THE RECORD
July 19, 2000

Fiat Lux

by Ed Deak

My quest into the double standards and double talk of economists started about 30 years ago, when I realized that contrary to propaganda, the more we invested and the more "efficient" we became the less we could do and the more everything cost. I was far to busy running my business at the time and didn't get around to do any serious research until about 1982. That was also about the time of the beginning of major inflation of costs and prices and the age of major downsizings, deregulations, cutbacks, and all the goodies demanded by corporations in the interest of so called "efficiency."

The more I read the textbooks and articles by so called "noted" and "respected" economists, the less sense it made that with all the costs savings, downsizings and efficiency every time we went shopping we found rising costs and prices, while the lines at the food banks and soup kitchens have been growing by the day for over 20 years.

In 1985 I was reading a university textbook, Economics, Principles, Problems and Policies Third Canadian edition by McConnell and Pope, when I realized they defined economic efficiency in two opposing, contradictory ways on pages 23 and 123. On page 23 the authors compared economic efficiency with engineering, or physical efficiency and wrote: "Economic efficiency is also concerned with inputs and outputs. Specifically, it is concerned with the relationship between the units of scarce resources that are put into the process of production and the resulting output of some wanted product. More output from a given quantity of inputs designates an increase in efficiency. Less output from a given bundle of inputs indicates a decline in efficiency."

The above is correct and nobody could argue with it. The more work is done with the least amount of energy resource inputs the more the efficiency. But then the same authors wrote the following on page 123: "....economic efficiency entails getting a given output of product with the smallest input of scarce resources, when both output and resource inputs are measured in dollars-and-cents terms"

Now this is totally irresponsible, utter nonsense. However, it gives a good indication why and how things are getting from bad to worse not only in Canada, but all over the globe. To put it mildly, anybody who believes this and follows it's tenets is either insane, or criminal.

Monetary terms can not be used for the measurement of efficiency, because they are not based on realities, but artificially induced, temporary perceptions. They are nothing more than infinitely corruptible illusions.

The monetary values of commodities and resources can be changed by controlling sectors at will. Money itself doesn't exist. Since the ties to gold and deposits on money creating by the banks have been removed by corrupt governments, money has became a "fiduciary", which means "faith based" concept that exists only in computers and in our imagination. The faith part is the most important one, because the minute the public loses faith in the power of money, our whole economic system will collapse.

Here's a situation which is almost unbelievable in the degree of it's moral corruption: By law only governments can create and own money. Citizens can only borrow and use this publicly owned currency, but nobody owns it except the issuing country. However, governments all over the world gave this right away to privately owned banks who can now create literally unlimited amounts of capital mainly for the purpose of resource exploitation.

So now the governments that had nothing to do with the creation of this imaginary money become responsible for it's convertibility into resources. They have no choice. They can't say that the protection of their citizens and resources is their first responsibility, because then the money markets and all sorts of so called "trade agreements" start putting the pressure on them, making their currency worthless overnight. Thus the publicly owned money becomes a liability to the public, but an asset for it's creators, the banks, who can blackmail the public by using the money as a weapon, supported by most political parties.

If economic efficiency can be measured at monetary terms, how does this concept work in Gold River and Tahsis, where corporate greed, most likely licenced by money created out of nothing, diverted the resource conversion process for the benefit of special interests, making the lives and investments in the homes and businesses of local people literally worthless?

Were the people of Gold River, Tahsis and a thousand other victim communities economically efficient before, but now? If so, who is the arbiter that decides the values of years of hard work and scraping by against the demands of the artificial entities of corporate shares? Where does the concept of democracy come in, when some executive in a foreign country thousands of miles away can decide the fate and value of whole communities? Is this what is called "the discipline of the marketplace" or just plain daylight robbery from innocent and defenceless victims?

More on this in future columns....Copyright (c) 2000, West's International