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Socialism 
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Post Re: Socialism

I can't speak for the rest of Europe as I never knew it existed beyond a drawing on a map much before 1970, until I was taken on my first package holiday to Spain with my parents, but I can comment on England, at least from my perspective and that of my parents. Before my parents died I tried to record as much of their lives as possible and what they could remember of their parents. After my mum died I found loads of scraps of paper with little stories on that I pieced together into a narrative of her life together with what I had been told, and I've passed it down to my children. Working class families were large back then, and you were put out to work as soon as you could be. The daily task was survival; children and grannies had to be fed as well as the workers.

My mum’s grandmother according to the 1881 Hackney census lived with my mum’s mum, but in 1887 her death was recorded in the workhouse at the age of 80, because my mum’s dad had died and my mum’s mum couldn’t support the family anymore. If you were destitute back then, you could either die in the street or go to the workhouse. Life in the workhouse was miserable; some say it was hell on earth. No doubt she died alone, cold and hungry. Here’s an article about them if you’re interested:

https://paulaslingauthor.com/2021/02/26 ... workhouse/

My mum live in the slums of London, in New Cross and she told me of her early memory of having to go to the outside toilet on her own instead of being taken by her sisters, and being terrified of the rats running around, she said in the end she got use to them like everyone else had to. She was told they were only harmless sewer rats. My dad had a similar story where he lived in Bermondsey, but their house was near a butchers and a meat market and he said some nights the ground would be thick with them, like the ground was moving, and you'd have to bang stuff to scatter them before setting off to the toilet.

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In 1929 my mum was put into service at the age of 14, becoming a live in servant for a middle class family, who treated her like a slave, with 15 hour days of cooking (or at least helping cook), scrubbing, cleaning, making fires in the morning and keeping them going during the day, running errands, washing clothes, washing up, waiting on table. When the family entertained visitors, her working day would be from 5 in the morning to midnight or later and she often fell asleep on her bed still in her uniform, too exhausted to get into bed.

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In 1928 at the age of 14 my dad was put into the docks like his dad and his dad before him and where both eventually fell to their deaths; it was a dangerous place. My old man was lucky, he fell and survived. He hurt his back, but was put on office work instead of being fired. Always a master of understatement and a man of few words, when I asked what was life like in the docks, he just said "rough". In the early days men would stand at the dock entrance to get a day’s work. If you were unlucky, your family didn’t eat that day. Fights would often break out of desperation.

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Life during the 1940s was no better. My mum's first husband died in the war and she was left widowed with 3 small children, and this was before the days of the welfare state. She had to work multiple jobs and clean well-off middle-class people’s houses to feed her kids.

I can certainly relate to the article in the post above; rationing in England didn't end until 1954, it had gone on for 14 years; indeed, rationing initially got worse when the war ended. The article talks about austerity in the 1950s, but very little had changed for the poorest working class people in England since Victorian times; Capitalism hadn’t lifted them out of poverty.

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Wed Apr 14, 2021 9:14 am
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Post Re: Socialism

Although I agree with a lot (not all) of that article I posted 2 posts ago entitled ‘Post-War poverty in Socialist Britain (1945 – 51)’, I don’t think it tells the full story, I think it generalises when it says;

Quote:
The new watchword was ‘Austerity’. And austere life was until the masses suddenly saw through it and voted Conservative again in 1951


And even the title ‘Post-War poverty in Socialist Britain (1945 – 51)’ suggests post war poverty was linked, even caused by socialism. Here what I think.

In 1945 the wartime Conservative-Labour coalition government headed by Winston Churchill was replaced by Labour with Clement Attlee as prime minister in a landslide victory. I’ve been told the portrayal of Attlee on the television series ‘The Crown’ is bang on. He was a shy, whiney, sickly man, concerned solely with his own career, to which he attached his self-worth. How he became leader of the Labour party is beyond me, as indeed why he went into politics in the 1st place. There is a saying that goes ‘power to the one that doesn’t want it’ and this describes the real behind-the-scenes leader of the Labour party and architect of Labour’s socialist agenda; the Welshman, Aneurin (Nye for short) Bevan. Here’s an interview he gave;

https://tribunemag.co.uk/2020/07/aneuri ... of-the-nhs

To quote a line from the intro;

Quote:
Aneurin Bevan, the minister responsible for its creation... described the National Health Service as “a piece of real socialism,” and spoke of how it stood “opposed to the hedonism of capitalist society.” For Bevan, the National Health Service was a radical endeavour, an effort to decommodify healthcare and make it not only public but free and universal.


Opposed to Bevan, and heading the anti-socialist wing of the Labour party was Hugh Gaitskell, but his views were largely out of step with the majority of the people in the country in 1945, who quite frankly had had enough of pre-war poverty and wartime austerity at home. Most men fought in the war, and putting the horror of war aside for a moment, what with arms and legs and heads being blown off, they ate better with Army rations than they ever did pre-war. At home most women that could work, did so, in factories filling vacancies left by men that were called up to fight. People had a glimpse of what a post-war Britain could be like; they didn’t have to live in poverty, wondering where the next meal would come from. They didn’t have to be at the mercy of landlord rent evictions. The war years were austere is perhaps an understatement, but so were the times before the war, and people wanted more than going back to the bad old days. The mistake Bevan made was to ignore people’s aspirations for a better life, and focus too much on the big picture; on society-level issues’, when quite frankly a lot of people only really cared about themselves and their immediate family.

In those 6 years between 1945 and 1951 under the direction of Bevan, labour raised the top rate of tax to 90%, in affect taking most of the income of the rich that was being generated by their factories, and redirecting it into building a National Health Service, a national pensions scheme, and social security system; collectively known as the ‘Welfare State’. This was before the days when the rich could just move their money elsewhere, and the rich were surprised, shocked and paralysed to find a government in power that wouldn’t let them do what they wanted. But for families that did not need medical care, or have retired or unemployed family members, there were no immediate benefits and no immediate improvement on their standard of living.

Labour introduced compulsory free secondary education for all, and reformed and extended the national insurance system to cover all the people regardless of income. It also introduced public (council) housing to provide decent affordable homes for all; but this was all ‘jam tomorrow’.

Labour nationalised about 20% of Britain’s economy in an experiment of state control. It had noble aims; to achieve full employment, job security, and a fair wage that a working man and his family could live on with dignity. It didn’t work partly because of the bureaucracy, partly because the managers who were part of the old system were at war with those they managed and vice versa, partly because they were input/resource driven, not output/productivity focused, but mainly because the politicians didn’t understand how the economy worked that they were interfering in.

Another factor in the failure of nationalisation was the nature of the industries nationalised, they were mainly utility industries such as electricity and gas, railways, and road transport, coal and steel industries; industries that were essential to the well-being of the whole of society, not just the few that could afford them. Unfortunately, when extended to all, they operated at a loss. And that was the problem, everything was costing something, and nothing was paying for it. So there was no money for investment, and no money to share out to the workers; which is the whole point of socialism, that the worker gets their fair share of the fruits of their labour. But bear in mind this was all new, there was no instruction manual for changing society in a 6 year period from something that had been running for 100s of years.

In 1951 Labour lost the general election to the conservatives by the narrowest of margins, and would not regain power until 1964 when Harold Wilson became Prime Minister. By 1951 much of the socialist infrastructure was up and running, but was not yet delivering tangible benefits. The conservatives swallowed their pride and went along with the socialist agenda, promising not to undo what Bevan had put in place, which must have been a bitter pill for Churchill to swallow being such an anti-socialist. But thanks to an aging, knackered Labour cabinet that had been in office throughout the war and for 6 years after it; that had poured all its energy into terra-forming society, and was now at war with itself in a Bevan-Gaitskell, left wing-right wing showdown, and fear from the public that increased taxes were coming to pay for the loss making nationalised industries, the conservatives stepped in to take all the credit. Four conservative governments under Churchill, Eden, MacMillan, and Douglas-Home, all won by narrow margins, would each in turn slowly and covertly steer the country away from socialism and back to capitalism.

The conservative years between 1951 and 1965 have been called the Age of Affluence, mainly by the conservatives that stole the credit. During this period Britain experienced rapid growth and a strong economy with GDP growing at 2% a year. But GDP is a spurious performance indicator, and although people were being told they had never had it so good, an income gap was growing and despite the propaganda on the television and in the conservative newspapers, people could see the decline. By the 1970s the decline in living standards was so bad and the relationship between workers and management so toxic, that industrial relations resembled a class-war zone. You could do a case study on the folly of nationalising the failed car company British Layland, its mismanagement, its rebellious workforce, its lack of innovation, lack of investment, the poor product that no one wanted to buy, and the complete disinterest shown by the management and workers towards the company that was paying their wages. It would have been funny if it hadn't been so tragic.

Socialism under Bevan succeeded in the sense that it stopped Britain returning to the conditions of pre-war 1930s. Bevan showed that a socialist political implementation based on soft socialism was possible, and that it didn't have to follow the authoritarian routes used by the USSR and China. It made unemployment and poverty election issues, which they never use to be, and forced politicians to address them. Despite their cost, even nationalised industries could be considered a success in some respects in that they did give everybody access to vital resources regardless of income, and they did help create near full employment.

