rocket guide to money and the economy

8/4/2019 Rocket Guide To Money and the Economy

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"Fortheloveofmoneyistherootofallevil"

(1Timothy6:10)


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Rocket Sc i ent i sts Gu ideT M

to Money and the Economy

Accumulation and Debt

By

DR.MICHAEL SHARP

www.michaelsharp.org

[email protected]

Cover and Illustration

LAURAVAN [email protected]

Lightning Path Press


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Published by Lighting Path Press

St Albert, Alberta. Canada

www.lightningpathpress.com

2009 by Michael Sharp.

All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical,

photocopying, recording, or otherwise without written permission

Distributed by Ingram

Library of Congress Cataloging-in-Publication Data

Sharp, Michael, 1963-

The rocket scientist's guide to money and the economy : accumulation and debt / by Michael Sharp.

p. cm.

ISBN 978-1-897455-11-1 (alk. paper)

1. Money. 2. Saving and investment. 3. Debt. I. Title.

HG221.S537 2009

332.4--dc22


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Contents

Life,TheUniverseandEverything....................................................................................................................... 6

TheNatureofMoney.......................................................................................................................................... 7

TheEconomy................................................................................................................................................... 8

TheSourceofMoney..................................................................................................................................... 10

TheValueofMoney...................................................................................................................................... 11

ProblemswithMoney....................................................................................................................................... 12

General.......................................................................................................................................................... 12

Accumulation................................................................................................................................................. 12

TheFall........................................................................................................................................................... 14

Power............................................................................................................................................................. 14

APrivateParty............................................................................................................................................... 16

TheTruth?..................................................................................................................................................... 18

SocialClass..................................................................................................................................................... 20

TheReport..................................................................................................................................................... 21

Intelligentsia.................................................................................................................................................. 22

Indoctrination................................................................................................................................................ 24

Education....................................................................................................................................................... 26

Taxation......................................................................................................................................................... 27

Progress............................................................................................................................................................. 29

ProductDifferentiation.................................................................................................................................. 30

Distortion....................................................................................................................................................... 31

MetalandRock.............................................................................................................................................. 33

Crisis................................................................................................................................................................... 35

Debt............................................................................................................................................................... 39

Index...................................................................................................................................................................... 46

Endnotes................................................................................................................................................................ 47


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THEROCKETSCIENTISTSGUIDETOMONEY

ANDTHEECONOMY:ACCUMULATIONANDDEBT

LIFE,THEUNIVERSEAND EVERYTHING

Money,money,money,money.

Moneymakestheworldgoround.

Whatstheproblemwithmoney?

Well,moneyistherootofallevil,orsowearetold.

Itisthebaneofourexistence.

Itisthesourceofourdespair.

Itsbad,andthatsthebottomline.

Money,money,money.

Asaspiritualwriter,itsatoughtopictobroach.IliketomaketheclaimthatImaworldteacher,iyousee.I

teachaboutSpirit,God,andconsciousnessandImaketheclaimthatwhatIteachisthetruth(andthatswith

acapitalT).Itsnotthatfarout.Justabouteverywriterorteacheroutthere,exceptmaybethewishywashy

postmodernists,willmakesomeclaimtotruth.Nobigdeal.Butforsomereason,assoonasIsayImaworld

teacher,assoonasIstarttoteachaboutGodandSpirit,peoplestarttosaythingslikeOh,youreaspiritual

teacherandyouteachaboutGodandSpirit.Well,shouldntyoumakeyourstuffavailableforfree?Afterall,

youcantchargeforsomethingasbasicasspiritualtruthright?

Thequestionalwaysbothersmeandsetsupabitofaconflict.

Iagreewiththesentiment.

TheinformationthatIprovideshouldbeaccessibletoeveryonewhowantsit.

But,shoulditbefree?

Personally,Idontthinkso.

Havingspentthousandsandthousandsofhourswriting, itseemskindofdisrespectfuland insensitivetoask

someonesomethinglikethat.Youdontgouptothebakerofyourdailybreadandsay,handyourstuffover

BubcauseImentitled,doya?

Ofcoursenot!


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Todothatwouldnotonlydishonouranddisrespecttheirlabour,butitwouldbeinsensitivetothefactthatin

thiswesternworldyoucannotdoanythingwithoutmoney,youcanteveneat. Imean,Iliveinanicehouse,

butIcantgrowfoodonitbecauseIcouldntaffordayardbigenoughtogrowfood.Andwhatsworse,Icant

evenbarteriimyservices.HowamIgoingtobartermyEnglishwritingsandbooksforbananasgrownbyaLatin

Americanworker,orclothessewninaChinesefactory?

Youseetheproblem.

IfIdontmakemoneyfromtheworkIdo(whichistowriteusefulspiritualbooks),myfamilyandIdonteat.In

thisdayandage,weallneedmoneytosurvive.

Still,likeIsaid,Idoagreewiththebasicsentiment.

Thebottomlineis,everybodythatwantstobuymybooksshouldhavethemoneytheyneedtodoso.

But,theproblemisnotthattheinformationisnotfree,andtheproblemisnotmoneyitself.

In

fact

it

is

exactly

the

opposite.

Theproblemisnothavingmoney.Theproblem is thatdespite the fact thatwe (andby we Imean thepeopleof thisearth)have amazing

technologyandamazingproductivepotential,noteverybodyonthisearthcanaffordthemodestfeeIcharge

formyeBooksandconsideringhowlittleImaskingformyeBooks(basicallyacouplebucksapiece),thatsa

crimeanditsacrimethatgoeswaybeyondthedesiretohavespiritualinformationavailablefree.Imean,its

notjustbookswecantafford. Alotofpeopleonthisearthdontevenhavethemoneytheyneedtobuyfood

anddecentshelterandbecauseofthat,alotofchildrenonthisearthgohungryandstarve,andthatsmost

definitelyacrime.iii

Soyousee,theproblemisnotmoneyperse.Theproblemisnothavingmoneyandtherightquestionis,Whydosomanypeoplelackthecashtheyneedtobuythethingsthattheyneedonthisearth?

THENATUREOFMONEY

Well,

the

lack

of

cash

in

the

pockets

of

the

people

is

not

for

reasons

that

you

might

think.

However,

in

order

to

understandwhysomanypeopledonthavethemoneytheyneed,wefirsthavetounderstandthenatureof

money.

Andwhatsthenatureofmoney?

Well,thatseasy.

Letusstartbysayingthatmoneyisnotthepaperitsprintedon.


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Moneyisnotgold,itsnotsilver,itsnotplatinum,anditsnotthoseshinylittlerocksthatpeopleputontheir

fingersandattachtotheirearlobestomakeothersgoallooh!andaah!andstufflikethat.

Moneyisnotaconcretethingatall. Infact,whenyouthinkaboutit,moneyissimplyanidea,anditsanidea

that,despitewhatsomepeoplemightwantyoutothink,isnotthathardtounderstand.

Itssimplereally.

Whenyouboilitrightdowntoessence,moneyrepresentstime.Time ismoney they say and thats totally true, though there is a bit more to it than that. Money does

representtime,butnotalltypesoftime. Moneyhasaveryspecificreferenceandthatisworktime.iv

Moneyrepresentsworktime.

Itsobvious,right?

Youworkanhouryougetpaidforanhour.

Ifyoustandaroundanddonothing,moneydoesntfallfromthesky.

Moneyisworktime.

Butofcourse,eventhatsnotwhollyspecified.Whileitstruethatmoneydoesrepresentworktime,itsalso

truethatmoneydoesntjustrepresentworktime.Moneyrepresentsaveryspecifictypeoflabour.Thefactis,

Idontgetpaidmoney forworking inmyback yard. Ionlygetpaidmoneywhen Imdoing something for

somebodyelse.WhenIdosomethingorbuildsomethingorprovideaservicethatsomebodyelsefindsuseful,thenIgetmoneyinexchange.AlthoughImightfantasizeaboutit,youarenotgoingtogivemeasinglepenny

forworkinginmygardengrowingflowersformykitchentable.However,Imightbeabletoconvinceyouto

givemeafewpenniesforaflowerIvegrownforyourkitchentable.

Ifyoupaintthewallsofmyhouse,Illgiveyou40dollarsforeveryhouryouwork.

Youseehowthatworks?

Money,money,money.

Thedefinitionofmoneyisthis:

Moneyrepresentstimespentworkingforsomeoneelse.And ifwedefinetimespentworkingforsomeone

elseaslabourtime,thenwecansay:Money=LabourTime

THEECONOMY


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Now,whilethewholemoney=labourtimethingmightnotbethatobvioustoyouatthispoint,butitwillbe

inamoment.Togetabetterideaofwhatmoneyisallabout;allwehavetodoistakealookatmoneyinan

economy.v

Andwhatisaneconomy?

Well, an economy is basically the formal exchange of money and, since money = labour, an economy is

basicallytheformalexchangeoflabour(i.e.timespentworkingforsomeoneelsewiththeexpectationoffair

exchange).

Simple.

Whenever two ormore people get together and do something for each other in exchange for something

(usuallymoney),youhaveaneconomy.

Nowofcourse,therearedifferenttypesofeconomiesandnotalleconomiesneedmoneytofunction.Inour

modernworldtheofficialeconomy,vithatistheeconomythatisrecorded,monitored,andfiercelypolicedbythoseinpower,doesusemoney.However,beneaththatofficialeconomythereareothereconomies.Thereis

theundergroundeconomy,forexample.Theundergroundeconomy isalsoamonetizedeconomy,but its

notrecordedandtaxedliketheofficialeconomy.Alongsidetheundergroundmarketeconomythereisalsothe

informal economy.viiWhen I traded a complete setofmybooks to a youngmanwhohelped to clean thewindowsinmyhouse,therewasanexchangeoflabour,butitwasntmonetized.Itwasbarter.Thepointhere

thoughisnottogointodetailaboutthedifferenttypesofeconomiesbuttosimplypointoutthataneconomy

basicallyinvolvestheexchangeoflabourpower.Whetherthatlabourisrepresentedbymoneyorbarter,oris

recordedornot,isirrelevant.Thepointis,aneconomyinvolvestheexchangeoflabour.

We

can

see

this

quite

clearly

if

we

simplify

things

and

look

at

an

economy

of,

say,

one

thousand

people.

In

this

simpleeconomyofone thousandpeople,everybodydoessomethinguseful forsomebodyelse.Oneperson

playsguitar,anothersings,anotherbuildshouses,onerunsafarm,anotherisintocomputers,anotherbakes

bread,anotherprocessesanimals,andsoon.Theyallhaveaskill(orskills),theyallhavethingstheylovetodo,

andtheyallgetupeverydayandapplythoseskills intheirdaily life. Inoursmalleconomyofonethousand

people,each individualhassomespecializedtalentsandabilitiesandtheybringthesetalentsandabilitiesto

theircommunity,andthatsgreatbecausenoteverybodyisthesame.Noteverybodylikestobuildthings,not

everybody likestositalldayandwrite,noteverybody likesanimals,andsoon. Butthatsokbecause inan

economy,wecanallexchangewitheachotherforthingsthatwecantotherwisedoourselves.

Andhowdowedothat?

Howdoweexchangeourlabour?

