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Friday, November 15, 2019

Monetary Feudalism v. Authoritarian Capitalism, or Why Does Putin Smile?

Why Does Putin Smile?
or,
Monetary Feudalism v. Authoritarian Capitalism.
Hundreds of years ago Europe was divided into numerous small provinces. Life was simple. Peasants where growing crops and animals. About one third of that they would give away to a Count, or a Baron. Plus, peasants had to work on the Baron’s land and in the Baron’s farms.
What would happen if a peasant refused to work or give up his food?
The Baron would send his army/police/militia.
Why would the army work for a Baron?
Because the army men did not grow up any food, so they would have to rely on a Baron; and a Baron would provide a roof and food for the solders.
A Baron would also store “his” food for a “rainy day”, or used it to barter with another Count, to buy a healer, or an astrologist.
Of course, sometimes things would go South.
Peasants would rise up, or a colonel would instigate a coupe.
But after a revolution time, life would come back to the original pace, with a new Baron, new army, and the same peasants. Counts, barons and colonels would come and go, but peasants would remain peasants.

Time passed, and eventually feudalism evolved and was replaced by capitalism.

But capitalism also was not static, it was evolving, it was changing, it had stages and phases. The capitalism we see now is very much different from the capitalism that existed forty years ago.

Google “income inequality” and you’ll learn that about 50% of the wealth belongs to about 1 % of a population.

Yes, one half of the Earth belongs to 1 % of the population, and the other 99 % should fight for another half of it – “divide and conquer!” in action.

It also means a very simple thing – there are about 7,700,000,000/100 = 77,000,000 or seventy-seven million Barons on the Earth, and everyone else, that is about 7.6 billion people, gives away - willingly!- to them about 50 % of everything they make.

This is no different from paying a racket that comes with a territory when you open your business in a certain region/country.


Eighty per cent of Americans have to fight for only 10 % of American wealth.

But let us stick to the Earth population. There, ninety-nine “peasants” out of every hundred of people give 50 % of what they make to one Baron (on average).

Why? For what?

My answers are: it’s God’s will; for being an inspiration – “One day I can become a Baron!”

Just kidding (BTW: “Everyone can become a president” is “The biggest lie of humanity”).

The reason everyone puts up with this situation is that it is a tradition. 
"Baron, why do you I have to give you away my wealth?" 
"Peasant! Because that is my law!"
"Tahnk you Baron, no I understand, please, take it".

90 % of people have no time or capabilities (education, culture) to think about this new racket – hence, to re-think this tradition.

And, this 50 % “tax to the rich” (do not confuse with a “tax for the rich”) goes for nothing.

This amount of wealth just gives the rich levers they need to manipulate with the system in their favor, to get even more rich. If nothing changes, soon they will be taking 60 % of what everyone makes (some more details are in “Conservative Liberals – future Porgs of the political America”).

Progressive media regularly accuse the rich in manipulating the system via bribes, lobbyists, and brainwashing tactics using conservative mass media. And that may be a case. But the most important tool the rich use to get from the politicians anything they want is an extreme private property protection. When they don’t like the political atmosphere, they just freeze their money. Nothing gets moving, nothing gets done, people get angry and replace “bad” politicians. Simple! Why else do you think construction and infrastructure projects have been dormant for years, but now you can see a new building is being erected almost every other block?

The only question new capitalistic Barons ask is “Will this make me richer?” "No? Then f#ck it."

On a surface, new Barons and the government are separated, or even competing. But in the reality, as we just saw, the government is in the pockets of the rich, because new Barons can replace the government fairly easy, and the government cannot do anything about that, and anything about Barons.

Even federal and some of state taxes everyone pays in actuality belong to Barons; they just use a small portion from those taxes to buy government officials and politicians and pay them for the good job those do to protect the status quo, and take the rest into their vaults via different “government programs or projects” (starting from the military budget).