But socialism also failed because the politicians didn’t have a well thought out political implementation for their socialism. It failed because they forgot to give the people the money they had earned through their labour, and it failed because they forgot about the economics to pay for it. It failed because of its own successes; as socialism moved people out of poverty, it also moved some working class into the middle class where socialism was less appealing, and some became more concerned with protecting their new found wealth, than sharing it with the less fortunate. It failed because successive anti-socialist governments, despite their promises, did chip away at what had been achieved in a covert, subtle, counter-revolution way that appealed to people’s greed.

From my perspective that brief period of socialism succeeded in that my father's working class generation was the 1st to receive an old age pension that was not subsistence based, but instead took quality of life into account. It succeeded in that my working class generation was the first to go to a comprehensive school to get a proper education and qualifications, instead of a secondary modern school that would provide a 2nd rate education and 2nd rate qualifications. It succeeded in that my working class generation was the 1st to go to university that would give access to professional occupations. Britain’s boomer generation comprises the children of the 1930s middle class, but thanks to 1945-1951 socialism it also comprises the children of the 1930s working class.

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Fri Apr 16, 2021 1:17 pm
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Post Re: Socialism

Having said I wasn't going to go down the rabbit hole of 20th and 21st century social history of capitalism, that's seems to be exactly what I've done, so I'm going to stop it, even though I’d be as happy as a pig in shit to critique capitalism in the 70s and 80s; especially the 80s where the empire struck back. Their hired goon, Prime Minister Thatcher, destroyed the miners union along with livelihoods and lives, without pity or remorse, and the rest of the working and middle class looked on; but I'm not going to go into all that. Anyway, I've covered a lot of the money printing and stock exchange scams that were made possible in the 80s in the 'Kings, Queens and Barons that now Rule the World' thread here; viewtopic.php?f=4&t=12222

I’m not going to mention that In the 80s, the super rich ruling class set out to destroy socialism in the UK once and for all. The socialism achieved in the late 40s and early 50s, had been made vulnerable by over a decade of a deliberate stagnation thanks to consecutive conservative governments keeping a lid on it. When labour finally got back into power in 1974 it was run by anti-socialist ‘Gaitskellites’ like Harold Wilson, Denis Healey and James Callahan. There was a socialist contingent made up of crusty cobwebbed academics like Michael Foot, Barbra Castle and Tony Ben, but they couldn’t implement socialism out of a paper bag. Going into the 80s, no one was prepared for the onslaught that was to follow.

Thatcher sold off the country’s council house stock, giving residents first option to buy their own house. Some workers became shareholders for the first time, as they were given shares in building societies that have become banks. If you refused to buy your own house, you risked being left behind, and someone else would buy it from under you anyway. For those that did hold out, they found themselves isolated as everyone else now had too much to lose to go on strike. Everyone thought they were so rich owning their own house, then they discovered that when they went to sell it, their new house needed increased credit to buy it, so they were no richer; and as the house prices rose, they discovered their kids could no longer afford one; and all the council houses were gone.

The days of the workers union was over; they stopped supporting each other, even unions within professions like the teachers and civil servants unions wouldn't support each other. Unions could be prosecuted, fined and bankrupted for going on strike, secondary picketing was made illegal, and unions morphed into a branch of management to become just another tool for the owners of the means of production to control their workers.

The 80s counter revolution would be a financial one. It would prey upon people's greed and desire for social status. It would use bribery, propaganda, deregulation, and consumerism, and it would be fuelled by credit.

But I’m not going to talk about any of that.





I'm certainly not going to mention Heavy Goods Vehicle


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Wed Apr 21, 2021 12:15 pm
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Post Re: Socialism

There are a number of reasons claimed by the West (US and its European allies) for the collapse of the USSR; the desire of its people for freedom being one, which is quite a nebulous concept, but I would define it in the case of the Soviet Union as a rejection of authoritarianism. Desire for a better standard of living, for personal wealth, and for consumerism is another. But these are the motives of the soviet people to want change, which the West fully exploited by spreading discontent and envy, not the motives of the West to destroy the USSR.

The motives of the West, in particular the US, and in particular the ruling class of the US, was to stop the threat of socialism that might one day spread to the US and take away their power and wealth. Of course the US wasn’t interested in the standard of living of soviet citizens, or was it to do with civil rights. The US has had, and still has dealings with many authoritarian capitalist countries around the world with far worse civil rights records than the USSR ever had without any problem at all. It has propped up some the worse regimes out there, especially if there was any hint of socialism emerging in that country.

Having removed the treat to their power and wealth by destroying the soviet union, the US ruling class attention was turned to increasing their power and wealth at home and globally, and so an economic reason was given for the collapse of the USSR. The reason for the stagnation of the soviet economy was that it was fully planned, and the lesson learnt was that the US economy shouldn’t be planned at all. If the US was not to follow the same economic fate as the USSR, a free economy based on monetary policy and deregulation was needed or the US was doomed. A free economy is what I regard as a cornerstone of hard capitalism and it’s a complete scam; one whose real goal is to deliver increased power and wealth to the ruling class.

Now to my knowledge Karl Marx never said ‘socialists, thou shalt fully plan thy economy’, just as Adam Smith never said ‘capitalists, thou shalt never interfere in thine’, and yet these 2 extreme positions have been claimed as true by advocates of hard capitalism. According to them socialism was doomed to fail economically because a fully planned economy would lead to economic stagnation, which in the case of the USSR ultimately led to the people rising up and demanding capitalism and the luxurious quality of life and wealth that goes with it.

The hard capitalists didn’t mention all the other political factors that led to the perceived stagnation of the USSR economy. I say perceived because so much of the USSR’s economic output was directed towards raising people out of extreme poverty and not to improving the standard of living of those that were no longer in extreme poverty; and to those people, it must have seemed like nothing had gotten any better for decades, but to those recently lifted out of poverty it must have seemed like some sort of utopia. There was also the matter of the USSR’s forced expenditure on an arms race against the wealthier West, the West’s trade embargo and sanctions, and the USSR having to erect and police an ‘Iron Curtain’ to prevent infiltration of Western covert forces into the USSR, and the loss of millions of its workforce to the West driven by media promises of a higher standard of living if they defected.

With the focus on pushing monetarist theory, which has spread to the UK like a Type 2 cancer, and threatens to spread to Europe like a Type 3, and around the world like a Type 4, the Federal Reserve (the US central bank), started its printing presses. They even wheeled out an economist called Milton Friedman, who they gave a Nobel Prize to in 1976 to legitimise the scam. The scam was money supply, or credit to give it its less glamorous name, or debt to be even less glamorous about it, or to be blunt, the emergence of an ultra rich ruling class and the return to extreme poverty for millions of people.

I should point out the new improved, softer name for Hard Capitalism is American Capitalism, just so that you know what the politicians and economists are really talking about when they defend it.

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Last edited by Beerman on Wed Apr 28, 2021 3:56 pm, edited 2 times in total.



Sun Apr 25, 2021 10:21 am
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Post Re: Socialism

There are around 228 billion trees in the US. It's not an easy task to estimate the average number of leaves on a tree because they come in different shapes and sizes, and even if you stick to one species, there are baby trees and granddad trees and all different ages in the middle. I've looked at some trees from my sun lounger in the garden and I reckon there are around 1000 leaf bearing branches with each branch hosting 1000 leaves, which my estimate around 1 million leaves on a medium sized, medium specie tree. I've tried taking a section of tree that I can see that holds around 1000 leaves and allowed for layers underneath that I can't see, and doubled it to include the back of the tree, and I still get around 1 million leaves. I went to the internet and was surprised to see just how many people have seemingly made estimating the average number of leaves on a tree their life's work; and it seems to range from 22,000 on young trees, to 200,000 on mature small trees like fruit trees, to 2 million on mighty oaks that are hundreds of years old. And the conclusion to all this was the average number of leaves on a tree is around 1.2 million. Now, I've never been one to follow the crowd and consensus means nothing to me, so I'm going to stick with 1 million, because as a doom rule once said "just because 6 billion people think you are wrong, doesn't mean to say you are".

What's all this got to do with money supply I hear you ask? Good question; patience is a virtue would be my response.

So, in the US there are around 228,000 trillion leaves (or 228 quadrilion). The current US national debt is around $30 trillion and household debt is about half of that, making a total of $45 trillion. Let's say there's around $5 trillion in circulation, held in reserves etc. in the US and around the world, making around $50 trillion. Most of this is newly printed money, newly meaning printed in the last 12 years, guaranteed by the US government, that hold no assets to guarantee it with. This gives an exchange rate of $1 to 4,560 leaves, which I estimate is the number of leaves that you can fit into a dustbin bin bag.

So when will the dollar reach parity with a leaf I hear you ask? Well, the forecast for $27 trillion was in 2023, but the US will likely top $30 trillion in 2021,

Image

Based on this graph, and assuming the debt now grows by $3 trillion in 2022, $6 trillion in 2023, $12 trillion in 2024, i.e. each New Year doubles the increase from the previous year, I predict the US will reach parity with the leaf sometime in March 2037.

The hitchhikers guide to the galaxy tells the story of how the earth was first populated. Apparently an advanced civilisation in the next spiral arm wanted to get rid of all the useless people in their society, like all the consultants, tired music executives, designer hairdressers and telephone sanitizers, so they got them all together and told them their world was about to be destroyed by a space creature and because they were so highly valued, they had built them an Arch spaceship to save them. They called this the B-Arch and said they would be sent off into deep space to be the first to colonise a new planet, and the rest of them would follow behind in the A-Arch. So the B-Arch was set to auto-pilot, launched, and after a few 100 years, crash landed on earth, where the descendents of all the useless people, who were genetically equally as usesless, quickly destroyed the environment, killed off the Neanderthals and half the wild life, and adopted the leaf as their currency. Inflation was initially a problem until a management consulted recommended burning down the rain forest which quickly brought it under control.

