The Truth, Finally!

Have you noticed how our overlords' discourse is becoming more candid lately?

First, it was mega-rich Gina Rinehart quoted as describing her fellow Australians as a bunch of lazy, drunk, envious whingers.

Then American right-wing presidential hopeful Mitt Romney with his 47% remark: "My job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."

More recently it was British former banker and conservative MP and Government Whip Andrew Mitchell's turn. According to the official logs of police officers in Downing Street, after asking Mitchell to dismount his bike and use the pedestrian gate, instead of the vehicles-only one, this is what happened:

"There were several members of public present as is the norm opposite the pedestrian gate and as we neared it, Mr Mitchell said: 'Best you learn your fucking place 
… you don't run this fucking government … You're fucking plebs.'

"The members of public looked visibly shocked and I was somewhat taken aback by the language used and the view expressed by a senior government official. I cannot say if this statement was aimed at me individually, or the officers present or the police service as a whole.

"I warned Mr Mitchell that he should not swear, and if he continued to do so I would have no option but to arrest him under the Public Order Act, saying 'Please don't swear at me Sir. If you continue to I will have no option but to arrest you under the public order act'.

"Mr Mitchell was then silent and left saying 'you haven't heard the last of this' as he cycled off."

Unfortunately for PM David Cameron, who is trying to improve the Tories' chronically bad image, the incident received wide publicity: "After a dressing-down from Mr Cameron, Mr Mitchell apologised."

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A few years ago, all of this would have been pretty much unthinkable. Nowadays, it's becoming commonplace.

Commenting on the Mitchell affair, The Daily Telegraph (UK) columnist Janet Daley (who "moved to Britain (and to the Right) in 1965 where she spent nearly twenty years in academic life before becoming a political commentator") says:

"Time to tell the truth about the 'nasty' party: as someone who has defended the Conservatives (or at least defended their arguments) for so many years, it is time to come clean. (…) The Andrew Mitchell Debacle is not an uncharacteristic, deranged and inexplicable lapse. It is just an extreme example of the kind of attitude with which many people who circulate in this world are familiar".

Apparently, Daley thinks Tories should try changing their ways.

Australian arch-conservative columnist Gerard Henderson, at the other hand, argues that incidents like these are being deliberately magnified by the sinister and manipulative "left-liberal" contemporary Western media, suggesting that a more ideologically adequate media would treat things in a more favourable way.

And referring specifically to Romney's remark, Henderson says:

"Sure, Romney's message was expressed in a clumsy manner. Moreover, he forgot the modern rule of politics that no event can ever be regarded as truly confidential. Yet Romney's essential problem is that he said what should not be said. According to, that is, the left-liberal consensus that prevails in much of the contemporary Western media".

I can't speak for the "left-liberal" Western media, of course, but I for one thank Rinehart, Romney and Mitchell for expressing their true views with honesty.

No need to apologize (as Mitchell was forced to do), to act nice (as Daley seems to ask), or to mince words and be discreet (as Henderson apparently recommends). Speak your "inconvenient truths" freely.

Show me the Money!

"An artificial mirage (...) This simulates
an atmosphere with two inversion layers." [A]

"Coal baron Nathan Tinkler has lost AUD2 million a day over the past year, according to BRW, and now ranks second on the Young Rich [Australians] List with a fortune estimated at AUD400 million." (See here)

And he is not the only extremely rich bloke to become slightly less rich in the past few weeks. About two weeks ago, mining billionaire Andrew "Twiggy" Forrest reportedly lost AUD500 million in one day, 330 of them... "in less than an hour". (See here)

How could this have happened?

After all, according to the free-market cult, rich people are rich because they work hard and are smart. Did these two very rich guys suffer a sudden mental breakdown? Did they just remain in bed longer than usual?

Clearly, not. If you are one of their fans, you can relax.

Or, were they robbed by a bunch of moochers and looters? I couldn't see anybody running around with bags of money, so I'd say it wasn't that, either.

I know! Maybe it was somehow that nefarious bearded dead German philosopher's doing? After all, the mere mention of his name keeps Murdoch "journalists" and their Pavlovian readers awake at night. You see, he's "Evil I tells ya. Eeevil!", and to be blamed for pretty much everything, from dandruff and belly-ache to the Holocaust, but not even He-Who-Must-Not-Be-Named can come back from the grave...

To me, what did happen wasn't much of a mystery or a drama. The mining machines didn't simply rust and fall to pieces overnight; the metallic ore and the coal veins didn't just disintegrate as in a sci-fi movie: they are still there, as they have been for hundreds, maybe thousands, of millions of years.

It was just that commodity prices sometimes go up, sometimes go down. They were inflated, and then they deflate.

But wasn't all that wealth destroyed in a matter of hours?

Think about it. Did any real wealth disappear? No. What was "destroyed" never had a physical existence, in the first place. It existed in paper only: it was an accounting mirage. It was virtual.

Michael Hudson has written about this kind of things. This is how our fearless leaders think, according to Hudson:

"Shifting planning to the financial sector [aka economic rationalism] and privatizing public enterprise on credit creates wealth by inflating asset prices".

Sounds familiar?

And, what is a free market, for Hudson?

"A free market is one free of unearned economic rent, including interest and financial fees, monopoly rent and resource rent."

