Psychopath Economics: Should we attack the system to save ourselves?

psychopath economics2  psychopath economics cover v2.1 pt1

We live in a world of major threats. Growing inequality and austerity; government for bankers, by bankers; the march towards catastrophic climate change and resource depletion. And then there’s the backdrop of constant, far-away wars. It’s a slow-motion car crash we seem powerless to avoid, despite small victories such as Greece’s No vote yesterday.

But there’s a good reason why our political and economic system is failing to address these threats. It’s the same reason why we are increasingly oppressed by our own governments. And that is: our political and economic system is psychopathic.

What’s more, it will kill us if we don’t challenge it. And if we are going to challenge it, we must look beyond traditional forms of political campaigning and protest, which are little more than expressions of futile rage and have little effect.

This is not, however, a narrative of despair. If grassroots campaigns are really to make any difference across the range of critical issues, they must be smarter, more targeted and must explicitly seek to use economic power as leverage.

Ordinary people have much more power than they think, they just don’t see it, or are scared of using it – as I argue in my book, Psychopath Economics, before going on to outline some methods by which, I believe, could be more effective. Unlike a lot of writers, I don’t see the point of providing a critique of power without also offering ideas on how to change it.

The purpose of this article is to promote the book and the issues around the need to take power back from the elite. To summarise the book’s main points:

The challenge

  1. Power:
  • Economic power is inherently psychopathic. It actively creates victims and blames them for being its victims.
  • Elites relentlessly take more wealth and power. Today’s ‘One Percent’ owns half of all global wealth, but still wants more and doesn’t care if getting it means starving everyone else and destroying the planet.
  • The elite is seeking to neutralise all democratic alternatives to corporate power, by shrinking or subordinating the state – hence the widespread adoption of austerity and the secret negotiations on TPP and TTIP.
  • The elite wants to make societies completely dependant on corporations as the providers for all human need. If successful, they will enslave our economies.
  1. Economic growth:
  • Economic growth is sold to ordinary people as a promise of greater prosperity that has not been delivered for decades. Ordinary people are constantly exhorted to work harder to achieve it, but economic growth largely benefits only the elite.
  • Growth is increasingly a function of economic control, and one that’s environmentally unsustainable. The elite would rather shrink the population, destroy the planet and enforce its control than concede any power.
  1. The gulf gets wider:
  • Forget the trickle-down effect, it doesn’t exist – thanks in large part to a system in which money is created as debt by commercial banks.
  • The wealth pouring up to the elite more than outweighs any downward redistribution by the state and progressively empties the real economy of vitality and jobs. Ordinary people are encouraged to make up the difference by taking on ever more debt.
  • By definition, for every pound or dollar of net wealth, there’s an equivalent net debt held elsewhere. Getting rich means pushing someone else into debt. In this way, the elite’s wealth is bought at the direct cost of everyone else’s indebtedness, a gulf that interest payments, tax breaks, incentives and bailouts widens.
  • Unequal capitalist economies are less efficient and create less happy societies.
  1. Catastrophe, here we come…
  • We are being driven on a path of unsustainable consumption that relies on the exploitation of human and natural capital beyond their breaking point. Exponential growth rates mean resource depletion and catastrophic climate change will be with us in just a decade or so.
  • Humanity has been here before. Elites, their belief systems and psychopathic exercise of power are major drivers of the rise and fall of societies. Only, this time, our civilisation is global. The victims of collapse will have no escape.