What's the point of this story I hear you ask? Well, it's funny how everything that goes around, comes around; it started off with American capitalism in prehistoric times and now American capitalism is taking us back there. Obviously I tried to find a clip on YouTube that explained this, but couldn’t find one. So instead here's a clip from the Hitch hikers guide on governing people.


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Mon Apr 26, 2021 8:42 am
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Post Re: Socialism

The Free Market

I started this thread with a ‘be careful’ statement about terminology with regards to terms socialism and communism. Because of the ambiguity over their meaning, you could have a conversation with someone about socialism and you both be talking about two different things. Some of this ambiguity is deliberately encouraged by those that do not want such conversations to talk place, or end well.

Another ‘be careful’ statement is needed when conversation turns to Free Market economy, as it implies the market is left to itself to do its own thing, without intervention. This meaning is encouraged by continual comparison with a socialist fully planned economy, but this is not the case as both are fully planned, but in different ways.

A ‘free’ market really refers to a market that is free from regulation, governance, and intervention in market practices, and from interference in market mechanics. A ‘planned’ market uses regulation, governance, governmental oversight and intervention, and attempts to run the economy by controlling supply and demand, wages and inflation, investment and growth; amongst other things.

The middle ground between these two fully planned economic positions is the ‘mixed’ economy, where governance and planning is applied selectively. Areas that need controlling are controlled and areas that can be left to run free are allowed to do so.

The free market allows the super rich to own all the financial institutions without interference from the government. They don’t own them by buying them like you or I would buy a house, they do it by investment. The super rich therefore wear two hats, one as the rulers of society, and one as owners of the economy, and it helps to separate these two roles just as it helps to separate the political, economic and ideology parts of the social-economic system.

American capitalism allows these investors to collectively buy controlling shares and hence own the banks, stock exchanges, and the US Federal Reserve. As rulers they control the politicians in congress and the top government officials in the treasury by a variety of ways, but mainly with promises of lucrative places on boards of corporations when they retire from politics. Another way is to ensure positions of authority are only filled by candidates that support their policies. It was once said about politics by someone I can’t remember, that it doesn’t matter who the people vote for; all that matters is who is on the ballot paper. This is not to be confused with the Joseph Stalin quote about democracy; "It's not the people who vote that count, it's the people who count the votes"; but I digress. The Federal Reserve is controlled by direct appointment of course, normally from bank CEO candidates.

American capitalism fully controls the deregulated market through money printing. Again, the term ‘money printing’ can be misleading, it’s really ‘money creating’, and it does it mainly by loaning money to the government, loaning money to banks to support fractional reserve banking, and loaning money to corporations to buy shares. The profit from all this credit is passed back to the investors through the stock markets and through corporate dividends. You’ll notice that these activities have little to do with supply and demand, buying or selling anything tangible, or any other aspect of classic economics. In fact, buying and selling products, is no longer the main income source or the main focus for the super rich; it’s buying and selling credit.

Let’s me give you an example of how the US Federal Reserve prints money for the Government;

Let’s pretend that there are say 10 super rich investors that work together and collectively have say $8 trillion to work with; let’s call them Investor Group A. And there’s another group of 10 that have roughly the same; let’s call them Investor Group B. Some of Investors in A may also be in B of course, but let’s not make it over-complicated.

Let’s pretend that there’s an ultra rich investor controlling A; let’s call him Adolf Pol-Pot. And there’s another ultra rich investor controlling B; let’s call him Heinrich Strange-love. They work together and invite each other round dinner every last Friday of the month, but each secretly wants the $20 trillion the other has, after all, who wants to be a Baron when you can be the king?

Let’s pretend the US government collects so little tax that it has a deficit of say $1 trillion to run the country. Fortunately it has the Bank of Mum and Dad just down the road called the Federal Reserve which is owned by Investor Group A.

So the government rings the head of the Treasury, who is on very good terms with Investor Group A, who rings the head of the Federal Reserve, who is on even better terms with Investor Group A, and says; “Daaaaaaad, can I have $1 trillion? I need to buy some new toys for the Army and I want to buy something to put all the homeless in.

The Fed says “ohh, ok then, but don’t send me your $1 trillion bond over here for me to buy directly unless you really have to, or everyone will start asking questions. Sell it by auction it to the banks instead and I’ll buy it off them”. So the treasury contacts the banks, and together they rig an auction so that the bank who’s turn it is gets the bond gets it, and they make sure the price the bank pays is well over-the-top, say $1.2 trillion, so they can sell it to the Fed for an inflated profit, and onlookers can say “what great job the Treasury is doing”.

Let’s pretend the bank that buys the bond is owned by Invest Group A and is called Goldman Sucks. Goldman Sucks sells the bond to the Fed for $1.5 trillion making a nice profit $300 billion (assume tax is negligible). All these $300 billion transactions add up so over the course of the year, the bank’s share price goes up, as do the dividends to Investor Group A.

The Fed which is owned by Investment Group A, pays for the bond being sold by Goldman Sucks which is owned by Investment Group A with virtual money because it doesn’t have any real money in its vaults. It credits Goldman Suck’s on-line account with the relevant 1’s and 0’s and voila! $ 1,500,000,000,000 is added to the US GDP and Government debt; and no one had to do any work.

But I hear you ask ‘what happened to the $200 billion extra the fed printed, the government only needed $1 trillion? Well, obviously the Fed has to earn a crust.

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Wed Apr 28, 2021 9:05 am
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Post Re: Socialism

Let’s have a Fractional Reserve Banking example of how the Federal Reserve supports the US Banks, and an example of how the Federal Reserve supports corporations.

All names of banks and corporations portrayed in these examples are not based on real banks or corporations, and any resemblance to banks and corporations living or dead is purely coincidental.

Fractional Reserve Banking is where a bank only holds a fraction of the deposits it receives, typically between 5% and 10%, and lends the rest out to businesses and the general public. Key to this is forcing businesses and the public to deposit funds in them, which is why you are given no choice but to pass all non-cash transactions through them. Sometimes reserves fall too low, maybe down to 1% if lending 99% was just too good an opportunity to miss. This is where the Fed comes in.

Let’s pretend the Goldman Sucks bank, which is owned by Investment Group A has run out of reserve money. Fortunately it also has the Bank of Mum and Dad to call upon which is also owned by Investor Group A. So, Goldman Sucks rings the head of the Fed and says ““Daaaaaaad, can I have $1 trillion? I’m a bit short this month as I’ve lent Amizon $200 billion and Testlar $300 billion and the rent’s due”. To which the Fed says ”ohh, ok then”, and deposits $1 trillion of virtual money into their bank account. Fortunately the Fed also sets the interest rate, which is set so close to zero as to make it free money; and viola! Another $1 trillion is added to the national debt and what Amizon and Testlar do with the money is added to the GDP.

What Amizon and Testlar should do with the money according to classic economics is invest it back into their businesses; to grow them, to make more profit, and through the increased taxation revenue due on this extra profit, grow the economy and improve society.

What Amizon and Testlar actually do with the money is buy shares. Amizon, which just happens to be owned by Investment Group A, buys Testlar shares on the stock market. Testlar, which jsut happens to be owned by Invest Group B in return, buys Amizon shares to increase their value. This is all thanks to those Friday night dinners between Adolf Pol-Pot and Heinrich Strange-love; those loveable ultra rich investors.

What some businesses might try is issuing more shares, go back to the Fed for more free money, and buy them back themselves to increase their value. Sometimes businesses don’t even have to make a profit to reach sky high share values; their job is to be a vessel for the shares not make products for a profit; these empty shells of businesses are sometimes called ‘Zombie Companies’.

What with corporations, agents acting on behalf of Investor Groups, and even lesser rich investors all buying and selling share to up their value, not only do the corporation dividends go up with the share price, but so do the stock market profits, which are also owned by Investor Groups A and B and as the profits go up, so do the dividends; and all this is added to the GDP.

But banks also lend to each other, so say if Goldman Sucks needed a quick $300 billion and they’d only just got off the phone with the fed arranging the $1 trillion loan to cover their fractional reserve funding shortfall. They may well go to another bank; owned by Investment Group B, that we’ll call Wells Trivago, and say “lend us $300 billion son”, to which the reply might well be “I’ll lend you $300 billion this month if you lend me $300 billion next month”, and with that agreed, Wells Triago goes to the Fed to borrow $300 billion of free money to lend Goldman Sucks, who pays them back the next month, along with the extra $300 billion of free money Wells Trivago requested. What’s Goldman Sucks going to do with this $300 billion you ask? Why, lend more and purchase more shares of course.

Now, I know what you are going ask, “What about that $1 trillion the government raised from the sale of that bond in the previous post? How does the government pay the Fed back with interest when the term is up? Well, it issues a bond to cover it of course, which is sold in auction to the banks, which is bought by the Fed and put with all the other government bonds it holds in their bond repository. Welcome to the world of American capitalism.

