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Asset Ownership And Our System Of Deepening Debt-Serfdom
Submitted by Charles Hugh-Smith via OfTwoMinds blog,
Debt-serfs who make the difficult and risky transition to small-scale business owners find they have simply moved to another class of serfdom.
The core dynamic of debt-serfdom is that debt-serfs must borrow money to buy essentials while the wealthy borrow to invest in productive assets.
This is not merely a random result of free-market capitalism; it is the structure of cartel-capitalism in which highly profitable goods and services must be paid for with highly profitable debt.
This need to borrow to pay for essentials is already evident in student loans, vehicles and housing.
The cost of these essentials is so high that few debt-serfs can borrow enough to pay for these essentials and then have enough borrowing power left to buy productive assets.
Those few who do attempt to buy productive assets face regulatory hurdles and costs that limit their ability to own or launch small-scale profitable enterprises.
The net result is a system in which the vast majority of productive assets are owned by the few who then have the means to exploit the many.
This core dynamic of cartel capitalism is not new, as longtime correspondent Bart D. recently observed. This was the core dynamic at the root of Ireland's catastrophic potato famine of the 1840s: wealthy English owned the productive assets (land) and limited the opportunities for enterprises that boosted Irish self-sufficiency and competed with the assets owned by English financiers and landed gentry.
Here is Bart's commentary:
I recently picked up a copy of a novel dealing with the topic of the Irish Potato famine of 1845-6 from a second hand book store run by charity. Author is Liam O’Flaherty and it was written in 1937. It was re-released in 2002. My edition was printed in the 1970’s, so it’s had a following over the years.I recommend this book HIGHLY as an insight into how families, communities, governments and economics will/are functioning in impoverished situations now and in the future. I know this because I was astonished (not using that word lightly here) at the similarity in the description of life and government/business portrayed in O’Flaherty’s book in 1845 and that which I have observed closely over many years in remote Australian Aboriginal communities from 1994 to 2012.Especially fascinating to learn that the English Government provided ‘relief’ loans to Ireland at market interest with a condition that they could not be used to do anything productive. Basically they set up a scheme to pay a small proportion of each community to build roads, but not a cent could be spent on developing alternate Irish-owned industries or businesses for fear it would upset the rich English industrialists.The English imported cheap American corn meal which everyone was forced to buy with the English Gov. financed wages (closing the loop of giving with one hand, taking with the other and adding in a profit to boot) after the Irish had to export all their own grain and livestock to England to pay the land rents.The model of resource ownership described in the novel--English landlords owned all the Irish peasant farmer land and set rent at a level that ensured the farmers remained a hairs breadth ahead of destitution even under the best of circumstances--will be, I think, what our own future will look like. Unfortunately.It’s very well written and engaging for the reader, but hard to read because of its infuriating and tragic subject material. No happy endings here.
One branch of my family (Scots-Irish, County Down) immigrated to the U.S. in the late 1840s, undoubtedly as a result of the potato famine. This history of exploitation and financial tyranny is not entirely abstract to me, and neither is the current American variation of the debt-serf model.
Those of us with experience in starting and operating small enterprises know that dozens of restrictive regulations and administrative costs limit debt-serfs' attempts to invest in small-scale productive ventures. We also know that the Federal Reserve's free funds for financiers enables hedge funds to invest $500 million in the latest software fad, while small-scale entrepreneurs have no equivalent conduit to near-zero cost funding.
Globalized cartels eliminate local pricing power by importing cheap goods from somewhere else. In less globalized circumstances, local producers retain some pricing power (and thus some profitability) because they can produce goods without the cost of shipping from overseas.
But the power of cartels buying millions of units at a time and the low cost of container shipping means cartels can eliminate the pricing power of local small-scale producers virtually everywhere.
Even low-income regions in developing nations cannot compete with global cartels in manufactured goods and agricultural/meat produce.
This is not a random result of free enterprise; it is the direct result of central banks' free funds for financiers that lowers the costs of borrowing and thus production for cartels.
Debt-serfs may legally start home businesses in some locales, but as soon as they become successful enough to compete with vested interests, their fixed costs are increased by regulatory and administrative rules. The resulting erosion of profitability and the lack of access to cheap credit limit their ability to expand without taking on burdensome levels of costly debt or selling their souls to vulture capitalists.
