#128: GFC II

THE ANATOMY OF THE NEXT CRASH

Surprising though it might seem, barely two weeks have elapsed since those of us who anticipate GFC II – the sequel to the 2008 global financial crisis (GFC I) – were in a very, very small minority.

Consensus opinion, backed to the hilt by conventional economics, said that no such event was going to happen. Rather, we had entered the sunny uplands of “synchronised growth”, and debt had ceased to be anything much to worry about.

Of course, events, in Italy and elsewhere, haven’t yet proved us right, or the consensus wrong. We remain in a minority, though one that seems to be becoming larger. But events should embolden us, and on two fronts, not one.

First, recent developments strengthen the case for GFC II, not because of their seriousness alone, but because – as will be explained here – they conform to a logical pattern that points towards a coming crisis.

Second, we’re being reminded of quite how far conventional economics is out of touch with reality. This, of course, will be proved decisively if – or when – GFC II does happen.

This, when you consider its implications, is really quite remarkable. The government, business and finance all place heavy reliance on a school of thought which decrees that the workings of the economy are entirely financial – so, if events prove this approach to have been wrong, the ramifications will be enormous.

Those of us who understand that, far from being a matter of money, the economy is an energy system, have a lot of work in front of us.

This seems like a good point at which to publish the promised brief summary of why GFC II is likely.

ECoE starts to bite

Hi Tim,

Rather depressing reading in the comments if that sort of thing gets you down.

SEEDS is a part of the solution to the current problem. I personally think, as you know, that Seeds needs to be coupled with an embodied energy index that will then translate to an empirically falsifiable value scale for the pricing of monetary exchanges.

There is a Finance problem at the heart of this problem. The Finance problem is that Finance has become divorced from the real Economy. SEEDS is intimately related to the DNA of the real economy in that All productive activity is Energy and Materials conversion into Goods and Services of primary importance to human life and society.

The size of the Finance Speculation sector is an easily remediated problem, but clearly not, when The same people living high off that imaginary hog are writing the regulations by which they are “Governed”.

A healthy Dose of Bucky Fullmeister is what is needed vis the Production function for modern Industry and Industrial Agriculture also a look back into the concepts of Localism and Subsidiarity.

Let’s be brutal, shall we? The System of Political Economy is broken, not because of a lack of resources and technical ability. The failure is a failure of Imagination due to a slavish following of an already falsified PseudoScience of Neo-Classical Economics.

One can look to the Great Hunger in Ireland, where the failure of the Potatoe Crop was not a failure of The Irish land to produce enough food to feed the People of Ireland. The Crops grown for export were still exported throughout the Famine, Hard Currency cash crops being seen as more important than Human Life. ( http://www.popflock.com/learn?s=The_Great_Hunger ) Effectively the same Malthusian, Social Darwinism that allowed the Irish Famine to become a reality out of ideological choice and not a necessity is the same Malthusian Social Darwinism driving the current failure of Seeing Bucky Fullmeisters simple solution to the production Function, Do more with Less.
The Circular Economy, where re-cycling and building for reclamation do not only preserve Materials but also sees energy re-capture and economy maximising the repeated use of all resources across time and product lines.
https://letthemconfectsweeterlies.blogspot.com/search?q=Circular+Economy

The Use and Utility is the benefit of a good, not the rights to use and abuse otherwise called ownership. Ownership has a speculative rentier benefit to a very small class of people (Elites) and it is this excessive freeloading which is causing so much waste in the ample resource base available.

Doing Less with more has been the experience of the past 30 years or so, its now time to try Buckys way. Doing More with Less. Seeds and Embodied energy pricing can incentivise Doing More with Less, which is what the Circular economy is about. The Broken way of doing Less with more for a Higher Financial Profit is logic turned upside down an anti-Economics that has become accepted as some sort of Natural law when in fact it is and always has been the Emperors New Clothes.