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Thu Apr 29, 2021 2:16 pm
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Post Re: Socialism

I know dwelling on American capitalism looks like going down another rabbit hole, but I've dwelled this long because unless it is stopped it will destroy everything in its path. It controls the economic system to such an extent that it warps it. Economists today remind me of the steam engine experts of yesteryear who became redundant along with the technology they were experts in. They couldn't adapt and move with the goalposts the new technology was moving. It's the same with software programmers who couldn't adapt to object orientated programming, or video recorder manufacturers, or Hollywood with their 60% reduction in viewing figures for their Oscar crap who can't adapt to Netflix. But before I move on I can feel someone somewhere must have a few questions to ask, which I shall try to answer from my perspective; and then it’s back to socialism;

Q. Why hasn't all this money printing lead to hyper-inflation?

A. Because it hasn't entered the economy in sufficient volume to cause it. However, where serious money have entered circulation has been in the world of the rich and super rich, causing a splitting of the economy into two. There is inflation in multi-million dollar mansions, private islands and private jets, in multi-million dollar jewellery, and in the service industry that services the rich (the upper-middle class of CEO millionaires that run the large businesses and corporations; and the super-rich (the upper class of billionaires that include the ruling class). Many of the rich, in their quest to join the super rich club have invested heavily in the stock market as small and medium investors, and in property, forcing the price up, making owning a property for young people an impossibility and forcing them into ever decreasing value for money rental market, where once $1000 a month rented you a house, then a maisonette, then a room in a house, and now a room in flat.

The economy for the lower middle-class (office workers, family-run small business owners, and working class people), has been unaffected by increased money circulation and has a result has, at least for now, been joyously stagnant for those that can make ends meet (with a little over to have some fun), and miserably stagnant for those that can't. With almost zero pay increases, zero inflation, and near constant supply and demand fixing prices, the lower economy (if I can refer to it as that for now until I think of something better to call it), resembles more of a socialist economy in the 1970s, at least for those that are financially comfortable; for those that are not, it resembles anything but.

Q. What is the end-state of American capitalism?

You hear talk of a K-shaped recovery after the Covid-19 epidemic. I think this refers to the dividing line between the financial secure and the financially struggling in the lower economy. So many of the lower middle class, and so many Millennials fall into this category. The upper economy doesn't need to recover, they own the printing presses, and if everything collapsed tomorrow I’m not sure they’d notice. For the rest of us unfortunately we can expect shops and small business to go out of business, the lower-middle class to slip into the working class, and the working class to slip into the underclass where the addicts, criminals and immoral dwell, alongside the moral poor, homeless and the destitute. In effect the point in the K where the haves and have-nots meet will slowly but surely move up the vertical line of the K until there is nothing left of the have’s and everyone is a have-not. At this point, the two economies will rejoin as one, an economy that resembles that of the Middle Ages.

The end state of American capitalism is to return the class system back to ruling class, merchant middle class, and with 99% of the population as working class peasants. I’m not saying society will resemble Middle Ages society, it definitely wouldn’t as that was a land- based, not an urban-based economy. It would resemble something more akin to that portrayed in the George Orwell book ‘1984’, which was made into an excellent film featuring Richard Burton and John Hurt.


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Sun May 02, 2021 10:40 am
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Post Re: Socialism

US National Debt Clock

This gives a great picture of how American Capitalism is sucking the life out of their country. I post it as a warning to the UK and others in Europe as to what awaits us all if you let these guys in.

https://usdebtclock.org/

Debt is shown in red, revenue in green. The top left corner shows the US National Debt. This is the figure that shows up on the GDP-Debt balance sheet that attempts to justify the US can afford the debt becasue it is so wealthy, but really inidicates the degree of wealth the super rich are extracting from the country.

Below that are the 3 major budget items listed as Medicare/Medicaid, Social Security and Defence, and beside them the interest on the debt, which even with an interest rate of practically zero, still amounts to nearly $400 billion at he time of posting this.

Below that is a really interesting box, unfunded debt and interest, and here we see the total US debt, standing at $86 trillion. This includes Federal Debt, personal debt which currently stands at around $21 trillion, and what the US owes the rest of the world, mainly China, whose money it used to set the money printing process up buy selling treasury bonds.

You’ll also see the total interest on the total debt, currently just under $4 trillion. Different components of the interest and on the capital borrowed will have to be repaid over short medium and long term, and most will be unfunded; so better keep those printing presses going.

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Mon May 03, 2021 1:22 pm
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Time for some more Q&A, bearing in mind I can’t predict the future any more than anyone else, and we are in unknown territory here.

Q. Will the dollar collapse?

A. I believe not.

Fiat money, whose value is supposedly, mystically, guaranteed by the government somehow, i.e. not by gold or any other valuable asset held as collateral, relies on the confidence of the people that trade in it. If you go back to 1923 Germany, the mark was printed out of existence because people in Germany and abroad refused to accept it anymore as payment for goods and services, and foreign governments refused to accept it for the repayment of debt; instead insisting on payment in foreign exchange, goods and raw materials.

If the value of trade in the dollar is overwhelmingly conducted by corporations and financial institutions, then confidence in the dollar enforced by them. For the vast majority of people, whose trade in the dollar is insignificant by comparison, have little or no say in the matter; they can either accept payment in the dollar or accept no payment at all. In effect, the confidence in the dollar of the middle and working classes is irrelevant, just as confidence in the king’s currency was in the Middle Ages.

That still leaves the confidence in the dollar abroad, which is made irrelevant by owning the financial institutions of your allies, as well and ensuring their appointed political leaders are of the correct mindset with regards support of the US and its currency. For those countries that do not fall in line, you’ll need a big army that roams the earth like a giant tarantula, destroying countries that challenge you; like Iraq, who were a US ally before they tried to break away and sell their oil in Euros, and like Syria and Iran would be if pesky Russia and China would stop interfering.

Q. Will the Stock Markets collapse?

A. I believe not.

Stock Market bubbles collapse when confidence is lost. But when is a bubble not a bubble? When it is a flow meter on a money pipeline carrying laundered money out of the economy and into the treasuries of the ruling class; and you can’t pop a money pipeline. Even if it were a bubble, the same principle would apply to the stock market that applies to the dollar. If the vast majority of trade in the stock market that is creating the bubble is being conducted by the people who own and run the system, then confidence is enforced and what small investors think is irrelevant.

Q. What would happen is the ruling class turned the money pipeline off, deliberately collapsing the stock market?

A. The question to ask first is why would they do such a thing, and the answer is to start the process of achieving a ‘1984’ society based around Middle Ages capitalism.

Image having your own printing press. I don’t mean some big bulky steam-driven thing in the basement that uses printing plates, ink and paper, but an application on your phone that by-passes the bank’s ledger and enables you to add zeros to your bank balance whenever you want. You want a new shiny red Ferrari? Drive down to the showroom in your Bentley, add $500,000 to your account, and buy one. Just leave your Bentley there as a tip, you can always buy another one in the future if you want one. Fancy a meal out? Nip down to your local Michelin star restaurant, add $10,000 to your balance, and treat yourself and someone you’ve paid for, to some lovely nosh.

Money would be relevant to you only in that it motivates others to fulfill your needs, and gives you what you want. Someone has to make the Ferrari and run the Michelin restaurant, and someone has to be your date when you go to the Michelin restaurant. Money would still be relevant to keep the rest of society subdued to avoid any unpleasant peasant uprisings, but other than that, why go to all that trouble of owning and running all that means of production, to make money that you can just print? This is the image of 1984, where a small middle class receive an education to run the things that need to be run, and are subject to constant surveillance to ensure their love for the ruling class, and the rest, the 99%, survive in slums, walled in and left to survive as best they can.

I’ve heard it said that American capitalism has made money supply irrelevant. I believe that to mean the emphasis of money supply is no longer used as a tool to regulate the economy, but rather it's part of a process to support the political system; a system that focuses on an upper economy to services the upper class and upper middle class, and a lower economy to support everyone else. Releasing vast sums of money into the lower economy by investing in commodities to increase prices, and creating personal debt, can all be used to drive inflation to bring the people back under control should the need arise.

I’ve heard it said that American capitalism has made money irrelevant as well. Of course it remains relevant to those that need it, but I take that to mean that money has become irrelevant to the owners of the means of production that have other sources, which is society-changing.

To get back to the question; why would the ruling class deliberately collapse the economy; and what would happen if they did?

Collapsing the economy would secure the ruling upper class at the top of a rigid class structure, as well as securing upper and lower economies. Over time people would tumble down the classes, either ending up in a much smaller working class, or a much larger underclass, which is the name I've given the social-economic group at the bottom of the pile. It's a place where the poor and destitute end up, living alongside the pushers, pimps and gangs in a sociopathic environment, where education and morals fade with neglect, and people are left to fend for themselves in slums. If there’s a lesson to be learnt from the Middle Ages, it’s that a rigid class and social structure secures upper class wealth and power.

What would happen if they do collapse the economy? The stock markets and corporations would be taken out causing large, medium and small business to collapse like a block of flats being demolished; or an atomic bomb going off.

If on the other hand I am totally wrong about all his and the stock market is a bubble about to burst, and the dollar is about to collapse; well, the outcome is pretty similar but without the new world order, or at least without the one I’ve described (it might be more like Mad Max).

To finish off on the subject of American capitalism, I'll just say that I’m not being anti-capitalist; I'm just being anti-American capitalist, as indeed should be every American, as indeed should be everyone else in the world.

