Bono and You, Too, II: Does Charity End Poverty?

In last Thursday’s posting we viciously attacked rock icon Bono of the Irish group U2, a name that sounds like the Hun invading.  We reported that he had mentioned in an interview with somebody-or-other that capitalism has lifted more people out of poverty than even the most massive foreign aid.  We also squealed on him by noting that he has actually said Good Things about America and Americans.  Obviously the man is a complete nutcase.

News from the Network, Vol. 6, No. 34

Those of you who have been paying close attention to this blog and a little bit of buzz around the internet know that CESJ is planning on republishing a “long lost” book by the late Archbishop Fulton J. Sheen, considered by many to be the first “televangelist.”  In what no doubt surprises many, Sheen was also a strong advocate of widespread capital ownership — and therein lies a tale.

Bono and You, Too, I: Is Bono, uh, “Kidding” Us?

Bono of the Irish rock group U2 (who has nothing to do with Cher) strikes us as someone who is both extraordinarily charitable and possesses a certain hardheaded practicality (in a good way).  His list of charities is “impressive,” to put it mildly.  We don’t agree with some of them, but unlike some celebrities and most media figures he has on occasion admitted to making mistakes.

How Not to Answer a Question

A couple of weeks ago somebody posted a . . . “meme” we think it’s called? on our FaceBook page.  That doesn’t sound right, but it doesn’t matter.  It’s not the point.  The little poster showed Superman having a cup of joe and asking Batman, “How can you start the day without coffee?” to which Batman, of course, replies, “I’m Batman.” You can see it for yourself, here.

The Slavery of Past Savings, II: Some Basic Finance

Anything that has a present value can be put into a contract as “consideration” — the inducement to enter into a contract.  Past savings obviously have a present value, for the marketable goods exist, and claims on them can be drawn or issued and used as “money.”  Money, of course, is anything that can be accepted in settlement of a debt, or “everything that can be transferred in commerce.”  All money is thus a contract, just as in a sense all contracts are money.

The Slavery of Past Savings, I: How to Finance Growth

Last week a member of the network forwarded a link to an article on cooperatives.  The article details many of the advantages of worker ownership, but then dilutes the effect.  It does this by making an unconscious assumption that has had a very negative effect on economic growth in general, and widespread, democratic ownership of that growth in particular.  This assumption is what ESOP-inventor Louis O. Kelso and Aristotelian philosopher Mortimer J. Adler called the “slavery” of past savings.

News from the Network, Vol. 6, No. 33

Breathe easy.  The CIA has just released a report on “Area 51” in Nevada.  In a stunning revelation, it has absolutely nothing to do with extraterrestrial beings.  Instead, Area 51 was used to test the U-2 spy plane . . . which has nothing to do with Bono (or Cher).

Dos and Don’ts of Urban Renewal

Evansville, Indiana, has reached a deal to construct a $74 million convention center that is expected to revive the downtown area and bring in new business and infusions of cash.  This is pretty much the standard pitch when something of this scale is planned, whether a convention center or a sports arena.

Abortion, Slavery, and Private Property, III: Scott versus Sandford, 1857

Scott v. Sandford in 1857 — the notorious Dred Scott case — effectively shifted the determination of who is a person (and thus who has rights) from human nature itself to the State.  As Chief Justice Roger Brooke Taney declared, no black man, free or slave, could ever be a person as that term is used in the Constitution.

Abortion, Slavery, and Private Property, II: Cotton is King

The invention of the cotton gin changed everything as far as slavery in America was concerned.  Suddenly, where it took one slave ten hours or more to pick the seeds out of a single pound of cotton, a team of three slaves could process fifty pounds in the same amount of time — more than 1,500% increase in production . . . and that was the early model.

Abortion, Slavery, and Private Property, I: The Economics of Slavery

The connection between abortion, slavery, and the decline of private property is not accidental.  Life, liberty, and property are, after all, the great triad of natural rights named in the Virginia Declaration of Rights in 1776.  Jefferson omitted property from the Declaration of Independence a month later probably because of “discomfort” over slavery.  It was, after all, a bit tricky to be demanding full rights for free men and, at the same time, denying any rights at all to half a million others.