The central, the core property of capitalism is free enterprise, is a fair competition between individuals. This property has ceased to exist. The market areas have been divided between several few gigantic corporations. “Big business jammed the wheels of innovation”. “Consolidated corporate power is keeping many products’ prices high and quality low”. The main reason for the overall decline in economic state of many Americans that eventually has lead to Donald Trump is unprecedented concentration of capital (as well as general frustration with the rise in sloppiness all around). And currently there is no single politician who knows what to do about it (majority even not mention this as a problem - I wonder why). The concentration of capital has also led price hikes (especially pharmaceutical products) and significant drop in quality of products and services - because when no one can control you, why bother? Professional pride for the quality of work has ceased to exist (except in Hollywood, so far).

We still could call this economic state “capitalism” since the economy is based on the use/flow of capital. But this capitalism functions like an old-fashioned feudal system, where few Barons take from “peasants” everything they want. So, a better term to call it is “Monetary Feudalism”.

The only really new thing the old feudalism didn’t have and this new Feudalism has is mass media.

To keep “peasants” in line, the new Barons use mass media and deliberately poor educational system. It is much easier to brainwash people who are illiterate and ignorant in the first place, and then feed them with any nonsense you want, than use oppressive armed forces everywhere across the country.

I am not the first and not the only one who criticizes the way current “capitalism”, a.k.a. “Monetary Feudalism”, works.

The question is what do Progressives like Bernie Sanders, Elizabeth Warren, et al. offer to replace it with?

They want to take money from the rich and give it to the government, so the government would regulate all important aspects of peoples’ life by using those money to make life of poor people better.

This idea is far from new (just google “take from rich give to poor”). The execution, though, always was with some kinks: first – a revolution, then some settling time, then – Napoleon Bonaparte, Joseph Stalin, Mao Zedong.

I wrote about a political aspect of this idea in “What is wrong with Socialism. Really.”

Now I just mention one (of many) governing aspect of it.

When the government regulates all important aspects of peoples’ life, it wants to do it as much as possible and as long as possible, and – eventually – with the least control.

And I’m not saying this is a bad or a good idea – who am I to judge?

I’m just saying that America progressives are populists – exactly like Trump, but they just riding a different wave of populous; and they both – Trump and Progressives – want to convert America into a country with a strong government, where the government dominates politics.

Trump wants to do it to keep (mostly) white and super-rich Americans in power. Progressives want to do it to “empower the poor”. But in the end, both competing political forces want the same – a government with much stronger executive power.

Trump and Sanders (here his name is used as a symbol for all socialists) are populists. However, they have different bases. And neither of the members of those bases follow their leaders to fight for democracy and freedom.

Trump’s base wants jobs and security (in their specific sense). Trump’s call is “Make me a King and I will give you jobs and will secure your future! I will make our enemies to pay, and to do what I want. And for that I need strong executive power!”.

Senders’ base wants free stuff. “Make me the President and I will give you free college, free health care, free food! Where will I get the money? I'll take them from the rich! I will write the laws and tax code that will work for you! What if the rich will sabotage my laws? I will force them into giving up their money.”

And how will he enforce the rich to give up their fortunes?

He will need a strong executive branch of government. 

"People, when I am the President, Barons will remain Barons, peasants will remain peasants, but I promise you, I will create a special Peasant Army, and after Barons collect their money from peasant, the Peasant Army will take back some of it and will give it back to peasants!"

Of course, I used simplification, or using science language, I built the basic model - that one that is simple enough to grasp the essence of a phenomenon. But look at what media do - they not just simplify things, they trivialize them, they make the things so dumbed-down, for example, they make people to think that the impeachment hearing is almost certainly going to result in removing Donald Trump from the office. Nothing can be further from truth than that, e.g. "The Impeachment is Over. What's Next?"

In my model both, Trump and Sanders will be making executive branch of the government stronger and stronger. They will be pushing (due to different reasons, though) for a special type of capitalism – Authoritarian Capitalism.