Well,asIsaidabove,wecandothatwithbarterorwecandothatwithmoney.Barter(i.e.Ibuildyouahouse,

yougivemea lifetimesupplyofhamburgers) isfineasfaras itgoes,but itsquite limitedbecausebarter is

neitherefficientnorflexible.Maybethelocalcarpenterisavegetarianandifso,howisthemeatpackergoing


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togetahousebuiltwhentheonlythinghehastoexchangeisasubstancethatcausesthecarpentertoretch

uncontrollably(i.e.deadmeat)?

Youseetheproblem.

Entermoney.

Money,money,money.

Moneyisanimprovementoverasystemofbarterbecauseitabstractslabour.Whentheeconomyisbasedatleastpartlyonmoney(i.e.partlymonetized),thenyouroptionsforexchangeareexpanded.Moneybasically

createsamorefluidandefficientsystemof labourexchange. Insteadofpayingthecarpenter indeadmeat,

themeatpackernowpaysincashwhichthecarpentercanthenusetobuywholesomeveggies.Itsawinwin

situation.Themeatpackerbenefitsbecausenowhe canexchangewith the carpentereven thoughhehas

nothingofinteresttobarter.Thecarpenteralsobenefits.Forhim,moneyisbettersincehecantakethatand

buywhateverhewants.Hecanbuyfood,hecanbuyanewcar,atool,orwhatever.Inthissensemoneycan

beseenasaneconomic lubricantor likeblood in thebody.Asameasureof labourpower, itsimplymakes

economicexchangemoreefficientandfluid.

Moneygiveslifetothesocialfabric.

So,thereyouhaveit.

Moneyissimplyabstractedlabour.

Moneyallowsustoexchangelabourpowerwitheachotherinanefficientandfluidway.

Putthisway,moneyhardlyseemsliketherootofallevilassomanypeopleliketothink.

THESOURCEOFMONEY

So, ifmoneyislabour,andiftheeconomy isnothingmorethanawaytoexchange labour,thenwheredoes

moneycomefrom?

Well,itdoesntappearoutofthinair;butitsalsonotthathardtounderstand. Moneycomesintobeingina

twostepprocess.First,somebodymakesit.Ifitspapermoney,weputpaperthroughapresswithspecialinksandsoon. If itsmetalmoney,westamp itwitha logoandsomenumbers.Thenweagreeonavalueand,importanttonote,whateveryoureusingformoney,whetheritbeitgoldorleadorstone,itdoesntmatter.

Allthats important isthatthepeoplewhoare involvedagreethatthispieceofpaperorthat lumpofmetal

representsacertainamountoflabourtime,i.e.thatithasacertainvalue,andthatsallthereistoit.Onceyou

agreethatyouaregoingtoabstractlabourandpouritintosomekindofsymbol,allyouneedisasymbolto

attachitto,andgeneralagreementaboutthevalueofthesymbol,andthereyouhaveit.

Itsallaquestionofconcordance.


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IfIhandyouapieceofbluepaperandtellyouitsworthonethousandlabourunits(assumingonelabourunit

isonehouroflabour)andyouagree,thenwereinbusiness.

THEVALUEOFMONEY

I suppose thequestion thatarisesnow is,howdowedetermine the valueofmoney?That is,howdowe

determinehowmuchlabourpowerisrepresentedbyourinstrumentsofexchange?Wellobviously,whatever

itisweareusingasaninstrumenttoconveyvalue,thevalueisntintrinsictotheinstrument.Thatis,apieceof

paper isntautomaticallyworthonethousand labourunits.Thatmuch isglaringlyobviouswhen itcomesto

something like paper money. A small piece of offwhite paper, printed in a huge mill, with automated

machinery,ateconomiesofscale, isprobablyworthsomething intheorderof .001cents.Thesamecanbe

saidofotherinstrumentsofexchange,likethegold,silver,anddiamondsthathavebeenmadetoholdvalueoverthecenturies.Nomatterwhatanybodytellsyou,goldhasnointrinsicvalue.Ithasasmalllabourvalue,viii

which isthe totalamountof labourthatwent intoextracting it,but itsworthlessoverandabovethat. It is

onlywhenweagreethatgold,paper,shinywhiterocks,orwhateverareworthsomethingmorethatthese

thingstakeonamonetaryvalueoverandabovethevalueofthelabourthatwentintoprocessingthem.Andhowdoweagree thatsomethinghasavalueoverandabove its labourvalue?Well, lets leave that

questionforlaterandinsteadfocusonthesimplevalueofmoneyquestion.

So,howdoweaddvaluetomoney?

Well,although therearepeoplewhowouldhave youbelieve such, itsnotblackmagicand itsnot rocket

science. Asnotedabove,theactuallabourvalueofmoneyisderivedsimplyfromtheamountoflabourthat

we(andbyweImeanthoseinvolvedintheexchange)agreeitrepresents.

Andhowdowedeterminethevalueofmoney?

Well, its not random, letme tell you that. The value ofmoney is basically determined in relation to the

amountoflabourbeingexchangedinaneconomy.Iknowitmightsoundcomplicated,butitsnot.

Itworkslikethis.

Say,forexample,youhaveasmalleconomyofonehundredpeopleandyouwanttomonetize(i.e.addmoney

in away that displaces barter as a primary form of exchange) that economy.Howmuchmoneywill you

introduce?Well,youwanttointroduceexactlyasmuchmoneyaswillrepresentthetotallabouroutputofthe

onehundredpeopleintheeconomy.Forexample,ifyoumeasureeachhourof labourasoneunitof labour

(onedollar/unit=onehouroflabour),andifmostpeopleworkfourhoursaday,sevendaysaweek,thenin

ordertofullymonetizeourlittleeconomywewouldhavetointroduceaboutonethousandfourhundredand

sixty(i.e.4x365=1,460)unitsofmoneyperpersonperyeartorepresentanentireyearsworthofthelabour

of your small society. For our small economy of one hundred people, that would amount to about one

hundredandfortysixthousandunits(1,450x100=145,000)ofmoneycirculatingintheeconomy.


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As for individualpiecesofmoney, their value isdetermined in relation to the total valueofmoney in the

economy.Assumingyourestartingfreshandwithnohistoryofinflation,howmuchan individualpieceof

money isworthwould depend onwhat fraction of the total it represented. You could, if youwanted to,

circulate therequiredonehundredand forty five thousandunitsofmoney inoursmalleconomyusing145

thousanddollarbills;inthatcase,eachbillwouldbeworthonethousandlabourunits.Or,youcouldbreakit

upandcirculateitas145,000onedollarbills;inthatcaseeachbillwouldbeworthadollar. Oryoucoulddoa

combination,inwhichcaseyoudhavetostampthebillssopeoplewouldknowthevalueofeach.Regardless,

thevalueoftheindividualbillsisonlymeaningfulinrelationtothetotallabouroutputinaneconomy.Inotherwords,inordertodeterminethevalueofmoneyinaneconomy,youhavetolookattheamountoflabourin

economyasawhole,andthendividetheamountofmoneyintothat.

PROBLEMSWITHMONEY

GENERAL

As noted above, there are a lot of benefits to a monetized economy; however, there are also potential

problems.Forexample,incomplexeconomiesitcanbehardtodeterminetheexactlabourvalueofsomething

and thereforehard todetermineexactlyhowmuch topay forasingle item.Forexample, itseasy toknow

howmucha loafofbread costs.Say, for the sakeofargument, thatabakerwitha smallovenbakesnine

loavesofbreadinthreehoursincludingcleanup.Inthatcase,andassumingonehouroflabourisequivalent

tooneunitofmoney,eachloafofbreadwillbeworthabout.33unitsofmoney(itworksouttoaboutthree

loavesanhouroflabour)pluswhatevertheflourandyeastandbutterandheatcost.However,itsnotsoeasy

to determine how much labour goes into a computer chip. There is design, engineering, manufacture,

distribution, sales, and so on. To be totally fair to everyone involved, all the labour that goes into the

manufactureofachipmustbefactoredintotheactualcostofthechip.ThatsacomplexequationthatIwould

thinkcanonlybeestimated.

In addition to theproblemof estimating the amountofmoney tobepaid for items, theremay alsobe a

problemwithselfregulation.Maybepeoplewillnotworktherequiredhoursforthemoneygiventothemto

representtheirlabourpower.Maybepeoplewillgettenthousandlabourunitsofmoneyforayearoflabour,

butonlyworkfivethousandhours.Thismightbeespeciallytrueofyoungadultswhomaybemoreinterested

inpartyingandboinkingthanworkingandcontributingtosociety.Theproblemhowever is likelyminorand

relativelyinsignificantinanemotionallyandspirituallymaturesocietyandcouldprobablybesolvedsimplyby

revisingoursocializationprocessandemphasizingthetruemeaningofmoney(i.e.asacontainerforlabour),

theneedformutualcontributiontothecommongood,gratitudeforwhatothersdoforyou,etc.

Notrocketscience.

ACCUMULATION


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Nowassimpleastheproblemsofdeterminingthepriceofcommoditiesandmotivatingpeopletocontribute

mightbe,thereisabiggerproblemwithmoneythatisnotsoeasytodealwithandthatcauseshugeproblems

anddistortionsinthegeneralfabricoflifeinourlittleglobalcommunity,andthatisaccumulation.

Andwhatisaccumulation?

Well,accumulationbasicallyreferstothepracticeofaccumulating labourpower. Inconcreteterms it isthe

practiceoftakingsomebodyslabourand,forexample,puttingitontheshelfinyourhouse.

Nothingwrongwiththat,right?

Wealldoit,right?

WhenIwenttoSouthAfricawithmyfamily,weboughtalotofhandicraftsfromtheartisansdownthere. We

exchangedourmoneyfortheirlabour(i.e.thehandicraftthattheyhadcreated),andthenweputtheirlabour

onthewallsofourhouse. Althoughtheartefactsinourbookshelflooklikeartisticobjects,reallywhatweve

doneisaccumulatelabour.

Itisnicetosurroundyourselfwithfineworksofartandhandicrafts.

Thereisnothingwrongwiththat,aslongastheexchangewasfair.

Of course, some things are easier to accumulate than others and, by the same token, some things are

impossibletoaccumulate.Mywifecantaccumulatethemassagesshegets,forexample,andmyhousecan

onlycontainsomanyelephantcarvingsandtribalmasksbeforeitstartstolookclutteredandmessy,orIhave

tobuyshelvesandstorage. Itcanbedone,butitsdifficultandthisdifficultyofaccumulatinglabourgenerally

makesaccumulationanonissueinsocietiesbasedonbarter.ixYouworkforwhatyouneed,accumulateafew

thingstomakeyourlifemorepleasant,anditdoesntgomuchfartherthanthat.Inabartersociety,thereisa

builtin limitation.Theres reallynopoint inaccumulatingbread,orhammers,or computers,orhandicrafts

beyondacertainpoint.

Ah,butinamonetizedeconomy,itisadifferentstory.Inamonetizedeconomy,thereisnosuchbuiltinlimit

toaccumulation. In fact, inamonetizedeconomy,you

canaccumulateasmuchlabourpowerasyouwant.You

can print a thousanddollar bill, a million dollar bill, a

billiondollarbill,itjustdoesntmatter.Sincethevalueof

money (i.e. the amount of labour it represents) in a

monetizedeconomy is symbolic andbasedon a simple

act of agreement rather than a reciprocal exchange of

goods,youcanaccumulateasmuch labour (i.e.money)

as youwant.As long as somebody believes you that a

thousand dollar bill is worth so many units of labour,

youresettogo.


