Structural Classism, the State and War

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Man is the only Patriot. He sets himself apart in his own country, under his own flag, and sneers at the other nations, and keeps multitudinous uniformed assassins on hand at heavy expense to grab slices of other people's countries, and keep them from grabbing slices of his. And in the intervals between campaigns he washes the blood of his hands and works for "the universal brotherhood of man"- with his mouth.[1]- Mark Twain

Overview

Human conflict has been a consistent characteristic of society since the beginning of recorded history. While justifications of this have ranged from assumptions of immutable human propensities towards aggression and territoriality, to the religious notion of polarized metaphysical powers at work, such as forces of “good” and “evil”, history has revealed that cases of conflict generally have a rational correlation to environmental circumstances and/or cultural conditions. From the immediate, fearful stress reaction of our “fight or flight” propensity,[2] to the calm, calculated planning of strategic national warfare, there is always a reason for such conflict and the general public's interest to reduce conflict naturally requires we fully assess causality as deeply as we can to consider tangible solutions.


This essay will examine two general categories of “warfare”: “imperial warfare” and “class warfare”. While perhaps seemingly different, it will be argued that the root psychological mechanisms of these two categorizations are basically the same, along with how some of the actual mechanisms of “battle” are actually much more elusive or covert than many recognize. Overall, the central thesis is that the source of these seemingly immutable realities resides within the socioeconomic premise itself - in the context of a certain reinforced psychology and hence sociological schemata - not rigid determinations in our genes or lack of some moral aptitude.

Put another way, these present realities are not fueled by ideologically isolated groups such as, for example, a rogue country’s government or some exceptionally “greedy” business mentality – but rather by the most fundamental, underlying values inherent to virtually everyone's lives in the current socioeconomic condition we perpetuate as culturally “normal”. The only difference is the degree to which these values are harnessed and for what purpose.


Imperial War: Rise of the State

The Neolithic Revolution some 12,000 years ago[3] marked a pivotal turning point for human society as it transitioned us from almost exclusively “living off the land” - limited to the habitat's natural regeneration – to an accelerating trend of environmental control and resource manipulation. The development of agriculture and the creation of labor-easing tools was the beginning of what can be observed today, where the spectrum of the human capacity to utilize science for the alteration of the world for our advantage appears virtually unlimited.[4]

However, this initially slow technological adaptation has set in motion certain patterns and changes which have arguably generated many of the problems we recognize as all too common today. An example would be how imbalance through relative poverty and economic stratification has taken hold as an apparent consequence of this new capacity. In the words of neuroscientist and anthropologist Dr. Robert Sapolsky: “Hunter-gatherers [had] thousands of wild sources of food to subsist on. Agriculture changed all that, generating an overwhelming reliance on a few dozen food sources...Agriculture allowed for the stockpiling of surplus resources and thus, inevitably, the unequal stockpiling of them, stratification of society and the invention of classes. Thus it has allowed for the invention of poverty.”[5]


Likewise, the rather nomadic lifestyle of the hunter-gatherer slowly became replaced with settled, protectionist tribes and then eventually localized city-type societies. In the words of Richard A. Gabriel in the work A Short History of War: “The invention and spread of agriculture coupled with the domestication of animals in the fifth millennium B.C. are acknowledged as the developments that set the stage for the emergence of the first large-scale, complex urban societies. These societies, which appeared almost simultaneously around 4000 B.C. in both Egypt and Mesopotamia, used stone tools, but within 500 years stone tools and weapons gave way to bronze. With bronze manufacture came a revolution in warfare.”[6]

This is also the period that the concept of the “state” as we know it and the permanence of the “armed force” emerged. Gabriel continues: “These early societies produced the first examples of state-governing institutions, initially as centralized chiefdoms and later as monarchies...At the same time, centralization demanded the creation of an administrative structure capable of directing social activity and resources toward communal goals...The development of central state institutions and a supporting administrative apparatus inevitably gave form and stability to military structures. The result was the expansion and stabilization of the formerly loose and unstable warrior castes...By 2700 B.C. in Sumer there was a fully articulated military structure and standing army organized along modern lines. The standing army emerged as a permanent part of the social structure and was endowed with strong claims to social legitimacy. And it has been with us ever since.”[7]

Imperial War: Illusions

“Imperialism” is defined as: “the policy, practice, or advocacy of extending the power and dominion of a nation especially by direct territorial acquisitions or by gaining indirect control over the political or economic life of other areas.”[8]

While traditional culture might generally think of imperial war as a variation of war in general, assuming other forms of armed, national conflict, it is argued here that the root basis of all national wars are actually imperial in nature. The literally thousands of wars in recorded human history have had to do mostly with the acquisition of resources or territory, where one group is either working to expand its power and material wealth, or working to protect itself from others trying to conquer and absorb their power and wealth.

Even many historical conflicts, which on the surface appear to be for the purposes of pure ideology, are often actually hidden imperial economic moves. The Christian Crusades of the 11th century, for example, are often defined as strictly religious conflicts or expressions of ideological fervor. Yet, a deeper investigation reveals a powerful undertone of trade expansion and resource acquisition, under the guise of the “religious” war.[9] This is not to say that religions have not been a source of tremendous conflict historically, but to show that there is often an oversimplification found in many historical texts, with the economic relevance often missed or ignored. Regardless, the notion of the “moral” crusade as a form of cover for national, economic imperialism continues to this day.[10]


In fact, there is a deeply coercive tendency witnessed throughout history when it comes to gaining public support for the act of national warfare. For instance, a cursory review of history will find that all “offensive” acts of war, meaning war initiated by a given power for whatever reason (not a response to direct invasion), originate from the constituents and associates of the governmental body - not the citizenry. Wars tend to begin with some kind of announced suggestion emanating from state power; then fueled by the corporate-state supported media;[11] with the citizenry slowly groomed to appreciate the suggestion. It also helps the state a great deal if there is some form of emotionally striking provocation as well, which can be manipulated to further justify the intended war.[12]

Such tactics for the manipulation of a citizenry can take many forms. The use of fear, honor (revenge), patriotic paternalism,[13] morality, and the “common defense” are likely the most common ploys. In fact, invariably all acts of war are justified as “defensive” in the public sphere, even if there is no rational, tangible public threat to be found. Yet, there is, indeed, a core truth to this notion of “defensive” war,[14] since acts of imperial mobilization are based on a very real, yet obscure form of economic and/or political fear – the fear of losing control or power. In other words, while there may not be a direct, immediate threat to a given, aggressor nation – the long term competitive need to continually re-secure its existing power from possible future loss is a very real and founded fear. So, in effect, this “defense” is that of elitist, upper-class self-preservation and hence usually morally unjustifiable to the public in its true terms; hence these ploys are used instead to gain public approval.[15]


Economist and sociologist Thorstein Veblen, in his famous 1917 work An Inquiry Into The Nature Of Peace And The Terms Of Its Perpetuation wrote the following on the subject of public persuasion: “Any warlike enterprise that is hopeful to be entered on must have the moral sanction of the community or of an effective majority in the community. It consequently becomes the first concern of the warlike statesman to put this moral force in train for the adventure on which he is bent. And there are two main lines of motivation...the preservation or furtherance of the community's material interest, real or fancied - and vindication of the national honor. To these should perhaps be added a third, the advancement and perpetuation of the nations culture.”[16]