At that point, debt-serfs who make the difficult and risky transition to small-scale business owners find they have simply moved to another class of serfdom, one in which the serfs own an enterprise but cannot expand their capital. As a result, small enterprise ends up being just another version of serfdom, i.e. barely getting by or borrowing more just to survive.
Consider the evidence of the erosion of American small business: Economic Death Spiral: More American Businesses Dying Than Starting.
The net result is a system in which the vast majority of productive assets are owned by the few who then have the means to exploit the many.
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the only protection is diversification. Happiness too. Deep breaths. Enjoy the air. Enjoy the sun. We must simply withdraw ourselves and step back into nature. Gold, silver and bitcoin is not enough.
Running a business, too, opens us up to all sorts of regulatory vulnerability.
Can I get fries with that?
Do you want to supersize your ponzi? It's only 3 more cents to have the monkey add a few more 0s to this balance sheet!
My mother asked me "what do you want to be when you grow up?"
"A debt slave." I told her.
And here I am 34 years later! Winning!
The trick is not to participate, don't buy coke drink filtered water. Brew your own beer. Bake your own bread or buy local from the bakery. Grow what you can. Make your own soap, its easy and higher quality and virtually free. Eliminate as much of the Mega Corp world from your life as possible. Cook don't eat out at the chain places. Do the pills from Big Pharma really help you or do you just need to change your diet? Turn off the TV, its just a brain washing device for the most part anyway. Men don't have much issue with this hence 85% of advertisements are targeted at women and fear is pumped down their throats non-stop as well as the "keeping up with the Jones's" mentality. I know I am preaching to the quire here but many people are starting to do this and it is having a affect. For example we now have farmers on eastern Long Island that will sell you a Pig (organic free range antibiotic free) then you can contract with them to butcher it for you. This gets around FDA requirements and saves you money and puts more money in the farmers pocket. Win Win for us, lose for the Mega Corp. I would do it with beef but thats a lot of meat to store.
You should be able to find multiple farmers in NE PA (if not NY) that will sell you a quarter cow in the same process as the pig, you just have to wait for all 4 quarters to sell before the animal gets butchered and aged. Last time I did it, I got about 125 pounds of various cuts, burger, bones and organs for $400.
I always order a side of beef every year from the same guy in Nebraska and have been doing it for years and I raise cattle myself. He feeds out longer for a bigger animal. Guy knows his stuff, Inch and a quarter thick sirlions as big as the platter and you can cut it with a fork.
He told me that the marbling is the last fat to lay. He said he knows he is ready when he pushes his thumb down on the animals back and it makes a dent. When the dent stays down and don't spring back up, its PRIME.
Or, stop eating grass seed products entirely. That will cut down the waistline, the need for meds of all sorts, and slow but steady brain wasting. Grains are blood sugar spiking killers. They are however good for civilisations...to provide cheap addictive commodity fuel for the masses. Same thing with industrial vegetable oils. Poisons in the long run, but cheap. Don't take my advice though. Listen to organisations whose members make their living off of treatment for nasty chronic diseases like diabetes and heart disease. They recommend gorging on "healthy whole grains"
since you are you, have you looked at the issue of hair loss? and prostate? DHT. Think the med folks would tell us that the reason winos have hair like when they were 15, although dirty, is that Resveratrol, a phytoestrogen is in wine and does it. No prostate issues for the wino also. What balances/fixes the dht is the phytoestrogen. This is not argued in science. There are phytoestrogen in Linseed (flax) Sesame seeds Wheatberries Oats Barley Beans(notice the mexicans) Lentils Yams Rice Alfalfa Apples Carrots Pomegranates Coffee Hops, bourbon Beer(but only made from hops) most beers now are high fructose corn syrup..... coconut oil pumpkin seed oil, grape seed extract.
Srry - looks like you have no muneee. Carls' Jr. says you're a bad mother and will now take custodee of your chill-ren.
the reporting requirements of the IRS exist to assure efficient asset-stripping of the public by the CB's
You didn't deepen that serfdom
We impoverished some folks.
potatoe
Really?