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Butwhywouldyouwanttodosomethingassillyasthat?

THEFALL

Well,inordertounderstandwhyyoudwanttoaccumulatemoney,youhavetounderstandsomethingabout

thenatureandpossibilitiesinherentinaccumulatedlabourpowerandthebestwaytounderstandthatiswith

alittlestory.

Letusimaginethatoneday,sometimeafterthemonetizationofoursmalleconomy,somebodygetstheidea

tochargejustalittlebitmorefortheirlabourthanisstrictlyfair.Forexample,insteadofcharging.33labour

unitsforaloafofbread(theactuallabourcostofthebread),thebaker(letscallhimJoe)nowstartstocharge

.66units(twicetherealcost),or.99units(threetimestherealcost),orwhatever.Joesurmisesthat itsnot

much really, and it doesnt seem like its going to hurt anything, or anyone, so whats the harm with

accumulatingalittleextralabour?

Whatstheproblemwithtakingalittleprofitforoneself?heaskshimself.

Wellasitturnsout,itisabigproblem.

In fact, it isa worldendingproblemx;however, that isnot immediatelyapparentwhen themachine isjust

startingup. Ittakesawhiletoshowup,so letsskipaheadandtakea lookatJoeayear latertoseewhats

happenedwithhisplantoaccumulate.

Itsnotdifficulttoimagine.

Afterayearofchargingmorethanthetrue labourvalueofhisbreadJoewillhaveaccumulatedabunchof

extralabour.

Howmuch?

Well,ifhechargesthreetimestheactuallabourcostforhisbread,attheendoftheyearheisgoingtohave

accumulated twice as much labour as he actually put into his business. If a typical person expends one

thousandfivehundredunitsayearthenJoe,havingchargedeverybodytriplethecostofthebreadwilbein

theblackbysomethreethousandlabourunits,insteadofhavingabalanceclosetozeroattheendoftheyear

asheshould.

Wow!

Thatsverycoolforthebakeranditsevencoolerwhenyourealizewhathecandowithallthataccumulatedlabour.

POWER

Andonceagain,itisnotrocketscience.

Takeagoodlookatthatdollarbillinyourwallet.


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Rememberthenatureofmoney.

Moneyisacontainerforlabourandwhenitsaccumulated,moneyhastheabilitytocommand(i.e.buy)other

peopleslabour.

Pauseandthinkaboutitforamoment,becausethisextramoneygivesourbakermananincredibleamountof

real,palpable,andmeasurablepower. Really,thepossibilitiesareendlessforournewlywealthybakerman.

With the extra three thousand units of labour he can do whatever he wants. He can take an extended

vacation,hecanhaveabiggerhousemadeforhimself,hecanevenemployahousecleanertocleanhishome,

oranassistanttodohisbakingforhimsohenolongerhastowork!

Now,howcoolisthat?!

And,sincethemoneyinhispocketrepresentsabstractlabourtime,aslongashecanfindsomeonewillingto

workforthecash,Joecandowhateverhewants.xi

Moreimportantly,hecandomorethananybodyelsearoundhim.

Henowhaspowerthatothersdonothave.Itsbrilliant,thinksJoewhenhepausesatyearendaccountingtoconsiderthebenefitsandethicsofitall.

He looksup fromhisbooks,he looksaroundat theworld,andhe realizes,he isnowabitdifferent from

everybodyelsearoundhim. Becausehethoughttochargealittleextraforhisbread,attheendofayearhe

nowhaspowerandcapabilitythatnooneelsehas.

Butisthatwrong,heaskshimself.

Nobodyseemstohavegottenhurtand,asfarashecansee,nothingseemstohavechangedinthewider

society.

Sowhatstheharm,hedecides.

Really,hesays tohimself,theonlyproblem that Ihavenow ishow touse thisextra labourpower. Joe

thinksaboutitandaftersomeconsiderationhedecidestospendtheextralabourunitshehasaccumulatedon

abeautifulmansion,twicethesizeofalltheotherhousesaroundhim,onthetopofalocalhill,overlookinghis

littlecommunity.Ofcourse,itsnotsomethinghecouldhavedoneayearearlier.Beforehestartedhis little

accumulationexperiment,hewouldnthavehad themoney topay for theextramaterials, labour time,or

extraeffortrequiredtohaulthematerialsupthehill.

Butnowhecan!

Now Joesgot thecashandsonowhebuildsabeautifulhouseon the topof thehilland that iswhenhis

communitystartstonotice.

Thatiswhenthequestionsstart.

HeyMr.bakerman,whatthehecksgoingon?askhisfriends.


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Andhowdidyoumanagetobuildthatbighouse?

Andthatstopshiminhistracks.

Nowhesgotachoice.

Whatshegoingtodo?

Ishegoingtocomecleanandrevealthe(real)secrettohissuccessorishegoingtohidethetruthsothathe

cankeepaccumulatinglabour?Hethinksaboutcomingcleanbuttobehonestwithhimself,hedoesntlikethe

implications.He figures if he comes clean, thejig is up and his free ride is over. After all, nobody in his

communityisgoingtostandbyand lethimoverchargeforhisbread.Notonlythat,buthesuspectsthathis

communitywillbealittlepissedathim.Heck,theymayevendemandrestitutionandthatwouldsuck,thinks

Joethebaker.Payingbackthreethousandunitsoflabourwouldmeanhedhavetoworktripletimeoverthe

nextyear.

Still,hethinks,despitetheirquestionsnoharmhascomefromit.

Everythingisstillworkinganddespitesomeminorgrumbling,everybodyisstillhappy.

SowhatifIvegotabiggerhousethaneverybodyelse?heasks.

Whereistheharminthat?

APRIVATEPARTY

So,whatdoesJoedo?

Well,hecantdonothing.

Everybodyinhiscommunityisaskingquestionsandhehastorespondtothem.However,insteadofissuinga

publicannouncement likeheshould, insteadof talking toeverybodyatonceandrevealing thesecret tohissuccess,insteadofdoingtherightthing,hetellshiscommunityhedrathertalktoonlyafewpeopleatfirst.

Itscomplicatedandhardtoexplain,hesaystohisfellowcommunitymembers,so,ifyoudontmind,itwill

beeasierifItalktoafewpeopleatfirstandafterthattheycanreporttoyou.

Andofcourse,nobodyseesaproblemwiththis.

MembersofthecommunitythinkthatifJoesaysitiscomplicatedandheneedssomespacetoexplain,then

thatisOK.

Everybodytrustseveryoneelseinthissocietyandsonobodyraisesanyconcerns.

Andso,thatswhatJoedoes.


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Onenightheinvitesafewcarefullychosenpeople

overforaveryspecialdinnerparty.He invitesthe

carpenter(whomhepaidextratobuildhishouse)

and a few of his closest friends over for a

sumptuousand luxuriousdinnerandhesparesno

expense. He takes a few thousand of those

accumulated labourunitsandhehiresanarmyto

throw a party like no party that has ever been

thrownbefore.Itsimpressiveandmagnificentand

when itsover,Joeandhisfriendssitdowntothe

finest cognac. There is idle chitchat while Joe

patientlywaitsforthewarmglowfromthecognac

tospreadthroughthebodyandmindofeachofhis

guestsandthen,afterasuitableperiodhaspassed,hestandsupandoffersatoast.

Mydearfriends,heexclaims.itisanhonourandaprivilegetosharetheseblessingswithyoutonight.

Ithasbeenawonderfulmeal,impeccablecompany,and Iamhappierthan Ihaveeverbeen inmy life,he

says.

Everybodynodsinenthusiasticagreement.

Butnowweshouldgetdowntobusiness,heexclaimsseriously.

Mydearfriends,hesays,ifIcouldtellyouhowyoucouldhaveamansionlikemine,andmakeeverynighta

nightlikethis,wouldyoubeinterested?

Hisfriendsgetexcited.

Ofcourse,theysay,thatiswhywearehere,tofindouthowyoudidthis.

Yes,Joesaysnodding,andIwilltellyou.

Butyouknow,thisonlyworksifyoukeepitasecret!

Atthisstatementapalpableshockgoesthroughtheroom.

Thereisabuzzofdiscussionandpuzzledlooks.Thepeoplesittingintheroomhaveneverbeenaskedtokeep

asecretbefore,sotheyarejustifiablyalittlewaryaboutit.TheystarttoraisequestionsandconcernsbutJoe

raises his hand, smiles, poursmore cognac into their glasses, and assures them there is nothing toworry

about.

Nobodygetsharmed,hesays.

Everybodywins!heexclaimsashenodshisheadenthusiastically.


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AndIcanproveit,hesays.

Butittookmeayeartofigureitoutandsoitsgoingtotakeyouayearaswell,hesays.

Youwillhavetotryitforayear,andthenyouwillunderstand.

Caneveryonedothat?heasks.

Hekeeps theglasses fullashis close friendsdiscuss the issue.They raise someobjections, really relatively

minor,whichJoecounters,andbytheendofitnoneofthemcanseewhattheharmwouldbe.

Thebakerisright,theysay.

Nobadthingsseemtohavecomefromthis,andwhowouldntwanttohavepartieslikethisallthetime.

So,theyshakehands,toastthemselves,congratulatethemselves,andsitdowntoplan.

Theyagree.

Theywontsayanythingandtheylltryitforayear.

Afterall,everybodytrustsJoe.

Heistheirfriendandhehasassuredthemitisawinwinsituation.

THETRUTH?

Theonlyproblemisthepeopleatthebottomofthehillareexpectingareport.

Itwasthereasonfortheparty,andsotheyhavetodosomething.

Butwhat?

Whatarewegoingtotellalltheotherswhowerenotinvited!?Joeasks.

Everybodyagrees,itsaproblemthattheycannotignore.So,theyconsiderthisproblemforquitesometime

untilfinallythecarpenterjumpsupandsaysexcitedly,Iknow,Iknow,Iknow!!!

Welltellthemthetruth!hesays.

Therearepuzzledlooks.

Wellsayweneedtostudytheproblem!hesays.

Wellsayweneedtowaitayear,dosomeresearch,andhaveacloserlook.

Anditstrue,isntit?hesays,Thatisexactlywhatwearedoing!


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Andofcourseeveryoneagrees,itisexactlywhattheyaredoingandsotheyjotdownsomenotes,picktheir

best public speaker, set a date, and call the community together to reveal the results of their private

discussion.

Itsverythrillingforthecommunityatthebottomofthehill.

Everybodyexpectsthetruthtoberevealed.

Everybody expects to learn the great secret to Joes wealth and so all the people and all their children

congregateinthetownsquareexcitedbywhatisabouttobeannounced.

Thespeakerclimbsthepodium...

Helooksoutoverthegatheredcrowdandsmiles.

Peopleofourcommunity,intonesthespeaker,Joehasstumbleduponthesecrettogreatprosperity.

Thebakerhasfoundawaytomakemoney.

Thecrowdhushesandallfacesturntothespeakeratonce.

