ENHANCEMENT OF INVESTMENT, There's Money to be Made - Let's Prehend
Let's Prehend
A Manual of Human Ecology and Culture Design

ENHANCEMENT OF INVESTMENT, There's Money to be Made

Wealth is produced by the investment of capital. There are many ways to invest, some yielding more profit than others. In a highly developed First World economy, most investment is not in production but in nonproductive activities such as buying low and selling high, or squeezing wealth from the unfortunate.

As in any real situation, there is no clear line between a service and a rip-off, or between nonproductive speculation versus the investment in capital growth (GM, p.194). No idealist discussion of the meaning of terms will help much, but a brief general description of the enhancement of investment illustrates what objectivist political economics is about. Anyone has the choice to agree, then refine, apply or use such objectivist description.

But objectivists may not simply disagree, since description, not truth, is at issue. Simple rejection is an indulgence in denial ideology, DI, and opposes the objectivist ethic. Like the scientist, the objectivist doesn't simply disagree but rather examines, corrects, refines and broadens, thus making a contribution to cooperative efforts rather than indulging in adversarial games. Objectivist discourse contrasts with the usual devious obfuscation and discloses the brutality of the system.

SURPLUS

All profits ultimately rest upon the production of real goods and services. Therefore, let's postpone discussing the merits of leveraged buy-outs and instead discuss the enhancement of investment in productive activities such as agriculture, mining, and manufacturing.

RESOURCES

Since the Free World now operates to maximize profits and enhance investment, a crucial task is securing resources on a world wide global scale. This is often called "freeing" the global economy.

Land is cheaper in the Third World than in the First. Land is mostly inaccessible in the Second, since formerly communist countries have not yet sold much of their collective land. Typically the targeted land is in some poor Latin American, African or Asian nation, either unused, owned by an absentee landlord, or farmed by a small landowner, tenant farmer, or squatter.

There are many ways to lower the price of the land to be bought. A common operation is to discover hunger in the land, then seek food aid to alleviate this suffering, food generously provided from the First World's tax subsidized food stocks. As a result of this common ploy, the local crop prices drop, the small farmer gets squeezed and is soon obliged to beg someone to buy his land at very low price. It may be called `free market capitalism', but looks like `victor over vanquished'. Another common method of freeing land is for the governing aristocracy to order the US trained military to "get those Indians off that land", as in Guatemala in recent decades. 1: Our gain depends on their loss.

TAX REDUCTION

Efficient marketing and creative accounting is crucial for enhanced profits: The profits can be taken at the producing country such as Indonesia, or at the consuming country such as the United States, or at the owning country such as Sweden, or even at some third way-station such as Barbados, as called for by tax, tariff, and other advantages. Any politician who proposes to tax these investments is eliminated, such as Aristide, Allende, Arbenz...to start with the A's. 2: Our profits depend on their corruption.

LABOR

Inexpensive labor is crucial, especially in labor-intensive activity. Since the Third World has a surplus of people who are being pushed off their land, the labor supply far exceeds the demand. Labor costs drop.

Labor unions can be a problem, but with proper intergovernmental communications, labor organization can be inhibited. Small scale efforts are stopped by simply firing the union workers, medium scale efforts by outlawing the activity. Large scale actions are essentially political and are dealt with accordingly. The U. S. Agency for International Development, AID, Military Intelligence, DIA, CIA, and many other agencies, train local police and army, provide training, weapons, and most important, computers to keep track of potential criminals including union organizers, education and health workers, those involved in liberation theology, those not cooperating with the local aristocrats, drug lords and foreign mercenaries.[ See *POWDERBURNS: Cocaine, Contras & the Drug War, by Celerino *Castillo III and Dave Harmon. Mosaic, 85 River Rock Drive, Suite 292, Buffalo, N. Y. 14207; 240 pages; $13.95 paperback, 1994, also *COCAINE POLITICS, by Jonathan *Marshal et al, University of California Press, 1991.]

The plantation labor is intense and exhausting, thus degrading the quality of life of the worker and adding toxic and mechanical hazards to his or her life. Even in the US the Mexican farm laborers and their families get heavy doses of insecticides. In the Third World, it's much worse, especially for children.

In the transition from peasant farms and villages to plantation labor, a few farmers are taken on as day laborers, a few get jobs as overseers, police, or informants, many leave for the city slums, many hang around to provide the essential reservoir of desperately unemployed.

The terror of a knock on the door and the reality of daily disappearances effectively inhibits the organization of the poor. Security often demands a local defense force, by which every poor young man is obliged to join in the terrorization of his own community. 3: Our luxury depends on their enslavement.

POVERTY

It is a common argument that such economic development makes jobs and upgrades the productivity of these poor peasants. So it does, but only in the narrowest context. Denial Ideology, DI, is crucial in avoiding the broader picture of what really happens, what people really experience.

Dislocation breaks down the community and culture. In Sao Paulo, Brazil, thousands of children live without families, on the street. Misbehavior is punished by police execution.[ See the 1999 movie *CENTRAL STATION in which a petty thief is chased in this Brazilian railroad station, then shot on the spot.] The decline of domestic food production degrades the diet, especially for the poor. In Venezuela, a staple nutrient is imported white bread, often not enough of that.

Public infrastructure and services are designed to enhance the export profits. Roads and rails carry the goods out, education teaches obsequious behavior and perhaps literacy. But the local government cannot collect taxes from the poor, who have so little, or the rich, who have so much, or the multinationals, who have as much control as necessary. Therefore, government expenditures and projects are supported by international borrowing, and the public debt rises to astronomical levels.

