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Can We Build Our Own Economy From the Ground Up?
The Economy Is Stuck In a Depression … For Most Americans
The mainstream economy is stuck in depression. See this, this and this.
More accurately, there are two economies:
- In one economy, the top .1% are being made richer and richer due to access to government handouts, fraud and bad government policies
- In the other economy, everyone else is getting poorer
Alan Greenspan agrees:
Our problem basically is that we have a very distorted economy, in the sense that there has been a significant recovery in our limited area of the economy amongst high-income individuals…
Large banks, who are doing much better and large corporations, whom you point out and everyone is pointing out, are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labour force, which is in tragic unemployment, long-term unemployment – that is pulling the economy apart. The average of those two is what we are looking at – that they are fundamentally two separate types of economies.
Put another way, the top .1% are currently acting like parasites, stealing the money from the rest of the population.
Moreover, the giant insolvent banks – which are receiving trillions in bailouts, guarantees and opportunities – are not lending to Main Street, while the smaller banks are (even though the smaller banks are being unfairly penalized by the Fed.)
And perhaps most importantly, consumer confidence – and Americans’ confidence that their government is doing the right thing to fix the economy – is extremely low.
Why?
Largely because the rule of law has broken down, and fraud is so rampant – and is actually sanctioned by the government – that it has become “the business model” of Wall Street. And see this.
In short, people no longer trust the economic system, which makes an economic recovery impossible.
So people aren’t spending, but are instead “keeping their powder dry” until the rule of law and free markets are restored. People know – either consciously or below the surface – that we have socialism for the rich, and that the little guy doesn’t have a chance. See this, this, and this.
Under such circumstances, people will not spend.
Is There A Solution?
We can’t get out of this depression until trust is restored and consumer spending occurs again. Trust and spending won’t happen unless the rule of law is followed. But the government refuses to enforce the rule of law or to prosecute most of the Wall Street fraud, partly because Washington D.C. has been bought and paid for by Wall Street.
So we’re stuck in a seeming catch-22.
But maybe we can build our own economy. Yes Magazine has a new article out entitled:
Who’s Building the Do-It-Ourselves Economy?
Corporations aren’t hiring, and Washington is gridlocked. Here’s how we take charge of our own livelihoods.
We – collectively – have enough money in our personal stashes to be able to grow a vibrant economy. If we held our own money, we wouldn’t need the big banks. Public banking could also really help us obtain credit to grow our local businesses and economies. But the big banks (and Federal Reserve itself) are exerting tremendous pressure to kill any public banking movement.
Local currencies and barter are also becoming huge trends. As John Stossel noted in March:
The Cleveland Federal Reserve notes that private currencies have even helped the economy function in the past: During the Great Depression, the Federal Reserve failed to keep enough currency in the economy – so some companies issued their own currencies and helped fill the void.
But the government at times cracks down ruthlessly on alternative currencies … going so far as to label them a form of “domestic terrorism”.
Moreover, there is a growing consensus that – since there is simply too much debt in the world to repay (much of it fraudulently incurred) – the debt should simply be written down. See this and this. However, the bondholders are fighting that idea with tremendous lobbying efforts.
So the large organizations – perhaps with the best of motives – are trying to keep us trapped in the dysfunctional, debt-based system.
Re-Building Local Communities of Trust
As professor of social anthropology – and debt expert – David Graeber points out, we don’t really need debt and money as such:
The big question in the origins of money is how a sense of obligation – an ‘I owe you one’ – turns into something that can be precisely quantified? Well, the answer seems to be: when there is a potential for violence. If you give someone a pig and they give you a few chickens back you might think they’re a cheapskate, and mock them, but you’re unlikely to come up with a mathematical formula for exactly how cheap you think they are. If someone pokes out your eye in a fight, or kills your brother, that’s when you start saying, “traditional compensation is exactly twenty-seven heifers of the finest quality and if they’re not of the finest quality, this means war!”
Money, in the sense of exact equivalents, seems to emerge from situations like that, but also, war and plunder, the disposal of loot, slavery. In early Medieval Ireland, for example, slave-girls were the highest denomination of currency. And you could specify the exact value of everything in a typical house even though very few of those items were available for sale anywhere because they were used to pay fines or damages if someone broke them.