News from the Network, Vol. 6, No. 32

The news is a little thin this week, possibly the “dog days” or the “silly season” for news — or maybe it’s the lull before the storm.  President Obama keeps running around trying to find some new cause to divert attention away from far more pressing problems.  A lot of talking, but very little walking, so what else is new?

Shakespeare Speaks! (Again)

Yesterday’s posting, “Was John Paul II a Socialist?” excited a little comment.  After posting it, I began to have second thoughts about some of the things I said.  All were true, of course, and can be substantiated from independent, third party sources.  Members of the CESJ “core group,” however, pointed out that some of what I said was not entirely appropriate.

Was Pope John Paul II a Socialist?

Someone recently sent us a link to an article from the Houston Catholic Worker, Volume XXVI, No. 2, March-April, 2007, “How an Unknown Text Could Throw New Light on John Paul II’s Views on Economics.”  The article was reprinted with permission from Catholic Life of Cheshire, England.

An Interesting Approach, But It’s Not Us

In The Transcribed Adventures of Nick Danger, Third Eye, “Nancy” (Betty-Jo Biolofsky) has managed to get hold of some incriminating photos with which the villain, Rocky Rococo, has been blackmailing her and her husband.  She quickly leafs through them and then exclaims in a shocked voice, “It’s not us!”  Then, in a calm, interested voice, she continues, “It’s an interesting approach, but it’s not us!”

Long Live Dead Animals!!

A while back in an article on the dangers of immigration we saw a sign on an ethnic restaurant advertising some kind of vegetarian fusion cuisine, a tofu taco or something.  That was shocking enough, but even more shocking was the attitude that “foreigners” (dirty or otherwise) are somehow a threat to the American Way of Life.

News from the Network, Vol. 6, No. 31

"I am the State thy God, and thou shalt have no other gods before Me."  This is the logical outcome of viewing the State as a "Mortall God," as totalitarian philosopher Thomas Hobbes put it in Leviathan.  Not surprisingly, Keynesian economics is based on that of Walter Bagehot, whose political philosophy was derived from that of Thomas Hobbes.

The “New” Glass-Steagall

A week or so ago somebody brought to our attention a proposal by Senator Elizabeth Warren.  No, it had nothing to do with the oddity of a culture that insists on “gender inclusive” terminology for pretty much everything that doesn’t matter, but says nothing about calling relatively young ladies “Old Men” or “Tribal Elder,” which is what “senator” means in Latin.

One, Two, Three: You’re Out

Wearing our “for-profit hats” (Equity Expansion International, Inc.), with a couple of nods to CESJ, we returned last week from a “retreat” in Cleveland, Ohio, meeting with members of a new start-up company who seem very interested in implementing the Just Third Way.  We also met with a professor at John Carroll University . . . getting caught in a hailstorm with tornado warnings, but that’s another story. . . .

A Brief Opinion on Scoacpitalism (a.k.a. “Csaopcitalism”)

Recently we came across one of those “tastes great/less filling” debates about the virtues of socialism v. capitalism, and the practicality of capitalism v. socialism.  There was obviously no way it could ever be resolved, for both sides in the, uh, er, “discussion” were not either defining their terms or even being too clear on what they were talking about.

If You Have a Free Moment . . .

We love it when we get intelligent questions that we can answer without too much trouble.  In addition to the fact that it proves somebody is actually reading this blog, answering the question saves us the trouble of trying to think of something to write about.  We were therefore delighted to receive the following question a few weeks ago:

News from the Network, Vol. 6, No. 30

And the winner is . . .?  Actually, in this case, it’s easier to pick the losers: We, the People of the United States.  At stake is the next chairmanship of the Federal Reserve.  Since none of the candidates appears to have the faintest idea what a central bank is supposed to do, the best we can hope for is the same financial floundering to which we’ve been subjected since the New Deal.

The REAL Dismal Science, IV: Democracy v. Plutocracy

By the early 19^th century, it appeared that democracy had triumphed over divine right.  The French Revolution had been a misstep, of course, but you can’t make an omelet without breaking eggs, and boys will be boys.  Besides, you know . . . foreigners.  And even the French had some good in them, e.g., Alexis de Tocqueville and what many authorities consider the first great work in sociology, Democracy in America.