As investments continue, most citizens become poorer, and deeper in debt. 4: Our prosperity depends on their impoverishment.

DEBT

Furthermore, the debt, both government and private, increases. Generally this debt amounts to a transfer of wealth to the elite from the present and future population.

From the oligarch's point of view it makes better sense to invest in his own country only through a First World multinational corporation with all its advantageous positions and its overt and covert governmental support, rather than foolishly exposing his wealth in his own country. Thus, `economic development' indebts the Third World while it sustains the First. 5: Our investment depends their debt.

DEVELOPMENT

Such enhancement of investment looks like economic growth, and in the narrow sense it is, because very high profits are made from these investments. The economic figures look good. But most of the profits revert to the owners in the First World, who then use them in their own economic communities, where these vast profits trickle down copiously and enrich everyone, including even the poorest - more equitably in Holland than in the United States. Three quarters of the jobs in the wealthy nations are so called service jobs. These non-productive jobs distribute wealth so that the First World consumers can buy the Third World's produce. In this way most of the actual consumption in the wealthy countries is supported by overseas productions.

First World expenses include the original direct investment, which is a tiny portion of the total investment, most of which is locally generated. Foreign aid, in the form of military, intelligence and other governmental activities, is a small price to pay to sustain this profitable system. The local wealthy oligarchy returns most of their wealth to the First World as "capital flight" investment, imported consumer goods, and tourism. These factors maintain an extremely steep income distribution curve in their own country - Brazil being an extreme example.

This vast and vigorous Third Word development looks like economic growth because what used to be ordinary life becomes an economic event: The farmer who once produced food for his family and community circulated little or no money or economic data. Before `development', production of rice and beans for local consumption is often not recorded as an economic event. But usurping that land for coffee, tobacco, or cocaine usually shows up as economic data. After `development', more of life becomes an economic event, the amount of recorded transaction is increased even though the quality of life is tragically degraded. 6: Our economic growth depends on their stagnation.

CURRENCY EXCHANGE

The currency exchange rate and the inflation rate also enhance the investment. Computers make the net surplus easy to compute, and easy to obscure. The local currency declines in relation to the investment currency because those in the producing country who get most of the money are the oligarchs, the landowners and their managers, the government bureaucrats, and the military upper classes. Wealthy people are willing to spend many pesos or bahts or reals for imported cars and foreign travel and education. The elites acquire crucial military supplies mostly free, either through foreign aid or financed with funny loans promoted by bribes. Therefore the untaxed wealthy are eager to pay many pesos for a few dollars; therefore, the local currency gradually becomes worth less.

Economists have excellent measures of the real purchasing power of the many national currencies, and much of this data is available to ordinary folk. The inflation undermines the local economy as it sweeps up a bit more wealth from the poor and middle classes, but has little impact on the rich and even enhances their profits by making labor and local goods cheaper. Then the tourists can visit and benefit from these low prices, a fallout from the great squeeze. 7: Our pleasure depends on their inflation.

MILITARY

Given the terrible shortage of jobs and excess of labor, many peons are eager to take jobs with the police, army, and intelligence services. A Mexican recruitment poster touts "Three meals a day!" A little money buys a lot of terror. One priest who fled Guatemala under threat of death from the ubiquitous death squads, explained that typically an $80 bonus is paid to the death squad member who actually does the killing. According to Father *Burke, perhaps ten percent of the youths and children, who are orphaned into the military, can be trained to enjoy this work.[ Father Burke, Chicago born priest who spent many years in a rural Guatemalan parish.]

The churches, which once supported the ruling oligarchy and the multinationals behind them, is openly split under the influence of liberation theology. But liberation theology, often targeted as subversive, may alleviate the suffering but is far from a solution.

Classic military strategy includes the need to convince the enemy, more importantly all prospective enemies, that massive military action is at the ready, should they misbehave or inhibit the prime directives of the GLOBAL EXPANDING ECONOMY, p. ?. Fred *Cuny details the ware against Ethiopia, Somalia, and Bosnia, not including Grenada, Panama, Iraq, etc. Economic motives in these many cases contribute secondarily through as gains for the Military Industrial Complex (cited in President Eisenhower's swan song) rather than simply softening up for cheaper resources, land or labor. If only they had had nuclear or other WMDs, thousands of lives would have been saved, as explained in PROLIFERATION OF DETERRENCE p. 303.

The modest expense of maintaining this system, with `Foreign Aid', military, and intelligence assistance, is very cost effective, in spite of large military and security expenses - in Mexico, Philippines, Zaire, and most of the Third World.[ See *MILITARIZED DEMOCRACY IN THE AMERICAS in *NACLA, REPORT ON THE AMERICAS, November 1998, Subs $27/yr: POB 77, 16650-0077. 212-870-3146 nacla.org] But in El Salvador the costs had outstripped the profits - unfortunately the objective figures are classified. Nevertheless, the war was maintained as a matter of principle, and also to allay the threat of nationalization and debt cancellation. The Vietnam War illustrates the extreme of this principle of inefficient warfare. This world order is a kind of Theatrical Imperative, TI, on the part of psychotic leaders. 8: Our security rests upon their terrorization.

CONCLUSION

  1. Our gain depends on their loss.
  2. Our profits depend on their corruption.
  3. Our luxury depends on their enslavement.
  4. Our prosperity depends on their impoverishment.
  5. Our investment depends on their debt.
  6. Our economic growth depends on their stagnation.
  7. Our pleasure depends on their inflation.
  8. Our security depends on their terrorization.


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