Category Archives: Profits

When will we learn that war is complete idiocy?

“When will they ever learn, when will they ever learn?…”

129 brutally killed in Paris: western media on fire. 43 brutally killed in Lebanon: the usual short notices in our media. 1,000,000 killed in Iraq: the root of the evil seldom mentioned.

Bernie Sanders cursed in church during Saturday’s Democratic candidate debate by saying that ISIS was created by the Iraq war, although it should be self-evident for anyone with an IQ above 30. It means that only top level reactionary pundits, journalists and politicians can ignore such a clear fact. Sanders’ outspoken view on this topic may very well be what disqualifies him as a candidate for the Democrats (if not all his other less housetrained opinions do). Implicitly he says that the Paris massacres can be put on Bush’s and Blair’s account (as war criminals).

When will we learn? For 500 years European powers have sought to subdue the entire world with military power. Initially these immoralities may have had some profitable effect for Europe. Assets of all kinds – technology, raw materials, slaves – could be stolen and enrich the masters of the world. At the same time the subdued countries could be withheld, their often superior products banned from competition by trade barriers and their own cultures undermined from within.

If this immoral behavior once could be said to work – for us – that is since long not true. The conquered colonies back then had no weapons that matched ours, which was the decisive factor, but that’s not how it works today. We can no longer intimidate people with threat and use of violence: they can hit back in all kinds of ways, and they do. If we don’t rise above this imperialist thinking once and for all, we can look forward to perpetual massacres from all sides: a mutual suicide and destruction that will end our era as masters of the world.

As we are pathologically fixated on killing as a means to achieve power, a country such as China is conquering the world behind our backs with peaceful and constructive methods, such as trade deals and all kinds of contribution to development, not least important infrastructure projects.

The Chinese cannot be intimidated. Their prime principle of foreign policy is non-interference in other countries internal affairs. When the West someday reaches the same level of political maturity, war will become a rarity.

Until then we have to sit with jaws dropped and watch our profit fixated business leaders and their bought politicians handle a dysfunctional economic system which funnels obscene wealth to a few at the expense of the majority and their need of fair living conditions and a decent society.

The economic life as a marbles game

When I was a kid every boy played marbles. Later my children did too, in their case with some girls also participating. It was an interesting schooling for the life to come.

The older guys had the most marbles to begin with, and at the end of the day the younger ones, less affluent, usually had lost the few marbles they had started out with. The older ones were also the strongest, so the outcome of any controversy about rules and other conflicts was given beforehand.

The reward for the small guys was the privilege to get to play with the big guys in the first place. And the fairness of it all lay in the fact that the younger ones one day became the older ones, thus able to retaliate for past inequities, bringing home large bags of marbles.

This game is a parable for life, except that in reality those who are poor from the start seldom get the chance to ever come on top, regardless of age. The well-offs in the world have the upper hand all the way, and the richer countries can indefinitely dominate the poorer and dictate terms.

This inequity plays out in trade rules. “Free trade” is a core concept seemingly promising the poor nations shelter under the umbrella of the rich world, which undertakes to open its borders to share its wealth. But just as in the marbles game, where the rules are the same for all, the real outcome is decided by wealth and strength.

The economic “sciences” provide convenient theories to prove that free trade brings prosperity to all. In the real world it’s an instrument serving above all the already rich nations. The most powerful are served the most. It’s no difference from the situation within nations: the rich have the most bargaining power to acquire even more wealth.

The mechanisms by which businesses in rich countries can use “free trade” to enhance their predominance are often equally simple and horrendous. One basic step is to overflow developing countries with cheap, heavily subsidized agricultural products. Thus imperialistic agribusiness effectively wipes out domestic farmers, and forces them to enroll the army of unemployed, serving foreign-owned industries with labor forced to work for pennies.

Absence of tariffs gives businesses in the industrialized world the opportunity to establish workshops in poor countries and profit handsomely on minimal wages. One result of this can easily be found in the numerous rust belts in the rich world, where material destruction leads to destitute societies where people lose hope.

Modern imperialism also uses free trade agreements to avoid all kinds of regulatory constraints, such as environmental regulations, laws ensuring workers security and other kinds of “unnecessary” obstacles to the ever growing profits. Other absurd clauses give corporations the right to sue countries that enforce laws which restrict possibilities to make profit.

The Nation provides a comprehensive and revealing text on the consequences for Central America of the free trade agreement DR-CAFTA. Recommended reading!

Are there reasons to revise the old thesis that profit is theft?

We are in the season for economic reports from the Swedish business world, with their staggering profits announced to happy shareholders, as we simultaneously still read about a world where millions suffer from the latest catastrophe concocted by respected criminals in international finance corporations.

In a rather discrete article in my paper one could read the other day that the large companies in our country bestow their shareholders this year with almost 200 billion Crowns (SEK) in dividends alone (7 SEK = 1 USD). Total profits are thus considerably more than that. And this is just from the large companies.

Extrapolating to all companies and total profits one could estimate that each household in Sweden pays about the same amount of “taxes” to private businesses as they pay in taxes to the community, state and local. How this can go on year after year with only marginal comments in the main media should have been some kind of mystery, at least. But there are “explanations”.

The first line of defense is that we all provide the huge profits to capitalists on a voluntary basis. And yes, we are not forced by anyone to buy any goods or services… unless we don’t want to become homeless and live on the sidewalks. It’s rather difficult to survive without feeding the wolfs, although there are some alternatives in the margin, such as cooperatives and the like.

We can take the Swedish bank system as an example. There are four major banks which provide all necessary banking services in this country. For everyone with a normal private economy it’s almost imperative to apply to any of these four banks for services. And these banks don’t compete with prices. They charge too high interest rates on loans and offers too low on deposits, thus making huge profits, half of which they hand out to their owners this year.

If the four banks would arrange meetings in which they agree on this oligopolistic pricing, it would be illegal. But no meetings are necessary. They know perfectly well how to keep interest rates on profitable levels and how to prevent competition, thereby forcing an average household to pay the equivalent of one month’s salary in “taxes” to their bank each year. And we are all enough disciplined not to start any tax revolt in this case, in fact not even react in the most modest way.

Another line of defense for businesses when they practically steal from consumers to create profits is that some of the stolen property returns to ordinary people through pension funds, who are large investors in shares and bonds. That’s of course true but rather pointless. To first deprive people of money, only to give back some part of it, is in all circumstances to drain off wealth in benefit of a rich minority.

It’s a fact that Swedish industries are large exporters, thus that their profits in part are paid by foreigners. If this would be an argument it’s also true that there are many foreign companies operating in Sweden with the opposite effect. But it’s of course a lousy argument. Where the ordinary people who pay for the profits happen to live should be irrelevant.

We are made to believe that profit is a necessary concept in a capitalist society. But in fact profit is an anomaly within neoclassical economic theory. In that model the productive factors worthy of compensation are labor and capital, through wage and interest respectively. To become valid the theory presupposes perfect competition, which entails that economic actors will compete until the margin for profits is compressed to nil.

This inconvenient circumstance has of course bothered economists eager to defend the prevailing system, and numerous attempts have been made to extract something productive from the capitalists’ juggling with their money. But this is a problem just for a narrow world of theoretical discussion. In real life the disastrous shortcoming of the dominant economic theory is totally ignored. Profit is not just considered absolutely natural but indeed one of the most important indicators of the health of an economy.