The REAL Dismal Science, III: The Philosophers of the Absolutist State

In the previous posting we mentioned that Walter Bagehot, whose economic theories were a strong influence on John Maynard Keynes (whose own theories have pretty much wrecked the global economy), wrote favorably of the political theories of the totalitarian philosopher Thomas Hobbes.

The REAL Dismal Science, II: Reason v. Divine Right

Democracy is based on the principle that people have the inherent right to rule themselves, and thus to select the form of government and society best suited to their needs, as long as it respects fundamental human rights.  How a specific government or society meets that requirement is up to the people who come together to organize it, and can take many forms, but the substance must remain, or the system is unjust.

The REAL Dismal Science, I: The Economics of Unreality

People often think of economics as “the dismal science.”  In the opinion of some authorities, this is due to the discredited theories of the Reverend Thomas Malthus that, nevertheless, became entrenched as economic orthodoxy.  This was primarily because Malthus told the wealthy and powerful — and those who depended on them — precisely what they wanted to hear.

News from the Network, Vol. 6, No. 29

The CESJ team has been preparing to go to Cleveland tomorrow for a retreat.  We’ll hopefully report on the retreat next week, but this week our time has been taken up with preparing for it.  A number of interesting sessions have been planned and a number of meetings scheduled that could result in significant advances — but we won’t know until the end of the retreat how well things went.  Unlike some reporters who see the future and it works, we have to wait until the events we’re reporting actually happen.

Free Advice to a Couple of Teenagers

This is a little complicated, but it is critically important in all of human thought.  Bishop Fulton Sheen translated a passage of Aquinas referring to the effects of abandoning the first principle of reason as committing "mental suicide" after stressing the fact that the first principle of reason is the strongest and clearest thing "the Angelic Doctor" wrote about.  G. K. Chesterton called forgetting or ignoring the first principle of reason "the assassination of Thomism."

Some (More) Questions About Future Savings

We recently received two questions about the monetary theory underlying binary economics, especially as it would be applied in Capital Homesteading.  The first question was whether future savings are any more secure than what backs the currency now.  The second question was how future growth actually backs a currency.

The Keynesian Money Multiplier Again

In college economics courses we all learn that under fractional reserve banking, banks can create money out of nothing.  This allows private interests to circumvent the government’s monopoly on money creation, and thus to control the economy.

Another Note on Say’s Law of Markets

Most authorities and experts have a partial understanding of “Say’s Law of Markets” and its application in the “real bills doctrine” from the perspective of past savings (the present value of past reductions in consumption) instead of future savings (the present value of future increases in production).  This causes a little confusion when we attempt to explain the monetary and fiscal reforms of Capital Homesteading.

News from the Network, Vol. 6, No. 28

As is usual in the summer, this has been something of a slow week for news . . . unless you’re big on Hollywood fluff (which is pretty much the same as Washington fluff these days).  On the Just Third Way front, matters in Cleveland seem to be chugging along, which ought to please Drew Carey because, after all, Cleveland Rocks.

The Federal Reserve Yet Again

If we keep raising the issue of the Federal Reserve, it’s because other people keep insisting on two things that we know are incorrect.  One, the federal government is the sole legal money creator in the United States.  Two, central banks were invented to finance government.

The Dictatorship of Money, XIV: Why is Property Important?

This brings us to the sticking point.  Why has every pope since Leo XIII (and a number before him, such as John XXII in 1329) stressed the importance of private property?  Clearly it is not income, or (at least) income alone.  The whole concept of the just wage, while frequently misunderstood and even more frequently misapplied, addresses the problem of an adequate and secure income, even if mistaken for false charity and used in the short term as an expedient.

The Dictatorship of Money, XIII: The Theory of Socialism

In the tenth and eleventh postings in this series, we demonstrated that capitalism is based on two premises, one true, and one false.  In today’s posting we will show that socialism is also based on two premises, both of which are false.  This is, in fact, why the Catholic Church condemns socialism, while it “only” criticizes capitalism.

