Posted to Subscribers on 7 August 2008


In mid-June, I wrote an article on one of the key economic theories, basically about how we make choices about whether to spend money on guns or butter. That article is posted online for those who missed it or who want to refresh their memories.

Today, I want to take up another deceptively simple economic theory, one that is actually so influential that it acts as the philosophical basis for such diverse economic systems as capitalism and communism. There are countless other economic systems but they all come down to a philosophical or sociological thesis about who is entitled to own wealth.

To make this easy, let's play mind games, but no matter what you think now, I will wager almost anything that 99% of those reading this have not thought about the subject . . . and, as a consequence of this, they are victims of systems of wealth allocation that short change them.

The King

Okay, we have a ruler and he has done the usual royal thing and spent a lot of money on battles — a.k.a. guns — and incurred a few debts of honor to some loyalists, one of whom he now appoints as Chancellor of the Exchequer or Chief Vizier, depending on which side of the clash of civilizations you are studying.

In short, the throne rewards those it trusts by letting them put their fingers in the cookie jar. Great fortunes are to be made in these posts, and it is generally anticipated that the appointees will avail themselves of the opportunity. Very seldom does an IRS auditor rise to acquire the grand title of chief tax collector; this honor nearly always befalls someone close to the head of state, someone who will succumb to temptations but not jeopardize the crown.

In nearly all historic cultures, wealth was confiscated from the land and funneled to the top via a complex system of extortion that was, of course, legalized, well, usually. There are real questions sometimes about legalities and only two days ago, a lawyer tried to explain the difference between legal and lawful. God help us!

As a consequence of this transference of wealth, the dichotomy between the haves and have-nots has usually been as wide as an ocean, but occasionally someone makes it from the bottom to the top, just often enough to keep the myth alive that it's possible. In other words, keep everyone working hard and let one or two convince others that hard work is rewarded. Those manipulating this game know that hard work has nothing to do with who wins and who loses, it's all about the strings and how they are pulled.

I had a date once with someone who was in line for a throne, fortunately not the heir apparent so there would have to have been a lot of accidents for him to come by a crown and scepter. We met through a mutual friend and he invited me to a number of banquets before one day asking me on a date, meaning he came to pick me up. I promise, I never took a limousine to any of the places, but when he arrived at my humble abode, he was quite utterly speechless and said, really tactfully, "Oh, I was born to spend money, not to earn it." Well, he died royally in debt, but the idea that he would start anywhere but the top never occurred to him even though his aspirations, such as they existed, were more artistic than political.


If we think about it, the privileged have always lived by a different set of rules, and they have always allowed others to die for them. Now, how does this happen? Well, first one has to have enemies or invent them. Then, one has to convince the citizens that poverty and war are not too costly if they secure one's safety. If you think about it, it's obvious it has been this way for thousands of years.

Moreover, by making the laws and policing the curriculum, the elite have legitimized the demands they make on the have-nots. They have often also criminalized resistance and used the have-nots to carry out hostile actions against other have-nots. It's a precarious system. Every now and then, a Robin Hood comes along and becomes a folk hero for the have-nots and a bloody nuisance to the haves. It's very dangerous to have an upstart challenge the system by saying, "I can play this game, too." It also happens to irk the daylights out of kings, kings who arrogate to themselves the sole right to confiscate riches.

We are, however, so used to fairy tales that we fail to realize that many resistance workers and guerillas are actually Robin Hoods in other costumes.


Because of the dehumanizing nature of poverty, that which is noble and indignant occasionally extricates itself from despair and declares war on the haves, but when this happens, it is called revolution, not war. When you fight with enemies, you have wars. When the have-nots get uppity, you have revolutions. Revolutions are never welcomed by the haves so they are always treated as radical social movements rather than "war as usual" such as the haves fight.

In our schools, we learned a bit about the French Revolution, the American Revolution, the Bolshevik Revolution, the Cultural Revolution, the Cuban Revolution, and so on and so forth, but India did not have a revolution because Gandhi did not play by the rules and did not use violence to oust the British Raj. Likewise, South Africa, emulating Gandhi, overcame apartheid through super human moral force and restraint.