Unfortunately,saysthespeaker,itiscomplicatedandnotwellunderstood.

Wehavebeenstudyingitandwebelieveitisacombinationoftherelativefluctuationofcommodityindexes,

plustheincreaseinconstantpricingofgoodsandservicesonthemarketexchange,overandabovethecostof

theinputsasopposedtotheoutputs,intonesthespeakerinamonotonevoice.

Thecrowdlooksconfused.

Itistheresultofthedeindexingofcommoditypricinginrelationtothecostofinputsandlabour,hesaysin

anefforttoexplain.

Thecrowdlooksbaffled.

Thespeakersolemnlynodshishead.

Yes,hesays,itiscomplicated.

But,hesaysthumpinghischest,weshallfigureitout.

WehavestartedaninstitutethatwewillcallTheInstituteofFiduciaryInvestigation,orjustTheInstitutefor

shortheproclaims,andforthegoodofthecommunity,weshalllabourdayandnightuntilwediscoverthe

inneressenceofthiscomplicatedprocessandwhenweunderstand,weshallsharewithyousothatwewillall

benefitfromthiswonderfulnewwayofmakingmoney.

Weshallreporttoyouinexactlyoneyear,hesaysquickly,raisinghishandstoavoidtheemergingquestions,

andturnstostepdownfromthepodium.


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Nowofcourse,thereisabitofconfusion.

Everybodywasexpectingananswertothequestionhowwasthebakerabletocreateamansion,butthey

didnt get that. All they gotwas a promise of future revelations. Still,what the speaker had said seemed

reasonableenough.Afterlisteningtothespeakertrytoexplainthings,itcertainlydidsoundlikeacomplicated

process,sowhynot?

Everybodyinthecommunitytrustedeachotherandsothepeopleatthebottomofthehillhadnoreasonto

distrustorquestionwhatthespeakerhadsaid.Theyacceptedtheexplanationingoodfaithandtheyallwent

homequietlytowaitforthereport.Inthemeantime,theboyswhohadbeenatJoesspecialpartygradually

start,atthebehestofthebakerman,toraisetheirprices.

SOCIALCLASS

Andofcourse,assoonastheboysfromthetopofthehillstarttoraisetheirprices,theinevitablehappens.

Afteronlyayearofsubtleaccumulation,alltheboysfromtheoriginalpartyhavebuiltfancyhousesontopof

thehillrightalongsidetheirbakerfriend.

Itsgreat,theytellthemselvesatoneoftheirnowweeklyspecialmeetings.

Andwhatsevenbetter,theysay,Joewasright.

Despitethefactthatwehaveallmovedupthehillandarenowlivinginbetterhouses,eatingfinefood,and

drinking finewine, theeconomy is stillworkingproperlyandnothinguntoward seems tohavehappened,

theytellthemselves.

Unlessofcourseyouincludethefactthatsocietynowseemstobedividedintotwodistinctgroupsofpeople

withdifferentinterestsanddifferentlifestyles.

Thedividinglinesareobvious.

Therearethefamiliesatthetopofthehillwiththeirbighousesandtheirlavishparties,andthentherearethe

familiesatthebottom.

Butthathardlyseemssignificant,atleasttothepeopleatthetopofthehill.

Whatsthebigdealanyway,theysaytothemselves.

Everybodysstillhappytheytellthemselves.

Butreally,howwouldtheyknow?Bytheendofthesecondyearthepeopleatthetopofthehilldontsocialize

toomuchwiththepeopleatthebottomofthehillanymore.Theyhavetheirownprivatemeetingsandtheir

ownprivatefunctionsandthetwogroupsjustdontseemtofittogetherwellanymore.

Itsmostlyaquestionofincomeandcomfort.


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Thepeopleatthebottomofthehillsimplycantkeepupwiththelavishextravaganceofthepeopleatthetop

ofthehill. Comparedtotheirformerfriendsatthetopofthehill,theyarepoorandtheyfeeluncomfortable

beingaroundtheextravagance.

And,iftruthbetold,theyarenotaltogetherhappyaboutthat.

Indeed,ifthetruthbetold,theyarestartingtogetalittlegrumpy.

Allthosefancyhousesandextravagantpartiesareaconstantremindertothemthattheydidntgetananswer

totheirquestionaboutthebakershouse.Alltheygotwasapromiseand,inthemidstofthatpromise,allthey

areseeingisfurthersocialdifferentiation.

Andthatsnotright,saythepeopleatthebottomofthehill.

Andyouknow,theyarentshyaboutshowingtheirdispleasure,oraskingdifficultquestionswheneverthey

meetupwithoneofthefamiliesfromthetopofthehill.

What

happened

at

that

first

party,

they

say

and

how

come

you

are

up

there

with

the

baker

now?

Whats going on!? they say as their voices get louder and louder. And it goes without saying that this

discontentanddispleasuremakesthepeopleatthetopofthehillalittleuncomfortable.

ThankgoodnessforTheInstitutethough.

Everybodyagrees!

Thereportisalmostdue.

Surelytherewillbesomesatisfactioninthat.

THEREPORT

Sadlyhowever,whenthereportisfinallyreleased,thereisnosatisfactiontobefound.Thebasicproblemis,

nobody seems to be able to understand it. The report is so full ofjargon and terminology, horseshit and

gobbledygook that it is a thousand times more confusing than the original speech was. It is positively

obfuscatoryandbythetenthpage,anybodyreadingithasbecomevirtuallyunconsciousoutofsheerboredom

andconfusion.Thismeans, Isuppose, that thosewhowrote thereportcouldbreatheasighof relief,since

theywouldnothavetoansweranydifficultquestionsfromthepeople.Howcanyouformulatequestionson

materialthatisinscrutable?

However,itisnotallgobbledygook.Insertedatthebeginningofthereportisaonepageexecutivesummary,andthewritingthereisasclearasabellonChristmasdaycallingustoawakentotheChristinside.

Theproblemismultifaceted,saysthesummary.

Thesituationsarecomplex.


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Thevariablesareindeterminate.

Morestudywillbeneeded,concludestheexecutivesummary.

INTELLIGENTSIA

Nowof course, ifyouareoneof thosepeopleat thebottomof thehill reading the reportandhoping for

satisfaction,youwouldlikelyfindithardtohideyourdisappointment,confusion,andanger. Afterallacouple

ofyearshavepassedandtheonlythingthatseemstobehappeningisthatthepeopleatthetopofthehillare

gettingricher,moreextravagant,andmorelavishallthetime.

Frankly,itsalittlehardtostomach.

Still,mostpeopleatthebottomofthehillsimplybitethebulletandgobacktowork.Afterall,theytrustthe

peopleatTheInstitutewhentheysaytheyareworkingontheproblem.Whatelsewouldtheybedoing?

Still,afewofthepeopleatthebottomofthehilldontgocalmlybacktowork.

Afewareunhappyaboutthewholethingandtheyfrown,grumble,complain,andaskquestionslikewhats

goingon?andwhy is it takingso long?andif theydontknowwhatsgoingon,whyaresomanynew

mansionsbeingbuilt?Andofcourseallthesequestions,andallthatanger,makethefamiliesatthetopofthe

hillalittlenervous.

Itwasclearlystatedinthereport,saythenervousfamiliesthatmorestudyisneeded.

Sowhyaretheygettingallagitated?theyaskindignantly.

Whycanttheywaitlikeeveryoneelse?

Forthepeopleatthetopofthehill,theagitatorsareadefiniteproblemandsomethingclearlyhastobedone.

Theycantjustlettheagitatorskeepagitating.

Thatwouldbeamistake.

Thepeopleatthetopofthehillcanseethatastheagitatorsagitate,othersarebecomingagitatedaswell.

Theagitationisgrowingandifleftunchecked

Well

Whoknowswhere thatmight leadandso theboyscallaspecialmeetingof theirBoysclub todiscuss the

problem. Asusual,afterabutlerservesadinnerof finewineand food, thechairman (i.e. Joe)standsand

says

Mosthonourableanddignifiedgentlemenoftheinnermostcircleofilluminatedbackscratchers,wehavea

problem.


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Asyouknow,thereportdidnotprovidesatisfactionorclarity,saysJoe.

Theproblemismultifaceted,hesaysechoingtheconclusionsofthereport.

Thesituationsarecomplex.

Thevariablesindeterminate.

Obviously,hesays,morestudy isneededbutunfortunately,somepeoplefromthebottomofthehilldo

notseemtounderstandthat.

Butwhatcanwedo?Joeasks.

UntilTheInstitutereachesapointofclarity,therearenoanswersandtherecanbenosatisfaction.

Still,saysJoe,thepeopleatthebottomofthehillarehavingahardtimeunderstandingandacceptingthis.

Theyareagitatingforimmediateanswers,andtheirdiscontentgrowseveryday,hesays.

Andwhoknowswherethatmightleadhisvoicetrailsoff.

ButIhaveaproposal,quipsthebaker.

Ihaveapossiblesolution,hesaysnoddinghishead.

Thoseagitatorshesayspausingforeffect.

Theoneswhoarentsatisfiedwiththereport...hecontinues..

Theonesgettingeverybodyelseagitated

Ibelieve,saysJoe,thattheyaresimplyalittlesmarterthaneveryoneelse.

Henodsandsmiles.

Andyouknow,saysJoe,ashiseyesscanthefacesofthegathereddignitaries,wecouldusepeoplelikethat

tohelpoutatTheInstitute!

Wecoulduse theirbrainpowerandhopefully,witha littledirection, they canhelpbring clarity,hesays

smiling.

Andofcourse,everyoneagrees.

Itisabrilliantidea.

The agitators want answers, so why not coopt them and put them into a position where it is their

responsibilitytoprovidethem.

Itwillsatisfytheagitators,saysJoe,anditwillremovetheirinfluencefromthebottomofthehill.


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Theonlyproblemis,saysthebaker,howtogetthemtoTheInstitute?

Whywouldtheyaddtheirvoicetosomethingtheyalreadyseeasproblematic?

ButJoehasananswerforthat.

Welldowhatwealwaysdo,hesays,welljusttellthemthetruth.

Welltellthemthatweneedtheirhelp.

Welltellthemthatwehaventbeenabletobringclarity.

Welltellthemwerejustabunchofdimwittedbusinesspeopleandweneedtheir intellectualprowessto

savetheday.

Howcantheysaynotothat?asksJoe.

Andjusttosweetenthedeal,hesays,wellgivethemasmallbonus.

Wellpaythemalittlemorethanthepeopleatthebottom.

Givethematasteofwhatitslike,saidJoe.

Nottoomuchthough.

Wedontwantthemasneighboursatthetopofthehill,hesaid.

Itstoocrowdedasitis.

Butthereslotsofspaceinthemiddle,hesayscheerfully,sowellhelpthemgetsetupthere.

Itsanoffertheywontbeabletorefuse,concludesJoenoddinghishead.

Andsothelettersgoout,thebonusesareoffered,andtheagitatorsandtheirfamiliespackuptheirbagsand

begintheshorttrekuptoemploymentatTheInstitute,andlifeatthemiddleofthehill.

