I started this post on September 17, 2018. Actually I thought I'd published it back then. It talks about democracy and how we used to practice it and how Trump is subverting it. With Trump's efforts to use decree powers to build his Southern Border wall, this assault is now in the critical stage. He's declaring a National Emergency, where there is none.
When I debate with some Radical Right folks, they will tell me,
“The United States is a Republic not a Democracy”
Well John Locke dealt with that question more than 300 years ago. In a Federated Republic, which is what we are, democratic features are either part of the equation or the country is tyranny!
The reality of this world is that most people try to do right and try to do good. Some people think that they are doing good when they do ruthless, manipulative things, but most people justifying the ends justify the means are simply not thinking about doing good. They may justify their efforts as helping some long term good, but it is clear that they are thinking of their own fame and fortune.
For some people life is a game, an often cruel game, where all that matters is who is on top and who is not. For some people, the world is an animal place. People who see things that way live in politics and business as if they were snakes, dogs, wolves and the rest of us were sheep. Such people fit psychological profiles that sometimes are labeled as mentally ill, but in truth, spiritual illness is not something that can be treated by psychologists and is reinforced by perverse religions. People can be motivated by anger, ambition, fear. They can be motivated by an unhealable pain. They can be motivated by joy. There are people who don't feel much pain themselves, but inflict it on others. There are many terms for them;
Psychopaths,
Sociopaths,
Narcissists,
But when we give such people, power, they make others suffer.
Since the 90s we've had a cycle of the GOP running the same con over and over again. Initially some of the more sane Republicans would push back. It was George Herbert Walker Bush who called Reagan's economics a con, "Voodoo Economics" and who helped coin the term "trickle down economics." The more honest cons in the Reagan Administration soon knew that their con didn't work. David Stockman would admit it later. Summarized in the famous quote:
“None of us really understands what's going on with all these numbers.” —David Stockman
The Atlantic Magazine describes his cognitive dissonance in an article titled "The Education of David Stockman." The entire Reagan Administration knew from 1981 on that lowering marginal taxation on the wealthy and making up for tax cuts with cost shifting to workers, doesn't help the economy.
Big Lie
Even so “trickle down” was very popular among the "donor class", so its shills held (and still hold) their noses and supported the con anyway. They rationalized that if they adopted the Hitlerian Big Lie principle and repeated a lie often enough it becomes an article of faith.
Key to successful taxation and public policy is clear crisp language and definitions.
Actual Capital as defined by Adam Smith or Henry George, was a very different concept from what is called "capitalism" currently. Thomas Piketty in his book on capital defined capital as basically all wealth. But according to Henry George, that is not actual capital unless it is used as capital.
WEALTH is:
“All material things produced by labor for the satisfaction of human desires and having exchange value.”
This means that wealth must have all of these characteristics:
Wealth is material. Human qualities such as skill and mental acumen are not material, hence cannot be classified as wealth.
Wealth is produced by labor. Land possesses all the essentials of wealth but one — it is not a product of labor, therefore it is not wealth.
Wealth is capable of satisfying human desire. Money is not wealth; it is a medium of exchange whereby wealth can be acquired. Nor are shares of stock, bonds or other securities classifiable as wealth. They are but the evidences of ownership. None of these satisfy desire directly; if they are destroyed, the sum total of wealth is not decreased.
Of course most financial mavens and economists don't use this narrow definition. Thus actual capital is:
Actual Capital is that portion of produced Wealth used in the process of production or in the course of exchange.
Capital is a factor in production as is:
Labor
Land
Raw Materials, Georgists include "Raw Materials" under their definition of land, which causes more confusion than helpful but helps them narrow their focus on taxing "land" without modernizing it to account for all sources of economic rent.
Production of things and services are what drive the economy and keep all of us clothed, housed and well fed, when things are well run and regulated.
Actual capital deserves protection. Actual wage compensation the same. Wealth from land rents, inherited property rents, etc... should not be protected. Wages include things like savings, retirements and debt acquired to sustain life from a persons wages. But if a person deserves all the products of his own labor and inspiration. His Children do not. That is why I consider myself a heretical Georgist so I don't have to argue this point.
Often the corruption of society starts with the corruption of language and George Orwell tried to explain in his writings, including "1984." The sophism of the "tyranny of words" is corrupting and leads to dysfunctional economic policy.
The retired VP of Dun and Bradstreet, Roy A. Foulke, in 1949 wrote an article in the New York Daily news called the "Tyranny of Words" about how modern business and economists. It explains the sophism of modern business language. My Friend Rick DiMar reproduced the whole of this on his facebook page.