Taking back power

  1. Challenging the system: There are risks to challenging the system, but overwhelming evidence suggests that failing to do so will simply guarantee our own destruction. Psychopathic power concedes nothing without a genuine threat, so traditional forms of political campaigning and protest, though important, will make little difference on their own. Instead, we need:
  • More imaginative and disruptive campaigns explicitly designed to leverage change by threatening to degrade, devalue or negate the elite’s assets.
  • More targeted campaigns against corporations, brands and organisations most closely connected with human exploitation, environmental destruction, corruption and lobbying.
  • A more explicit agenda that redefines and promotes what business is actually for.
  1. Campaign via the political system to:
  • Reinstitute downward redistribution of wealth while politicising debt. Capitalism works best when wealth is widely distributed. It makes societies happier, too.
  • Replace ‘debt-money’ with sovereign money that is democratically controlled in the interests of society, not of a parasitic banking sector.
  • Redefine debt-money as illegitimate or odious as a precursor to a campaign of debt cancellation.
  • Attack the moral and economic rationale for debt, which always grows beyond an economy’s ability to pay. Enforcing unpayable debts unnecessarily foists misery on ordinary people – just look at Greece.
  • Ensure risks emanating from the corporate and financial sector should remain there. Corporate risks should not be nationalised or underwritten by taxpayers. And, where they are, they should be subject to clear repayment criteria.
  1. Direct action:
  • Directly attack the rationale of debt – including its moral, economic and legal framework – as part of the wider campaign for cancellation. Debt strikes have the potential to destabilise an already vulnerable financial system. And where there’s vulnerability, there’s leverage.
  • Directly campaign for tax strikes as a counterweight to corporate lobbying power. No tax without representation; no representation without tax.
  • Threaten and launch class actions against governments and corporations engaged in exploitative practices and failure to address climate change.
  • Anti-branding and ‘brandalism’ – campaigns that ‘vandalise’ brands so as to reverse the ever-increasing corporate control of public mindshare through marketing and advertising.
  • Publicise and democratise short-selling campaigns through the stock markets that target specific corporations and degrade the value of their assets.
  • Disintermediate’ the corporate press, financial system and captured states by promoting a diverse media, non-debt digital money (such as bitcoin) and peer-to-peer technologies.

Fear is a major factor that inhibits grassroots movements for change, but whatever the risks might be, all the evidence suggests that the risks associated with doing nothing are much greater and more urgent.

One of the first lines of argument we will hear if any grassroots campaign does begin is how it will threaten to destroy the economic system. But history suggests otherwise and, in any case, the elite is as likely to crash the system itself to keep the wealth and power it already has.

Psychopath Economics comes in four parts. The first, The Bull & The Bewildered Herd, describes the book’s overall arguments before critiquing mainstream economics as a service industry that specialises in selling ideas and concealing basic truths behind a veil of science.

I’m not particularly into the salesman thing, but the book has been published by Smashwords and so, if you like its message, you can promote it as an affiliate and obtain a commission on each copy sold via a link on your Facebook page or website.

Meanwhile, if anyone out there is interested in collaborating with me, or would like me to give a presentation or talk on the issues contained in the book, then please drop me a line via the details below.

Contact

Email at info@peterbatt.co.uk

Twitter: https://twitter.com/peterbatt

Author profile at Smashwords: http://www.smashwords.com/profile/view/peterbatt

Psychopath Economics Facebook page: http://www.facebook.com/psychopatheconomics

Psychopath Economics blog at http://psychopatheconomics.com

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Marching won’t beat austerity, but a debt rebellion might

anti-austerity

So Saturday’s anti-austerity marches in London and Glasgow were just the latest of a continuing campaign. Labour leadership hopeful Jeremy Corbyn and comedian-come-revolutionary Russell Brand addressed the assembled hordes in the capital.

Theirs is a just cause. Austerity not only disproportionately hurts the poor, but it also very rarely works during a recession. What’s more, although austerity does not always inhibit economic growth, the benefits of growth are overwhelmingly concentrated at the top where income is unequally distributed. Income inequality has been steadily growing in the UK since the mid-1980s, and so the poor and middle classes are likely to feel the pain but few of the rewards.

But their challenge is that traditional forms of protest have lost their effectiveness. As the third, 2m-strong anti-Iraq war demonstration made painfully clear in 2003, marching might foster a satisfying sense of solidarity and shared experience, but in today’s world it is little more than an expression of futile rage. Marching changes nothing.

However, by sticking to their template for public protest, the anti-austerity movement is overlooking some very potent sources of power, a point clearly demonstrated by Russell Brand’s appearance on the Keiser Report in April. The show’s host asked Brand to identify the “chink in the armour” that could be used to rein in the financial elite and its austerity agenda. His answer? “Individual direct action, collective direct action, co-operation, collectivisation and … your [Max Keiser’s] alternate currency model.” Brand might be right on all counts, but such words will hardly have the neoliberals quaking in their boots.

Like many of those opposed to the spiteful thrust of government policy, Brand is strong on outrage but relatively light on leveraging change. Few may have sympathies with the bankers, or a political establishment set on penalising the poor, but the narrative is incomplete.

Part of the challenge is that we are ruled by a political system that simply doesn’t care. Our leaders don’t care that austerity pushes the most vulnerable among us towards hunger and destitution, or that it gradually dispossesses the middle classes. They don’t care, even less admit, that austerity returned Britain to recession just as its post-crash recovery was gathering steam. And, in their heart of hearts, does anyone really believe that Saturday’s demonstrations would ever inspire a revelatory transformation for the likes of George Osborne and Iain Duncan Smith? No, neither do I.