Not a new development, by the way. In 1921, after Bolsheviks won the Civil War and secured their power, Russian economy was absolutely shattered. Lenin made a genius move, he allowed private initiative. He argued that with the strong Bolshevik government individual private initiative will not become a political danger. He called it New Economic Policy under “state capitalism”. It helped –  in three years Russia was able to surpassed pre-Revolution production in agriculture.

In China, Deng Xiaoping used the same approach to transform the country from chaotic Marxists dictatorship into strong market-based but government-controlled economy.

The governing system that both Trump and Sanders what to develop is not new. It exists right now in such countries like Russia and China. If either Trump or Sanders become the President, a similar transition may be in the works in America. They both will be converting America into China or Russia.

That is why Putin smiles.

In 2016 Vladimir Putin was working hard to prevent Hilary Clinton from being elected. His intervention was not decisive, but was helpful for Trump (internal American problems plaid the most decisive role in Trump’s victory, and the top problem was and still is “Degradation of White Male American Elite”). In 2020 Putin does not need to choose. Trump or Sanders – does not matter, America will be sucked deep into transitioning for becoming China/Russia.

And that is why Vladimir Putin smiles every time when someone asks him about America.

What if an establishment candidate, e.g. Joe Biden (Michael Bloomberg, Deval Patrick) will win the election?

Any of them will try to continue politics established by the establishment, hence, they will try to reverse all the Trump’s doings and return to Obama’s political line, based on reason and compromises. That’s also good for Putin. So, nothing that happens in America can make him frown.

Right now America is at war – at war with itself, within itself. Millions are sucked into an impeachment process, despite the fact that the outcome of it is highly predictable (e.g. “The impeachment is Over. What’s Next?”). Energy, time, money are being spent on things that will not make any difference. The most discussed economic question is – how to redistribute money?

Until some people will finally start analyzing – what is the difference between money and wealth?; how wealth is produced?; what is the political role of wealth? – politics will remain no different from circus.

Dr. Valentin Voroshilov

Appendix I

Let’s touch on the role of government: what does it do, what is its mission, what is its purpose?

A society is a complicated system – like a human body. A body has organs; a society has groups, classes, layers, strata.

Every system has a governing part – in a body it is a brain; in a society it is government.

A brain is a governing organ of a body.

A government is a governing organ of a society.

Simple.

When a brain is ill, even a healthy body does not produce anything useful, and eventually its organs suffer.

When a government is corrupt, society suffers, people are getting hurt.

A liver or a hart cannot turn to a brain and demand – “Do your job better”, but people can – and that is what democracy is about.

The mission of a brain is to govern a body in such a way that provides long and happy life.

The mission of government is to govern a society in such a way that all people would sustain (not just pursuit) long and happy life.

Hence, the number one criterion of how good a government is at doing its job is how many people have long and happy life.

Longevity and happiness.

Period.

Or in one word - prosperity. 

A good society is a prosperous society - not just for a select few but for everyone. 

Prosperity of people is the mission and the purpose of a goverment.

Different countries should compete with each other in the race to the prosperity (and the U.S. starts to loosing this race).

For achieving prosperity for all government has to establish rules of engagement/behavior/business (a.k.a. laws), and instruments for following those rules.

When a body is functioning in a normal environment, each organ functions in a routine regular manner.

When society is functioning in a normal environment, each group of it functions in a routine and regular manner. No government interference is required on a regular basis. However, strong changes in the environment make a system unstable, and the government must find the right way to address the changes. Unfortunately, very often that requires a strong executive power, and that is why we observe “The Dawn of The Era of Dictatorships”.

Appendix II

A trivial straightforward taxation of the super rich have been proven to be controversial in Europe.
Some specific details on wealth production and management beyond a trivial taxation are available in “Creativity, Tax Code, and Human Psychology”.

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