This last point on the perpetuation of the nation's culture is best exemplified with the common, modern Western imperial claims of seeking to spread “Freedom and Democracy”. This claim takes a paternal position, positing the idea that the current political climate of a targeted nation is simply too inhumane and intervention to “help” its citizens becomes a “moral obligation” of the invading power.Veblen Continues: “Any Patriotism will serve as ways and means to warlike enterprise under competent management, even if [the people are] not habitually prone to a bellicose temper. Rightly managed, ordinary patriotic sentiment may readily be mobilized for warlike adventure by any reasonably adroit and single-minded body of statesmen - of which there is abundant illustration.”[17] “...it is [also] quite a safe generalization that when hostilities have once been got fairly underway by the interested statesman, the patriotic sentiment of the nation may confidently be counted on to back the enterprise, irrespective of the merits of the quarrel”.[18]


In America, the phrase “I'm against the war but support the troops”[19] is common among those who oppose a given conflict but wish to be viewed as still respectful of their country in general. This phrase is unique as it is actually irrational. To logically “support the troops” would mean to support the role of being a “troop”, hence the acts that are required by that role. The implicit gesture, of course, is that one supports the need for war and hence supports the men and women of the armed forces who assist that need. Yet, the statement itself is fully contradictory and exists as a form of “doublethink”,[20] as to disagree with the existence of a certain war is to wholly disagree with actions of those who engage it. It is similar to saying, “I'm against cancer killing people but I support cancer's right to life”.

The armed forces have historically been held in high public esteem by a citizenry and the government continually glorifies this to the extent that the assumption of “honor” takes on an irrational life of its own. In fact, it is compounded psychologically by a built-in ceremonialism. Honor is formalized through awards, medals, parades, postures of respect and other adornments which impress the public as to the supposed value of the actions of the soldiers and hence the institution of war. This further reinforces the cultural taboo where to insult any element of the war apparatus is seen as showing disrespect for the sacrifice of the armed forces.

From the standpoint of true protection and problem resolution, as would be the “honorable” case of a firefighter who saves a child from a burning building, this admiration is warranted. The selfless, altruistic position of putting one's life at risk for the benefit of another is naturally a noble act. However, in the context of historical warfare, the personal altruism of a soldier does not justify broad acts of national, imperial aggression, no matter how well intentioned the soldiers may be.

Furthermore, this fear-oriented power preservation by the established governmental apparatus also naturally generates a “sub-war” against the domestic citizenry itself, almost always amplified in times of war. Those who challenge or oppose a given national conflict have historically been met with direct oppression and, by cultural extension, public resentment. The common yet ambiguous legal violations of “treason”[21] and “sedition”[22] are historical examples of this, along with the pattern of suspending the rights of citizens during times of war, sometimes even including free speech.[23]

Socially, the use of “patriotism”, as noted before, is also very common to the effect that those who do not support a war are often dismissed as not supporting the national citizenry by extension, creating alienation. More recently, those in opposition and perhaps engaging in protest actions have been considered “terrorists” by the state,[24] a powerful incrimination with severe legal consequences if deemed true by the authorities.

However, this “sub-war” can be deconstructed into an even deeper mechanism - what could be called a kind of social control in support of imperial intent. In many countries today, either by obligation from birth[25] or by persuasion to legally binding contracts[26] the pressure or motivation to join the military itself is manipulative on many levels. Advertising tactics such as “money for college” or “personal accomplishment” are common, arguably targeting the lower rungs of the economic hierarchy.[27] The United States is on record for having at times spent billions a year ($4.7 billion in 2009) on global public relations in assist public image and recruitment.[28]


Imperial War: Source

When the traditional, propagandized illusions in defense of the act of organized human murder and resource theft have been overridden, dismissing such shallow justifications as paternal patriotism, honor and protectionism, we find that war today is actually an inherent characteristic of the propertied, scarcity-driven business system. It would be false to say that war is a product of capitalism in and of itself since the practice of war predates capitalism extensively. However, when we deconstruct the premise itself we see that war is, indeed, a central, immutable feature of capitalism as it is simply a more sophisticated manifestation of these same, divisive, competitive, archaic values and practices.

Just as a corporation competes with other corporations of the same genre for income survival, invariably seeking monopoly and cartel when it can, all governments on the planet are fundamentally premised on the same form of survival by extension. Using America as a case study, in 2011 the country gained about $2.3 trillion in federal income tax revenues alone.[29] These revenues are important to the operation of what is, in effect, the business institution known as “America”, in the same way the annual earnings of Microsoft affect its ability to function. America is, in truth, a corporation in function and form; with all the registered businesses existing in its domestic legal web to be considered subsidiaries of this parent institution we traditionally call the “US government”.

Therefore, all actions of the US government, along with all competing governments in the world, must naturally keep an acute business acumen in operation. However, what separates this “parent corporation” (America) from its subsidiary sectors (corporations) is the scale of its capacity to preserve itself and keep a competitive edge. Its necessity to preserve the core drivers of its economy is crucial and a cursory glance at history regarding how the US was able to gain and maintain its status of a global “empire”, shows this business acumen clearly. The manifestation is really little different in principle than how a specific corporation seeks to gain a commercial monopoly. Only in this case the ideal of global monopoly (empire) is not restricted by legal mandate as is commonly claimed by the domestic legal restraint - it is forcefully executed in the theater of imperial war.

In fact, interestingly enough but not unexpectedly, the very act of this self-preservation through military might have itself become a powerfully lucrative business venture which often improves the economic state of the nation and hence profits to its corporate constituents. Today, we can extend these economic benefits to the massive military expenditures[30] [31] along with the reconstruction of war-torn areas by the conquering states' commercial subsidiaries,[32] the slow prodding of a country's integrity through trade tariffs, sanctions and debt impositions for the sake of population subjugation for the benefit of transcontinental industries[33] [34] and many other modern “economic war” conventions.


This point was likely best expressed by one of America's most decorated army officers of the 20th century: Major General Smedley D. Butler.[35] Butler was the author of a famous book released after World War I titled War is a Racket, and stated the following with respect to the business of war: “War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.”[36]

He also wrote in 1935: “I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”[37]

John A. Hobson's (1858-1940) monumental work Imperialism: A Study described the tendency as a “social parasitic process by which a moneyed interest within the state, usurping the reins of government, makes for imperial expansion in order to fasten economic suckers into foreign bodies so as to drain them of their wealth in order to support domestic luxury.”[38]


Now, many would think about these acts of abuse as a form of “corruption” but this reasoning is difficult to justify in the broad view. The ethical and moral argument of “fair” and “unfair” has no cogent integrity within the system framework inherent to capitalism. This is one of the unfortunate failures of realization by those who are active in the message of “world peace” or “anti-war” activism but yet still defend the competitive market model. In other words, “world peace” appears simply not a possibility within the currently accepted model of economic practice.

Every step of the application of global capitalism, starting from its European inception, has been associated with vast violence, exploitation and subjugation. European colonialism,[39] the capture of African “slaves” for use and sale, the forced subjugation of countless colonial peoples, and the creation of privileged sanctuaries of profiteering and power for the many government-created or government-protected businesses, only touches the surface of its inherent character as a “war system” of thought.

