miércoles, 9 de noviembre de 2011

The wealth of the Nations

Adam Smith, supposedly the first economist ever, was the first to coin the term “the wealth of the Nations”, however he skipped the explanation on what to do with it. Ever since people all over the world have always quarreled to grab it in order to satisfy particular types of greed, several theories have emerged to justify different aims.

According to capitalism, especially neo liberals, they take for granted that wealth and whichever they can obtain is for them; and them exactly means the richest aristocracy.

According the communist point of view it should belong to society in general.

There is a third approach that I shall do may best to explain later on.

History is full of pages describing different kinds of wars that took place even long before the so called economical science was invented as well as afterwards. If war description pages are numerous, more pages are dedicated to justify such wars and, ironically, most are or were based on moral an ethic principles there being the contradiction that lots of people are killed in order to save people but impossible to see a written statement or hearing an oral one mentioning the real reasons to provoke them, controlling and looting natural resources and other richness. What were actually the true reasons behind all colonial wars and interventions along past centuries and present times? Positively, justifications are or were not self defense, national interest protection, hindrance to national citizens, etc. Hypocrisies, cynicism, blatant lies widely hollered at their best.

Another question should be posed. Who benefits from wars? First of all, let’s define war: Old people who know each other shove young people who don’t know each other to die on their behalf in order to secure their interests. Summing up, war is for money but we have talked so far about conventional warfare where armies confront and said nothing about other semi silent wars made of small or large battles with no rifles, ammunitions, shots and brutally massacred persons. I properly refer to common everyday struggle to make money to live, struggle known as work, where common and ordinary people use their intellect, their sweat or both as weapons against a stronger group who exactly needs their best performance to make money for the group, but doing their best to yield the least. This statement means in plain common slang, come and screw up yourselves to death producing the most for me for as nearly possible as free.

It is widely known that capitalists are always speaking of competition. That is an absolute fallacy. Stronger enterprises do whatever they can to eliminate competition by eliminating weakest competitors in order to obtain for themselves the absolute dominion of markets; i. e. creating monopolies and impose their will, which means their prices, their quality, and their quantity, to create a permanent crisis of supply. It occurs that several corporations might remain in a certain segment of a particular market; in such a case they wind up agreeing on a dirty term, cartelization. Creation of cartels means an agreement among exploiters to impose their will on consumers who are in turn the majority of the population and force them into paying obscene prices thus yielding immoral profits. In simple words, the term highly regarded by economists and other technicians is the so called profit maximization. 

Originally, capitalists “invested” part of their wealth, i.e. disbursed actual money to buy equipment and machinery to elaborate useful or useless products to be sold; raw or semi-elaborated materials to be transformed into final products; land and buildings where to operate; office equipment and supplies, and so on and so forth. They exploited their workers and their customers.

As from recent times they don’t invest in physical assets. How come? Then, what do they do instead? The answer is not naive; they hire weaker investors to produce for them, in other words, they buy products at cheap prices to resell at the highest the possible, thus they exploit smaller (weaker) producers and consumers. The operation of buying goods to resell however involves some risks and eventual losses; so, they found out a better and less risky method that required no physical investments, no depots, no personnel and no waiting time. It’s easy to imagine and know. They decided to buy papers, be whatever called, bonds, tittles, shares and other imaginable or unimaginable “legal” denominations. The sooner they sold such paper, of course at higher prices, the sooner they realize their profits.

Production of physical and material goods involves the existence of so called added value. Paper trading involves nothing, no added value whatsoever. At the end of every transaction nothing has changed except an amount of inorganic money that has no good incidence on the overall economic system. Nothing is produced, nothing is transformed, and there being no added value, there is no capital gain to improve or contribute to enlarge the so called real economy. Capitals growth with no real economy growth is a fiction since no labor (employment) and no new goods to enter the economy stream creates NO benefit for the general population. That’s what they call it Financial Economy or Speculative Economy.

Speculative Economy, also called Financial, produces nothing for the people and the society in general but for capitalists. Paper being sold time after time at higher and higher prices with no control, just to satisfy personal greed, contributes nothing to the National Wealth, thus there being nothing to share among the whole population. But there is a tremendous risk involved which is the mathematical impossibility of infinite growth known as the pyramidal system. There is certain time when the artificially created bubble explodes. Now, they don’t exploit workers and customers only; they now exploit society in general.

Think for a while what the National Wealth good is for. After only few seconds you would quickly reply that is should be to share evenly among members of society. Well, that simple assertion does not happen in a capitalistic society: wealth is not fairly distributed; the larger part of the common wealth that belongs to all goes only to a few, usually to the top 1% of the social scale. Then, what about the other 99%?

Well, I have already explained you what I had promised in the fourth paragraph above. To round up, I only need to mention what I consider the best possible governmental approach. To be short I’ll only repeat 1819 Simón Bolívar´s words:

The most perfect Governmental System is the one that produces the greatest sum of possible happiness, the greatest sum of social security, and the greatest sum political stability.

And that, naturally involves the National Wealth equal distribution among all inhabitants. How to share? Easy, with health, education, nutrition, housing, infrastructure, science and technology, culture for all are and should be the main items.    


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