organizations is that bureaucracies operate on inertia. Once something is set rolling it moves like a Giant Ship. Even if the captains of the ship see an iceberg ahead, even if every crew-member sees that iceberg, if the charter says "full steam ahead" they'll keep steaming according to their orders. That is why the most effective bureaucracies have a dictator at the top, a bottom up legislature, and some means to tell the Captain he can change course and not hit the Iceberg dead center. Bureaucracy is a feature of human organization. Armies are the oldest example of it. The next oldest is the Imperial Government, but that is an extension of military bureaucracy. What you don't want is concentrated power. Bureaucratic law is often unjust by design unless it is subject to democratic controls like appellate rights, jury trials & representative structures..

When the military, or any other bureaucracy, administers justice, the result is even more rigid than the bureaucracy on the Titanic. And unfair. So it has been with Admiralty Courts and the Investor State Tribunals. Admiralty Law has been "Investor Law" since ancient times. When State agents (factors) steal it is loot, when it is you or I, we hang for our crimes.