Essentially, our political and economic system is psychopathic. Britain is becoming more unequal, and elites are less likely to empathise with their victims as they become more remote. Hence change is not achievable by debate alone. Psychopathic power makes no concession without a genuine threat. It’s maximising leverage that will bring change, not halting the traffic and shouting slogans, no matter how justifiable or coherent the message.

On this front, opponents to austerity and the whole neoliberal enterprise have considerably more power than they think. There are chinks in the armour, and debt is among the most potent. Debt might not seem a particularly promising line of attack at first glance, but once the rationale is understood, the system’s vulnerability becomes clear. Indeed, the sheer scope of its power might scare even the most ardent campaigners.

By retreating from such basic issues of fairness and social control as debt, the political left has ceded much of its relevance. An honest and uncompromising debate on what debt is, where it comes from and the way our financial system has used it as a weapon of control has the potential to widen the anti-austerity campaign well beyond the usual suspects.

Put simply, this is the threat: if you owe your bank £1,000, you have a problem. Owe them £100bn and the bank has a problem. An organised debt strike is a potentially powerful form of leverage because it highlights our passive consent to an elite’s parasitic extraction of wealth. Debt cancellation also has surprisingly strong moral, historical and economic foundations. Thanks to the misleading narratives around debt, most people see it as a weapon of exclusive benefit to the banks.

Debt dominates the British economy. Taken together, government, corporate and household debts come to 252% of GDP. But while ballooning government debt is constantly highlighted as one of our great existential threats, household debt – which has more than quadrupled since the early 1990s to reach £1,390bn in 2013 – is the silently-ticking time-bomb.

Debt is central to so many people’s hopes and fears. More than any other economic concept, it commands an almost primeval moral and emotional power that encompasses everything from the desire for independence and status, to fears about missing out, of dependancy and a sense of obligation to the lender. Property reinforces that power: for many, keeping their place on the housing ladder at all costs is such an obsession that it is a form of self-imposed slavery. Yet the central power of debt is derived from commonly-held falsehoods about what money is and where it comes from.

The notes and coins in our pockets, for instance, give the impression that money is a public commodity controlled by the state for everyone’s benefit. But notes and coins only make up 3% of the money in circulation. Commercial banks create the rest out of thin air by tapping numbers into a computer when they issue loans.

The implications of this are far-reaching. To start with, the commercial banks don’t create the interest on their loans, so if the total interest bill exceeds the stock of public money in circulation – which it will if the rate exceeds 3.1% – then the banks are staking a claim on money that doesn’t exist. Interest payments are spread over time, but the money still has to be found, and this is a major driver of economic growth – which is environmentally ruinous as well as of unequal benefit – and the reliance on yet more debt. As debt-money is simply deleted when a loan is repaid, our economy is completely debt dependant.

For the banks, deriving riches from money they don’t even have is a fantastic business model that allows them to extract £192m in interest from the UK economy every single day. But for the wider economy, this is little more than an economic rent, and one that largely transfers wealth and jobs from the periphery to the centre, London’s gilded circle. This is because only 8% of the banks’ loan portfolio is invested in productive assets, thus starving the wider economy of the means to renew itself. It’s a system that helps to explain why many people depend on welfare benefits, and why austerity is so unfair.

International comparisons suggest that the larger and more overbearing a financial system, the lower a nation’s productivity and prosperity will be. Given that his is the party of capital, it should be no surprise that George Osborne has barely begun to talk about Britain’s productivity gap, let alone address how the financial sector impedes UK economic performance.

But inequality is not static. Ever-increasing inequality is a dynamic process that’s central to a debt-money system such as ours because, by definition, every pound of one person’s net wealth is matched by a pound of net debt held elsewhere. In this way, the concentration of wealth among a small elite is directly bought by distributing an equivalent debt among everyone else, a disparity continually widened by interest payments.

History shows us that unequal concentrations of wealth and debt are not static in a commodity-based money system that used gold or silver coins, for instance. Debt tends to rise beyond an economy’s ability to pay whatever money system is in place. However, debt-money systems accelerate the process. In other words, unless we wipe the slate clean from time to time, or can create an explosive period of economic growth, the misery of debt deflation and dependancy becomes inevitable.

Of course, it should be expected that any debt jubilee campaign will be immediately branded as immoral and irresponsible and likely to collapse the entire financial system. History tells a rather different story. In antiquity, not only did the debt jubilees boost economies to everyone’s benefit, but were instrumental in helping many societies survive for as long as they did.