Thorstein Veblen, again writing from 1917, makes the direct connection to what he called the “pecuniary” or monetary foundation of war: “It has appeared in the course of the argument that the preservation of the present pecuniary law and order, with all its incident of ownership and investment, is incompatible with an unwarlike state of peace and security. This current scheme of investment, business, and [Industrial] sabotage, should have an appreciably better chance of survival in the long run if the present conditions of warlike preparation and national “insecurity” were maintained, or if the projected peace were left in a somewhat problematic state, sufficiently precarious to keep national animosities alert...”[40] “So, if the projectors of this peace at large are in any degree inclined to seek concessive terms on what the peace might hopefully be made enduring, it should evidently be part of their endeavors from the outset to put events in train for the present abatement and eventual abrogation of the rights of ownership and of the price-system in which these rights take effect.”[41]

Further evidence of this context can be found in the more modern forms of indirect violence. These include “economic warfare” approaches, as mentioned before, which can serve as complete acts of aggression in and of themselves, or as a part of a procedural prelude to traditional military action. Examples come in the form of trade tariffs, sanctions, debt by coercion, and many other lesser-known, covert methods to weaken a country.[42]

Global financial institutions such as the World Bank and IMF have heavy vested state and hence business interests behind them and they have the power to allocate debt to “bailout” suffering countries at the expense of the quality of life of its citizenry, often taking charge of natural resources or industries through select privatization or other manners which can weaken a country's ability to the effect that it becomes reliant on others, to the advantage of commercial outsiders.[43]

This is simply a more covert manner of subjugation than was seen, say, with the British Empire's imperial expansion through its “East India Company” - the commercial force that took advantage of the newly conquered regional resources and labor in Asia in the 17th century.[44] However, unlike British Empire expansion, American empire expansion did not gain its status through military action alone, even though such a presence is still enormous globally.[45] Rather, the use of complex economic strategies that repositioned other countries into subjugation to US economic and geo-economic interests was made common.[46]

Class War: Inherent Psychology

Moving on to the “class war” this notion has been noted in historical literature for centuries based partly on assumptions of human nature, partly on assumptions of a lack of capacity of the Earth and production means to meet everyone's needs and partly on the more relevant awareness that the system of market capitalism inevitably guarantees class division and imbalance due to its inherent mechanisms, both structurally and psychologically.

Founding free market economist David Ricardo's statement that “If wages should rise...then... profits would necessarily fall”[47] is a simple acknowledgment of the structural assurance of class conflict as the wage relates to the lower “working class” and the profits the upper “capitalist class” and as one gains, the other loses. Likewise, even Adam Smith in his canonical The Wealth of Nations clearly expresses the nature of power preservation on the behavioral (psychological) level, stating: “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”[48]

However, the true use of government for the purposes of the upper or business class seems to be stubbornly ignored by Smith, Ricardo and even many of today's economists, who seem unable or unwilling to take into account present-day events. Even the most committed, laissez-faire market economist still expresses the need for government and its legal apparatus to exist as something of a “referee” to keep the game “fair”. Terms such a “crony-capitalism” are often used under the assumption that “collusion” between a governmental constituency and the seemingly detached corporate institutions is of an unethical or “criminal” nature.

Yet again, as noted before, it is illogical to assume that the nature of government is anything else at its core than a vehicle to support the businesses that comprise the wealth of that country. The business apparatus really is the country in technical form, regardless of the surface claim that a “democratic” country is organized around the interests of the citizenry itself. In fact, it can be well argued that no government in recorded history has ever offered its citizens a legitimate place in governance or legislation and within the context of modern capitalism, which is still a manifestation of centuries old values and assumptions with a clear elitism in intent, it is interesting how this myth of “democracy” perpetuates itself today in the way that it does.

To further this point, one of the architects of the US Constitution of the United States, James Madison, expressed his concern very clearly regarding the need to oppress the political power of those in the lower classes. He stated: “In England, at this day, if elections were open to all classes of people, the property of landed proprietors would be insecure. An agrarian law would soon take place. If these observations be just, our government ought to secure the permanent interests of the country against innovation. Landholders ought to have a share in the government, to support these invaluable interests, and to balance and check the other. They ought to be so constituted as to protect the minority of the opulent against the majority. The senate, therefore, ought to be this body; and to answer these purposes, they ought to have permanency and stability.”[49]

So, starting with this awareness that the very premise of global “democracy” is deeply inhibited by the capitalist incentive system to competitively maintain power on the level of the state to assist the upper class in preserving political and, by extension, financial power, a clearer picture of how deep this class war runs is obtained. Likely the most striking aspect of this is how such mechanisms of class division exist in our every day lives but yet go unseen since they are structurally built in to the financial, political and legal apparatus itself.


Class War: Structural Mechanisms

In the modern day, with 40 percent of the planet's wealth being owned by 1 percent of the world's population,[50] we find that both in terms of system structure and incentive psychology, powerful mechanisms exist to maintain and even accelerate this grossly disproportionate global wealth imbalance. Needless to say, given the financial basis of everything in the world today, with great wealth comes great power. Hence, as described prior, this power enables a more robust strategy for competitive gain and self-preservation and consequently it has hence extended into the very structure of the social system itself, assuring that the upper class has great ease in maintaining their vast wealth security, while the lower classes face enormous structural barriers to attaining any basic level of financial security.

Some mechanisms of this class war oppression are fairly obvious. For instance, the debate over taxation, and how there has been an historical favoring of the corporate rich over the working poor, is one example.[51] The argument of the establishment usually revolves around the idea that since the rich are also the “ownership class” and are partly responsible for the generation of general employment, they should be given more financial freedom.[52] As an aside, it is easy to see that there is very little true merit in this one-sided argument since the financial oppression through public taxation is actually limiting the purchasing power of the general public, creating an arguably more powerful impediment to economic growth than the mere limiting of the coffers of the corporate “employers”.[53] The only exception to this, which transcends the argument of the rich as “job creators”, is the advent of plutonomy, which will be addressed towards the end of this essay.

Class favoring taxation aside, four other more critical structural factors will be discussed: (a) debt, (b) interest, (c) inflation and (d) income disparity.

(a) Debt is a misunderstood social practice in that most assume debt is an option in society today. In reality, the entire financial system is built out of debt, quite literally. All money is brought into existence through loans in the modern economy, coming from central and commercial banks who essentially create the money out of demand itself.[54] This basic mechanism of monetary creation is a powerful force of economic oppression. Household debt today tends to consist of credit card loans, housing loans, car loans and student (educational) loans. Those in the lower classes naturally hold higher levels of this consumer debt than the upper class since the very nature of being unable to pay outright for basic social staples, such a car or home, forces the need for banks loans.

The result is that the pressure of debt is constant in the lives of the vast majority.[55] [56] [57] The general wage and income rates being what they are on average, naturally as low as possible to assist with the dominant capitalist ethos of cost-efficiency upon which the entire society is engineered, the wage income made by the average employee tends to only barely meet the basic loan servicing requirements while in concert with meeting basic, everyday survival needs. Hence a form of “running in place” is constant and the possibility of social mobility up the class hierarchy is deeply impeded, let alone the difficulty of simply getting out of debt itself.[58]


(b) Interest: Coupled with debt is the profit attribute associated the sale of money itself. Since the Capitalist market economy supports the general commodification of virtually everything, it is no surprise that money itself is sold into existence for profit and this comes in the form of interest. Whether it is a central bank creating money in exchange for government securities or a commercial bank making a mortgage loan to an average person, interest fees are almost always attached.