Integration occurred in the U.S. through moral force; slavery ended through revolution. These are the two options that are available to the have-nots when oppression drives them to the point of no return.


What is it then that was so bewildering about Gandhi that the Windsors couldn't deal with him? I believe the answer is that he proved that the power of conviction is stronger than the power of guns and this is not found in any textbooks studied by the elite . . . and the reason is that the elite are cynics of human nature because they mock it through their success in exploiting naïveté.


What we have seen is that revolutionary heroes tend to create new governments that pretend that the pie can be cut fairly and distributed equitably. It is often called communism. The difference between capitalism and communism is really only in whether or not there are any big pieces of the pie or only lots of small ones. The have-nots tend to work just as hard for just as little and a new ruling class emerges but it is somehow less obscenely rich than the monarchs they overthrew. The irony, of course, is that all these uprisings are anticipated so most wealth has vanished before the executions or surrender of power occur.

Maybe this is too simplistic, but it could be argued that the difference between communism and socialism is that while both redistribute wealth, socialism aspires to redistribute power as well. Socialism has created huge middle classes in Scandinavia and eliminated poverty without having to overthrow the monarchies, but the monarchs had to give up power in order to keep some wealth. The new form of government is called "constitutional monarchy" and parliaments are supposedly representative of the people, not the monarchies and their interests. Over time, the monarchies become increasingly meaningless and eventually, they are only relics symbolizing bygone eras. Constitutional monarchs enjoy some social privilege but they do not rule and because they do not rule, they don't wage wars and do other things that real kings do.


Capitalism is a form of economics that rewards risk with wealth. In theory, and it's only a theory, perhaps only my theory, a capitalist regards his innovation and entrepreneurship as comparable in value to a kingdom. You might argue that a Conquistador could become a capitalist by retaining some wealth — wealth achieved through adventure, weapons and piracy — and investing it outside the kingdom for his own benefit. Basically, this is what happens when a colonist separates himself more and more from the throne and over a period of time, there are those who no longer feel the slightest attachment, much less allegiance, to the throne. Put it this way, if one fights indigenous peoples on one's own with little help from the king, a point may come when one sets oneself up as independent of the king and makes a little financial empire and perhaps also one day a political empire that declares its independence from the throne. Most people probably think the United States is an example of this, but we ought probably to reserve judgment until this story is completed.

Throughout history, soldiers have been promised all sorts of rewards for their bravery, not just more stripes and stars, but honor and wealth. The Crusades would be an excellent example of immense financial reward for valor on the battlefield. The colonization of the Americas might have been similar except that it became so difficult to control the uppity colonists that an expedient decision was made, probably made, to control the wealth and let it appear that power had changed hands.

Throughout all these big political games, there have also been minor league games, bandits and pirates. Bandits raid caravans and convoys. They hide behind rocks or dress up like bushes and move unexpectedly upon their prey. They steal and leave, and some probably have become quite rich in this "line of work." Pirates are bandits who work the seas. By definition, the difference between a Conquistador and pirate is that the pirate is uncommissioned.

Because of the risks involved in "trade", both commissioned and "uncommissioned" adventurers were armed and eventually had their own uniformed soldiers . . . and as fate would have it, the "countries" and "corporations" were both building empires, at gunpoint, of course.


So, the Knights Templar protected the booty from the Crusades and through an elaborate and trusted system of assurances, the Swiss banking system arose. Obviously, a heap of details have been omitted, but the Templars were, in fact, the precursor of today's multinational corporations.

Later, the spice trade was protected by the East India Company military, and it could easily be argued that the interests of the Carlyle Group and Halliburton Corporation and all the sundry other "interests" are protected by a combination of commissioned and uncommissioned soldiers who represent corporate interests rather than the interests of the people of the United States. If we have any doubt at all about this, we need only look at the bottom line of Exxon Mobil. In the latest quarter, it made $1500 a second, $11.7 billion.


How did this happen? It happened because of a cascade of preparations and reasons, top of which is the United States government has become or perhaps always was a front for financial operations of a corporate empire, not a political empire but a financial empire.