Here, I don't fully agree with Hudson (capitalist markets exist to exploit one unearned income: surplus value), but he's not that far off the mark.

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On second thoughts, maybe the dead bearded German philosopher is smiling in the other world.

Image Credit:
[A] "Mirage experiment..." Wikipedia. By Shy Halatzi. File licensed under the Creative Commons Attribution-Share alike 3.0 Unported. My use of the image does not imply the author's endorsement of it.

The Exorcism of Adam Bandt.

Or Red-Baiting Down Under

Medieval book illustration of Christ
exorcising the Gerasenes demon. [A]

OMG! Thank God for The Herald Sun rediscovering (Sunday, September 23, 2012) what The Australian had already discovered in 2010 (August 28) and what the other Murdoch "journalists/newspapers" will surely keep periodically rediscovering in the future.

Brace yourselves, dear readers, for this earth-shattering revelation:

"The former teenage Marxist [Green MP Adam Bandt], who confesses he once described the Greens as 'bourgeois', has revealed the stunning conclusion to his 300-page epic is that Marxism did not offer 'a proper explanation for what was happening in 21st century society'.
"He completed the thesis four years ago in 2008, but requested university officials impose a three-year ban on anyone reading it."

And that proves that Bandt, is... a cripto-Marxist!

Don't believe me? Check this out:

"Amazing! The very fact that these believers actually close their eyes to the very fact of how the general population lives [sic] in Russia, not to mention all the other countries they have occupied and destroyed their economys! [sic] Sprout your wisdom after you lived under them, not for long, just 3-5 years or so! [sic]". (Eva Balogh of Melbourne, posted at 11:59 AM September 23, 2012. Comment 15 of 16. Comment thread to The Herald Sun's "exposé")

Call an elite team of exorcists!

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I am sure this has nothing to do with another recent revelation involving punches against a wall, a lost election and other youthful indiscretions.

For another related Murdoch media chilling revelation, see here.


Image Credit:
[A] Healing of the demon-possessed. Wikipedia.

Who Creates Wealth? (II)

In the previous post in this series, I quoted Ayn Rand's views that wealth is at least a close correlate to talent or hard work.

Today I intend to show why, under capitalism, wealth is a reward to property, independently of talent, hard work or creativity.

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A few weeks ago, according to reports by Reuters and Bloomberg:

"Apple became the most valuable public company of all time after its market value climbed beyond $US620 billion to surpass a milestone set by Microsoft more than a decade ago.
"Its shares were up 2.3% at $US662.73 in overnight trade (...)". (See here)

Click for a larger version. [1]

The chart above traces Apple Inc. (AAPL) market-close share price since September, 1984. All that time, within the US and abroad, assembly workers assembled gadgets, mobile phones, computers. Industrial designers, designed; computer programmers, programmed. They contributed anonymously to the production with their physical and mental efforts and were paid for it. They pulled their own weight, so to speak.

Stuff was sold; profits made and cash dividends were distributed.

According to Yahoo Finance, this was AAPL price in September 7, 1984: USD26.50 (adjusted for dividends and splits). This was the price in August 14, 2012: USD631.69. [1]

A shareholder (or capitalist, if you prefer) who held AAPL stock since September 1984 did not do anything: did not assemble a single machine or write a single code line, didn't design anything. No hard work, creativity or talent flowed from the shareholder to the firm.

If she bought the share in the secondary market, inherited it, or somehow acquired it from an original capital subscriber (say, won it in a raffle), she did not contribute to the initial capital, either.

What about "entrepreneurship"? Assuming one accepts entrepreneurship as a potential justification, an individual's ownership of AAPL stock cannot be said to improve the quality or quantity of the gadgets produced, neither it influences their method of production or variety. [2]

Moreover, shareholders, as such, don't need to go near the firm they partly own, know what is it they do, or for that matter, even breathe: institutional investors, for one, can't do those things and they are shareholders in the exact same sense human shareholders are.

And yet, every shareholder gained from holding that share: USD26.50 (the price of a single AAPL share in September 7, 1984), adjusted for inflation, is equivalent to USD58 to 60 in August 2012. The close price of USD631.69, represents a capital gains of at least 950% over the original investment. [3]

It's hard to see what kind of contribution shareholders, in their capacity as shareholders make to the productive process, even taking into account "entrepreneurship". The only justification shareholders (breathing or not) need to profit from their ownership of shares is ownership itself.

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Note that I am not making any value judgement. I am not saying this is good, or should be otherwise. The reader is free to decide.

Some readers, however, are likely to oppose this scenario on several grounds. A common objection, for starters: let's leave aside institutional investors and limit the discussion to breathing human shareholders; these shareholders, the objection would go, may deserve their gains, no longer as reward for hard work, personal talent or creativity, but due to other personal virtues.

Incidentally, formulated that way, that is a moral objection, not that there's anything wrong with that. But it's important to call spade a spade.

To keep this post as short as possible, that and other objections will be considered in the coming weeks.

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Readers are invited at all times to submit their questions, to offer their own original objections and comments. Please, however, check the Comments page before posting.

Notes:
[1] Yahoo Finance: APPL
[2] The topic of entrepreneurship has become popular in the last few decades. To this day, however, the notion of entrepreneurship is contested even among mainstream economists and for good reasons: how do we define and measure it?
[3] Source: BLS. Series ID: CUUR0000SA0