As mentioned in previous essays, this creates the condition where more debt is generated than actual money in circulation to cover it. When a loan is made, only what is termed the “principal” is produced. The money supply of any country consists of this principal in form, which is the aggregate value of all loans made (money creation). The interest fee, on the other hand, is not in existence. This means that, on the social level, all those taking interest bearing loans must find money from the preexisting money supply in order to cover it when paying the loan back. In this process, since all interest paid is being pulled from the principal, it is a mathematical eventuality that certain loans simply cannot be repaid. There simply isn't enough money in the system at any one time.[59]

The result is an even more powerful downward class pressure on those holding such basic, common loans since there is always this basic scarcity in the money supply itself and everyone working to service their loans have to contend with the inevitable reality that someone is going to fail to meet their loan repayment in the long run. Bankruptcy is a common result in those segments of society that get this “short end of the stick”. Even more troubling is how the banking mechanism reacts to those who are unable to fulfill their loan obligation. The loan contract and legal system support the power of banks, in most cases, to “repossess” the physical property of those who cannot pay.[60]

If we think deeply about this ability to “repossess”, it is arguably an indirect form of theft. If it is inevitable that some will succumb to not meeting their loan repayment due to the inherent scarcity in the money supply, with the possible result of the physical property obtained from that loaned money being repossessed by the bank via contractual agreements, then the bank's acquisition of such true, physical property is inevitable over time. This means the banks, which are always owned by members of the upper class to be sure, are taking houses, cars and property of the lower classes, simply because the money they created out of thin air in the form of a loan is not being returned to them. This is, in essence, a covert form of physical wealth transfer from the lower to the upper class.

However, returning to the subject of interest itself, such realities are of little direct concern to the upper class. Given the wealth surplus inherent to their financial status, coupled with the lack of necessity to even take loans most of the time due to this surplus, the scarcity pressure inherent to the money supply due to interest fees always falls on the shoulders of the lower classes. Also, the wealthy are actually further class-protected as the phenomenon of investment income via interest earned from large savings accounts, certificates of deposit and other means, turns this vehicle of social oppression for the poor into a vehicle of financial advantage for the rich.[61]

(c) Inflation is generally defined as “The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.”[62] Unfortunately this common definition gives no insight into its true causality. While there has been debate as to the true causes of inflation in different economic schools,[63] the “Quantity Theory of Money”[64] has been proven as the most relevant. In short, this theory simply recognizes that the more money in circulation, the more inflation or rising prices. In other words, all things being equal, if we double the money supply, price levels will also double, etc. The new money dilutes the value of the existing money in a variation of the supply-demand theory of value.

The consequence of this is what we could call a “hidden tax” on people's savings and fixed income rates. For example, let us assume the inflation rate is 3.5% a year. If you have $30,000, in ten years it will only buy about $21,000 worth of goods.[65] While this might appear to have an equal effect for the whole of society, the reality is that it deeply affects the poor much more than the rich when it comes to survival. A person with 3 million dollars in savings is not much hindered by the 3.5% loss of purchasing power. However, a person with only $30,000 in savings, working to perhaps put a down payment on a home in the future, is deeply affected by this hidden tax.


In the context of structural classism, where fixed attributes of the system itself assist in the oppression of the poor and helping of the rich, the mechanism of this hidden tax in also immutably built in. The inherent scarcity in the money supply forces new loans constantly in the economy. Coupled with that is the now globally utilized monetary expansion process known as the fractional reserve lending system.[66]

Contrary to popular belief, most loans are not given from a bank's existing deposits. They are invented in real time, limited only by a set percentage of their existing deposits.[67] In short, due to this process over time, it is currently possible that for every $10,000 deposited, about $90,000 can be created from it through the process of ongoing loans and deposits across the entire banking system.[68] This pyramiding of money, coupled with the interest pressure that creates scarcity in the money supply, reveals that the system is inherently inflationary.

(d) Income differences across society also have both a psychological and structural causality. Psychologically, they are driven, in part, by the basic profit and cost preservation incentive necessary to remain competitive and functional in the market. In many ways this incentive could be considered cognitively structural, as there is a behavioral threshold that all players in the market economy must adhere when it comes to survival. In turn, this interest of self-preservation though cost-efficiency and maximizing profits, while basic to the capitalist game at its core, shows a clear tendency to extend as an overall survival philosophy or human value system in general.

In other words, social values become altered by this economic need for constant self-preservation and very often it manifests itself into behavior which, in abstraction, might be condemned as “excessive”, “selfish” or “greedy” - when, in fact, such deemed characteristics are mere extensions or matters of degree with respect to this basic conditioning to “stay ahead”.

Therefore, the overall trend of increasing income inequality in general should not be a surprise.[69] While the United States, with its deeply competitive nature, is a highlight of extreme class inequality today,[70] the trend is still very much a global phenomenon.[71] While the debate about historical trends vs. current trends can be made regarding why this period of time, the early 21st century, is showing such extensive increases in the wealth gap – we might conclude that certain structural factors have made their way into the system and these factors are assisting the disparity. We may also conclude that these mechanisms are not anomalies of the system - but rather represent a natural evolution of capitalism through time.

For example, the vast income now coming from “capital gains” is a case in point. While seemingly a minor nuance of general income, some economic analysts have deemed capital gains to be the “key ingredient of income disparity in the US”.[72] Capital gains are defined as “[t]he amount by which an asset's selling price exceeds its initial purchase price. A realized capital gain is an investment that has been sold at a profit.”[73] Its most common context is with respect to the selling of stocks, bonds, derivatives, futures and other abstract “trading” vehicles.

It has been found that in the United States alone, the top 0.1 percent of the population earns about half of all capital gains,[74] and such gains account for about 60 percent of the income of the top 400 richest citizens.[75] The class mechanism of capital gains is interesting because it is a privileged form of income. While the stock market might be used for conservative mutual fund and retirement investment by the general public, it is really an upper class person's game when it comes to substantial returns due to the high level of capital initially needed to facilitate such high value returns. Like the elitism of high level interest income, capital gains are a class securing mechanism fueled by preexisting substantial wealth.