But once you understand that taxes and money largely begin with war it becomes easier to see what really happened. After all, every Mafiosi understands this. If you want to take a relation of violent extortion, sheer power, and turn it into something moral, and most of all, make it seem like the victims are to blame, you turn it into a relation of debt. “You owe me, but I’ll cut you a break for now…” Most human beings in history have probably been told this by their debtors. And the crucial thing is: what possible reply can you make but, “wait a minute, who owes what to who here?” And of course for thousands of years, that’s what the victims have said, but the moment you do, you are using the rulers’ language, you’re admitting that debt and morality really are the same thing.
If Graeber is right in his claim that modern ideas of money and debt came from warfare and slavery, if the large banks and their “bought and paid for politicians” continue to block public banking, and if the IRS is going to tax barter transactions and block alternative currencies, what can we do to escape the clutches of the wealth-extracting system we currently have?
Graeber hints at one possibility:
[French anthropologist Marcel Mauss] was one of the first anthropologists to ask: well, all right, if not barter, then what? What do people who don’t use money actually do when things change hands? Anthropologists had documented an endless variety of such economic systems, but hadn’t really worked out common principles. What Mauss noticed was that in almost all of them, everyone pretended as if they were just giving one another gifts and then they fervently denied they expected anything back. But in actual fact everyone understood there were implicit rules and recipients would feel compelled to make some sort of return.
What fascinated Mauss was that this seemed to be universally true, even today. If I take a free-market economist out to dinner he’ll feel like he should return the favor and take me out to dinner later. He might even think that he is something of chump if he doesn’t and this even if his theory tells him he just got something for nothing and should be happy about it. Why is that? What is this force that compels me to want to return a gift?
This is an important argument, and it shows there is always a certain morality underlying what we call economic life.
In other words, in communities or webs of human interaction which are small enough that people can remember who gave what, we might be able to set up alternative systems of money and credit so we can largely “opt out” of the status quo systems of money and debt measurement.
I’m not arguing for becoming Luddites and living in mud huts (but that is fine, if you wish to do so). Nor am I suggesting that we all have to become selfless saints who give away all of their possessions without any reasonable expectation of something in return.
I am arguing that it might be possible to empower ourselves – and create our own systems for keeping track on a local or people-centered basis, and create our own vibrant economies using the resources we have – by moving away from the national and global systems dominated by the biggest banks and oligarchs, and towards a system where we “spend” resources and goodwill into our local communities in a way in which trust is built from the ground-up, and the energy of trade and commerce can be re-started.
Postscript: Mainstream economists will argue that we need a universal, fungible type of money in order to trade on a global basis. But because currencies are now unpegged from anything in the real world and are traded on the currency markets, their values fluctuate wildly in the modern world. In other words, one of the essential characteristics for money – that they represent a universal, fixed yardstick – has disappeared. And fiat currencies have a very short lifespan. So how valuable are they, really, for anyone but forex speculators?
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GW, I often disagree with you. As a Misean anarchist, though, this makes perfect sense. Good job.
Jimijon, you get it.
anarcho-capitalism bitchez
+++++
I have been thinking about this and coined the term Socialocracy. What we have here is a time where the Internet is changing everything and the last to be changed is the political economic system. This is causing real stress. If you accept this premise, there is nothing we can do until after the collapse.
So I proposed the complete elimination of all regulatory agencies. With an Internet and "open and free" information flow, crowd sourcing will unleash the idle savants to dig through endless papers and formulae. While this does not create an alternative currency, it will be a very level handed, and cheap government. This will immediately change laws and create freedoms and the Bigs will have to obide by the same rules as the Smalls. This creates liberty, and then comes prosperity.
You can read one of my first musings on the issue:
http://jimijon.blogspot.com/2011/03/origins-of-socialocracy.html
cheers
Which is why, I believe, the government will ultimately attempt to control the internet and the free flow of information and ideas. We are already beginning to see the rumblings.
The government already controls the internets. Read up on the NSA and ESCHELON or the FBI and CARNIVORE or AT&T and the tap on the backbone in San Fransisco, or the software bots used to respond to forum postings.
The internet was not made public to make your life easier, it was made public so that the NSA had it easier. The internet is streams of digital data which are much easier to search and scan and data mine, than analog signals like written letters and telephone conversations.
jim,
it's thinkin like that, from people like us, that assures me everyting is gonna be fine on the other side. i'm certainly no 'elite'; but i've spent a bit of time with some of their representatives in power -- not the elite personally.
they are not impressive in the least. they have large staffs; but ours are larger, devoted and hungry.
i've favorited your blog, my friend.
the respect is mutual.
http://www.youtube.com/watch?v=JC0Wa3P_dO0
this band should have made it BIG TIME...should've been big stars -- but, as is so often the case, they thought the world would come to them. gotta take it TO the world! and do it with confidence!
fortes fortuna adiuvant,
janus
Am I the only one who see's this as more a morel failure (those in power), than a governmental system failure?