We don’t, however, have to look that far back to see the power of debt forgiveness. Post-war Germany enjoyed an ‘economic miracle’ as a direct result of the 1953 London Debt Agreement, in which half its liabilities – including personal debts – were cancelled. Interestingly, that deal reflected an explicit acceptance that excessive debts are a debilitating economic burden for which debtors alone cannot be held responsible. Indeed, its a central tenet of capitalism that interest rates reflect the lender’s risks. Blaming only the debtor is penal and unfair. As debt cancellation also shows, it is also economically counter-productive.

But a close inspection of today’s debts highlights an even more explosive issue. Some argue that today’s household debt and credit agreements might not even satisfy the laws of contract and, specifically, the rules of consideration. To be accepted as a consideration, the stake of each party must be real, tangible and have value. Also, the commitments of both the promisor (the borrower) and the promisee (the lender) must not be ambiguous or fraudulent. The mere fact that the two reach an agreement does not itself constitute a legally-enforceable contract.

In the case Currie v Misa in 1875, consideration was defined as “some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other”. In other words, the promisee accepts a forbearance in providing the promisor with a benefit or right. But if the banks aren’t actually lending anything, what exactly is their detriment or forbearance? What consideration is it that the banks are bringing to the party? Meanwhile, why do we still refer to the banks ‘lenders’ at all?

Then there’s the question of how most banks use their customers’ promises to pay. Rather than merely enjoy the interest, the banks have commonly pooled these ‘debt assets’ into securities and sell them as bonds, though the government’s Funding for Lending scheme has at least temporarily suppressed this market. However, it still raises two main issues: one concerning the bank-customer relationship and the other a potentially even greater, global economic time-bomb.

On the first, while customers might continue making mortgage repayments to their high street bank, it’s possible their repayments are actually ending up with a financial institution thousands of miles away. In fact, some banks have even taken for themselves a power of attorney so they can, on their customers’ behalf, ‘execute’ the processes necessary to securitise their debts. References to this process can sometimes be found buried away in their mortgage terms and conditions. Presumably, that’s the banks’ nod to transparency.

In addition to the lack of transparency, repackaged debt is a crucial element of the market in derivatives. The fraudulent sale by US banks of derivatives as triple-A rated securities in the sub-prime mortgage scandal was, if you remember, the spark for the 2007 credit crunch. Just three short months ago, financial regulators around the world were concerned about the apparent risks of another credit crunch hitting the bond market.

The instability of the financial markets, even without a threatened debt strike, shows just how much leverage debtors potentially have. And challenging debt is a surprisingly easy process. Under consumer credit legislation, borrowers can write to their bank to ascertain their debts’ legal status – such as who owns their promissory note. Even if their loans and mortgages are legally rock solid, simply having the conversation has the potential to unmask the deceit that gives debt its moral power.

And herein lies the real point: on a philosophical level, the economic system is simply a means by which we deliver on our promises and obligations to each other. What is notable today is that the promises and obligations increasingly go one way: from the poor and middle classes to those at the top – the elite. And all the indications are that, in today’s age of low-growth, this process will continue.

The state is one of the few means of distributing wealth downwards, though it is already more than counterbalanced by extraction of wealth upwards. Reducing the state is simply a way for the elite to deny its obligations to those below it. Many on the left might see this as a uniquely capitalist problem, but it’s actually the result of an elite’s overwhelming power.

Osborne has been described as the most political chancellor for generations, and with good reason: economics is obviously not his top priority. Instead, his agenda is about the removal and/or subordination of democratic alternatives to corporate power; to remove the state as provider and protector and deliver the British nation’s complete dependancy on corporate interests. Austerity is his primary means of achieving this. TTIP, the secretly-negotiated free-trade agreement that would shift sovereignty from nation states to multinationals, is this process writ large.

Debt is central to all these equations. While it can oil the economic wheels, debt also becomes a form of slavery, wealth extraction and social control. Indeed, it’s the rationale for the whole austerity drive; in which an elite enforces its claims on wider society regardless of the costs and misery it causes, while denying as far as possibly any countervailing claims.

Money, wealth and status are merely social constructions, and their distribution are becoming ever more focused on a small group of people, both in Britain and globally. Yet those at the top could not enjoying their envious position without the labour, spending power and consent of those below it. It may not like the fact, but the elite is in many ways as dependant on us as we are on it.

By failing to understand and explain our interconnectedness, the entire political system has remained silence on increasingly thorny issues, such as debt. By changing this, the left can re-establish its relevance. What’s more, seizing the debt nettle now may not only help to redefine the balance of power, but can help to lift an unnecessary burden of misery from millions of people. Debt is a major political opportunity for the left. Whether they’ll have the courage to take it is another matter entirely.