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Tue May 04, 2021 12:28 pm
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Post Re: Socialism

Private enterprise in a socialist system

Starting with private property; a profound thing Marx never said was “property is theft”, which when combined with “workers control the means of production”, suggest private enterprise is not allowed in a socialist system. This is an incorrect assumption based on an incorrect interpretation of “property is theft”.

"Property is theft" was originally quoted by a geezer called Proudhon who was an activist in the French revolution around 1850. He was actually referring to the means of production; not private property that had been legally acquired using money earned by a worker’s labour.

When Proudhon talked about property, he was referring to where a person owned a piece of land, a factory, or a company, did no work, but still profited by the labour of the farmers, factory workers, or company employees working on or within the property. Proudhon was referring to people who do not work but live off of inherited wealth, investment income, interest fees charged to borrowers, and rent from tenants. Proudhon suggested these people were immoral and the cause of poverty and misery, and should have their heads chopped off (I made that last bit up).

Marx on the other hand hardly mentioned private property, except to dismiss it as unimportant. He believed it would become less important to people as society developed, eventually being replaced by social ownership; and I think he had a point. I see it happening today in our capitalist society, so it’s not unique to socialism. In the housing market, many young people have been forced to accept they will never own their own home due to property speculation, and have accepted they will always rent. Renting means you may have 1 to 6 months notice to move, so many don’t hoard possessions, especially bulky ones and prefer furnished rentals. How many people seek to own their own CDs or DVDs instead of streaming them? If there’s a good public transport people, how many now choose to own a car? If they do, it’s often not a new one because its role for many is now purely utilitarian; it’s not the prized and loved possession it might once have been. For Marx the upper class defence of their property was no different to their defence of their power. The property of the upper class was looted property; the property of the working class was earned.

By way of an example; say some billionaire called Big Daddy Warbucks wanted to put some of his paper money into an asset like a Rembrandt for $60 million. Big Daddy got that $60 million by exploiting wage labour, and the object he now owns is irrelevant to him; it is the act of owning it that preserves his money. If a worker who through his labour could afford say $60 for the Rembrandt, and there was a law that prohibited the sale of art for more than $60, then there is nothing stopping the worker buying and owning it; and no doubt the Billionaire would no longer be interested in owning it as would most art collectors who value art on its price tag.

Taking this further, with the speculative price tag removed, and with technology able to reproduce perfect copies so that everyone could own one for $60, as the copy would have no less value than the original; then you ask the question; why own it at all? Why not just hang it on your wall until you get bored of it, then take it to a picture exchange and pick up a Titian?

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Wed May 05, 2021 9:43 am
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Owning means of production in a socialist system

Starting with what it means for workers to own their means of production.

In a socialist system, businesses need money to set them up just as they do in a capitalist system. They need money to lease and fit out a building, purchase the tools and facilities, buy stock, establish working capital etc. and this will almost inevitably have to be borrowed from a bank. The difference with a socialist system is the bank is also owned and financed by the workers, not by super rich investors, financed with 10% of deposits at best using fractional reserve banking, and run by loan sharks and gangsters that have your business assets, and maybe your house, as collateral.

Banks, along with everything else that serves society as a whole, is centrally governed by the government, because it has to be. I’m not talking about privately owned central banks as in the capitalist system, but a single government bank, with local branches everywhere. And I’m not talking about government as in a capitalist government; which pretty much does nothing except make laws on behalf of the ruling class, go on the telly to talk about democracy and how we’re all in it together and how we all need to forgo pay rises, and claim expenses. The role of a socialist government is to invest on behalf of the workers that fund it, in the principles of a socialist society; which I mentioned earlier and I’ll repeat here, with some examples;

- Workers control the means of production. The government loans money for workers to set up businesses, or builds factories, infrastructure, hospitals etc. on behalf of workers.

- Money is a unit of a person’s time/life and should be treated as such. Governance over business pay-bands to ensure those at the bottom receive compensation for the hours of their life they have given up to serve the business, and those at the top do not receive disproportionate high remuneration for theirs.

- Money is not power. Limit the wealth an individual or family can own so that they cannot use their wealth to gain power over society; $1 billion should be enough. China seems to have unofficially capped it at $10 billion, probably to allow for foreign investment. In your own country; limit private investment, credit, speculation and activities of stock markets.

- All people are equal. Eliminate poverty and unacceptable inequality. If people only work in a dirty or dangerous job because they financially have to, then everyone should take their turn in working in that environment (perhaps with the exception of prostitution).

- All people have equal human rights. No one should live without dignity. Everyone has the right to decent housing, food, water, warmth, employment, healthcare and social security. Everyone has the right to feel safe and secure, not to face discrimination, intimidation, or live in fear. Everyone has the right not to be poor.

The government achieves these principles by implementing infrastructure projects, including building or loaning the money to build the means of production, passing legislation on social issues, and intervening in the economic system to prevent predatory exploitative behaviour. It is paid for by taxation, which could be taken from the business profit before profits are distributed to the workers, or form part of a worker’s taxation. There are many different ways to cut this cake. In addition to the taxation would be the instalment on the loan used to set the business up.

Another variation could be for the business to tax the worker as well, bearing in mind that the workers own the business. This would enable the workers to govern their business, perhaps to give up some of their wage to grow it and make for them to make more money in the long term.

Once taxes and loan instalment have been paid, the rest is divided up amongst the workers in a way that each worker’s share is proportional to their contribution to the profit pot, bearing in mind minimum and maximum wages, and the rules on wage inequality as laid down in legislation to stop disproportionate shares going to senior and middle managers. This distribution of profit would probably be done the same in capitalist or socialist businesses; by pay-grades defined by functional and personal competences, but again there are different ways to cut this cake.

The problem with dividing the profits up equally say, would be a lack of motivation to advance through the grade to more senior levels, and this is an example of where socialism can learn from capitalism; in areas of competition, innovation, ambition and the drive for a better standard of living; for themselves, their family, their children. The problem with Marx is that is it just an ideology, socialism as I said earlier, is the ideology, economics and the political implementation combined to define a system and there are many ways to cut the system cake. To be fair to Marx, he never claimed to be any but a political philosopher, but in my opinion to call him the father of socialism doesn’t take into account that he did the easy bit.

The USSR failed because it didn’t take into account the human behaviour aspects of society, the psychology and the sociology, and this was exploited by the subversion of its people by its enemies. In its efforts to raise its people out of extreme poverty it paid its workers low wages, which were then taxed at 13% that it left them poor. The economic stagnation it created left many feeling there was little prospect of improving their lot any time soon, so there was not drive to improve things. It wasn't as if this money was being siphoned off into the pockets of the super rich; a lot had to be wasted on defence, but the rest went to the people, just not the people who were earning it. It took the collapse of the USSR and the bad times that followed for Russia to learn from this mistake and introduce private enterprise under Vladimir Putin (not the gangster oligarch corrupt enterprise under Boris Yeltsin). Private enterprise was actually illegal under Joseph Stalin. China learnt this lesson in the 1970s under Deng Xiaoping who introduce private enterprise in accordance with China’s own way of doing things and to its own rules.

So, getting back to the original question; is private enterprise possible in a socialist system? I think it is not only possible, but is essential in today’s world.

But there is still a missing factor in this social equation. If a capitalist society is all about happiness through the accumulation of wealth and consumerism, then how does a socialist society find happiness?

To answer that I'm going to use my doomster definition of happiness;

Happiness is not being unhappy

And the biggest cause of unhappiness is being treated like a wage slave, or being poor and having no way out of poverty and watching the rich stop you from not being poor. Then there's the human rights; if there's a certain way to make someone unhappy, it's to deny them decent housing, food, water, warmth, employment, healthcare, safety, welfare security, job security, fairness, and a decent standard of living. In short not being unhappy is achieved through the socialist principles.

So, to answer the question; how does a socialist society find happiness? The answer, using my definition of happiness, is by being socialist. If you want more than not being unhappy, well, that's up to you.

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Fri May 07, 2021 11:57 am
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Post Re: Socialism

When I was young and easy under the apple boughs about my lilting house, and happy as the grass was green, and the night above was dingle starry; time let me hail, and climb golden in the heydays of his eyes. Time let me play and be golden in the mercy of his means. Green and golden, I was huntsman and herdsman, the calves sang to my horn, the foxes on the hills barked clear and cold, and Black Sabbath rang slowly In the pebbles of the holy streams.

It was during this time that I once went to a lecture. It took all morning, it seemed like all year; and as if to compound my torture, I was forced to participate in a practical test in the afternoon; I still bear the scares today.

The lecture was Dynamics and the subject was mathematically balancing a 4 piston reciprocating engine. Entering the lab I was faced with numerous tables each with an engine rig on it comprising a rotating camshaft connected to 4 pistons running along vertical guides. Everything on this rig; lengths, diameters, angles and masses, were adjustable. We were split into pairs, assigned a rig each and told we can go when the lecturer could balance a 50 pence coin on the top of the rig.

Unfortunately for me the guy I was paired with had attended less lectures than me, but at least we had both attended the morning lecture, and neither of us were wasted from the previous night’s activities. So, we put our best foot forward and set to it; and failed miserably. As the official end of the test approached, when turned on, our rig resembled 2 people doing a jitterbug dance from the 1950s; and the 1st team to complete the task shouted; Done!

It was no surprise that the winning team comprised the brightest in the class; you could smell their smugness and taste the ill will towards them felt by the rest of the class. The lecturer came over, balanced his coin on the rig, announced them as winners, whilst saying it wasn’t about winning. He then turned around and went out of the room for a minute. Immediately 2 of the least academically gifted in the room, apart from myself and the guy I had been partnered with, picked up their rig, carried it across the room to where the winning pair had left their balanced rig, and swapped it with their unbalanced one. When the lecturer returned to the lab, they announced; Done!

