The economy fails – thank God

While everybody is hiding under the table and the morons in power try to save something that is neither worth saving nor rescueable, some people think about the future. One of them is Douglas Rushkoff. Recently, I participated in an online course given by Mr. Rushkoff that was based on his forthcoming book “Life Incorporated“. The book describes how our present system of economics came to be and why it can’t work. Things like the imperative for economic growth, the nature of our currency (yes, there is more than one) and others are explained in a way that the non-economist finally gets how he has been been fucked by big business every day for the last 500 years.

Below you can find an excerpt of a recent article in Arthur magazine by Mr. Rushkoff that gives a comprehensive overview. If you feel like participating in the new world that comes after the present one has burned, preorder the book. Sound a bit funny, I know. But I have about had it with big business and I want a change. Not as in revolution, that usually doesn’t work, but one through participation in an ongoing project to save us from ourselves. It is unlikely to finish something like this in one generation, so we better get going.

They invented the corporate charter. By granting an exclusive charter, a king could give one of his friends in the merchant class monopoly control over a region or sector. In exchange, he’d get shares in the company. So the businessperson no longer had to worry about competition—his position at the top of the business hierarchy was locked in place, by law. And the monarch never had to worry about losing his authority; businesses with crown-guaranteed charters tend to support the crown.

But this changed the shape of business fundamentally. Instead of thriving on innovation and progress, corporate monopolies simply sought to extract wealth from the regions they controlled. They didn’t need to compete, anymore, so they just sucked resources from places and people. Meanwhile, people living and working in the real world lost the ability to generate value by or for themselves.

For example: In the 1700s, American colonists were allowed to grow corn but they weren’t allowed to do anything with it–except sell it at fixed prices to the British East India Trading Company, the corporation sanctioned by England to do business in the colonies. Colonists weren’t allowed to sell their cotton to each other or, worse, make clothes out of it. They were mandated, by law, to ship it back to England where clothes were fabricated by another chartered monopoly, then shipped back to America where they could be purchased. The American war for independence was less a revolt against England than a revolt against her chartered corporations.

The other big innovation of the early corporate era was monopoly currency. There used to be lots of different kinds of money. Local currencies, which helped regions reinvest in their own activities, and centralized currencies, for long distance transactions. Local currencies were earned into existence. A farmer would grow a bunch of grain, bring it to the grain store, and get receipts for how much grain he had deposited. The receipts could be used as money—even by people who didn’t need grain at that particular moment. Everyone knew what it was worth.

The interesting thing about local, grain-based currencies was that they lost value over time. The people at the grain store had to be paid, and a certain amount of grain was lost to rain or rodents. So every year, the money would be worth less. This encouraged people to spend it rather than save it. And they did. Late Middle Ages workers were paid more for less work time than at any point in history. Women were taller in England in that era than they are today—an indication of their relative health. People did preventative maintenance on their equipment, and invested in innovation. There was so much extra money looking for productive investment, that people built cathedrals. The great cathedrals of Europe were not paid for with money from the Vatican; they were local investments, made by small towns looking for ways to share their prosperity with future generations by creating tourist attractions.

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2 Comments

Filed under econopocalyshit

2 responses to “The economy fails – thank God

  1. schreibkrampf

    About building tourist attractions… another reason for the wealthy to build the odd cathedral or at least a decent church or found a monastery was to appease the man upstairs. After a life of chasing the money and the broads, elderly and well-off individuals seeked the blessing of the divine, and what better way to earn brownie points in heaven than to build something that added to the glory of our (alleged) maker?
    About alternative currencies, I agree that money should be made from banana skins. Get rid of it before it gets all smelly and gooey. That’d add a new meaning to the popular game of “pass the buck.”

  2. louiszyphire

    While this is doublessly true, I think the point here is that some small town actually could afford such a monster project. Have you ever been to Ulm? They have a cathedral there with the biggest churchtower in the world. And even today Ulm is a small city. For some pretty good descriptions check out “Fernand Braudel, The Wheels of Commerce:
    Civilization and Capitalism, 15th–18th Century”.

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