Then we have the differences in income with respect to one's position in the corporate hierarchy. In a study performed by the Canadian Centre for Policy Alternatives, it was found that Canada's top CEOs make an average worker's yearly salary in 3 hours.[76] In the United States, according to research by the Economic Policy Institute “the average annual earnings of the top 1 percent of wage earners grew 156 percent from 1979 to 2007; for the top 0.1 percent they grew 362 percent. In contrast, earners in the 90th to 95th percentiles had wage growth of 34 percent, less than a tenth as much as those in the top 0.1 percent tier. Workers in the bottom 90 percent had the weakest wage growth, at 17 percent from 1979 to 2007.”[77]


They continue: “The large increase in wage inequality is one of the main drivers of the large upward distribution of household income to the top 1 percent, the others being the rising inequality of capital income and the growing share of income going to capital rather than wages and compensation. The result of these three trends was a more than doubling of the share of total income in the United States received by the top 1 percent between 1979 and 2007 and a large increase in the income gap between those at the top and the vast majority. In 2007, average annual incomes of the top 1 percent of households were 42 times greater than incomes of the bottom 90 percent (up from 14 times greater in 1979), and incomes of the top 0.1 percent were 220 times greater (up from 47 times greater in 1979).”[78]

Similar patterns can be found in other industrialized nations. In fact, in 2013 even China has been discussing their growing income gap problem with proposals to ease the disparity.[79] The Organization for Economic Co-operation and Development in a 2011 report found that countries with historically low levels of income inequality have experienced significant increases over the past decade.[80] [81]


Causality in the form of clearly defined structural mechanisms are more difficult to pin down with respect to this general trend of employment related income imbalance. The combination of the psychological incentive of self-preservation and self-maximization inherent to the value system of capitalism, coupled with the ever-changing legal, tax and financial policy related variables in play, along with the basic strategic edge maintained by the upper classes due to their existing wealth security, creates a complex, synergistic mechanism of class preservation and external oppression.

A subtle yet revealing statistical point to also note is how during recent recessions in the United States, the wealth gap has actually widened.[82] It is axiomatic to conclude that if the system of economy was without structural interference in favor of the wealthy, a national recession on the scale of the what occurred from 2007 onward should have affected most everyone negatively, regardless of social class. Yet, it was reported in 2010 that “the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year...Families at the $50,000 median level slipped lower.”[83]

As a final point on the issue of income inequality, it is important to note how national economic growth often relates to those of the upper class itself, reducing the general economic relevance of the lower classes. The term “plutonomy” is appropriate in this case. A “plutonomy” is defined as “Economic growth that is powered and consumed by the wealthiest upper class of society. Plutonomy refers to a society where the majority of the wealth is controlled by an ever-shrinking minority; as such, the economic growth of that society becomes dependent on the fortunes of that same wealthy minority.”[84]


Perhaps the best way to describe the nature of plutonomy and its relevance to the modern day, is to consider the words of those who embrace it. In 2005, Citigroup, a powerful global banking institution, produced a series of internal memos on the subject and it was quite candid in its analysis and conclusions.

They stated: ”The world is dividing into two blocs - the Plutonomy and the rest. The U.S., UK, and Canada are the key plutonomies - economies powered by the wealthy.”[85] “In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer”. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.”[86] “We should worry less about what the average consumer - say the 50th percentile - is going to do, when that consumer is (we think) less relevant to the aggregate data than how the wealthy feel and what they are doing. This is simply a case of mathematics, not morality.”[87]

With 20% of the American population controlling 85% of the country's wealth,[88] it is clear that those utilizing that 85% are more important to the GDP or growth of the economy. What this means is that the financial system has little incentive to care about the actions or financial wellbeing of most of the public.


It continues: “the heart of our plutonomy thesis [is] that the rich are the dominant source of income, wealth and demand in plutonomy countries such as the UK, US, Canada and Australia...

Secondly, we believe that the rich are going to keep getting richer in coming years, as capitalists (the rich) get an even bigger share of GDP as a result, principally, of globalization. We expect the global pool of labor in developing economies to keep wage inflation in check, and profit margins rising – good for the wealth of capitalists, relatively bad for developed market unskilled/outsource-able labor. This bodes well for companies selling to or servicing the rich.”[89]

With respect to the relevance of the rest of the population, the memo states: “We see the biggest threat to plutonomy as coming from a rise in political demands to reduce income inequality, spread the wealth more evenly, and challenge forces such as globalization which have benefited profit and wealth growth.”[90] “Our conclusion? The three levers governments and societies could pull on to end plutonomy are benign. Property rights are generally still intact, taxation policies neutral to favorable, and globalization is keeping the supply of labor in surplus, acting as a brake on wage inflation.”[91] [92]

While plutonomy itself might not exactly be a source of class conflict it is certainly a result. Chrystia Freeland, author of Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else makes a point about the nature of this framed psychology inherent to those of the opulent minority:


“You don't do this in a kind of chortling, smoking your cigar, conspiratorial thinking way. You do it by persuading yourself that what is in your own personal self-interest is in the interests of everybody else. So you persuade yourself that, actually, government services, things like spending on education, which is what created that social mobility in the first place, need to be cut so that the deficit will shrink, so that your tax bill doesn't go up. And what I really worry about is, there is so much money and so much power at the very top, and the gap between those people at the very top and everybody else is so great, that we are going to see social mobility choked off and society transformed.”[93]


In Conclusion

A great deal more could be said with respect to the multi-level battling occurring on the planet Earth, mostly centric to financial and market power and its institutional preservation. From physical violence to subtle legal manipulation, the theme is consistent and dominant. It could even be argued that progress itself has war waged against it since established corporate institutions who maintain powerful market share in a given industry, will often work to ruthlessly shut down anything that can compete with them, even if the product is progressively better or more sustainable in utility.[94] Change and progress itself, in real terms, are not readily welcomed in the capitalist system as it often disturbs the success of established institutions. The incredibly slow rate of application of new, sustainability improving technological methods is a case in point.[95]


In fact, on the corporate level, there is not only a perpetual war to reduce such competition but there is also the ongoing exploitation of the public in general. Adam Smith actually made this point in his The Wealth of Nations, stating: “The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public...To narrow the competition is always the interest of dealers...But to narrow the competition...can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.”[96]

On the national level, “peace” today seems to be merely a pause between conflicts on the stage of global civilization. There is a war going on somewhere virtually all the time and when there isn't, the major powers are busy building more advanced weapons and/or selling off the old ones to other countries who are posturing in the same way, all under the name of not only protection but in the name of “good business” as well.[97] Even nations themselves have taken on a form of class hierarchy with dominant 1st world nations subjugating poor 3rd world nations. Common gradient terms such as superpowers, powers, sub-powers and vassal states can be found in historical literature with respect to the national class hierarchy and the structural mechanisms which keep this gradient in form are not very different in intent than what keeps the social classes in order.

For example, while the debt and interest systems, as described, do very well to keep downward pressure on the lower classes, structurally limiting prosperity and social mobility, the same effect occurs to repress a nation via the World Bank and International Monetary Fund.[98] Even John Adams, the second president of the United States pointed this out with his statement: “There are two ways to conquer and enslave a country. One is by the sword. The other is by debt.”[99]

On the broadest scale, the real war being waged is on problem resolution and human harmony. The real war is on a balance of power and social justice. The real war, in effect, is on the institution of economic equality.[100] [101]= =In the words of former Supreme Court justice, Louis D. Brandeis: "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both."[102]

All across the world today people talk about the need for equality. Most literate people in the world have no respect for gender or racial bias. The idea of being sexist or racist has become a deeply abhorred view, even though it was not that long ago in the Western world such cultural views were considered “normal”. There appears to be a course of evolution that wishes to equalize society that is, by definition, what the underlying gesture of “democracy” is supposed to denote.

Yet, in the midst of all this, the most oppressive form of segregated human suffering continues largely unnoticed in its true context. Today, it is not race, gender or creed that keeps one most oppressed – it is the institution of class. It is now an issue of “rich” and “poor” and, like racism, these ideological and ultimately structural forms of oppression discriminate and divide the human species in deeply powerful and destructive ways.