INDOCTRINATION

Now, when the new intelligentsia arrive at The Institute there is, of course, a magnificent ceremony of

welcome. There is finewine, there is gourmet food, and there is a charismatic keynote speaker, hired to

addressthenewcomersandsetthetonefortheworktheywouldcarryout.Wheneverybodyhasfilledtheir

bellieswithfinewineandfood,thespeakerclimbsthepodiumandsaystotheassembledguests

HonouredguestsThankyouforcoming.

Thankyouforacceptingourinvitation.

Thankyouforagreeingtohelpus.


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Fortwoyearswehavestruggledsaysthespeaker.

Fortwoyearswehavelabouredintothenight,shesays.

Wehavecollecteddata

Wehavepouredovercharts

Wehaveanalysedpatterns

Butstillwelackclarity.shesaidshakingherhead.

Butnowwearehopeful.shesayssmilingbroadlyandraisingherhandstowardstheaudience.

Nowyouarehereandnowweareconfident.

Withyourhelp,wewillbringclarity.

Withyourfineminds,andyourdeepmotivationfortruth,wewillsucceedshedeclares.

But first, says the speaker, there must be a period of

study.

Acoupleofyearsatthemost,shesaysraisingherhandsto

fend off the questions that start to percolate through the

assembledguests.

Itisnecessary,nodsthespeaker.

We have laboured for two years, she says, and in that

timewehavemademuchprogress.

We have developed new ideas and discovered new

concepts and these ideas and concepts inform our studies

andhelpuscommunicateourfindings.

But, she says, there aremany new concepts and it is a

complicated language and therefore you, our honoured

guests,mustlearntospeakthatlanguage.

Nosenseinreinventingthewheel,shesmilesandshrugs.

Andofcourse,thehonouredguestsagree.

Whywouldtheynot?

Afterall,theymightbealittleunhappywiththeperformanceofTheInstitute,butthatiswhattheyarehere

for.Theyareheretohelp.Beyondthat,theytrustthegoodfaithoftheircolleaguesandagreethatitwillbe


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mostefficientiftheybuildonwhathasgonebefore.Therefore,theywillenteraperiodofstudyandlearnthe

languageandtheconceptsusedatTheInstitute.So,withthedecisionmadetheyfinishtheirmeal,drinktheir

wine, and shuffle off to bed in order that theywill be bright and fresh for their first day of study in the

morning.

EDUCATION

Whentheywakeupthenextday,theystudy.

Andthedayafterthat,theystudy.

Andthedayafterthat,theystudy.

AndfortwoyearstheystudyandinthattimetheylearnhowtothinkandtalkjustlikeTheInstitutefounders.

AndwhenthefoundersofTheInstitutearesatisfiedthattheagitatorswillthinkandtalkjustlikethem,they

setthemtowork.

Andthenewprofessionalslabourintothenight.

Theycollectdata

Theyporeovercharts...

Theyanalysepatterns

butattheendofeachdaytheystilllackclarity.

Somethingisalwaysmissing.

Somethingjustdoesntfit.

Still,theyworkdiligentlywithintheconceptualframeworkprovidedbyTheInstitute,andeveryonceinawhile

theyissueareport.And,sincethenewcomershavelearnedtothinkandtalklikethefoundersofTheInstitute,

the report always says basically the same thing. Amidst all the specializedjargon, technical concepts, and

economichoaxuspokeusthatseemtogetmorecomplicatedeveryyear,andwhichnobodyatthebottom

ofthehillcaneverunderstand,thereportalwayssays...

Itiscomplicated,andmorestudyisneeded.

Andofcourse,everytimethepeopleatthebottomofthehillhearthat,theyareverydisappointed.

ButthatisOK.

Thepeopleatthebottomofthehillknowthatthebestmindstheyhavetoofferareworkingontheproblem

and they believe that if anybody can do it, they can do it. So, for the most part, they bury their

disappointment, trust theircomrades,andgoback toworkwhile thepeopleat the topof thehillcontinue

theiraccumulationexperiment.


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Andofcourse,itisntallwineandrosesforthepeopleatthetopofthehill.

Eachyear,wheneverTheInstitutereportisreleased,therearealwaysafewpeopleatthebottomthatcannot

hidetheirdisappointment.

But thatwasOK toobecauseeach year thepeople at the topof thehill scout thepeopleat thebottom,

identifying the agitators, and inviting them to work at The Institute. It is a perfect system and it works

brilliantlyuntilonedayTheInstitutegrowstoobigandthefinancialstrainonthepeopleatthetopofthehill

becomestoomuchandonthatday,Joecallsaspecialmeeting.

TAXATION

Most illustrious and honoured brothers, he says, I call you here today because of a problem that is

emerging.

Upuntilnowwehave,asabenefittothepeople

Andoutofkindnessofourhearts

fundedTheInstitute.

Ithasallbeenoutofourownpockets,hesayswithvoicerising.

Andthathasworked,hesays.

ButnowTheInstituteisgrowinganditscostsareincreasingandwecannolongeraffordthiskindnessonour

own,hesays.

Ofcourse,hesays,laughing,gettingridofTheInstituteorscalingbackoperationsisnotanoption.

NotonlydoesTheInstituteprovideuswithinvaluableyearlyreports,hesays,butitprovidesagreatplace

toputpeoplewhoarenthappylivingatthebottom.

Still,saysJoe,somethingmustbedonetorelieveusofthecostwhileensuringThe Institutecontinuesto

function,saysthebaker.

Helooksaroundattheanxiousfaces.

However,hesays,donotworry.

IbelieveIhaveasolution.

Weshallgetthepeopleatthebottomofthehilltopayforithesayssmilingbroadly.

Afterall,hesays,TheInstituteservesthemandnotus.

We, he says spreading his arms to encompass the wealth that surrounds them all, do not need The

Institute.


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Andasalways,smilesthebaker,welljusttellthemthetruth.

Andofcourse,uponhearinghisexplanation,everyoneagreesandsotheyhirethebestpublicspeakermoney

canbuyandcallanassemblyofthepeopleatthebottomofthehill.

Thespeakerclimbsthepodiumandspeaks...

Thesearetimesofgreatpotential,heintones.

Thesearetimesofgreatpromise.

Look,saysthespeakerashepointstothemansionsattopofthehill,atwhatispossiblewithindustryand

fortitude.

Look,hesayspointingtoTheInstitute,attheworkthatwearedoingtobringthatpotentialtoyou.

Heraiseshishandstotheaudienceasifpushingsomeoneaway.

Butthereisnoneedtothankus,thespeakersays.

Wedothisnotforgratitudeorprestigebutbecauseyouareourbrothersandsisters.

But,hesays,wecannolongerdoitalone.

EachyearTheInstitutehasgrownandeachyearthecostbecomesmoreunbearableforus.

Weneedyourhelp,hesaysreachingouthispalmstothepeople.

Itwontbemuch,heshakeshishead.

Justafewpenniesaweek.

Youllbarelyfeel itand ifyouwant,saysthespeaker,youcanalwaysmake itupbyworkinga littleextra

eachweek.

Andofcourse,everybodyatthebottomofthehillagrees.

Whywouldtheynot?

Theytrustthepeopleatthetopofthehill.

TheytrustthepeopleatTheInstitute.

Theyhaveeyes.

Theycanseewhatisgoingon.

ThepeopleatthetopofthehillarepayingforTheInstituteoutoftheirownpocketsandthepeopleatThe

Instituteareworkinghardtobringclarity,prosperity,andprogresstoallpeople.


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Thepeopleatthebottomofthehillagree,thepeopleatthetopofthehillshouldnotbemadetoshoulderthe

burdenthemselves.

Itisonlyfairthattheycontribute.

Andifitmeansworkingafewextrahoursaweek,saythepeopleatthebottomofthehill,thensurelythis

isasmallpricetopayforthebenefitsthatwilleventuallyaccrue.

Andsotheyagree,andwiththatthepeopleatthetopofthehillcreateamanagingbody,whichtheycalla

government,andthisgovernmentischargedwithtaxingthepeopleatthebottomofthehillinordertofund

thenowpublicinstitute.Andthepeopleatthetopofthehillrejoice,fortheyunderstandthatnowthatthefundingofTheInstituteis

linkedtothelabourofthemasses,TheInstitutecannowgrowwithoutbounds.

Whichisexactlywhatitdoes.

Every

year

The

Institute

releases

a

new

report.

Everyyeartherearenewagitators.

EveryyearTheInstituteexpands.

Atfirstitiseconomics,adisciplinedesignedtohelpunderstandtheeconomy.

Thenitisengineering,adisciplinedesignedtoincreaseproductionexpertise.

Thenitisphilosophy,adisciplinedesignedtohelpunderstandwhytheworldisdividedbetweenthoseatthe

top,andthoseatthebottom.

Thenitishistory,adisciplinedesignedtotellthestoryfromtheperspectiveofthoseatthetopofthehill.

Thenitisreligion,adisciplinedesignedtoprovidejustification.

Then it is psychology, to control the workers and keep them docile and pretty soon The Institute is

everywhere,which isgreatbecausewithThe Instituteoperating tomanagediscontentandprovideobscure

explanations,everythingisworkingfantastically.And,witheverythingworkingsowell,theboysatthetopof

thehillnowhavetimetodealwithotherissuesbesidessystemmaintenanceandso,finally,theyturntheirfull

attentiontothethingtheylovethemost.

PROGRESS

Accumulation!

Onedayatameeting,afteraparticularlylavishdinner,Joethebakerstandsandspeaks.

DidntItellyou?hesaysraisinghisglassforatoast.


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DidntIsay?

Nobodyhasbeenharmed,hesmileswithgreatsatisfaction.

Infact,Joesays,quitetheoppositehasoccurred.

Lookaroundyouatthechangeswehavebrought!

Wethepeopleatthetopofthehillhavecreatedabetterworld!heexclaimsdramatically.

Ourhomesarethepinnacleofarchitecturalinnovation,hesays.

Ourgardensarethesummitofcreativityandbeauty.

AndTheInstitute,hesays,isourcrowningglory.

CongratulationstoallofusJoesaysraisinghisglassandtoastingtheroom.

Congratulations!hecries.

Wethepeoplehavebroughtprogresstothisworld.

Hepausesforamomentandthenbeginstospeakslowly.

But,saysJoe,wecandomore.

Withenoughresources,wecanimproveeverything.

Withenoughresources,wecanleadthisworldtoutopia.

Wecouldbringanewworldorderthatwouldbringprogressandincreaseourwealthandprosperityamillion

fold,hesays.

Andallweneedisthemoneytodoit,heconcludes.

PRODUCTDIFFERENTIATION

AndIknowhowwecandoit,Joesays.

Iknowhowwecanfundutopia.

Allwehave todo is increase the rateof extraction, and Ihave found away todo that, says thebaker

triumphantly.

Insteadofmakingonlyonekindofbread,hesays,insteadofmakingonlythefinestbreadthatIamcapable

ofmaking,Icanmakeacheaperbreadwithcheaperingredientsandlesscareandattention,andIcansellthat

tothepeopleatthebottomofthehill.

IfIdothis,hesays,IwillsavemoneyoningredientsandlabourandthereforeIwillaccumulatemore.


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Helooksaroundtheroomattheattentive,smilingfaces.

Theresmore,hecontinues.