Ephemeralization – Doing more with less – Buckminster Fuller (animated clip)

Buckminster Fuller on an Economic System Based on Abundance not Scarcity

My own background is that of an Entrepreneur, regarding the next Collapse, the causes are the same as the Last one 2008 and the one before that 2000 and probably all of them since the first Mississipi Bubble courtesy of John Law. Doing More with less requires a re-thinking of how Profit is accounted for and taxed with respect to reward incentives to a “Free Market” or a “Trading Economy” it requires also a look back to the distinct categories of Localised transactions and Trust-Based exchanges and Long Distance or Trustless exchanges I am advocating a Vernacular Economics supporting localised permaculture as well as promoting efficient trade prioritising acquisition of that which is lacking locally by trading that which is in surplus.

http://letthemconfectsweeterlies.blogspot.com/2016/02/usury-hells-fuel-and-mans-oppressor.html
The courtiers of the Exchequer address the king;

We economists beholden as we are to the princes of usury and as the false prophets of usury.
We fit the horse foot to the shoe that suits us best. It matters not that the horse becomes lame and less furlongs are ploughed. As we deny the poison in our own usurious medium. We also deny that what ills our patient, could be from any panacea concocted in our own alchemists crucible.

Our unit of account, that is to say this store of value.
Not to leave unsaid, this medium of exchange.
Our scarlet pimpernel which no one quite pins down.
We say; ”we give you something , always the same
fungible with each the other. The one whole. Held in safe keeping, returned. What we call these claims or, definitions of claims. These bundles of demands, is money.

Insinuated into civil intercourse,
ubiquitous in the machinery of community,
deployed as a lever and pulley in affairs of state.
A measure of nothing, conjured to divine what’s important.

Counsel for the people charge usury of its crimes.

This baron abstract that claims fruit.
This heavy invisible burden,
a yoke. Fashioned in language,
felt but never seen.

inflicting scars as deep as any lash,
claiming lives as real as any canon.
This nightmare device of imagination.
Who are the slayers of this mythical dragon?

Coleridge saw beauty in nature where sweet amaranths bloom. And Shakespeare compared his summers day.
What of this hamlets ghost of a spectre?
something is rotten in the danegeld,
many more promises are written than can be kept.

So much nectar strained from thin broth,
which bargains can be made?
When the music stops and the dancers
sit down. Chairs are our metaphor for the real.
Always too few.

Rascals become clothed in robes
and honesty is reduced to rags.
Elisabeth lease had a purchase on truth.
”When people starve how can overproduction stand charged. It is money promises, kept short in supply that causes starvation. The consumption in the lungs of the community, is the usurers confection.

A counterfeit Nobel laureate, theres an irony.
Denies that in money there can be a place that gertrude stein called there, home once but no longer there , there in Oakland. A precursor to some sub prime heritage.
A speaker of truth to power could follow Pauli ´Das ist nicht nur nicht richtig, es is nicht einmal falsh!

Not even wrong, not even there.
All counterfeit, yet to counterfeit the counterfeit? a crime.
What of the shepherd of this unruly nothing,
where will they pen and fence this pack of wolves.
Will they dress this pack of cards in sheep’s clothing.
Limit the herd a need for Golden standards.

Prudence of sound Money and even sounder usury.
Fix the price and patronise those who will honour the thievery. A mechanism to harmonise silent ballot boxes.
A gentlemen from belgium would complement his single currency. Unruled and unruly sets a course for austerity on a continent many times at war. A fight of 11 rounds.

Spread like a cancer through the development of continents, enabling the killing called wars. That increase the debt and centralise the money power.
Quiggly shewed the tragedy, little hope it seemed,
blind faith in capitalisms harlot. That babylonian whore.

At first a mere money trick for ragged trousered philanthropy. With usury, take away whats not even yet been paid. Ruskin would see wealth as that which is valuable in the hands of the valiant. Real goods sustain and wealth succours. Usurious money is but an unmade claim and worse. No banker has earned that newly minted note that hangs discordant in the air, as apt to rob as to pay.

How obscure this obscurant cult of mammon.
What smoke screened hall of mirrors.
How obese and gluttonous the leviathan of usury.
Austerity for the likes of you and I.
More banqueting and evacuated vomit spews from the sceptred top table. Corrupt in patronage and jealousy of power. Overstuffed with greed and thirsty for more.

How mean the jealousy of greed grows.
As more wants more and demands all.
The truly poor are those who desire much,
oppressive wealth no longer is, it only has.
Usury consumes the usurer, no self just an exponential nothing. Growing ever more grotesque in a shadow of what never was and never could be.

