|
|
HUMANITY'S PROSPECTS This site deals with the prospects for humanity. We consider the evolutionary trends and see what needs to be done to enter into the next stage of development. There are ancient forecasts that the lion and the lamb will be lying side by side and that swords will be transformed into plows. In modern times, several authors have dealt with society's evolution (The word evolution, as used here, has nothing to do withh Darwinian evolution. It means only the natural process of change. ) Kenneth Boulding mentions three stages in human evolution: slavery or threat system, market or exchange system and cooperation or integration. Jean Jacques Servan-Schreiber also described three stages: nature in control, economy in control and humans in control. In these descriptions, we are supposed to be moving beyond economics. Pierre Teilhard de Chardin divided evolution into unconscious and conscious evolution. It is high time for us to take conscious control of our lives by choosing what we want to have in life. In The Survival of the Wisest, Jonas Salk was more specific, writing that we are at the threshold of a new era, when the survival values will no longer be power, prestige and status, but purpose and meaning. (Viktor Frankl , in Man's Search for Meaning, described how meaning was important for the survival of individuals in the harsh conditions of the German concentration camps. It is reasonable to assume that it also has importance for the survival of society.) Decades before Salk wrote this book, Buckminster Fuller made a change in his survival values, which illustrates the kind of transformations we have to undertake nowadays. In a profound personal crisis, he had decided to take his own life by drowning in the Lake Michigan. On his way there, he meditated on life and concluded that the function of humans in the Universe was to fight entropy by using their minds, Entropy is just the scientific term for the natural tendency to loss of energy and for order to become chaos. We are all familiar with this phenomenon in rust, decay, putrefaction, disease, aging and death. Fuller made a sharp distinction between brain and mind. Animals have brains, but no minds. Mind is a unique faculty that allows human to deal with generalized principles. Fuller's business experiences convinced him that the monetary economy is entropic. So, he adopted the motto: to make sense rather than money. It is difficult for people who have not undergone the shift in survival values to understand Fuller. For them, the only way to make sense is to make money. Unbeknown to him, Professor Frederick Soddy discovered how to eliminate the entropic tendency of money, thus eliminating the incompatibility between making money and making sense seen by Fuller.
While the predictions stress cooperation, we live in days of increasing violence. While technology increases plenty, poverty persists. The paradox of plenty amidst plenty is getting ever more absurd. It is not an act of God, as it usually assumed. Plenty is a physical phenomenon and poverty, a monetary phenomenon. So, it is crucial that we reconsider the monetary question. In the issue of January 18,1982, Business Week published an editorial entitled "Dismal Performance" criticizing economists for their show of confusion about in their annual meeting in the previous month. This editorial led Wassilly Leontief, a Nobel laureate in economics, to write a letter to the editor of Science magazine discussing the flaws of the profession.
Our current concept of money stems from an era of scarcity and it is becoming ever more inconsistent with the era of potential abundance.
The strange persistence of the paradox of poverty amidst plenty, even today, when we have an increasingly advancing technology and an enormous supply of sophisticated economists and computers is getting harder and harder to explain. A comparison will be made between the current situation and that of the Great Depression. "It ain't ignorance that does the most damage, it's knowin' so derned much that ain't so" Josh Billings Among the "knowin so derned much that ain't so" is the common assumption that life will continue always being the same and that this paradox is an act of God. A moment reflection, however, shows that this is not true. Plenty is a physical phenomenon and poverty is a monetary phenomenon and, therefore, the result of human action. right reason. And Jonas Salk, in The Survival of the Wisest, wrote that we are in transition from an epoch where the survival values were power, prestige and status to another one in which the survival values will be meaning and purpose. Prior to the Great Depression, the 1921 Nobel Prize in Chemistry, Frederick Soddy, undertook a scientific scrutiny of economics and found that the proper issuance of money is the cure for this paradox. The flaw is in the fractional reserve banking that allows banks to issue money at an improper time. Money should be issued after the production level has increased and not before. With the fractional reserve banking, the economy becomes money-centered and money is its ruler. With the full reserve system, the economy becomes wealth-centered and money becomes a servant of the economy. Wealth is defined as the requisites for life. Economists, however, did not learn from him. Business Week, in