IcanalsomakespecialbreadwiththefinestingredientsandthemostcareandattentionandIcansellthat

specialbreadtothepeoplehigherupthehillforapremium,saysJoe.

Insteadofthreetimesthecost,Icouldsellitforfive.

Andyes,hesaysanticipatingtheirquestions,theywillbuyitwhenItellthemitisspecial.

Butofcourse,saysthebaker,thereisaslightproblem.

Whenthepeopleatthebottomofthehillcomeintotheshopandfindtheycanonlyaffordthecheapbread,

theywillprobablygrumbleandcomplain,saysthebaker.

Andofcourse,saysthebaker,weknowwherethatleads.

But,saysJoesmiling,Ihavelearned,thatinordertocurtailtheirgrumbling,Isimplyneedtotellthemthe

truth.

WhentheycomplainIwilltellthem,thisisthepricethatyouhavetopayforprogressandthatwillquieten

themdownbecausenobodycanargueagainstprogress.

Andofcourse,saysthebaker,Illtellthemitisallintheirhandsanyway.

Iftheyworkalittleharder

Iftheypinchtheirpennies

Iftheysavetheirmoney

Thentheytoowillbeabletoaffordthespecialbread.

Thebakerlooksaroundtheroomsmiling.

Inthenameofprogress?heasksraisinghisglass.

Inthenameofprogress!cryhisbrothersastheytoastthebakerandquafftheirwine.

DISTORTION

Andso,inthenameofprogress,thepeopleatthetopofthehillbegintolookforwaystoincreasetheirrateof

accumulation.Andtheydontstopwithproductdifferentiation. Afterall,thegoalisprogressandthemore

efficienttheycanmakeaccumulation,themoreprogressthereis.So,eachweektheymeetwithoneanother

andsharetheirideasformoreefficientaccumulation.Oneweektheycomeupwithplannedobsolescenceandproduct lifecycle. Insteadofdesigningproducts to last, thosewho cangetawaywith itdesignproducts tobreak,orgooutof fashionaftera suitableperiodof time. In thisway theyensure that consumers,as the


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peopleatthebottomofthehillhavecometobeknown,aretiedconstantlyintoproductpurchase.Ofcourse,

plannedobsolescenceandproduct lifecyclemeansthepeopleatthebottomofthehillhavetoworkharder

and longer inordertofundThe Institute,buythespecialbread,replacewornoutproducts,andaffordeach

years new fashions. And it alsomeans an expanding strain on the resources of Mother Earth as shoddy

consumergoodsandbrokenproductssaturatethelandfillsanddevourresources.ButthesethingssaysJoe,

aresmallpricestopayforprogress,andsotheycontinue.

Oneweektheycomeupwithanideatolowerlabourcostsbypayingpeopleatthebottomofthehilllessforthework they do.Of course, this isnt a very popular idea amongst the people at the bottom of the hill

becauseitrequiresthem,theirspouses,andsometimeseventheirchildrentoworkharderandlongerjustto

getby.However,thepeopleatthetopofthehillarepersistentandinthenameofprogresstheyfindways

to force the issue.Theydeskill labour, tie theworkers toassembly lines, keepdemand for keyprofessions

lowerbyrestrictingaccesstoeducation,andevenusechildlabourincountrieswheretheycangetawaywith

it.Andofcourse,thepeopleatthetoprecognizetheunpleasantnatureofthesethings,butthereisalwaysa

pricetobepaidforprogress,theytellthemselves,andsotheycontinue.

Oneweek,thepeopleatthetopnoticethatalotofpeopleatthebottomofthehillarestillusingtheinformal

economy toexchange labourbybarter.They thinkabout thisandconcludethat this isabad thingbecause

when people barter it is impossible to accumulate labour, and when they cant accumulate, there is no

progress. So, the people at the top of the hill decide that bartering should be reduced and eventually

eliminated.Ofcourse,thepeopleatthebottomresist.Intheireyesbarterhasalwaysbeenalegitimateform

oftradeandtogiveitupwouldputthematafurtherdisadvantage. Butthepeopleatthetopofthehillare

persistentand,inthenameofprogress,eventuallyfindawaytoreducebarter.WiththehelpofTheInstitute,

theycommissionareportthatsaysthatactivityoutsideofthemaineconomyisdetrimentaltotheprogressof

thenation. Theytheninstructthegovernmenttobegincountingallformsofeconomicactivity.Finally,they

reorganizeproduction.Insteadofhavingsmall,locallyselfsufficienteconomieswhereinformalexchangeand

barteriseasyandnatural,theyforceaseparationofproductionandmakewholecountriesspecializeinsingle

productlines.Theygrowbananasinonecountry,buildcarsinanother,getgrainfromathird,andsoon.Itis

brilliant. Inagloballydispersedmarketplacewhere yougetyour food from farmerswho live thousandsof

milesaway,barterbecomesimpossible,andlifebecomesprecarious.

Andso,inthenameofprogress,onitgoes.Eachweek,theboysfromthetopofthehill,meettodiscusshow

tobringprogresstotheworld,andeveryonce inawhilesomeonecomesupwithanewandbetterwayto

makeprogress.Andthroughallthis,thepeopleatthebottomofthehillworkharderandharderjusttryingto

keep

up.

But

that,

say

the

people

at

the

top

of

the

hill,

is

the

price

we

pay

for

progress.

But

then,

one

day,

aproblembeginstoemerge,andtheproblemismoney. Asitturnsout,alltheeffortthattheboysatthetop

ofthehillareputtingintodevelopingefficientwaystocreateprogressiscreatinganuncomfortablyrapidflow

ofcash.

Theproblemis,itiscollectinginfilthyandmouldypiles.


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Itisridiculous,nottomentionugly,dirty,andunsanitaryandinitiallytheboysatthetopofthehilldontknow

whattodo.So,theycallaspecialmeetingtodiscusstheproblemand,tomakealongstoryshort,theyfinda

bettercontainerfortheirmoney.

METALANDROCK

Itisthestonemasonwhofiguresitout.

One day, at one of their special, private meetings, the

stonemason sheepishly raises his hand and says to the

assembled brothers, I think Imighthave a solution toour

problemwithmoney.

Hecallsthemintoacircle.

Hebeckonsthemtolookashereachesintohispockettopull

out

a

beautiful

gold

ring

with

a

huge

shiny

rock

in

it.

Heshowsitaroundtheroomashebeginstoexplain,About

sixmonthsagomycashflowwassuchthatInolongerhadto

workforaliving(pausewhilethemembersoftheclubraise

their glasses and congratulate his hard work and good

fortune).

ButIwasbored,hesays,andIneededsomethingtofillmytime.

So,beingastonemasonbytrade, Istartedtoplaywithrocksandmetalsand Idiscoveredthat theseshiny

rockscouldbecutintothesebeautifulsparklydiamondshapes.

And,saysthestonemason,IdiscoveredthatIcouldtakethissoftmetalandbenditandshapeit.

And,saysthestonemasonasheraisesthediamondringintriumph,IdiscoveredthatIcouldcombinethe

two.

Everybodyadmirestherockinhisfingers.

Itsnotmuchwork,hesays,butitdoestakeasteadyhand.

Andlookhowprettyitis,hesays.

Andisntthismuchbetterthanapileofmoney?heasks.

Andofcourseeveryoneagrees.

Itismuchprettierthanapileofmoney.

Buthowdoesthissolvetheproblemofmoney?somebodyasks.


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Well,saysthestonemasonwithasmile,itslikethis

Wecanstoreasmuchaccumulatedlabourintooneoftheselittlemetalwrappedrocksaswewant!

Remember,thevalueofpapermoneyismerelyaquestionofagreementandsowecanstoretens,hundreds,

eventhousandsoflabourunitsintoindividualbills.

Thereisnolimit!hesays.

Andsoitiswiththisprettyring!

Allwehavetodoisagreeonavalue...thestonemasonsvoicetrailsoff.

Asthestonemasonfinishestalking,thereissilence.

Browsarefurrowedandfrownsappearonsomeofthefaces.

Abuzzofdiscussionarisesandafterafewminutes,smilesbegintoemerge.

Somebodywhispers,itisbrilliant.

Buttherearequestions.

Whatwillwedowiththemoneythatwestore?asksone.

Andhowwillweagreeonaprice?asksanother.

Thestonemasonsmilesandraiseshishands.

Ihaveanticipatedthesequestionsandconsideredasolution,hesayswithsatisfaction.

Asforwhattodowithallthecash,wecanbuildacentralstorehouseorbankandwecanstorethemoney

there.

Asfordeterminingthevalueofourgoldanddiamonds,hesays,wecanappointourmosttrustedbrothers

toacouncilandtheycandeterminetheprice.Thiscouncil,thiscartelifyouwish,willtellus,acaratofweightisequaltoonemillionlabourunits.andwe

willagreeandaslongasweagree,hesayswithasmile,wereinbusiness.

The

brothers

consider

this

for

a

moment

and

they

all

have

to

admit,

it

sounds

pretty

good.

In

fact,

they

can

not

seeanydownsideandsotheydecidetodo it.Theycreateabank,theycreateapreciousstonesandmetals

cartel,andthestonemasongetstoworkcreatingbeautifulandextravagantwaystostoreaccumulatedlabour.

Problemsolvedand,backtobusiness!

Thepeopleatthetopofthehillcontinuetheirdriveforaccumulation,distortionspileup,andthepeopleat

thebottomofthehillworkharderandharderjusttogetby.Itseemslikeaperfectarrangementanditworks

beautifully,accordingtothepeopleatthetopofthehill,untiloneday,outoftheblue,thereisacrisis.


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CRISIS

Andwhenthatcrisishits,itisadoozy!

Allofasudden,forthefirsttimeever,peopleatthebottomofhillareoutofwork,andnotinthefancypants

leisuredwayof thoseat the topof thehill,but inaplainolcantbuyenough toeat, lose thehouseand

homesortofway.

Whenthishappens,itisatotalsurprise.

Onedaytheeconomyisworking,thenextdayitisnt.

Onedaypeopleareexchanginggoodsandservices,thenextdaytheyarent.

AndIwontlietoyouhere,asthiscrisishitsitishugeandugly.

Peoplesuffer.

Childrenstarve.

Peopledieandsadly,nobodyatthebottomofthehillunderstandswhyitishappeningtothem.

Butthepeopleatthetopofthehill,theyunderstand.Theycanseetheproblemasclearlyasthediamondson

theirfingers.Overthecourseoftheirlittleexperiment,thepeopleatthetopofthehillhaveaccumulatedso

much money that they have literally siphoned off all the lifeblood (i.e. cash) from the economy and

unemploymentistheobviousresult.(duh!).

Ifnobodyhasmoneytobuythethingstheyneedbecauseallthemoneyhasbeensuckedoutoftheeconomy

bythepeopleatthetopofthehill,andifoverspecialisationhasmadebarterimpossible,howarepeoplegoing

tobeabletoselltheirgoodsandservices?

Theansweris,theycannot.

Thebottom line is, ifyoukeepextractingmoneyoutofaneconomyyouaregraduallytakingawaypeoples

abilitytoexchangetheirlabour.

Ifyoudothatforlongenough

oraggressivelyenough

andifyoudontputbackwhatyouvetakenout

Thenmassunemployment,recession,andeventuallyeconomicdepressionsetsin.