You could see the condescending sneer across the lecturer’s face when he saw who was claiming the task complete, and the look of shock and bewilderment when the coin balanced on the rig. They left triumphant.

When the lecturer finally let us go out of pity, I reflected on this and learnt 4 important life lessons.

1. It’s not about being the most academic, it’s about being the most resourceful, innovative and bold. But above all, it’s about achieving your goal, not necessarily the one set you, which for the two that swapped their rig over was about getting down to the pub as quickly as possible.

2. The guys who came first in the technical race are probably working for the guys who use their work and came second.

3. Everything in life has to be balanced.

4. I wish I had thought of that.

In fact, writing this now, 40 years on, I still wish I had thought of that, but at least I learnt the lesson and have applied it many times over the years. This lesson is actually portrayed in a Star Trek movie where a young Kirk undergoes the ‘Kobayashi Maru’ test set by his lecturer Spock and beats the test by cheating stating “I don’t believe in no-win scenarios”.

What’s all this got to do with socialism? Well, if economics is to be the engine that funds everything you want to do, then a socialist system has to run its economy like a balanced engine if it is to put wealth in the pockets of the 99% rather than a machine doing a jitterbug that makes 1% of society extremely rich.

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Last edited by Beerman on Wed May 12, 2021 11:40 am, edited 4 times in total.



Mon May 10, 2021 1:19 pm
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Post Re: Socialism

Time for the most obvious question of all; ‘how do you create wealth for the many, so that everyone is better off and everyone has that decent standard of living? If economics has a point, isn’t it that? And yet you never hear economists talking about it. So let’s talk about some of the things that don’t create wealth.

Buying and Selling

Buying and selling only transfers money from the buyer to the seller, it doesn’t create wealth for the whole of society, it redistributes it. It doesn't improve the lot of employees that make the things being sold; it only grows the wealth of the employer that sell the things for a profit; and if sellers don’t sell enough to cover their outgoings, it doesn’t even do that.

If you put money in a working man’s pocket by increasing his wages (as opposed to just offering him more credit), then he goes out and spends it, which increases demand, which enables suppliers to put their prices up, which causes inflation, which nullifies the wage increase.

Consumerism accelerates this as the increased money in the wage goes on things the guy and his family don’t need, but are convinced they do by marketing.

Interest Rates on Savings and Credit

Interest rates on savings accounts are a way to temp the worker to save his money, and if interest rates on savings were higher than inflation, then they’d create wealth; unfortunately they are set such that they never are.

The more common use of interest rates is to cool a credit-driven economy by restricting credit, by making it unaffordable for a certain percentage of the population. Credit has nothing to do with creating wealth. In fact monetary policy, or money-tree policy as I like to call it, dislikes savings. It regards savings as money tied up, not being put to use earning more money, money that could be used to apply for more credit. You hear the argument;

‘Use your savings to buy a house. You put down 10% of the purchase price in the form of a deposit, and the bank uses its money to cover the rest. They lend to you 90% of the purchase price at a really low interest rate, then when you sell the house at a higher price, you make a killing’.

And that is what money-tree economics is all about, making money without working for it; by speculation. What’s immoral about this is housing is a human right. Speculating in housing is not only wrong, but it’s an illusion for anyone other wealthy property developers and asset traders.

For the person whose house is their home, if the house goes up in price and they sell it, they still have to buy another house, probably a bigger one, which too would have gone up, and by more than their old one. So rather than make a killing, they’ve made more debt. Mortgages are so high now because of inflated purchasing prices, that terms of 30 years are common place, and with such low interest rates, they are breaking through this once impenetrable barrier. People are taking on massive mortgages over such long terms, so late in life, that many will never pay their mortgage off, leaving the debt to their children to take on if they can afford it, or having the house repossessed by the bank if they can’t.

If you borrow money to buy assets because interest rates are low, it drives up asset prices, creating bubbles that burst, then it’s a race to the bottom to sell them and salvage what you can. Interest rates don’t create wealth, they create debt.

Money Supply

If you could increase wealth by giving someone a pay rise, then the money supply would have to be increased in order to increase the quantity of money in circulation. So the money supply doesn’t drive wealth creation, it serves it. If you do it the other way round, and try to use money supply to create wealth, all you do is create credit and debt when the credit is spent. If I were to give a one-liner to an economics student that I would be totally unqualified to give, it would be;

“It’s not about the money supply, stupid”

Growth

If you reinvest profit back into the business, then the business has the opportunity to grow. The directors of the business may decide to buy better machinery to increase productivity by reducing costs, increasing output, improving quality, or to increase their product range. They might decide to open another site in a different part of the country. All these options could create more vacancies, allowing more workers to join the business to earn the same wage. This is why working class families in the old days had such large families, so that more of them could go out to work and bring more income back into the family. But that doesn’t mean the worker gets any more money in his pocket. The reinvestment is more likely to lead to more reinvestment and the owner of the business pocketing the extra profit left over. In my experience, increased profit has never led to increased wages without industrial action. It’s only when profit losses outweigh the cost of increased wages that you’ll prise a pay rise from an employer’s cold hand.

Business reinvestment can only drive growth if there are workers available with the right skills to run and operate the increased capacity. If there’s a shortage, then it becomes a seller’s market for the employee selling his labour, and the employer has to raise the wage for job if he wants to fill the vacancy, because he's in competition with other businesses chasing those skills. Does this increased wage for the job create wealth? Well, they’ll still take it home and spend it on crap they don’t need, causing inflation which devalues the money again. Even when collective bargaining secures a pay rise, inflation takes it away again. Supply and demand are working against the working man.

In the UK, large enterprises and mega-large corporations employ 40% of the working population in the private sector and account for 50%, or £2 trillion of the UK's total turnover. They are increasingly consuming small and medium sized businesses by either taking them over, putting them out of business, or by getting the banks who are owned by the same people, to starve them of funding. This means that increasingly more of the wages earned by workers, is going to buy goods and services from shops and businesses that are owned by these corporations, that are owned by the super rich, and increasingly less is going to small and medium sized businesses. So, a significant proportion of the worker’s wage is going directly back to the 1% that own the business that gave him the wage in the first place.

To Summarise

Very little creates wealth in a capitalist driven economy for the 99% of working men and women. Even the middle class that earn a bit more due to their skills and competencies, earn a wage that is stagnant within a pay band and gets consumed by inflation, just as it does for those in the working class. The illusion of wealth is created by credit, which will become apparent when the credit eventually dries up, and debts have to be repaid.

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Wed May 12, 2021 10:47 am
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Post Re: Socialism

Before we proceed, I’ve just heard that the wonderful philanthropist Mr Jeff Bezos, the CEO of Amazon, has just bought a new $500,000 super yacht. It’s so big, it comes with its own yacht, presumably because like Jeff’s stature, its too big to dock anywhere.

Can I join with everyone in Amazon in congratulating Jeff and his partner on their new arrival, and wish them all the happiness and joy it will bring them. I’m sure all the 650,000 Amazon employees in the US will be thrilled to know that the profit from their $7.25 per hour has been put to good use, as indeed will the 275,000 employees in the UK on £8.91 per hour (if they are over 21), along with the 375,000 employees from around the world in countries with no minimum wage.

I would like all 1.3 million employees and everyone else globally, to mentally join hands and pray for Jeff, so that one day when he passes on to that great package delivery service in the sky, he will automate heaven.

Our Jeff, who one day will be CEO of heaven
Hallowed be they name
Thy kingdom come
Thy will be done
In Amazon as it will be in heaven
Give us this day our daily bread
And forgive us that would unionise
As we must forgive ourselves for wanting to unionise against you
And do not temp us with a living wage
For money is the root of all evil
For thine is the kingdom
The power and the glory
For ever, and ever
Amen


I feel a tear welling up. God bless you Jeff.

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Sat May 15, 2021 10:35 am
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Post Re: Socialism

Back to that all important question; ‘How do you create wealth for the many, so that everyone is better off and everyone has a decent standard of living?'

If you were to ask a capitalist, or the economist the capitalist employs this question; they would both look at you blankly. This is because one of the key things to do in economics is to minimise costs, and capitalists regard the labour used to make the goods and services as a cost. It would be like asking ‘How can we maximise the electricity we use to make the goods?’ or, ‘How can we increase the rent we pay on our offices to deliverthe service?’

To the capitalist it would be like saying the steam engine serves the coal that drives it. The capitalist would say the wage bill is the biggest variable cost and as such has to be minimised; and would go on to say that maximising wages is not the point of economics, and is certainly not in the interest of the economy.

When profits are down, wages are frozen or cut. In time of plenty, wages are frozen or cut if the worker lets them be. If the workers go on strike, the government and employers join together to warn that pay rises above inflation will cause more inflation, and we will all die in our beds. The media, which is owned by the same people who own the employer and the government, will then kick in, and attempt to destroy the workers, and turn their own working class people against them, and probably succeed. The capitalist and his economist would probably go on to talk about trickle-down economics, and the wealthier the employer, the wealthier the employee etc.

The socialist however, wouldn’t treat the economics in the same way. The socialist economist would see the point of economics to increase the wage of the worker, and would do so by making the worker the owner/employer. Now the mantra ‘the wealthier the employer, the wealthier the employee’, works because they are one of the same.