Peter Batt is the author of Psychopath Economics, a four-part book on belief systems, the logic of economic power and consumption, and their impact on the rise and fall of societies. Part 1 – The Bull and The Bewildered Herd – has been published via Smashwords.

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Economics by the psychopath, for the psychopath

psychopath economics cover v2.1 pt1

The first instalment of my book, Psychopath Economics, has been published and is available for download via Smashwords.

In it, I argue that the political and economic system in the West is psychopathic, having been effectively captured by a tiny elite whose only concern is the relentless increase of its share of wealth and power.

Part 1 gives an overview of the whole book before looking at today’s mainstream economic narrative as a belief system that conceals the unequal exercise of power, its consequences and the motivations of those who wield it.

Using the market imagery of the bull, the faceless power of capital, and Walter Lippmann’s concept of the ‘bewildered herd’, Peter Batt argues that much of today’s economics narrative is the foundation for the elite’s ongoing power-grab. And neoliberalism, he claims, is its ultimate expression of economics by the psychopath, for the psychopath.

For a fuller description of the book, go here.

A free sample and the full version of Part 1 is available here. Quote code YK67Q for a 20% discount (expires on July 1). Parts 2 to 4 are due to be published over the course of this year.

Goodbye to the BBC as we know it

The BBC has long been risk-averse and fearful of offending the establishment. Its own demise is the likely reward for its own timidity.

John Whittingdale: MP in charge of the BBC’s future believes the licence fee is ‘worse than a poll tax’ – UK Politics – UK – The Independent http://ow.ly/MNUPi

David Cameron’s Tory government is completely illegitimate … Now for the rebellion

Chancellor George Osborne, left, and David Cameron in the House of Commons

Chancellor George Osborne, left, and David Cameron in the House of Commons

Political power has been stolen from the British people.

Through a combination of an outdated voting system and a neoliberal-friendly political campaign, the Conservatives won Thursday’s general election with just 36.9% of the vote. When expressed as a proportion of the British adult population, that figure falls to 24.4%.

In other words, today’s Conservative government has the active support of less than a quarter of the British people. Their election ‘victory’ is a travesty of democracy.

What makes this theft of power even more acute is how the Conservatives are using it to force through policies which have little or no popular support, and which are being directed against many of its own citizens.

The Conservatives are driving through further privatisation of the NHS and other public services. They are continuing their assault on the poorest and most vulnerable people in society. They are introducing mass surveillance with a new Snooper’s Charter. They intend to scrap the Human Rights Act, and sell off social housing in an economy that’s become over-reliant on an unsustainable, unaffordable house price bubble.

And the Conservatives are persisting with austerity, a policy that has never worked – in Britain or, indeed, any other major economy – other than as a means of transferring wealth from the poor and middle classes to the rich. Indeed, the Tories’ entire economic narrative is a lie.

This is the very definition of psychopath economics: the Conservatives are using their tenuous mandate to drive through a harsh neoliberal agenda that enriches and empowers the elite at the direct expense of everyone else. But by doing so, they threaten to destroy the very foundations of the institutions of government, as well as the basis of their own power. This is economics by the psychopath, for the psychopath. It is exploitative, immiserating, impoverishing and completely self-destructive.

Indeed, the Tories’ whole economic agenda is about manipulating the British people into a position of dependancy on this rapacious elite. It seeks to achieve this by denying our common humanity, and our obligations to each other.

The result is a drive to remove or capture all sources of non-corporate power – such as public services, the welfare state, legal rights and protections, and especially democracy itself – so we are powerless to resist. In this way, the state has become an oppressor; a form of social and economic control. Forget welfare dependancy, we are being pushed into a state of corporate dependancy.

Psychopathic power concedes nothing without a threat. And so now our democratic system has been captured, political argument alone will have no effect. Instead, the only way for ordinary people to take back power is through a combination of civil disobedience, direct action, debt rebellion and attacks on corporate intellectual property.

The American revolution began with the slogan ‘no taxation, no representation’. In the UK, as with many Western democracies, the elite monopolises representation while minimising its payment of tax. Meanwhile, judging by Thursday’s general election vote, the majority of ordinary Britons are saddled with high taxes for minimal representation. Tax rebellion would be a good first statement of intent in the exchanges to come.

Today’s unequal balance of power cannot be redressed without challenging the neoliberal state. Failure to do so will simply deliver our dependancy. If you can accept that, dear reader, then you’re a better person than I am.

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