The Dictatorship of Money, XII: Faith v. Reason

The claim that both capitalism and socialism are based on opinion — faith — is easily proved.  As we have demonstrated countless times on this blog, both capitalism and socialism rely on the demonstrably false premise that the only way to finance new capital formation is to cut consumption and accumulate money savings; financing for all new capital is presumed to come out of the present value of production that was withheld from consumption.

News from the Network, Vol. 6, No. 27

The Dow shot up this morning more than a hundred points in the first few minutes of trading . . . and as of this writing has been losing ground . . . regaining it . . . losing it again . . . ever since.  In other words, business as usual.  The rapid rise is presumably in response to a favorable jobs report for June, while the drop is presumably due to the situation in Egypt.  It does raise an issue about the widespread belief that the stock market is a leading economic indicator, but what can you do?

For one thing, support an initiative like the proposal to make a counteroffer to the Chinese purchase of Smithfield Foods, Inc., as we explain in our first news item this week:

The Dictatorship of Money, XI: The Theory of Capitalism: Use

In yesterday’s posting we learned that capitalist theory is correct in asserting the absolute character of the right to be an owner, i.e., “title.”  We also learned that being correct in such an important matter is not enough.  We must also be right for the right reason.

The Dictatorship of Money, X: The Theory of Capitalism: Title

By the time Pope Leo XIII issued Rerum Novarum advocating private property in capital for everyone (§ 46), “private property” had come to mean different things for the rich, and for the non-rich in America.  This was largely due to two circumstances.

Response to Professor Shakespeare, III: Shakespeare in His Own Words

As promised last Thursday, here is the full, unedited text of Professor Rodney Shakespeare’s comments on CESJ’s response to him that we sent out June 17, 2013.  This was cut and pasted directly from the e-mail as Professor Shakespeare sent it.  The only changes are the removal of some extraneous spaces Professor Shakespeare seems to have added in the heat of composition:

News from the Network, Vol. 6, No. 26

We’ve been watching the progress of the Chinese offer for Smithfield Foods, Inc., with great interest.  It does seem, after all, that it would be a perfect test case for a leveraged worker buyout financed by a consortium of banks with the loans rediscounted at the Richmond Federal Reserve.  Ownership of the company would remain in American hands, and what amounts to an economic stimulus of billions of new dollars backed with private sector hard assets instead of government debt would show the way to finance growth and pay down the debt at the same time.

Response to Professor Shakespeare, II: Analyzing Shakespeare

As Jonathan Swift explained in the sixth number of his “Drapier’s Letters,” commenting on what he believed to be the fraud of William Wood’s State-granted monopoly for the coinage of copper halfpence and farthings for Ireland, “I foolishly disdained to have Recourse to Whining, Lamenting, and Crying for Mercy, but rather chose to appeal to Law and Liberty and the common Rights of Mankind, without considering the Climate I was in.”

Response to Professor Shakespeare, I: CESJ’s Position

A few months ago, Mr. Chris Dorf, an occasional participant in the “Kelso Binary Economics Discussion Group” and on this blog who supports Keynesian theory, published some vague accusations against Dr. Norman G. Kurland, president of CESJ.  Mr. Dorf refused to support his accusations with either evidence or logic.  This encouraged a number of other critics of CESJ to join with Mr. Dorf in making further unsubstantiated accusations, particularly after he falsely accused CESJ of “banning” him.

Three Principles of Banking, II: The Solution

Yesterday we described the current financial situation in the world in very broad terms, along with what governments have been doing to try and fix things.  In general, the solution is to print more money backed solely by increases in government debt.  In effect, this is trying to get out of a hole by digging it deeper.

Three Principles of Banking, I: The Situation

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A serious problem in the world today is that the people in charge of the world’s central banks have no idea what a central bank is supposed to do.  Their guiding assumption is that central banks were invented to finance government.  They also believe (erroneously) that “money is peculiarly a creation of the State” (Keynes, Treatise on Money).

News from the Network, Vol. 6, No. 25

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As of this writing, the Dow is up slightly from the “plunge” of the last few days.  This writer’s opinion is that this is a result of the short sellers locking in their profits by buying back what they sold off over the last couple of days.  It could also be that the speculators are counting on some action by the Federal Reserve to pump more worthless cash into the system to stimulate the bubble and raise prices artificially.