We're doomed.
Small number of rich, large number of poor and just enough middle class to service the rich. As it has been in most societies throughout most of human history. We're basically undergoing one giant reversion to the mean right now.
Two things are diffrent now that I can think of. 1) A large free shit army that is used to that life. 2) Lots of guns and ammo in the hands of many.
Some people say potatoe ....some say patatoe!
the catholic irish were shipped to america on purpose. The obvious orchestrated famine was met with ships ready to move people to the us. The us folks were not happy to find drunk guys wanting a fight all over the cities. There was actually a movement of non cathoiics to teach their sons to fight and get strong. I forget what that movement was called. It did have a name.
Bowel movement?
Potato has no "e".
Where is Quale when you need him?
You want a toe, we'll give you a (pota) toe
Pick a government program, any government program and then dig down and find out who it's REALLY helping.....
Did CHS really label student loans as essentials?
No, in the same way he didn't label car loans as essentials. I believe his point was that an education and a vehicle are both essentials, and borrowing to pay for them is stupid. I agree.
So true.
That which cannot be sustained, won't be, period.
Turns out, humanity hasn't really evolved after all.
It is the structure of cartel-capitalism in which highly profitable goods and services must be paid for with highly profitable debt.
My two minds exploded. Stopped reading right there.
"the needs of the few outweighed the needs of the many"
- Kirk.
"Fire all photons"
-Kirk.
I canna get no more power Captin!
-Scotty
It's Powa not power.
there is no need to borrow. there is a want(not wont) to borrow. needs and wants are two different things. so there is no coercion as much as effective persuasion for people to borrow money so a person's debt slavery is a function of knowledge and discipline.
they sold it. you bought it. caveat emptor.
Slightly off topic - but "serf" is a term that gets used a lot - I assume that is in regards to Feudilism?
Does anyone have any good reading recommendations about Feudilism and serfs, so as to understand how today relates to that period in time?
Thanks
I wonder if the NAR is Pissed that the government is enslaving all the students before they have a chance to become enslaved home owners?
Guys check this out...
https://www.youtube.com/watch?v=aThCr0PsyuA
Very cool!
Interesting gateway to the Matrix.
Yeah, I even said "whoa" just like Keanu Reeves when I watched that video.
Microsoft HoloLens today, Microsoft Life Network tomorrow: https://www.youtube.com/watch?v=IFe9wiDfb0E
Microsoft? The company that sells you a virus operating as an OS and loaded with Spyware?
Ok.
Probaly bullshit. We were promised a flying jet car in every carport in the 1950's. 60 years later I still have to change a flat tire.
good article. I like how this guy thinks and he usually puts out good stuff.
One approach is to simply diversify your income streams, provided that small, profitable income streams do not have prohibitve barriers to entry or capital requirements that would diminish NPV.
There are many ways to skin a cat.
Max the debt out and default.
Borrow all you can and buy portable assets.
Let the banks hold the bag. The taxpayer will bail them out anyway.
I know people who did this. They got the timing wrong. They're now up to their eyeballs in debt, and the first thing they sell to make minimum credit card/student loan payments is all the hard assets they bought. Proles don't get inside tips. Proles will never be able to "time" the market. But hey, if you end up being one of the lucky few who this works out for, more power to 'ya. I'm just not a gamblin' man, I leave that to Central Bankers.
Of course, the scenario you outline only holds true if financial institutions are bailed in. If they're instead overtly nationalized and your debt collector now has an MRAP and an M-16, accompanied with the return of debtor's prisons "for the good of the Nation," things would play out very differently... "Live by usury, die by usury" is just as true for the borrower as the lendor. Perhaps even moreso.
Why did it take the author so long to figure it out? Is he stupid or something? Sorry I mean he is a victim of his indoctrination. I though he reads but apparently he doesn't. Let me fix that for him by quoting one of the giants of the 19th Century intellectual history:
"The slave receives a permanent and fixed amount of maintenance; the wage-labourer does not. He must try to get a rise of wages in the one instance, if only to compensate for a fall of wages in the other. If he resigned himself to accept the will, the dictates of the capitalist as a permanent economical law, he would share in all the miseries of the slave, without the security of the slave."