the January 18, 1982 edition, published an editorial, entitled A Dismal Performance, about the annual meeting of the American Economic Association held in Washington in December of the previous year. It criticized the low intellectual level of the profession. About money it said: 'Although in this country we rely on monetary policy to control the economy, economists showed only bafflement over such basic as how to define money, with even some monetarists adding to the confusion". What this proves is that, in a scientific age, economists have not yet learn to deal with money in a scientific manner. Any intelligent layman can see the point of Soddy calling monetary policy a nonsense. Just think about it a moment. One of the important functions of money is to be a standard of value. We do not have a weights and measures policy. So, monetary policy should not be accepted by a rational society. However our libraries are full of material on monetary policy. Economists overlook the fact that, since money is issued only as loans and that the banks issue money only for the principal and not for the interest, this system of issuance is an enormous source of disturbance in the economy. This question is taken up by Jacques S. Jaikaran in his book, Debt Virus - A Compelling Solution to the World's Debt Problems. Money questions is dealt in, among other sites, in the following one: http://www.algaoaktree.com In the Great Depression there was the possibility that the monetary system could be have been put in order. A Soddyan solution was advocated by the original Chicago School and also by no less an economist than Irving Fisher in 100% Money - Designed to keep checking banks liquid; to prevent inflation and deflation; largely to cure or prevent depressions; and to wipe out much of the National Debt. This book, despite its importance has been ignored. Today's Chicago School is led by Milton Friedman who does not know anything about Frederick Soddy. Soddy's economic works went into oblivion. Instead of doing the needed reform, America adopted the pseudo-solution of deficit spending offered by John Maynard Keynes. Frank Knight, one of the founders of the original Chicago School, said this about Keynesianism "The latest 'new economics' and in my opinion rather the worst for fallacious doctrine and pernicious consequences, is that launched by the late John Maynard (Lord) Keynes, who for a decade succeeded in carrying economic thinking well back to the dark age...". This quotation was made to the 1950 meeting of the American Economic Association, entitled The Role of Principles in Economics and Politics, in which he criticized the profession for its venality and insisted in putting the value of truth above all values. This address is reprinted as Chapter XI of his book On the History of Methods of Economics. Keynesianism offered just a palliative. Only the World War II brought an end to the Depression. But economists found in it an opportunity to develop econometric models, an important source of prestige for appearing "scientific".. Liberals embraced Keynesianism as a means of achieving social goals. Later, conservatives found in it a way to fund defense expenditures. President Nixon declared, then, that now we are all Keynesians. Other wrong assumption is that our monetary system is satisfactory and that it is essential to the maintenance of free enterprise. In reality, it is a threat to freedom. And it is the root of the antagonism against the West.
The explanation for this puzzle can be found in the fairy tale of the Emperor's and in the conspiracy of silence involving the money question. Another wrong assumption is that we arrived a plateau in human development We are facing epochal changes, but people, instead of preparing for them, are working for the recovery of the prosperity of previous years. This happened also in the Great Depression, when Buckminster Fuller wrote about the destruction of food in the midst of hunger:" 'Recovery' of inefficient ways of living and special privileges for individuals and groups." Jonas Salk, in the Survival of the Wisest, argues that we are at the threshold of a new era, in which the survival values will no longer be power, prestige and status, but meaning and purpose. Power, prestige and status imply fear, while meaning and purpose imply longing. Buckminster Fuller, following Einstein, considered fear and longing as the basic human motivations. Reward and punishment, society's motivational tools, are both based on fear. Even when struggling for a reward, there is a fear of not getting it. So, at our evolutionary stage, it is crucial that we shift our emphasis to longing. In the Great Depression, a reform of the monetary system was advocated by the original, pre-Milton Friedman Chicago School, that would have made possible a more humane life. This reform was inspired by the writings of Professor Frederick Soddy. Indeed, his writings constitute truly a Copernican revolution, which, so far, has been overlooked. Having undertaken a scrutiny of economics, Soddy found that economists put money at the center of the economy. He suggested that the center of the economy should be wealth, by which he meant the requisites for life. In a money-centered economy, money is the ruler, while, in a wealth-centered economy, money is the servant of the