Itislogical.


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36

It is inevitable and because the ability to barter has been taken away from their economy, potentially

catastrophic. Millions, even billions, could starve and there is simply nothing, short of ending the little

accumulationexperiment,andgivingitallback,thatanybodycandotostopit.

Dontbelieveme?

Letstryalittlethoughtexperiment.

Imagineforamomentasmalleconomyoftenpeople.

Now, imagine thateachof these tenpeoplehasonehundreddollarsand that theyuse thoseonehundred

dollarstoexchangetheirlabourwith.

Nowimagine,thatoneday,oneofthem,letscallhimFred,startstoextractmoneyoutoftheeconomyalittle

bitatatime.

Maybehedoesitbytaxation.

Maybehedoesitbyprofit.

Maybehejustmusclespeopleintoit.

How the extraction happens doesntmatter because the end result is always the same. Sooner or later,

dependingonhowaggressivelythemoneyisextracted,peoplewillnolongerbeabletoexchangetheirlabour

becausenobodywillhaveanymoneylefttouseforexchange.

Allotherthingsbeingequal,(i.e.ifFreddoesnothingtoputthemoneybackintotheeconomy)atsomepoint

Fred isgoing tohaveallthemoney,andeverybodyelse isgoingtobeunemployed (i.e.unabletoexchangetheirlabour),unlesstheyareluckyenoughtoworkforFred.

AndwhatdoesFreddoatthatpoint?

HowdoesFredsolvetheeconomiccrisis?

Wellreally,theonlythingFredcandoatthatpointisgivethemoneyback.

The pure and undiluted truth is, if Fred wants to avoid all the nasty human suffering that attends

unemploymentandrecessioninaneconomythathessuckeddryofitsverylifeblood,heputsallthemoney

thatheextractedbackintocirculationsothatpeoplehavetheresourcestheyneedtoexchangetheirlabour.

Itistherightthingtodo.

Nothingelsewillsolvetheproblem.

Nowofcourse,hedoesnthavetodothis.

Ifhewants,hecanconvincehimselfthatthemoneybelongstohim,orthathehasworkedhardforit,orthat

hedeservesitbecauseheissuperior,orclear,orwhatever.However,ifFreddecidestokeepthemoneyand


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maintainhisprivilege,thenthebestthinghecandoisprovidebandaidsolutions.Ultimately,unlesshestarts

todotheright thing,unlesshestopssucking the lifebloodoutoftheeconomy,nothinghedoes isgoing to

preventgeneralsystemicfailureanddeath.

Andifhedoesntmakethatchange?

Ifhedecidesnottodotherightthing?

Well,letslookatsomeoftheoptionsourfriendFredhasthen,shallwe?

OneoptionthatFredhasistodonothing.Afterall,Fredhaslotsofmoneyandcanbuywhateverheneedsto

survive.Notonlythat,butafterawhilepeoplewillbesodesperatethattheywillworkforpeanuts(thereby

extendingFredsbuyingpower)justtohaveenoughtofeedtheirfamilies.Butreally,thatapproachcanonly

betakensofar.Slowdeathbystarvationdoesntgooverwellwithlargegroupsofheavilyarmedpeople.

JustasktheFrenchAristocracy.

If

he

keeps

all

the

money

for

himself

to

the

point

where

the

only

thing

thats

left

to

eat

is

cake,

the

people

are

going toeventuallybesohardup,and their families in suchdistress, that theywillbuildaguillotine inhis

honour.

Chopchop!

Andofcourse,thatsamistakehewontmaketwice.

So,whatdoeshedo?

Well,ifyoucanimaginethatyoureFred,andyouwanttoavoidlosingyourheadoverthewholething,youd

havetoputsomemoneyback.

Atacertainpointitcantbeavoided.

Ofcourse,givingitbackhastobedonecautiously.

Imean,youcantjustgiveitback.

Youcantjustgouptothepeopleinyoureconomyandsayhereitis,startagain.Ifyoudidthat,peoplewould

immediatelystarttowonderwhytheyweregivingittoyouinthefirstplace,andmaybelearntorefusetogo

alongwithyourextractionactivities,therebyputtinganendtoyourprivilege,butavoidingthechroniccycleof

sufferingcausedbyyourgreediness.

Hmmm....

Therefore, ifFredwants tomaintainhis little secret,hehas to finda sneakyway toput themoneyhes

stolenbackintotheeconomy,withoutitlookinglikehesgivingitback.Thankfully,theresafewwayshecan

do that thatwont tipoff thepopulation as to thenatureof thebeast.One iswar, theother ismoney

lending.Welllookatlendingfirst.


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Nowonegreatwaytoputmoneybackintotheeconomy,therebyreducingunemployment,withoutgivingthe

realsecretaway,istolendit.

Ifyoulendit,whilesayingthisismineandyouhavetopayitback,thentheillusionthatthemoneyisyours

ismaintained,andyoustillgettoinsertamuchneededtransfusionintothesystem.Butitisnotapermanent

solution,especiallywhenyourereallygreedyaboutitandchargeinterestontop.

Consider:

Afterextractingallthemoneyfromtheeconomy,andputtingtheeconomyintocardiacarrest,Fredgoesupto

allthepeopleinhiscountryandsaysheyeverybody,Icanhelp.Illlendeachofyouahundreddollarssoyou

can get your businesses going again (general cheers and applause) as long as you pay me back with

interest,hesays.

Illgiveyouahundredbucks,andyoullpaymebackonehundredandten.

[puzzledlooks].

Butwhyinterest?thepeopleask.

Well,saysFred,IfigurethatsinceImlettingyouusemymoney,Immakingahugesacrificebecausewhile

youareusingmymoneytoputyourselvesbacktowork,Iwontbeabletoenjoyitmyself.

Soitsonlyfair,hesays,thatIgetsomethinginreturn.

Andso,becausetheyhavenootherchoice,thepeopleagree.

Anditdoesseemtomakesense.

Anditdoesseemtowork.

Fredlendsouthismoney,bloodisbackintheveinsof

theeconomy,andeverybodyisbacktoworkagain.

Unfortunately however, the new found circulatory

healthdoesntlastverylongatall.

In fact, economic ruin happens once again, in about

halfasmuchtimeasitdidbefore.

Theproblem?

Fredhasgothisfangs intotheeconomicbloodstream

intwowaysnow.

On the one hand he is still engaged in his regular

extractive activities, thereby slowly draining the fluid


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39

outofthebody,whileontheotherhandhesgettingloanANDinterestpaymentsaswell.

You can see theproblem,and thepredictableoutcome. Fred isnowextractingmoney from theeconomy

twiceasfastasbeforesonow,collapseoccursinhalfthetime,butwithonecriticaldifference.EvenafterFred

hasextractedall themoney from theeconomy, thebalance sheet isnot zero! That is,evenwhenall the

moneyisbackinFredshands,becauseFredlentmoneyatinterest,thepeoplestillowehimmoney.

DEBT

Fredhasdiscoveredtheperversityofdebt,anditsaproblem.

Itisaproblemfortheotherninepeoplewhoarefaced,forthefirsttimeever,withthegrindingabsurdityof

debtanditisaproblemforFredbecauseatthispoint,andeventhoughtheeconomyiscollapsingandpeopleare suffering, Fredhasbecome very reluctant to lendoutmoreofhismoney to save thepeoplewho aresuffering.

Why?

Well,hesnotstupid.

Hesalreadycomeupshortonhislastloan,andhecanseethateverybodyisnowbroke,soitwouldbekindof

dumbtostartlendingmoneytopeoplewhocantpayitback.YoucouldsayFredhaslostconfidenceinthe

peoplesabilitytopayhimback;hehaslostconfidenceintheeconomy.

Itisabitofaquandary.

EventhoughFreddoesntwanttolendanymoremoneybecauseheknowsforcertainhellnevergetit(and

the interest)back.Heknowshesgottodosomethingotherwisethepeoplewillgethungry,desperate,and

maybeevenviolent.Andthatwouldruinhisbreakfast.

Sowhatdoeshedo?Well,whentheeconomyisincrisisandFredhaslostconfidence,therearebasicallytwo

thingshecando.Hecaneitherignoretheproblemandletthepeoplesuffer,orhecanjumpstarttheeconomy

byputtingmoneybackintoit.

Inordertoseethismoreclearly,letusexpandthisthoughtexperimentabitsothatweimagineFredtobein

controlofanational,orevenglobal,economy.

If he ignores the problem, hes going to need to use force and indoctrination to keep the people down

otherwisetheylldowhatstarvingpeopledoeverywhere.Theywillriseupandtakewhattheyneedtosurvive.

Of course, hes not going to call it force and indoctrination. That wouldjust leave people bitter and

unwilling to work. Instead, hell probably call it keeping the peace, security, education, and cinematicentertainment.Andofcourse,hellgivethemallsortsofreasonswhytheyhavetoputupwithit.Maybehellblowuponeofhisownbuildings,orputadozenpolicedramasontelevisionconvincingthemoftheneedfor

security.Ormaybehellscarethemwithtalesofhorrorinthenight.Howeverhedoesit,theoutcomewillbe


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the same.When thepeople start looking athimwithhungry eyes, all the surveillance, police, armies and

technologyhesgatheredunderhiscontrolcanbeeasilyusedtosuppresstheanxiousandagitatedpopulation.

Andthisapproachwillwork,toapoint.

However,asthoseFrenchmenwithguillotinesdemonstrated,Fredcancallouslydisregardthesufferingofthe

masses for only so long before it all ends in tragedy.xii So, no matter how much he might want to keep

everything for himself, at some point hes going to be forced to initiate a transfusion, and possibly a

defibrillation,ofthedonor.

Andhowdoeshedothat?

Well,sinceFredwontevenconsidertherightthingandjustgivethemoneyback,andsinceFred istheonly

onewithmoneytolend,FredbasicallyhastorestoreFredsconfidenceinthepeoplesabilitytopayFredback,

sothatFredwillfeelcomfortableenoughwithhisreturnoninvestmentforhimtolendagain.

AndhowisFredgoingtorestorehisownconfidenceand,ergo,hiswillingnesstolend?

Well, there are number of tried and tested things that Fred can do to help restore his confidence in the

economy, thereby giving himself the freedom to lend again. One of the things he can do is reset the

economy.Hedoesthis,simplybylettingtheeconomycollapse,andthenrepossessingallthethingsthatare

his. Fred reasons itout like this.Whenpeopleborrowedmoney fromhim, theywentaheadandbought

somethings(housesforshelter,carstogettowork,foodfortheirfamilies,etc.)thattheyneededtosurvive

andthrive.Sincetheydidntpayhimallhismoneyback,Fredreasonsthatallthethingstheyboughtwithhis

moneynowbelong tohim.So,he takeswhatshisandclears thedebt thisway.Gettinghismoneyback,

through therepossessionofgoodsboughtwithhismoney,basicallyrestoresFredswillingness to lend. Its

ugly

though,

especially

when

children

are

involved,

since

it

leaves

the

people

in

the

horrible

position

of

having

tostartalloverfromthebottomagainbutcestlavie,right?