— Karl Marx - Value, Price and Profit 1865
All the CBs in the world cry about deflation being the problem and tell us it's very difficult to achieve 2% inflation. It is very easy to accelarate away from deflation and to acheve 2% inflation, you VERY SIMPLY do this through measured reduction in the debt burdens of productive people. I'm not talking about a debt jubilees but gradual reductions through write downs of debt (or at the very least the interest paid on serviceing the people's debts). This would kick start economic confidence and cause inflation and monetary velocity to rise in more productive areas of society and thusly give us the illusive 'growth'.
The CBs and governement (paid for and votied in by the overlords) will NEVER allow this because it does not serve the OVERLORDS that Charles writes of. Instead they (insanely) attempt to squeeze more productive assets out of us though THEIR centrally planned 'SOLUTION' - increasing the number of serfs through more debt. Giving banks QE to increase serfdom.
The future of the western world is North Korea or the Irish Potato Famine if we allow the overlords to out gun us.
The Two Types of Lending: Why the Difference is Important
http://culturalengineer.blogspot.com/2015/01/the-two-types-of-lending-why-difference.html
Such a basic take on small business.
It is actually pretty easy to get capital from the Small Business Administration at very low fixed rates (under 6%) for a 10 year term. Stay under $500k in intangible assets, and your cash outlay is 15%. Look it up.
https://www.sba.gov/
The issue with small business failings are people who simply a) don't want to work hard enough to succeed, so they fail or b) work their ass off, but don't know enough about business to stay away from terrible business models.
There are 108 "restaurant" listings in my local city on a quick search of businesses under $550k. There are another 54 "liquor" businesses. There are 68 "start-up ventures". There are 2 manufacturers. 3 healthcare companies. 2 logistics businesses.
a-haw-ahaw-ahaw! Let them eat biscotti!
The Irish needed a al o'sharpton
The English used the famine as a stranglehold and watched the Irish die. They ignored opportunities to provide aid out of direct genocidal tendencies. Irish migrated to America as religous refugees and indentured servants; helping make USA what it is. Other ethnicities are still under the belief they were the only ones forced here. F them and the English.
+100. Why can't we have all sorts
of affirmative action benefits for what the fing
Brits did to us ( and the Chinese, India, Blacks, Scot's,
Native Americans etc etc)
The US never got rid of slavery. It merely replaced iron chains with financial chains, and EXPANDED its slavery.
Welcome to the Debt Plantation, sheeple. Feel "Free and Brave" to roam and graze as you please. LOL...
Alot of the Gen Xers have already exited the Matrix. It's just a matter of time before the walls come tumbling down.
$100,000 in student loans, $250,000 for a starter home, $40,000 for a car, and a starting wage of $35,000 for your $100,000 in student debt just doesn't add up. Add a family into the equation and you can forget about it. They look at their friends and are like Thanks but no thanks.
Kicking back with the folks sounds better all the time.
History is clear in the light it sheds on the tendency of human societies to freeze into hierarchical structures and remain that way until the structure fails because it can no longer adapt.
This country (America) had the good fortune to come into being about the same time that communication accelerated making it possible for men who rejected serfdom to form a like minded group with an awareness of the conditions necessary to defend against it.
They did an elegant job.
It wasn't good enough. We again have the inevitable ridgid hierarchical structure.
Communications have again accelerated. The time has come for men who cannot live as serfs to recognize that we have come full circle.
An awareness is the primary requirement. An aware person acts locally using his convictions as a guide. If we are to be a nation of free men we must believe at the grass roots level that we are not serfs and act accordingly. A true American respects our Founders. A true American also would desire to be respected by our Founders.
Well Put.....
And this is precisely the True Legacy of Our Founders:
A Constitution that has a Natural Structural Ability to Right itself against just what you describe......
As has been PROVEN in Years Past, and Will Again in the Years to Come....
In this version of totalitarianism ZWO style...
property ownership will not be illegal, instead nearly everyone will be so dirt poor no one can afford to own property and everyone will be totally dependent on their printing press output for things like gruel stamps.
We're already a good part of the way there. The frogs are boiling quite nicely.