Even when I worked for the State Department, I did not understand why we had "interests" rather than "relationships" because I did not think that war was in the national interest, but it was perhaps in the interest of some entity or other.

If we doubt this, we need only see the suffering of those whose lives were impacted by the Vietnam War to realize that it divided a Nation and the Nation has not healed from this event. So, given that it has not healed, why are "we" doing it again? The only answer can be that what is not good for the people or the Nation is profitable to corporate interests, obviously the military-industrial complex.


Once the American Revolution succeeded in officially ending the rule of the monarchy, we were to have moved to a constitutional status, i.e. something like what happens when the people decide to cut the pie more evenly and to make the pieces equitable, they trim the slice that was going to the monarchy. To reach this point, they had to assume the power that was wielded by the monarchy. In short, King George loses; the people win.

However, it looks more and more like this is not really what happened. The people got a lovely piece of paper, but they did not get rid of the East India Company or its heirs. Likewise, it seems not to have been very successful in handling the pirates either.

This brings me to Skull and Bones, the most powerful secret society in America. It was founded by two Yalees in 1832, but why would sophisticated New Englanders choose to name a secret society "skull and bones" unless the agenda was piracy? Remember, the definition of pirate is a bandit, someone who steals from both land, i.e. the have-nots, and sea, i.e. the formal government. In fact, the Skull and Bones Society has been hugely influential in both finance and politics. The first Skull and Bones president was Taft, son of one of the two founders of the society.

Recent U.S. Elections

By the year 2000, one of my friends said, "Oh, gosh, we have to choose which oil company" we prefer to have running the country. As we now know, this was the first time a bonesman succeeded in hijacking an election. By 2004, both the Democratic candidate for president and the Republican were bonesmen.

My Theory

My take on this is actually very simple. This is not about politics, it is about money. In the struggle between the haves and have-nots, the haves want it all. They have endless means for making sure they do not have to share too much with the have-nots. All they want is enough have-nots to mine the precious metals and grow their food and wait on them. They regard the have-nots as inferiors, as workers, as subjects, and as nuisances if there are too many or if they become uppity.

There is no more compelling or sorrowful economic dilemma as the distribution of wealth. This is the fundamental issue underlying all schools of economic thought and all schools are dominated by cultural biases that run the gamut from privileged because of social rank or valued because of ability to generate profits, the alleged function of a CEO, to equal distribution of all based on the concept that all human beings must truly have equal opportunity.

As I have tried to show, there are not just different interests, all of them potentially selfish and self-serving, but there are different shadow forces, such as pirates who infiltrate corporations and bleed them to death, which was their intent from the beginning, and then leave the corporations bankrupt and, of course, headless, because once a corporation has been fleeced, it is no longer of "interest" and we ought to listen very carefully to that word.

Now, if in a system of government, the corporations are permitted to influence politics, the risk is that the have-nots surrender both the power and slice of pie they struggled to obtain because corporations, just like the East India Company, are operated for the benefit of stockholders, not employees or customers. That is, unless a pirate masquerades as a manager and infiltrates the corporation to fleece it.

As Ralph Nader has explained, World Com did not go under accidentally. It had 20,000,000 customers making monthly payments. It was virtually impossible to bankrupt it unless this fleecing was intentional. Anyone who believes otherwise is gullible.

Okay, now, if we have shadow CEOs, pirates masquerading as CEOs, and if the corporations put the politicians in office, then we also have pirates playing government and their intentions are exactly the same regardless of whether they are playing boardroom or politics. They want a bigger and bigger and bigger slice of the pie and one way they can do this is to play the king game: war.

How do you have a war? you need an enemy. What do you do if you don't actually have an enemy? You make one up. How do you do this? You create a boogeyman. So, the penultimate pirates of all time invented 19 hijackers who couldn't fly but they managed to knock down three buildings with two planes, one of which was never seen, and make a nice neat hole in the Pentagon by disposing of the wings and tail and everything — before impact — so they wouldn't mess up the lawn of the Pentagon. The fourth plane made a hole in the ground but left no wreckage except for one engine that bounced eight miles because of the ferocity of the impact.


. . . to be continued


Copyright by Ingrid Naiman 2008







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