The socialist would argue that rather than the wage bill of the workers being a cost, it is the extortionate and disproportionate wages and bonuses of the employer and the board of directors; and the dividends that are paid from the profits made, that are the real costs. It’s a bit like having an equation where x (the employer), or y (the employee), can be made the focus.

Taking the employer as the focus;

profit = wealth to employer and owners (investors)

profit = (price x volume) – (reinvestment in business) – tax – (wage cost + other costs)

We can rewrite the equation to make the employee the focus;

wages = (price x volume) – (reinvestment in business) – tax - (dividends + disproportionate director wages + bonuses + other costs)

Now it’s easy to reduce costs, and this is why you never hear capitalist economists talking about it.

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Sat May 15, 2021 11:54 am
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Post Re: Socialism

Private enterprise in a socialist system

In the early days of this thread I talked about hard socialism evolving into soft socialism. By adopting some of the best practices of the more successful capitalist countries and better exploiting the economic system, more wealth can be created for the worker and for society. The worker earns more, and more tax can be collected to pay for the things everyone needs, like a welfare state and a national health service, so everyone is happy.

One thing I haven’t talked about in any depth that was touched on earlier by firebird on page 1 of this thread, is the role human nature plays in all this. This is an aspect of socialism Marx never really addressed. People are either genetically disposed or socially taught to have "an excessive desire to acquire or possess more than what one needs or deserves with respect to material wealth". Or to put it more succinctly and a little less politically correctly; people are greedy. Some may want to increase their wealth by starting up their own business by owning not sharing the means of production, and some may want to speculate to make more money than they’ve earned from their labour; and given the opportunity they will because it is what people do.

If Karl Marx was the father of socialism, then Adam Smith was the father of capitalism, or at least industrial revolution era capitalism. To quote Adam Smith;

Quote:
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”


I think a socialist would add; “but not to the detriment of others or society.”

The butcher didn’t have to put his prices up, but he did because of self interest. Adam Smith contended this is the nature of man, and you can’t fight it.

So how would a soft socialist system bring these two together? How can a socialist system introduce private enterprise that benefits society and satisfies greed at the same time? This is where the balance comes in; not too little, not too much.

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Sun May 16, 2021 11:14 am
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Post Re: Socialism

Private Enterprise in a Socialist System

Here are my views on how to incorporate private enterprise into a soft socialist system; there are dozens of ways to skin this cat. Let’s start with a vision.

You want the benefits of private enterprise like price and quality competitiveness, innovation, drive and passion, achievement, ambition, and personal wealth. But you don’t want the downside of capitalism like winner-takes-all brutality, ruthlessness, aggressive and obsessive greed, and all the other sociopathic behaviours associated with capitalism’s excesses like exploitation of workers, the poor, and the vulnerable. You don’t want the medium sized businesses taking over the small ones unless there are enough small ones coming on line to replace them, and you don’t want large businesses taking over or destroying your Small and Medium Enterprises, or SMEs as they are sometimes called, as my vision of private enterprise in a socialist society would be based on them. You definitely don’t want money used as power, as that would undermine a principle of socialism. So there has to be some rules and regulations to keep this beast under control.

Let’s do some definitions so we are all taking about the same things. Definitions vary from country to country; I’ll base mine around the UK definitions. Categorising businesses by size we have micro businesses that employ less than 10 people, small businesses that employ less than 50 people, and medium sized businesses that employ less than 250 people.

Putting SMEs into context when looking at the UK economy

There are 6 million small businesses in the UK. They employ nearly half of the people in the UK private sector (13.3 million). Collectively they turnover 36% of the total turnover in the UK private sector (£1.6 trillion).

Add medium sized businesses to the mix and SMEs together employ 60% of all the people in the private sector (16.8 million). SMEs turnover 52% of the total turnover in the private sector (£2.3 trillion), and they account for 99.9% of all businesses in the UK.

Looking at it another way; large and mega-large businesses make up only 0.1% of all businesses in the UK, and yet they employ 40% of the working population, and account for nearly half the UK turnover. Avoiding this concentration of wealth and power in the hands of so few companies, and in the hands of the few people who run them, is the reason why private enterprise should be limited to SMEs.

Things you'll want to do


My rule of thumb would be; no private business should be allowed to grow beyond medium sized, and there should be limits on income and personal wealth employer’s can make from ownership of private businesses. I believe the practice of investing in businesses through the purchase of stocks and shares, although potentially beneficial to the successful investor, is often detrimental to SMEs. But this is one of those human nature moments where people want money for nothing (and your chicks for free), so it’s a case of allowing investment in moderation; small investors, limited holdings, etc. As for major investors, these should not be allowed domestically, but foreign investment would be.

The large and mega large businesses need to be run by the government, or at least their appointed management teams, selected from the best in society. They would be collectively owned by taxpaying workers, and focused on providing the things society needs for its domestic market, and on exports to raise revenue from abroad.

I should point out that there are other ways to classify SMEs, primarily by value that I’m going to ignore. A micro business can be defined as having a turnover of around £2 million, a small business having a turnover of around £9 million, and a medium business having a turnover of around £43 million. Businesses can also be categorised by stock market valuation called Market Capitalisation Value. A Small-Cap business is valued between $300 million and $2 billion, so a Small-Cap business is not the same as small sized business. A Mid-Cap business is valued at $2 to $10 billion, and a Large-Cap is $10 billion or more. Cap value categorisation is generally only used by bankers and investors, and has nothing to do with the SMEs I’m talking about.

Other things you'll want to do

The centralised banking system would support private SMEs by offering communal funding collected from taxes to augment the private funding provided by the owner to set the business up. This would make any worker employed by the owner an investor, and therefore due a share in the profits made by the businesses that would be paid in their wages, just as an investor in a capitalist system would receive dividends through their shares in the business.

You don’t want businesses that lose the competitive race to crash and burn, along with the people that work in them. Failing businesses need to be dusted down, retrained, refinanced and sent back into the ring,

Some businesses will be more successful than others, so some workers would earn more in some companies than in others. I think a moderate wage disparity would encourage workers in the less successful companies to catch up, especially as they would have a stake in the company they work in by virtue of the state funding the employer received. However, an extreme wage disparity is more likely to make everyone give up.

For society as a whole, private and public, I think there needs to be a minimum income. It should be enough to maintain the household and cover the living costs of each person in it, whether they are in employment or not, before working age or after it. It should not be a subsistence handout, but rather provide a standard of living that gives a quality of life. Whether this could be afforded or not is another matter, but this would be the goal to work towards, and made a reality, by making it affordable.

Obviously this is a huge subject, and a huge rabbit hole to go down. I’m not going to try and define a complete Marxist-Beermanist social-economic-political system here today, or any other day for that matter as the pubs open properly on 21 June, and I wouldn't be able to do it in time. But hopefully I’ve given a taste of how I think a soft socialist system could embrace private enterprise, and scratch that itch called self-interest. Like I say, the key is not too little, and not too much.

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Wed May 19, 2021 9:48 am
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Post Re: Socialism

Tax

Tax has been around in the capitalist system since the Middle Ages. Its primary function from 1200 to 1945, was to fund wars. This changed significantly in the latter half of the 19th century with prime ministers Disraeli (Conservative) and Gladstone (Liberal) having it out over the future of income tax in Britain. Disraeli became prime minister in 1868, lost to Gladstone in the next election, who then lost to Disraeli again in 1874, who then lost again to Gladstone in 1880. Gladstone wanted to phase income tax out, and Disraeli wanted to keep it and use the funding for social reform. This was quite revolutionary at the time as apart from the odd isolated incident, tax had never really been used for this before. Disraeli’s income tax led to the Reform Bill Act of 1857 which gave voting rights to working class people that were wealthy enough to pay tax, so tax was a catalyst that would eventually give the whole of the working class a voice.

What with the politicians being happy with the extra money income tax was bringing in, and what with the rich not minding too much as the rate was low and they kind of liked playing the philanthropist to the poor that worked in their factories, and what with most of the working class being so poor that they were exempt from it anyway, income tax became a permanent feature, and importantly, became a way to build and fund society.

Tax reverted to its traditional role of funding wars with WW1 and WW2, just as it had funded all the wars before it, but in 1940 the Conservative-Labour coalition government introduced a tax game-changer; Pay-As-You-Earn, or PAYE (pronounced by saying the name of each letter). It was introduced to speed up tax collection to fund the frantic pace of the war effort by withholding tax and paying post-tax (net) wages. This continued to be used after WW2 by the socialist Labour government of 1947 as a way to fund their agenda of social spending. It enabled high rates of tax to be levied against the rich without giving them recourse to non-payment, or delayed payment, had the pre-tax (gross) sum been paid.

PAYE has had a tremendous cultural impact on the UK as well. There is an old saying that goes; ‘you don’t miss what you’ve never had’, and that’s true of tax. People of the UK think of their wage as their net wage not their gross wage. You’ll hear gross wage mentioned in job interviews, or by governments and financial institutions in connection with economics, but in the workplace and in the household, people work on and think in terms of net income. When workers and unions go to their employer asking for a wage rise, they may talk in terms of gross, but they are calculating the percentage increase on the net.

This means that over the years, net wages in the UK have become comparable with net wages in other countries that pay far less tax, but unlike those countries, the UK benefits from the society that taxes fund; like the welfare state, national health service, state pensions etc.