Now, the second thing Fred can do to stave off economic collapse is to printmoney and let it enter the

economy.Printingmoremoney isagreatwaytostaveoffeconomiccollapsebecause itbasicallymakesthe

essential(inaneconomysubjecttoconstantaccumulationoflabour)processoftransfusion(i.e.puttingback

thatwhichhasbeendrainedaway)apermanentthing.Ofcourse,justasFredisnotgoingtogiveawayhisown

money,whenhestartstheprintingpresseshesnotgoingtojustgiveawaythefreshminteither.xiiiJustgiving

themoney awaywould lead to inflation and the steadydevaluation of hismoney.xiv So to avoid that, hechargesinterestonthenewmoneyaswell.

Howmuchinterest?

Well,letsjustsayitisnotanexactscience.

Itisabitofaguessinggame,really.

If interest ratesare too low, this leads to lostopportunityxvand (more importantly) inflation.On theother

hand, if interestratesaretoohigh,extractionand loanpaymentscripple theeconomy tooquickly.So,Fred


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triestocreateabalancepointkeepingbothinflation(causedbytheentranceofnewmoneyintotheeconomy)

andunemployment(causedbylackofmoney)toreasonablelevels.

Anddoesitwork?

Well,sortof.

Connectingtheeconomicbodyuptoapermanent,interestbearingcashintravenous(IV)xvidoesstaveoffthe

inevitable economic collapse caused by the extractive and lending activities of Fred, but only for a time.

Eventuallydebtbuildsup,Fredlosesconfidence,andthemoneyflowstops.Inasmalleconomy,theprocessis

totally obvious. However in a huge economy, it is less obvious. In a huge economy typically what would

happenisdebtwouldpileupinoneortwoareasoftheeconomy,acorrectionwouldcome(i.e.debtwould

pileuptothepointwherepeoplecouldntpaybackthemoney),Fredwouldpanic,theeconomicintravenous

(IV)wouldbeshutoff,businessesinthatsectorwouldcollapse,peoplewouldbethrownoutofwork,andso

on. At that point Fred would reset that sector of the economy by repossessing assets until he was

comfortableto lendagainatwhichpointhed lendagainuntildebtbuiltupsomewhereelseandthewhole

thingwouldhappenagain.

Andisthisabadthing?

Wellifyouareoneoftheonesthatloseeverythingasaresultofthereset,thenyesitisabadthingandit

doesnt takemuch imagination to figureoutwhy. You lose yourhouse, your childrengohungry, your self

esteem takesahit,your family fallsapart,and lifebecomesagrindhouseofpainandstress.On theother

hand,Fredbenefits.Fromhisperspective,recession(i.e.theresetcausedbyFredsextractiveactivity)brings

anecessary financialcorrection thatallowshimtorecouphis investment,returnhimself toconfidence,and

raisethevalueofhismoneywhichhasprobablytakenahitasaresultofinflation.ItisallgoodforFredwho

probablythinksthatiftheworstthinghehastodealwithiscyclicalrecessions,xviiheshappy.Unfortunately,

cyclicalrecession isnottheworstthingthatFredhastodealwith.Whilehe iscelebratinghisgoodfortune,

recessive criseshappenwithmoreandmore frequency,growdeeperanddeeper,andbecomeharderand

hardertogetoutof.

Theproblem,asalways,isdebt.

Thethingyouhavetorememberis,Fredisalwayslendingmoneyatinterestandextractingmoneyatprofit

sonomatterwhat Fred does to putmoney back into the economy,whether its a bailoutor a stimulus

package or a tax break orwhatever, debt (i.e. the owing of your labour power to someone else) always

accumulates.ItstartslikealittlecanceroustumourthatFredcanmanagewithabandaidortwo,butitgrows

andgrowsandgrowsandunlessFredoutlawsinterestandgivesthemoneyback,thereisreallynothingFred

candotostopthecatastrophiccollapseofhiseconomicsystem.Eventually,mayberightnow,maybeinthree

orfouryears,apointisgoingtocomewhendebtissobadandsopervasivethatnothingthatFredcandowill

restoreFredsconfidence in theeconomyandwhen thatpointcomes thedominoeswill falland theentire

economywillgointofullscalecardiacarrest.


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Andthefunnythingis,Fredknowsthis.Becauseofhisprivilegedvantagepoint,hecansee itcomingbetter

than anybody and he knows that when it happens, people are going to experience incredible hardship,

unemployment, long termdeprivation, starvation, and slow, grindingdeath,whichperhaps explains Freds

affinityformilitarytechnology,security,armedforces,RFID,andthingslikethat.Ofcourse,hesnotgoingto

usethatstuffifhedoesnthaveto.Fredsnotabadguyafterall.Butitdoesmakehimsleepbetterknowing

itsthereifheneedsit.

So,whenthetimecomesandtheeconomygoesintocompletecardiacarrest,whatisFredgoingtodo?

Well,asalways,Fredhasachoice.

Ontheonehand,Fredcanwakeupandseethetwistednatureofthesystemhesbeenlivingwith,giveback

themoney,outlawaccumulationandinterest,andallowthecountrytolivehappilyeverafter.Ifhedoesthis,

thenwe canall sing forhesajollygood fellowandgodance in the streetsbecause if Fredmakes that

choice, itwillmeanapermanentend topovertyandsufferingand theglobalemergenceofshambhalaand

utopia.

Ontheotherhand,Fredcouldcontinueintheoldwaysandtrytohangontohismoney. Ifhedoesthat,things

willjustgetworse. AsIalreadysaid,itwillbelikeadominochain.Whenitfinallycomes,thecollapsewillbe

rapid and dramatic and therewill be nothing Fred can do to stop it. Itwill start in a single sectorof the

consumereconomywithanormalrecession.However,becausetherestoftheeconomyissomiredindebt,

therecessionwillnotstayconfinedtoasinglesector.Evenalittledropoffinsaleswilltriggerbankruptcyand

default inothersectors,panickingFred intoshuttingoff the IV,andwhenthathappens,thewholechainof

dominoeswillfallrattlingdownwithdisastrousconsequencesforthemajorityofpeopleinFredseconomy.It

willbe sobad thatnoamountof surveillanceand indoctrinationwillcalm theagitatedmassesandat that

pointFred is,onceagain,onlygoing tohave twochoices.Helleitherhave to comecleananddo the right

thing,orhellhavetogotowar.

Whywar?

Well,aspeople likeFreddiscovereda long timeago,war isagreatway to channelaggressionandpullan

economyoutofeconomicdepression.NotonlydoeswarallowFredtoinjectmucho$$$intotheeconomyina

waythatdoesntgivehisprecioussecretaway,butitalsoallowshimtochanneltheaggressionoftheyoung,

ablebodied, andpotentiallydangerousmen.He calls somebody evil and then sends all theablebodied

youngmenoutofthecountrytofighttheevil.

Simple!

Andofcourse,werenottalkingaboutalittlewarhere.

Atthepointoftotaleconomiccollapse,Fredisgoingtoneedarealwar,aglobalwar,withgadjillionsofdollars

in military spending leading to bajillions of dollars in economic offshoots into the economy to solve the

problemandthatmeans,ofcourse,thata lotof innocentpeoplearegoingtodie.Ofcourse,Fredneedsan

enemytofight.Butthatseasy.Aftercenturiesofindoctrination,theworldissodividedupbyreligion,byskin


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colour,bynation,bygender,byculture,andbyregion thatstartingaglobalwar isassimpleasdroppinga

singlenuclearbomb.

So,whatareyougoingtodo?

Well,Ipersonallydontrecommendyousitaroundanddonothing.

Even if the next world war does manage to solve our global economic crisis by remonetizing the global

economy,were rapidly reaching a planetary environmentalwall. Ifwe dont fix the numerous ecological,

psychological,political,andsocialdistortionsthatarecausedbythelunaticfringeleadingthislunaticeconomic

systemwelivein,humanitywontsurvivetodoitagain.Andbesidesthat,werenotfightingwithsticksand

stonesanymore.With the typeof technology that canbedeployed to killwith thesedays,and the global

interconnectednessthatthreatenstounifytheplanet,billionscoulddiebeforeFredregainshisconfidence.

Ialsodontrecommendguillotinesandviolence.Thatneverreallyworkedanywaybecause,aswehaveseen,if

you killone Fred,anew Fred comesalong to takehisplace.Andbesides, theold saying is true: violence

begetsviolence.Youcantrepairabrokenworldbyusingrepressivestrategies.

Ialsodontrecommendyoustandaroundwaitingforabigalienshiptotakeyouaway intothesky,oryour

Sirianbrotherstocomefixtheproblemsonthisearth.IknowsomepeopleouttherearedoingthatbutIm

tellingyounow,thataintgonnahappen.Trustmeonthisone.IfthealienhighcommanderoftheAnnunaki

fleetwas speaking to you rightnow,hedbe saying exactlywhat Im saying to youwhich is, this is your

problemandyouhavetofixitbeforewecanhelpyou.Sogettoit.

Finally, Idonotrecommendyoustandaroundwaitingforthesaviourtocomeandsaveyourbutteither.I

havenodoubtatallthat ifthesaviourwasstanding infrontofyouandspeakingtoyourightnow,hedbe

telling

you

exactly

what

I

am

telling

you

which

is,

you

are

a

powerful

co

creator

and

brilliant

spark

of

the

divinecreatorGod,andyouhavethepowerwithinyoutochangethisworld.Allyouhavetodo iswakeup,

takeyourpowerback,andlearnhowtouseit.

Isupposethough,intheend,itsyourchoice.

Youcanmakeupsomeexcuseandsitaroundwaiting forFredtodotherightthing,oryoucanrealize that

aftersomuch indoctrination,war, fighting,division,depression,andsufferingyouhavegot to takematters

intoyourownhands.Ifyourchoiceisnumberone,thenthebestyoucandoishopethatwhatIvetoldyou

today is not true. However, if you want to do number two, I recommend you visit me at

http://www.michaelsharp.org/

where

I

can

help

you

get

started

on

the

awakening

and

empowerment

part

of

thesolution.Keepanopenmindthough.Remember,ImaspiritualauthorsoanysolutionsIhavetoofferfor

thismesswecallplanetearthwillbespiritualsolutions.Ifyouthinkyourereadyforthat,thenbyallmeans,

dropbyforavisitandletsseewhatthereistosee.


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44

OnreachingJerusalem,Jesusenteredthetempleareaandbegandrivingoutthosewhowerebuyingand selling there.Heoverturned the tablesof themoneychangersand thebenchesof thosesellingdoves,andwouldnotallowanyonetocarrymerchandisethroughthetemplecourts. Andashetaughtthem,hesaid,"Isitnotwritten:Myhousewillbecalledahouseofprayerforallnations?Butyouhavemadeitadenofrobbers."Thechiefpriestsandtheteachersofthelawheardthisandbeganlookingforawaytokillhim,fortheyfearedhim,becausethewholecrowdwasamazedathisteaching.Mark11:1518.


45/53

45

Pleasefeelfreetopostthisdocumentonyourwebsiteorblogasaservicetoyourreaders.

Alinktohttp://www.michaelsharp.orgwouldbeappreciated,butisnotnecessary.

Pleasedonoteditthedocumentorremovenotices.

Ifyoureadthiseconomictreatiseonlineasafreeebook,

andwouldliketoprovideafairexchangefort

rocket guide to money and the economy

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