In the broad view, this theatre of multidimensional warfare - truly a world= =at war with itself – is wholly unsustainable. It is becoming more and more clear, given the accelerating social problems at hand, that the ethos of all-out competition and narrow self-preservation at the expense of others - whether on the personal, corporate, class, ideological or national level - will not be the source of any resolution or long-term human prosperity. It is going to take a new type of thinking to overcome these sociological trends and at the heart of such dramatic cultural change rests the change of the socioeconomic premise itself.


References

  1. Source: “Man's place in the animal world”, What is Man? And other Irreverent Essays, Mark Twain, 1896, p.157
  2. “The fight-or-flight response” (or the acute stress response) was first described by American physiologist Walter Bradford Cannon. His theory states that animals react to threats with a general discharge of the sympathetic nervous system, priming the animal for fighting or fleeing.
  3. Sometimes also called the Agricultural Revolution, it was the world's first historically verifiable revolution in agriculture. It was the wide-scale transition of many human cultures from a lifestyle of hunting and gathering to one of agriculture and settlement that supported an increasingly large population and the basis for modern social patterns today.
  4. Reference: Exponentially Accelerating Information Technologies Could Put an End to Corporations (http://scienceprogress.org/2011/06/exponentially-growing-information-technology-will-put-an-end-to-corporations/)
  5. Source: Why Zebras Don't Get Ulcers, Robert Sapolsky, W. H. Freeman, 1998, p.383
  6. Source: A Short History of War: The Evolution of Warfare and Weapons, Richard A Gabriel, Strategic Studies Institute, U.S. Army War College, Chapter 1, 1992
  7. Ibid.
  8. Source: Merriam-Webster.com (http://www.merriam-webster.com/dictionary/imperialism)
  9. Reference: Economic Development of the North Atlantic Community, Dudley Dillard, Prentice-Hall, New Jersey, 1967, pp.3-178.
  10. The use of religion to generate political support for imperial acts of war is quite common historically. Even in the United States today, politicians, with respect to recent military actions, have consistently made a general undertone of religious war or of acting on the behalf of “God”. Islamic and Jewish states appear to do the same thing, along with states. The Israeli-Palestinian conflict, for example, which is generally acknowledged as a deeply religious conflict for “holy” territory, reveals, upon closer inspection, that religion, while perhaps a real factor in the public mind overall, is actually not the root of the conflict. The real root appears to be elite imperialism and resource acquisition in general, with religion used as means to foster and maintain public support. Reference: http://www.thejakartaglobe.com/globebeyond/israel-palestine-not-a-religious-conflict/558353
  11. State supported media is commonly defined as media produced by direct funding from a country's government. While this is still common in the world and often subject to state propaganda, in the United States, a similar yet more obscure form has emerged - something we could call corporate-state supported media. Corporate statism is a form of "corporatism" whose adherents hold that the corporate group is the basis of society and the state. The poetic tradition of the "free press" in the US, being without "regulation" or "interference", is a long-standing value and assumption. Yet, when we factor in the reality of the increasing concentration of major media outlets, such as the fact that as of 2012 six corporations control 90% of them* - coupled with the basic understanding that there is little to no separation between the government and its corporations by default in the Capitalist rooted socioeconomic model between the government and its corporations - it is difficult to defend the idea that the most dominant news outlets exist without ideological influence towards preserving the status quo since they are so bound up with it. With respect to the initiation of war, a statistical review of historical media for the past 100 years will show a deep support by all major news outlets towards the government's interests. *Source: (http://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6)
  12. Former US National Security Advisor Zbigniew Brzezinski understood this well, and stated in his famous work The Grand Chessboard: American Primacy And Its Geostrategic Imperatives: "The attitude of the American public toward the external projection of American power has been much more ambivalent. The public supported America's engagement in World War II largely because of the shock effect of the Japanese attack on Pearl Harbor. (Basic Books Publishing, 1998, pp.24-25) “...as America becomes an increasingly multi-cultural society, it may find it more difficult to fashion a consensus on foreign policy issues, except in the circumstance of a truly massive and widely perceived direct external threat."(Basic Books Publishing, 1998, p.211)
  13. The term paternalism is defined as: “a system under which an authority undertakes to supply needs or regulate conduct of those under its control.” (http://www.merriam-webster.com/dictionary/paternalism) The term “patriotic paternalism” denotes the assumption that a sovereign nation knows better than another and hence it works to influence and take control of the nation for the supposed benefit of its people.
  14. In the modern day, the term “preemptive war” is commonly used to justify an act of aggression by the claim it is a defensive move to thwart a looming attack of some kind by the target.
  15. Former US National Security Advisor Zbigniew Brzezinski expresses this “paternalistic defense” clearly in his work The Grand Chessboard: American Primacy And Its Geostrategic Imperatives. He states with respect to the need for America to essentially remain in control of the world: "America is now the only global superpower, and Eurasia is the globe's central arena. Hence, what happens to the distribution of power on the Eurasian continent will be of decisive importance to America's global primacy and to America's historical legacy." (Basic Books Publishing, 1998, p.194) "To put it in a terminology that harkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together." (Ibid., p.40) "Henceforth, the United States may have to determine how to cope with regional coalitions that seek to push America out of Eurasia, thereby threatening America's status as a global power." (Ibid, p.55)
  16. Source: An Inquiry Into the Nature of Peace and the Terms of Its Perpetuation, Thorstein Veblen, Echo Library, 1917 p.16
  17. Ibid., p.7
  18. Ibid., p.16
  19. Reference: Can You Support the Troops but Not the War? Troops Respond (http://www.huffingtonpost.com/paul-rieckhoff/can-you-support-the-troop_b_26192.html)
  20. “Doublethink” a term coined by George Orwell which describes the act of simultaneously accepting two mutually contradictory beliefs as correct.
  21. “Treason” is defined as: “the offense of attempting by overt acts to overthrow the government of the state to which the offender owes allegiance” Source: http://www.merriam-webster.com/dictionary/treason
