THE RECORD
January 29, 2003

Fiat Lux

by Ed Deak

Many years ago a British politician said: "War is too important to be left to generals" He was correct. However, generals are not the creators, only the executors of economic theories, which have always included wars.

Economic theories kill more people than wars, therefore economics are also far too important to be left to those who claim to be economists. If falling bridges and crashing airliners would kill 10% of people killed by economic theories, all engineering faculties would be padlocked.

Economists may claim that they are "attempting" to lower costs, but they fail miserably, because the models they use are worthless hallucinations. I don't know of a single economic theory of the past or present that had, or could have reduced costs.

Around 1985, about 3 years after I began the serious reading of economics I just threw up my hands in despair and came up with this definition: "Neoclassical economists are an occupational group dedicated to the alchemic conversion of silk purses into sows' ears." The GDP, GNP, consumerism, materialism, environmental and human damage, etc. are all effects of a simplistic ideological theory. It is neither a science, or economics, but a nightmare of unsupportable rationalizations that grew like cancers from single cells.

We can't cure the sick body by trying to minimize the effects. The only solution is an operation to remove the cancerous cells before they spread over the whole body. There are no compromises. This growth mania and its phony reporting mechanism, the GDP, are nothing more than classic pyramid schemes that depend on wider and wider exploitation before their inevitable collapse. No warring (competitive) society, or ruling system can survive indefinitely.

Where are the great warrior societies of the Avars, Kuns, Egyptians, Macedonians and a thousand more? The Athenians fought themselves into slavery and extinction, but at least they left us a few buildings and great traditions in art and philosophy. The only thing left of the mightiest warriors, the Spartans, is a tablet at Thermopylae where the Persians of Xerxes slaughtered them on their own way to oblivion.

Who was King Arthur and where was Camelot? Who and what were Attila's Huns? Nobody knows. The Vikings are now making butter cookies. My Magyar ancestors have raided on horseback as far as Spain until only seven survivors were sent home with their ears and noses cut off after the battle of Augsburg in 955.

Where is the mighty Mongol empire and so on and on, endlessly throughout the ages? They all gather at the same place where today's "competitive" money markets, the Dow Jones, Hang Seng and the commodity futures of Chicago are heading for: In the garbage heap of history.

Our environmental and human degradations are caused by the inflation of the money supply. We are in a major, uncontrolled, devastating and unreported inflation, because the statistics and the reporting systems do not exist to measure the worst kind: That of monetary capital.

The profit and interest demands of the present system cause gross inefficiency resulting in environmental and human destruction. As I have written many times before: By far the major cause of deforestation and resource depletion are not caused by human needs, but by the demands of artificial capital. As the investment capital grows, so is the damage. Again, there's no escape, or compromises.

Nobody in their right mind would wish to go back to gold standard, but at least it had some form of braking, balancing and limiting effect on capital creation, which is now out of control. Until some form of a braking system reinstated, all talk of sustainability is useless.

The vast majority of the fuel used by the present, outdated engine of economics is not to create useful work, but to drive the engine (in this case the corporate system) itself. Through uncontrolled capital creation this inefficiency grows by the minute, creating more devastation. Look at the balance sheets of corporate systems. The bigger they grow, the more investments and profits they have, the more inefficient and the more burden on the real economy they are. It is all there in the reports, visible and obvious.

The most important steps for economic recovery should be:

At this time money can not be created to employ, educate, heal, or to make people useful and to prevent environmental damage, as there's no profit in it. Therefore the creation of money for the most important things is calculated as a "liability", whereas the damage causing part is an "asset"? Here's the creation of sows' ears out of silk purses and it is being taught as economics at universities? Some of the textbooks remind me of the Mad Hatter's tea party.

When we cut the quality of inputs into certain products by 5 or 10% it may be reported as "cost cuts", but we may cut the life expectancy, or usefulness of the product by 50%, or more, which is unreported, huge inflation, waste, stress on the public, etc. However, it also props up the GDP. Makes sense to anybody?

Copyright (c) 2003, West's International