If you were to compare the UK with the US for instance; the US pay less tax, and as result, do not fund for their society to the same extent. But if someone in the US wants healthcare, pensions etc., then they would have to pay extra. By the time they’ve paid for all the extras, they may well discover that they have paid more than if they had paid a higher tax in the first place.

The problem with Tax

A big problem is corruption, or even the perception of corruption. Here are some examples of the perceptions out there;

- Some people think all politicians are crooks.

- Some people think that certain professions attract certain types of people and that politics attracts self-serving, low intelligent bastards, who couldn’t hold down an honest job.

- Some people believe the taxes you pay do not end up financing society; they end up lining politician pockets and the big business they serve and take bribes from.

- Some people have such a distrust of politicians that they believe government threatens their very liberty. You give money to the government to fund society, and they will use it to fund ways to spy on you, control you, and rob you.

- Some people believe that they no longer have any meaningful say over where the money collected in taxes will go. You pay your taxes thinking it will improve your healthcare system, then in the spending budget, healthcare gets cut and military spending goes through the roof.

I’m not saying any of this is true, or if it’s what I believe, but I believe some people do believe it is true (I think I’ve covered myself here).

Another big problem is the rich avoid paying taxes. I think it’s fair to say that most, if not all successive governments in the UK since the demise of the socialist government of 1947, have given tax breaks, tax exemptions, tax loopholes, and general ‘get-out-of-jail-free tax cards to the rich, super rich, ultra rich, large businesses and corporations, leaving the working class and middle class to fund a society that the rich want nothing to do with. Yet it is this top 1% that have taken most of the money out of the economy that would fund it.

In the UK, 1% of people own 50% of the country’s wealth and yet contribute as little as possible to the society that 99% of the people want to live in; and they employ specialist tax lawyers to ensure they do.

I talked earlier about cutting the economy into upper and lower economies, with the rich occupying an upper economy and the non-rich occupying the lower economy. Another way of looking at the economy is to split it into the economy that funds society through taxes, occupied by people that want a quality public healthcare system, welfare system, education system, pensions system etc.; and an economy that does not fund a society, occupied by individuals that do not want a society. I’m not saying people who do not want a society should be forced to pay for one, that’s their choice; and not everyone that does not want a society is rich. There are people who are individuals and don’t need or want anyone else outside their own family. What I’m saying is no one should be allowed to take money earned by a worker’s labour who wants a society, and put it into the economy that doesn’t want a society.

The way I'd do it in a socialist system would be to replace these two economic layers of haves and have nots, with three layers of worker, business and society.

- The top layer has the workers driving and funding everything else. The worker’s wage would be reflect the profits generated by the business. There would be no elitist, privileged Board of Directors, or CEO, or massive bonuses, or investor dividends taking the lion’s share. The profit would be shared out amongst workers in accordance with their contribution, and the worker would be taxed to fund the business and society layers below.

- The middle layer, supporting the worker is the business in which the worker works. Some of the money earned by the worker would be taxed and reinvested back into the business for the future income. You don't have to do it like this; it could go back to the government and they reinvest it in the business, but it strikes me this cuts out the government, which should be cut out where possible.

- The third layer, supporting the business and the worker would be society’s layer. Some of the money earned by the worker would be taxed to fund society.

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Fri May 21, 2021 4:04 pm
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Post Re: Socialism

Let me give an example of why many people in the UK think the government, be they conservative or labour, are thieves, tramps and vagabonds when it comes to tax.

You may recall earlier I described the UK as being one of the hardest of capitalist countries in Europe, and yet we pay high taxes to fund our society. On the surface at least, this may seem like a contradiction.

A hard capitalist society, typically has low taxes, little or no market intervention to protect workers, or limit personal wealth or corporate profit, and does not value the concept of society. Instead, individuals chose private enterprise, normally large corporations, to provide the services they need. People only pay for what they use and they don’t pay for anybody else. Typically this hard approach to capitalism is accompanied by American capitalism and monetarist economics. Culturally, a hard capitalist society is an uncaring society, and some would say, it isn’t really a society at all. To quote Margret Thatcher, who introduced hard capitalism into the UK “There is no such thing as society”.

In fact why not quote the whole thing to put what she said in context;

Quote:
I think we have gone through a period when too many children and people have been given to understand ‘I have a problem, it is the Government’s job to cope with it!’ or ‘I have a problem, I will go and get a grant to cope with it!’ ‘I am homeless, the Government must house me!’ and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first.

It is, I think, one of the tragedies in which many of the benefits we give, which were meant to reassure people that if they were sick or ill there was a safety net and there was help, that many of the benefits which were meant to help people who were unfortunate. That was the objective, but somehow there are some people who have been manipulating the system; when people come and say: ‘But what is the point of working? I can get as much on the dole!’ – Margret Thatcher 1987


Here was a thief, tramp and vagabond, calling working class people thieves, tramps and vagabonds, but the interesting thing was many working class people must have believed her because she served 3 terms. She bribed the working class with the purchase of their council houses and lowered their taxes from 33% to 30% but that was enough to get them cheering for her. No one seemed notice she also lowered the top rate of tax from 83% to 60%, or that she increased other taxes like VAT to 15% that took back more than she had given away. She later cut the top rate to 40% No one (who voted for her) seemed to notice that she had slashed public spending, and yet everyone, except the rich, was still paying the same tax; more if you counted VAT and the new petrol tax.

But I do our other useless governments we’ve had in the UK since 1947 an injustice. Every one of them has done their bit to hollow out the UK society by cutting public spending. They’ve maintained high taxes for the working and middle classes, whilst staving the welfare state and the rest of society’s infrastructure of funds.

I was looking for an example and came across this newspaper article written in Dec 2014 by John Prescott, a labour member of parliament that some say is just another fat cat, self-serving individual, despite his fine words in the article; noting that words are cheap. Here’s a bit of background.

George Osborne, the millionaire conservative chancellor of the exchequer (in David Cameron's government), that some say has the IQ, compassion and personality of a cockroach, who left politics to take up a board membership in a multinational somewhere; was trying to hide £30 billion of National Insurance funding from the welfare state (for which it is ring-fenced). Some say he had probably cobbled this £30 billion together by salami slicing welfare state budgets, including NHS budgets, in the conservative party’s never ending quest to privatise the NHS for their masters, under the pretence of delivering medical care more cost effectively. Just so that you are aware, in the UK we pay Income Tax, National Insurance Tax and VAT. National Insurance pays for benefits and pensions, and about 20% of the NHS (the rest coming from Income tax). Osborne was trying to change the law so he could use this £30 billion elsewhere, possibly for defence, where it could be siphoned off by defence contractors, but he got caught.

https://www.mirror.co.uk/news/uk-news/g ... bn-4762414

There are so many other examples I could give, dozens, from multiple NHS computing system fiascos to the Universal Credits benefits system; the cost of which has all had to come out of the spending budget. This means high taxes to pay for incompetent politicians, incompetent consultants, incompetent and predatory private enterprise; and cuts in services, Here’s just a taste of what I’m talking about.

https://www.independent.co.uk/news/uk/p ... 71967.html

You could pick any government department and see the same incompetent actors at work. Ministry of Defence procurement is run just as badly, the result of which is poor quality equipment that’s over budget and late; if any equipment is delivered at all. Our benefits system is so complex and means tested and running costs so high that it’s on the verge of collapse. We've seen mentally ill people dumped in the community unsupported, whilst their sheltered homes and work places have been closed. We've seen people who have lived with their parents all their life, evicted from council home (the few that are left), when their elderly parents die. Our hospitals are short staffed, our junior doctors overworked and nurses underpaid, and waiting lists for some operations are measured in years. Our railways are a disgrace since they have been privatised; all profit and no investment. Our schools are the same, short staffed and buildings in need of refurbishment. Where is the tax money going?

I can feel a rant and a rabbit hole coming on, so I shall stop and assume I’ve made my point. Incompetent governments are not unique to capitalism or socialism; both systems are equally cursed with the wrong type of people who are unable to do the job. Governments are untrustworthy, so it’s hardly surprising people resent paying high taxes for a society they know they not going to get.

The problem is we in the UK have a system we call a democracy, but it isn’t a democracy. To quote Churchill

Quote:
Democracy is the worse form of government except for all the others


Churchill reckoned it was the best of a bad lot. I argue what we have is about as far as you can get from a system where the people decide what to do as you can get. We shouldn’t settle for the best of a bad lot. Every 4 years everyone gets to vote for someone you don’t know, have no idea of their character, intelligence, or ability; have no idea what they really stand for or believe, and no idea what they will do once they are in power, which is almost never what they say what they would do. You get to vote of a package of things; maybe half of which you agree with and the other half you don’t; and apart from foreign affairs, where they get to play like big kids in a playground with the big kids from other countries, they come across as being either completely disinterested, or as actors on a stage distracting you, whilst others behind the scenes do what they want. What’s more, once they are in power and you realise what they are like, you can’t get rid of them; you’ve got to wait 4 years for the next election, only to find the alternative is even worse. Ironically Churchill, despite the heroic rhetoric he threw at the Nazis and the hope he gave to the people of the UK when it was most needed, he was a good example of a politician that gave his ‘best of a bad lot’ democracy a bad name.

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Last edited by Beerman on Tue Jun 01, 2021 9:47 am, edited 2 times in total.



Mon May 24, 2021 9:08 am
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