  22. “Sedition” is defined as: “incitement of resistance to or insurrection against lawful authority” Source: http://www.merriam-webster.com/dictionary/sedition
  23. From World War II's Japanese-American Internment camps that imprisoned over 127,000 US citizens, (Source: http://www.ushistory.org/us/51e.asp) to the suspension of civil liberties as such as “habeas corpus”, (Source: http://www.salon.com/2009/04/11/bagram_3/) to the prosecution for mere speech, (Source: http://www.history.com/this-day-in-history/us-congress-passes-sedition-act) rights violations during wartime is an historical constant.
  24. A recent example of this was the “Occupy Movement” uprising that was later revealed to be considered a possible “terrorist threat” by the FBI. (Source: http://www.justiceonline.org/commentary/fbi-files-ows.html)
  25. Israel, for example, enforces near full conscription of its citizens. (Source: http://www.aljazeera.com/news/middleeast/2012/07/20127853118591495.html)
  26. Reference: “Why Is Getting Out of the U.S. Army So Tough?”, Time, 2012 (http://nation.time.com/2012/05/04/why-is-getting-out-of-the-u-s-army-so-tough/)
  27. Reference: “Military recruiters target isolated, depressed areas”, Seattle Times, 2005 (http://seattletimes.com/html/nationworld/2002612542_recruits09.html)
  28. Source: “Pentagon Spending Billions on PR to Sway World Opinion”, Fox News, 2010 (http://www.foxnews.com/politics/2009/02/05/pentagon-spending-billions-pr-sway-world-opinion/)
  29. Source: “Federal Revenues by Source”, Heritage.com, 2012 (http://www.heritage.org/federalbudget/federal-revenue-sources]
  30. Reference: The 25 Most Vicious Iraq War Profiteers, BusinessPundit.com, 2008 (http://www.businesspundit.com/the-25-most-vicious-iraq-war-profiteers)
  31. Reference: Ten Companies Profiting Most from War, 247WallSt.com, 2012 (http://247wallst.com/2012/02/28/ten-companies-profiting-most-from-war/)
  32. Reference: Advocates of War Now Profit From Iraq's Reconstruction, LATimes.com, 2004 (http://articles.latimes.com/2004/jul/14/nation/na-advocates14)
  33. Reference: Deadly Sanctions Regime: Economic Warfare against Iran, GlobalResearch.ca, 2012 (http://www.globalresearch.ca/deadly-sanctions-regime-economic-warfare-against-iran/5305921)
  34. Reference: Confessions of an Economic Hit Man: How the U.S. Uses Globalization to Cheat Poor Countries Out of Trillions, DemocracyNow.org, 2004 (http://www.democracynow.org/2004/11/9/confessions_of_an_economic_hit_man)
  35. Reference: Banana Wars: Major General Smedley Butler, About.com (http://militaryhistory.about.com/od/1900s/p/Banana-Wars-Major-General-Smedley-Butler.htm)
  36. Source: War is a Racket, Smedley D. Butler, William H Huff Publishing, 1935, Chapter 1, p.1
  37. Originally in Common Sense, 1935. Reproduced in Hans Schmidt's Maverick Marine: General Smedley D. Butler and the Contradictions of American Military History. University Press of Kentucky, 1998 p.231
  38. Source: Imperialism: A Study, J.A. Hobson, University of Michigan Press, Ann Arbor, 1965, p.367
  39. Reference: Western Colonialism defined: http://www.britannica.com/EBchecked/topic/126237/colonialism-Western]
  40. Source: An Inquiry Into the Nature of Peace and the Terms of Its Perpetuation, Thorstein Veblen, B.W. Hubsch, 1917 pp.366-367
  41. Ibid. p.367
  42. Reference: Our Economic Warfare, ForeignAffairs.com (http://www.foreignaffairs.com/articles/70162/percy-w-bidwell/our-economic-warfare)
  43. As noted by research by the STWR regarding the World Bank: “In most of its client countries, it is virtually the only doorway to access international trade, development finance and private investment capital. It derives its power and policy agendas from its wealthiest shareholders – governments that comprise the G-7...who routinely use the Bank to secure lucrative trade and investment deals in developing countries for their respective transnational corporations (TNCs).” Source: IMF, World Bank & Trade, STWR (http://www.stwr.org/imf-world-bank-trade/corporate-power-and-influence-in-the-world-bank.html)
  44. Reference: East India Company, Britannica.com (http://www.britannica.com/EBchecked/topic/176643/East-India-Company)
  45. As of 2011, it has been reported that the US military exists in over 130 countries, with an estimated 900 bases. Source: Ron Paul says U.S. has military personnel in 130 nations and 900 overseas bases, politifact.com, 2011 (http://www.politifact.com/truth-o-meter/statements/2011/sep/14/ron-paul/ron-paul-says-us-has-military-personnel-130-nation/)
  46. Reference: Why the Developing World Hates the World Bank, TheTechOnline, 2002 (http://tech.mit.edu/V122/N11/col11parek.11c.html)
  47. Source: The Principles of Political Economy and Taxation, David Ricardo, 1821, Dent Edition, 1962,p.64
  48. Source: An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith, 1776, par. V.1.2
  49. Source: Notes of the Secret Debates of the Federal Convention of 1787, Robert Yates, Alston Mygatt, p.183
  50. Reference: One percent holds 39 percent of global wealth, RawStory.com, 2011 (http://www.rawstory.com/rs/2011/05/31/one-percent-holds-39-percent-of-global-wealth/)
  51. Reference: Poor Americans Pay Double The State, Local Tax Rates Of Top One Percent, HuffingtonPost.com, 2012 (http://www.huffingtonpost.com/2012/09/21/poor-americans-state-local-taxes_n_1903993.html)
  52. Reference: Don't Tax the Job Creators, Cnbc.com, 2012 (http://www.cnbc.com/id/48290347/Don039t_Tax_the_Job_Creators_Romney)
  53. Reference: Private Debt Kills the Economy, GlobalResearch.ca, 2012 (http://www.globalresearch.ca/private-debt-kills-the-economy/5303842)
  54. For a full treatment on the creation of money, see: Modern Money Mechanics, Federal Reserve Bank of Chicago, 1961
  55. Reference: U.S. Credit Card Debt Grows, Fewer Americans Make Payments On Time, HuffingtonPost.com, 2012 (http://www.huffingtonpost.com/2012/11/19/us-credit-card-debt-grows_n_2158010.html)
  56. Reference: Drowning In Medical Debt? Filing For Bankruptcy Could Be Your Life Raft, BusinessInsider.com, 2012 (http://articles.businessinsider.com/2012-01-27/news/30669714_1_bankruptcy-filers-medical-debt-credit-score)
  57. Reference: The Debt That Won't Go Away, cnbc.com, 2010 (http://www.cnbc.com/id/40680905)
  58. Reference: The American Household Is Digging Out of Debt in the Worst Possible Way, TheAtlantic.com, 2013 (http://www.theatlantic.com/business/archive/2013/01/the-american-household-is-digging-out-of-debt-in-the-worst-possible-way/272657/)
  59. A common objection to this analysis is the assumption that interest income is also output into the money supply through savings accounts, C.D.s and other such investments. However, this assumes that that money is being created during the time of payment. This is not true. Interest income payments are generated by the existing profits of the financial institution so the assumption does not change the equation. The interest fee required for payment simply doesn't exist in the money supply.
  60. It is interesting to point out as an aside that banking institutions by which loans are obtained for a purchase - such as a home – are able to take the full property regardless of the value paid in prior. Even if 99% of the loan is paid off, they can still take 100% of the property if the final payments are not made.