Adam Smith On Production
“In WEALTH OF NATIONS, Adam Smith pointed out, over and over again,”
“that all production is divided into three streams:
one in the form of wages to employees,
one in the form of rent to landowners,
and one in the form of PROFITS to suppliers of capital.” [Tyranny of Words]
He explains:
“These terms, as used by Adam Smith, carry connotations that are somewhat different from their meaning in our present-day industrial life. ” [Tyranny of Words]
“In wages to employees is included payments to officers of corporations, to proprietors and to partners for their services, as well at to labor.” [Tyranny of Words]
“The payment of rent represents the return to the landowner on the value of the land in its natural state without improvements of any kind, and not the payment of a monthly or yearly sum, which today has generally come to include two payments, economic rent on the value of land, and a return on capital (i.e., the improvement)” [Tyranny of Words]
“Profit, according to Adam Smith, is the return to capital after the payment of all wages and the rent of the land in its natural state has been deducted from production.” [Tyranny of Words]
And then Smith carefully observed:
“‘When those three different sorts of revenue belong to three different persons, they are readily distinguished; but when they belong to the same they are sometimes confounded with one another, at least in common language.’” [Tyranny of Words]
Of course that meaning got confused, on purpose sometimes. So,
“Because of the confusion in the term ‘profit’ as used by Smith in 1776 as the return to capital, and by the general public as the excess of income over cost, Henry George in 1879 decided to substitute the word ‘interest’ in place of the word ‘profit’ as used by Smith to represent return on capital.” [Tyranny of Words]
Which of course, was in turn deliberately obfuscated as the rise of modern financial institutions pushed "interest" as a main goal:
“It is possible that substitution in terms—though carefully explained with great clarity—has been the source of steadily increasing confusion in the mind of the pragmatic businessman.” [Tyranny of Words]
So the author calls it:
The ACCOUNTING PROFIT of business, representing the excess of income over cost . . .” [Tyranny of Words]
By which he means that business profits are not the same thing as "the profit to investors" as a person. A corporation is an institution, not a person. At least til clever lawyers got involved:
“Few business corporations were in existence in 1879.” [Tyranny of Words]
He notes:
“Not until 1886 did the Supreme Court decide that a corporation was a person in the meaning of the ‘due process’ clause of the federal Constitution. That decision gave an element of unprecedented security to the existence of the large corporation, which was just becoming a dynamic power in our economic life.” [Tyranny of Words]
Sources and Citations
Citations (note you may need a facebook account to see it):
Legalized theft and warfare against commerce on the high seas.
Modern Defintion
Usurpation of Government or public functions for private profit
₽rivateers engage in the following:
Filibustering
Private warfare against unorganized places or countries the country the privateer is at war with.
Smuggling
Usually private sea captains would do legal trade with whoever they could. But often privateers would engage in illegal smuggling if it made them money.
Slave Trade
Privateers often combined private warfare elements with smuggling by grabbing people for sale like they were any other good for sale. The Navies would even recruit their own sailors by grabbing them from ports and "pressing them" to service. Privateer sailors were often little better than slaves.
Piracy
One reason that the saying "Dead men Tell no tales" is that if a privateer took a prize of a ship not at war, if nobody survived to rat them out, and no evidence could be found of a crime, the now pirate could continue to pretend to be a privateer. This led to some confusion among pirate captains. The famous Captain Kidd of the 1700s went to England to argue his case that he had been a legal privateer, not a pirate. He was hung as a pirate. Many pirate/privateers got away with that.
Private government and colonization.
Private government was always an element in privateering. King James granted them the East India Company charter in 1600. This was the real beginning of the Tory Party and of the movement to modern Privateering. But when Christopher Columbus got his permission to sail west, it was with the aim of establishing private government in the lands he discovered.
Privateering And Large Scale Swindles
The theme of piracy and privateering to describe our current economic system, much of our current political system, and the ideology of our modern Republican Business classes. Not that Democrats aren't sometimes pirates and privateers. It is just not their stated ideology.
Privateering is at the heart of the worst of modern capitalism; the "privateering spirit. As I've noticed before privateering is defined as using private enterprises to accomplish missions assigned to government. Initially the term was window dressing for legal piracy. As I've noted before both the British Navy and the USA navy emerged from the private navies of legal pirates like Sir Francis Drake. The successful descendants of pirates became the lords and barons of British Society, and more importantly of British foreign trade, adventurism and the admirals of the fleet.
The heart of the matter is that modern business relies on contractual relationships, and ₽rivateering relies on the inequity of contracts that involve power relationships. The difference between a pirate and a privateer is that privateers are bound by contracts that grant them license, and use those contracts to abuse law and power.
To illustrate, Pirates, were simply outlaws. For that reason pirate ships often were more democratic and the officers and crew more free, aboard ship, than the crews of privateers, who were often little more than slaves to ambitious, greedy power hungry captains. However, the ideal privateer operated his ship as if it were a pirate ship and treated their crew with respect. Thus the lines between pirate and privateer were often blurred. On land they had to follow rules. At sea "dead men tell no tales" was often practiced to avoid getting caught by officials while robbing and stealing at sea while ostensibly doing legitimate business. The result was the legal pirates were often hanging known pirates. Privateers have always tended to be pirates. But pirates rarely get to be privateers unless they can manage to avoid being caught.
Modern Privateers
Modern privateers don't need eye patches, peg legs. They wear Armani suits and carry briefcases. They enslave through contracts, loans, lawsuits and hostile takeovers. No need for cannon. They frequently own (or are) Judges and law enforcement. But when the cops are the criminals, who will enforce the law? Piracy led to privateering and privateering enabled:
Private Warfare, Filibustering, legalized robbery and looting.
Conquest and colonization
Vast estates for the successful Pirates
Layers of Oppression
Power establishes Inequitable relationships established through abusive contracts and debt. The robbed can be robbed over and over again. Privateers would do anything for trade goods and property:
Smuggling to acquire trade goods
Monopoly over vital properties
Rent from that property
So the irony of modern privateers is that often they are playing all sides. Robbing people, and arresting robbers. Smuggling and arresting smugglers. Bribing people and taking Bribes. Piracy attracts con artists and grifters. A Grifter is a con artist who has a plan B for avoiding getting caught. Grift + Drift to new marks. Privateering only works when the pirates can attract a crew and governments can hire them. Since it is based on looting, it hollows out any actual capital that might have been there.
Modern pirates operate through the use of contracts, courts and information and power disparity. This post is about their historic involvement in drug smuggling.
Things have been in the twilight zone lately. Captain America a member of Hydra? Movies like the Man in the High Tower, where the Nazis rule America? Russians in the white house?
And a fracking Russian Agent as President of the USA!
FRACK!