Fighting the Last War

During the Great War (a.k.a., World War I), both sides insisted on running head-on against the other, despite the fact that military technology had advanced far beyond tactics.  Nevertheless, the leaders kept on using tactics that were at least half a century out of date.  Yards of territory were gained or lost at the cost of hundreds of thousands of lives.

The Dictatorship of Money, IX: Catholicism and America

Contrary to popular belief among some Catholic groups that there is something inherently wrong in the American system as designed by the Founding Fathers, there is every indication that Leo XIII and other popes saw something special about the United States — in a good way.

The Dictatorship of Money, VIII: “New Things”

As we noted in our last episode in this series, socialism was growing by leaps and bounds in the latter half of the 19^th century, particularly in America, which had seemed immune.  This was largely due to the fact that prior to the Civil War the issue had been between the industrial and commercial capitalism of the North that ran on wage slavery, and the agrarian capitalism of the South that ran on chattel slavery.

Private Sector Money, V: A Final Question

We had one more question come in on this brief series.  This involved the duty of a private issuer of money to disclose how much he or she was issuing and in what form.  As our correspondent asked,

News from the Network, Vol. 6, No. 24

As of this writing (a little after 2:00 pm EDST), the Dow is down more than a hundred points.  It’s up, it’s down.  Don’t even try to second guess it.  Just take your cash to Las Vegas and play the slots or Keno.  You probably won’t come out any better, but you can catch the shows and get free drinks.

Private Sector Money, IV: The Rest of the Story

Now, to get back to the original question that started this series — we don’t think that such private money creation will allow multinationals (or anyone else) to escape taxation or accountability.

Private Sector Money, III: The Same Story

We’ve already seen how in the American Civil War and World War I, the politicians decided to finance the war effort using debt instead of taxes.  In the 19^th and early 20^th centuries following the wars, however, the government made a concerted effort to pay down the war debt.  This put the economy and the money supply back on a more or less sound basis.

Private Sector Money, II: After the Faux

Maintenance of a national debt by the U.S. government began in earnest after the Civil War.  This was in the mistaken belief that the currency had to be backed with government debt, and that if the government paid down its debt, there would be no money.  Reliance on government debt, however, ensured that the people who most needed access to credit were denied that access.

Private Sector Money, I: Antebellum Bucks

Last week we got a (nother) question about money creation.  Given the fact that the more money the government seems to be printing up the less we have, this is a question on everyone’s lips — or, at least, in everyone’s pocketbook.  As our correspondent said,

News from the Network, Vol. 6, No. 23

Despite the evident bafflement and lack of vision exhibited by the powers-that-be on both sides of the aisle, we are making progress in presenting and even implementing the Just Third Way.  This appears to be making people nervous who think — erroneously — that their jobs, reputations, careers, and so on, are somehow threatened by the Just Third Way.

The Non-Essential National Debt

On May 22, 2013, the Wall Street Journal published an op-ed piece by Phil Gramm and Steve McMillin, “The Debt Problem Hasn’t Vanished.”  We thought it was pretty good — except that the authors assumed as a given that the currency had to be backed by government debt.

The Dictatorship of Money, VII: “A Theory of Human Society Peculiar to Itself”

As we saw in yesterday’s posting, the U.S. Supreme Court’s opinion in the Slaughterhouse Cases effectively shifted the source of all rights, especially life, liberty and property, from human beings, to the State.  This, to all intents and purposes, abolished the natural law as the basis for the government of the United States.

The Dictatorship of Money, VI: The Turning Point.2, Continued

As we saw yesterday, in the notorious Dred Scott decision, the United States Supreme Court ruled that, to all intents and purposes, rights come from the State and are vested in the people at the discretion of the State.  Under traditional natural law theory, of course, rights are inherent in each human being, and are vested in the State at the discretion of the people.  As Pius XI pointed out,

The Dictatorship of Money, V: The Turning Point.2

Last week we examined the first “turning point” in people’s understanding of money.  That was the idea that seems to have popped up around the time of the Reformation that rights are not inherent in human beings, but in the State.  By a somewhat circuitous route, this new concept of where rights come from found its way into political economy.  This provided the foundation for the rapid expansion of State power and totalitarianism in the 20^th century.