While I very much appreciate your efforts, "very level handed, and cheap government" does not exist in real life. It is illusion and fraud.
Take the last step and give up on the corrupt concept of state.
The only true grass-roots economy is the black-market. Engaging in it, while avoiding the predatory state is the only solution to the problems, until such a time that enough people recognize the state itself as the main underlying problem.
Given the state school system though, I'm not holding my breath waiting for the mass epiphany.
Masses will recognize black markets once 'legitimate' markets are not able to provide for basic necessities, then all school conditioning and MSM indoctrination will go out the window. It's not a matter of choice, rather a matter of time until the system breaks down completely. Black market isn't that black though, it's just not transparent for the purposes of state control.
Please see: www.dgcmagazine.com and http://www.alt-market.com/
i expect and actually observe economic "localization"...granted, austin's a special case but it seems the locally grown/brewed/made movement is growing
Guess what? It's busy being co-opted by the Feds via "sustainability" grants.
fuck the feds...like some asshat in d.c. knows what's better for me and my neighbors...10th amendment bitchez
If we haven't the balls to turn down Fed money, we're fucked.
Not sure I gather much practical info from this article. Even such basic pursuits as farming, house construction, transportation, and trade require large amounts of capital to get up off the ground and be competitive. The only exception I can think of would be communities such as the Amish, where they own land to begin with, and are able to continue working in their own particular style.
I would be open to trying a new career as a farmer or miner, if I needed a job. Yet the financial forces of the world brook no intrusion into such realms without the backing of serious company organization and resources. Hence, the next best thing is to allocate my spare capital to further the efforts of such existing companies as are already engaged in the field.
I started my construction business out of the trunk of a '92 Buick Regal. I used money that I had saved to buy some basic tools. i then reinvested profits to buy more tools. I didn't borrow a dime until I bought a work truck, and even then, I bought something pre-owned and only financed it for 3 years.
The last 2 years have been difficult, but I have stayed busy because of the reputation I built for myself for providing a quality service at a reasonable cost.
Starting and operating a business is not difficult. What is difficult is breaking through all of the conditioning and indoctrination placed on us from a Collectivist society.
Even such basic pursuits as farming, house construction, transportation, and trade require large amounts of capital to get up off the ground and be competitive.
Dude, you need to get around more. I've done lots of those things with mere pocket change.
exactly...grab a hammer or a hoe dude it's not that hard
This discussion always comes back to force. If you can make the new market, it means the old market can no longer enforce its will upon those in the new market.
So find the force, depose the old market, and be the new market.
Will you succumb to the entitlement that it is "your market," just as today?
The technical term is "coercion" not force. And supposedly the issues raised here are over come through the sanctity of contracts. Once we head down the road of bailout nation the battle lines are drawn. And this crowd kills patriots--let alone idealists who only want to be left alone. Formulate what you love...what you are truly prepared to defend and die for (family comes to mind) and proceed accordingly. As long as you never forget who you are and that you are standing for something then you will not be wrong..though wronged you will be.
What company is the largest producer of guillotines?
Government is force. Market is cooperation.
Nope, government is the referee and propagator of the market system. It's not like humans were living in an all encompassing market system since the started walking on two feet. It's to force people to live in a market system because 400 years ago the vast majority did not. A market was only a tiny portion of economy, if at all. The spread of capitalism was a state run operation of a lot of coercion
The modern day nation state is a product of capitalism and the all encompassing market system is a product of the state. The two go hand and hand.
In modern market economies the needs of the market determine social behaviour, whereas in pre-industrial and primitive economies the needs of society determine economic behavior.
Reciprocity has been the dominant human behavior throughout history(as well as the biosphere) - that people produced such goods and services for which they were best suited, and shared them with those around them. This was reciprocated by the others. There was an unspoken agreement that all would produce that which they could do best and mutually share and share alike
This is on of the reasons why capitalism is failing
Nice try.
Force is the enemy of capitalism. You advocate it. Stay away from me and mine.
Is force involved in staying away from you and yours?
US citizens unable to cope with the consequences of what they've triggered...