  61. For example, a person who deposits $1 million into a C.D. at 3% interest annually will generate $30,000 a year merely for that deposit alone. In terms of percentage, 3% may not seem as that dramatic. In terms of absolute value, compared to the income of the vast majority, it is quite dramatic.
  62. Source: Investopedia.com (http://www.investopedia.com/terms/i/inflation.asp#axzz2JypjmRJs)
  63. Reference: Macroeconomics: Theory and Policy, Robert J. Gordon, ”Modern theories of inflation” McGraw-Hill, 1988
  64. “Quantity Theory of Money” defined source: http://www.investopedia.com/articles/05/010705.asp#axzz2JypjmRJs
  65. 3.5% annual depreciation after 10 years. Original value $30,000 - Year 1: $28,950; Year 2: $27,937; Year 3: $26,960; Year 4: $26,017; Year 5: $25,107; Year 6: $24,229; Year 7: $23,381; Year 8: 22,563; Year 9: $21,774; Year 10 $21,012
  66. For a full treatment on the Fractional Reserve Lending, see: Modern Money Mechanics, Federal Reserve Bank of Chicago, 1961
  67. To quote Modern Money Mechanics, a text produced by the Federal Reserve Bank of Chicago: “Of course, they [the banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts...Reserves are unchanged by the loan transactions. But the deposit credits constitute new additions to the total deposits of the banking system” (Modern Money Mechanics, Federal Reserve Bank of Chicago, 1961)
  68. To quote Modern Money Mechanics: “The total amount of expansion that can take place...Carried through to theoretical limits, the initial $10,000 of reserves distributed within the banking system gives rise to an expansion of $90,000 in bank credit (loans and investments) and supports a total of $100,000 in new deposits under a 10 percent reserve requirement.” (Modern Money Mechanics, Federal Reserve Bank of Chicago, 1961)
  69. Reference: U.S. Income Inequality: It's Worse Today Than It Was in 1774, TheAtlantic.com, 2012 (http://www.theatlantic.com/business/archive/2012/09/us-income-inequality-its-worse-today-than-it-was-in-1774/262537/)
  70. Reference: The Unequal State of America: a Reuters series, Reuters.com, 2012 (http://www.reuters.com/subjects/income-inequality/washington)
  71. Reference: Income Inequality Around the World Is a Failure of Capitalism, TheAtlantic.com, 2011 (http://www.theatlantic.com/business/archive/2011/05/income-inequality-around-the-world-is-a-failure-of-capitalism/238837/)
  72. Reference: The Top 0.1% Of The Nation Earn Half Of All Capital Gains, Forbes.com, 2011 (http://www.forbes.com/sites/robertlenzner/2011/11/20/the-top-0-1-of-the-nation-earn-half-of-all-capital-gains/)
  73. Source: Investorwords.com (http://www.investorwords.com/706/capital_gain.html)
  74. Reference: Capital gains tax rates benefiting wealthy feed growing gap between rich and poor, WashingtonPost.com, 2011 (http://www.washingtonpost.com/business/economy/capital-gains-tax-rates-benefiting-wealthy-are-protected-by-both-parties/2011/09/06/gIQAdJmSLK_story.html)
  75. Reference: Questioning the Dogma of Tax Rates, NYTimes.com, 2011 (http://www.nytimes.com/2011/08/20/business/questioning-the-dogma-of-lower-taxes-on-capital-gains.html?pagewanted=all&_r=0)
  76. Reference: Top Canadian CEOs make average worker’s salary in three hours of first working day of year, FinancialPost.com, 2012 (http://business.financialpost.com/2012/01/03/top-canadian-ceos-make-average-workers-salary-in-three-hours/)
  77. Reference: CEO pay and the top 1%, Epi.org, 2012 (http://www.epi.org/publication/ib331-ceo-pay-top-1-percent/)
  78. Ibid.
  79. Reference: China Issues Proposal to Narrow Income Gap, NYTimes.com, 2013 (http://www.nytimes.com/2013/02/06/world/asia/china-issues-plan-to-narrow-income-gap.html)
  80. Reference: Society at a Glance 2011 - OECD Social Indicators, Oecd.org, 2011 (http://www.oecd.org/social/socialpoliciesanddata/societyataglance2011-oecdsocialindicators.htm)
  81. Reference: 10 Countries With The Worst Income Inequality: OECD, HuffingtonPost.com, 2011 (http://www.huffingtonpost.com/2011/05/23/10-countries-with-worst-income-inequality_n_865869.html#s278244&title=1_Chile)
  82. U.S. Census data revealed:”The top-earning 20 percent of Americans – those making more than $100,000 each year – received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent made by the bottom 20 percent of earners, those who fell below the poverty line, according to the new figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968. At the top, the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, the data show. Families at the $50,000 median level slipped lower.” Source: http://www.huffingtonpost.com/2010/09/28/income-gap-widens-census-_n_741386.html
  83. Reference: Income Gap Widens: Census Finds Record Gap Between Rich And Poor (http://www.huffingtonpost.com/2010/09/28/income-gap-widens-census-_n_741386.html)
  84. Source: Investopedia.com (http://www.investopedia.com/terms/p/plutonomy.asp#axzz2K4wDOCp1)
  85. Source: Plutonomy: Buying Luxury, Explaining Global Imbalance, Citigroup Internal Memo, October 16th 2005, p.1
  86. Ibid, p.2
  87. Source: The Plutonomy Symposium — Rising Tides Lifting Yachts, Citigroup Internal Memo, September 29, 2006, p.11
  88. Reference: Wealth, Income, and Power, UCSC.edu, 2013 (http://sociology.ucsc.edu/whorulesamerica/power/wealth.html)
  89. Source: Revisiting Plutonomy: The Rich Getting Richer, Citigroup Internal Memo, March 5th, 2006, p.11
  90. Source: The Plutonomy Symposium - Rising Tides Lifting Yachts, Citigroup Internal Memo, September 29, 2006, p.11
  91. Source: Plutonomy: Buying Luxury, Explaining Global Imbalance, Citigroup Internal Memo, October 16th 2005, p.24
  92. For a more detailed analysis of these documents by Citigroup, see: http://www.insideriowa.com/en/opinion/index.cfm?action=display&newsID=17761
  93. Source: National Public Radio (October 15, 2012) "A Startling Gap Between Us And Them In 'Plutocrats'" (http://www.npr.org/2012/10/15/162799512/a-startling-gap-between-us-and-them-in-plutocrats)
  94. A well established example of inhibited progress for the maintaining of existing profit establishments was the successful effort made by the oil industry and, by extension, the U.S. government to slow progress toward fully electric vehicles in the 1990s. (Suggested viewing: “Who Killed the Electric Car?”: http://www.imdb.com/title/tt0489037/synopsis)
  95. Reference: Oil Giants Loath to Follow Obama’s Green Lead (http://www.nytimes.com/2009/04/08/business/energy-environment/08greenoil.html?pagewanted=all&_r=0)
  96. Source: An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith, Modern Library Reprint, 1937, New York, p.250
  97. Reference: The U.S.: Arms Merchant to the Developing World, Time.com 2012 (http://nation.time.com/2012/08/28/theres-no-business-like-the-arms-business-2/)
  98. Reference: Structural Adjustment - a Major Cause of Poverty, GlobalIssues.org, 2013 (http://www.globalissues.org/article/3/structural-adjustment-a-major-cause-of-poverty)
  99. Source: Heritage.com (http://www.john-adams-heritage.com/quotes/)
  100. Reference: =Extreme' Poverty in US Has More Than Doubled, Study Says, MoneyNews.com, 2012 (http://www.moneynews.com/Economy/Extreme-Poverty-US/2012/03/06/id/431627)
  101. Reference: Of the 1%, by the 1%, for the 1%, VanityFair.com, 2011 (http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105)
  102. Source: Quoted by Raymond Lonergan in Mr. Justice Brandeis, Great American, 1941, p.42

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