The Myth of Amer­i­can Pros­per­ity

The Kurdish Globe - - NEWS - By Jamin Cas­ci­ato

It is al­ways in­ter­est­ing to have a con­ver­sa­tion with a per­son out­side the United States about the seem­ingly end­less wealth and eco­nomic lib­erty Amer­i­cans en­joy. There seems to be some strange spell un­der which many in the world have fallen—one that de­ludes them into think­ing that the ma­jor­ity of Amer­i­cans are per­son­ally wealthy and en­joy a lib­er­at­ing de­gree of sovereignty in their eco­nomic en­deav­ors. How­ever, a more de­ter­mined anal­y­sis of the Amer­i­can eco­nomic re­al­ity re­lates a wholly dif­fer­ent story. What has long been rep­re­sented and ac­cepted as a crys­tal stair­case lead­ing up­wards to more el­e­vated, more cul­ti­vated, more uni­ver­sal forms of eco­nomic de­vel­op­ment is truly more akin to a glo­ri­fied pyra­mid scheme, not so dif­fer­ent from that orig­i­nally fo­mented on the Me­sopotamian plains and rep­re­sented by that no­to­ri­ous tower of col­lec­tive ig­no­rance and hubris. For the fun­da­men­tal ideal is the same in both sce­nar­ios, with the top of the pyra­mid en­joy­ing its em­i­nence by per­pet­u­ally con­scrib­ing ser­vants to con­struct the tower.

The dis­play of sup­posed pros­per­ity ad­ver­tised by the United States is, in re­al­ity, an il­lu­sion cre­ated by debt, which both en­slaves the in­di­vid­ual debtor and ar­bi­trar­ily raises the level of in- come nec­es­sary to main­tain the ne­ces­si­ties of life. The façade of pros­per­ity is cre­ated by credit ex­pan­sion via the cen­tral bank through its man­dated mo­nop­oly on mone­tary pol­icy. Op­er­at­ing un­der the as­ser­tion that eas­ier ac­cess to debt will stim­u­late the econ­omy and cre­ate em­ploy­ment op­por­tu­ni­ties for the av­er­age cit­i­zen, the cen­tral bank loosens credit so that in­di­vid­u­als and busi­nesses can make more pur­chases and in­vest­ments us­ing bor­rowed funds. This ar­bi­trary, tem­po­rary ex­pan­sion of the money sup­ply re­sults in an im­bal­ance be­tween the scale of pro­duc­tion and the amount of money avail­able to pur­chase what is pro­duced, lead­ing to spec­u­la­tive bub­bles. In the mean­time, bor­row­ers are em­bold­ened to live far be­yond their means, tem­po­rar­ily main­tain­ing lux­u­ri­ous life­styles rooted in ar­ti­fi­cial wealth. The re­sult is that con­sumers end up shack­led to goods that are, in re­al­ity, worth less than what they pur­chased them for (and of­ten still owe on them), as the price of the goods upon pur­chase was ar­ti­fi­cially in­flated by an over­sup­ply of avail­able credit. In the end, peo­ple be­come the slaves of things, the ob­jects of ob­jects, and live for the land as op­posed to from it. They work to pay the wages of money, in the form of in­ter­est, when in­stead it should be money that works for them as a mech­a­nism of ex­change. The un­sus­tain­able ac­cess to bor­rowed money that fu­els the il­lu­sory pros­per­ity also fu­els ris­ing price lev­els and, with in­fla­tion out­pac­ing earn­ings growth, the av­er­age Amer­i­can is ac­tu­ally be­com­ing pro­gres­sively poorer.

The great irony of this cha­rade is the fact that those who have taken the bait of easy credit (which is now con­sid­ered to be syn­ony­mous with money) do not even own their pur­chases; they are in fact renters of what they con­sume. In other words, their ‘pur­chases’ are not as­sets con­tribut­ing to greater wealth, but are ac­tu­ally li­a­bil­i­ties to which they are fet­tered. This re­al­ity ma­te­ri­al­izes when the cen­tral bank sub­se­quently con­tracts the money sup­ply, di­min­ish­ing liq­uid­ity in the mar­kets, and con­sumers can no longer ob­tain the nec­es­sary fi­nanc­ing to re­pay the debt they have ac­quired. Con­sumers come to un­der­stand that debt is in fact the only thing they have ac­quired, and when they are un­able to re­pay their loans, their pur­chases are con­fis­cated by the lenders. The re­sult is the trans­fer of real wealth, in the form of cap­i­tal in­fra­struc­ture and other per­sonal prop­erty, to the lenders.

This is a re­cur­rent re­frain with re­gard to economies ma­nip­u­lated by cen­tral­ized bank­ing au­thori- ties. Through credit ex­pan­sion and con­trac­tion, bankers plun­der the wealth of those who ac­tu­ally pro­duce what is nec­es­sary for life, and di­rect the use of cap­i­tal re­sources to their per­sonal ide­o­log­i­cal ends. It is dif­fi­cult to con­sider a case in which a small group of peo­ple af­forded a mo­nop­oly on the con­trol of money would not abuse such au­thor­ity, yet the cen­tral bank is the eco­nomic hall­mark of the na­tions of the mod­ern in­dus­tri­al­ized world. So long as this in­ju­ri­ous in­sti­tu­tion re­mains lodged within the eco­nomic or­gan­ism, the so­cial body will suf­fer and the di­vide be­tween rich and poor will broaden per­sis­tently.

The same logic ap­plies to na­tions as a whole for, in our mod­ern age, they are col­lec­tive debtors to a far larger com­mu­nity of cen­tral­ized eco­nomic au­thor­ity. Those who would en­vi­sion a truly au­ton­o­mous Kur­dis­tan might con­sider that to en­roll in the es­tab­lished sys­tem of debt­fi­nanced eco­nomic de­vel­op­ment and global cen­tral­ized bank­ing is to take a seat at the ta­ble of an old game. And it is quite dif­fi­cult to win a game you have just be­gun to play when the other play­ers, long seated at the ta­ble, are the ones who de­signed it.

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