economy. Had his message been heard, we would have changed our survival values from power to purpose and meaning Without the heliocentric view, space travel would not have been possible. Similarly, without a wealth-centered economics, we cannot solve our socio-economic problems. Soddy pointed out that Adam Smith wrote at the beginning of the industrial revolution, but was describing the conditions of the agricultural age. Thus, for him, the agents of production were land, labor and capital, when in the industrial era they became energy, discovery (of natural laws) and diligence. The important source of energy is the sun . Plants from immemorial times have been capturing this energy through photosynthesis. This energy is stored in the fossil fuels. Thus, plants were the first true capitalists, while capitalists in the monetary sense are often destroyers. While Milton Friedman keeps repeating that "there ain't free lunch", in reality there is only free lunch, for the sun does not charge for its energy and nature does not charge for its laws. Soddy made a scrutiny of economics and concluded that the identification of money with wealth, i.e. with requisites for well-being, is the basic flaw of economics and the root cause of the paradox of poverty amidst plenty. Money is the symbol and wealth, the reality. People confuse the symbol with the reality. We pray for peace, but lead our lives in predatory and litigious ways, which stem from our living under an improper monetary system. Questions, comments and suggestions are welcome. Please, e-mail me: prios@calstatela.edu WRONG ASSUMPTIONS
Frank Knight, an economist of great integrity, used to repeat this aphorism.. And he repeated it He was familiar with Soddy's economic writings and, as one of the founders of the Chicago School,, which advocated a monetary reform along the lines suggested by Soddy as a solution for the Great Depression, Society's resistance to Soddy can be explained not only by the common resistance to change, but also by the fact that money, which is essential for allocation of resources and a necessity for survival, is also an important source of personal security, Thus, money matters involve the strong emotion of fear. Furthermore, people erroneously assume that the present monetary system is the only one compatible with free enterprise. In reality, the current monetary system destroys the free enterprise system. Buckminster Fuller, in his posthumously published book, Cosmography, claimed that humanity is still in the dark ages, because of its many misconceptions. The book describes how he escaped from the dark ages and guides people to do the same. Both Knight and Fuller held truth as their supreme value.. Knight, in his philosophical bent, used logical reasoning. Fuller's approached reality through geometrical models. He developed his own geometry, synergetics - the geometry of thinking, to bridge the gap between C. P. Snow's two cultures -science and the humanities. Integrity was the basic characteristic of Fuller's inventions.. And he always pointed out that it was on our personal integrity, and not on the validity of our economic, political and religious ideologies, that humanity's future depended. Note to Christians : Their emphasis on truth is consistent with the biblical verse: "The truth shall make you free". Norbert Wiener in God & Golem, Inc. - A Comment on Certain Points where Cybernetics Impinges on Religion, put emphasis on personal responsibility. According to him, scientists, who do not care for what purposes their work is used, are committing the sin of simony - the sale of sacred things. In this book, he wrote that he refused to give economists mathematical advice, because they lacked an appropriate conceptual basis. He was not aware of the conceptual contribution that Frederick Soddy had given to economics.
Soddy showed that this confusion between money and wealth is the root cause of poverty amidst plenty. The solution of this paradox resides in a shift from a money-centered economy to a wealth-centered economy. So, it is appropriate to say that Soddy provoked a Copernican revolution in economics. Soddy's first major book is entitled Wealth, Virtual Wealth and Debt - The Solution of the Economic Paradox,. By calling money virtual wealth, Soddy expresses that money represents a wealth that does not exist. This is so, because, at any moment, all forms of wealth have owners. So, for a person to redeem his/her claims to wealth, someone else has to give up ownership of wealth for a claim to wealth. Adam Smith. classified the factors of production into land, labor and capital. When the term capitalism is used, it is implied an economic system supposed to refer to an economic system The power struggles in today's world are at a high peak. At the international level, we are living an era of international terrorism. There are also regional and and intra-national conflicts all over the globe. So, we are still in an epoch of power. With the existence of arms of mass destruction, we are facing oblivion. According to Buckminster Fuller, our choice is between Utopia or Oblivion. So, we have to take stock of our situation in search for meaning. In Man's Search for Meaning, Viktor Frankl described the importance of meaning for the survival of prisoners in German concentration camps.
|
|