There is the problem it lies with the Administration and not the Executive, where the executive is the population and its Industry.

“I am not one of those who think that the people are never in the wrong. They have been so, frequently and outrageously, both in other countries and in this. But I do say that in all disputes between them and their rulers the presumption is at least upon a par in favour of the people. Experience may perhaps justify me in going further. When popular discontents have been very prevalent, it may well be affirmed and supported that there has been generally something found amiss in the constitution or in the conduct of Government. The people have no interest in disorder. When they do wrong, it is their error, and not their crime. But with the governing part of the State it is far otherwise. They certainly may act ill by design, as well as by mistake. “Les révolutions qui arrivent dans les grands états ne sont point un effect du hasard, ni du caprice des peuples. Rien ne révolte les grands d’un royaume comme un Gouvernoment foible et dérangé. Pour la populace, ce n’est jamais par envie d’attaquer qu’elle se soulève, mais par impatience de souffrir.” These are the words of a great man, of a Minister of State, and a zealous assertor of Monarchy. They are applied to the system of favouritism which was adopted by Henry the Third of France, and to the dreadful consequences it produced. What he says of revolutions is equally true of all great disturbances. If this presumption in favour of the subjects against the trustees of power be not the more probable, I am sure it is the more comfortable speculation, because it is more easy to change an Administration than to reform a people”.
Edmund Burke.
http://letthemconfectsweeterlies.blogspot.com/2017/03/on-present-discontents-burke-opined.html

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This Blog is based on an old discussion on the LinkedIn Philosophy Network.

http://letthemconfectsweeterlies.blogspot.com/2013/09/capitalist-dead-horse-flogs-99.html 23 September 2013

That people exchange things , trade things gift things and so forth is quite natural to say that this is a behavior ascribable to a market or that due to the nature of or existence of markets, people do these things is non-nonsensical .The concept of the Market in a Capitalist sense gets further away from human nature. Commerce exchange and trade would exist without capitalism and without our conception of Market.

The Free Market is a chimera one of many reflections we prisoners interpret on The wall of plato´s cave according to our own belief systems. The exercise of free will by individuals is a completely separate question for which any concept of markets is wholly unnecessary. That all things boil down to a Market and that Capitalism is the best way for Markets to do what they do best is the basis of a particular way of looking at the world as one group of people think it is best looked at.

the word Market is unnecessary, the sense in which the word Market is usually used has a lot of baggage. Kind of off topic but not completely this post from here.

http://www.golemxiv.co.uk/2013/09/my-interview-about-syria-on-npr/#comment-139605

´´Heads up on a new must watch lecture series (for the Ecuadoran gov) by Steve Keen. Starting here:

“This is Keen explaining his reasons for pursuing his dynamic systems modelling with the importance of debt & money factored in drawing on, well, his entire academic career.
I think Keen is miles ahead in understanding how a real macro economy works & why the present mainstream thinking is so utterly crap & deeply corrupted by vested interests. Keen’s distinction between the ‘dynamic’ (mathematically ‘chaotic’) system that is reality versus the ‘equilibrium’ or static system it is assumed to be, is massively important in considering macro policy.
Engineers & mathematicians should grasp this immediately. But Keen makes a good effort at explaining this for others, and I think he absolutely nails probably the most important aspects of money & macro, drawing on insights & critiques of Marx, Schumpeter, Keynes, Fisher, Kalecki, Goodwin, Minsky and others. Top stuff”

Mike Hall ( pre MMT is the truth and Light Conversion) .

´´ I am a big fan of Steve Keen and particularly his work on Minsky’s instability hypothesis. Ceteris paribus, is an analysis tool it has nothing to do with natural systems where Pante Rhei rules

http://en.wikipedia.org/wiki/Heraclitus#Panta_rhei.2C_.22everything_flows.

I accept what freedom is about, but not that Freedom qua freedom is what ´´Free Market ´´is about. I do not know if that is so. In a pure sense of a perfect knowledge where all transactions are fully informed of all the facts and all participants participate on their own terms, would that or could that ever exist?

Steve Keen provides a valid criticism of modern mainstream economics in that its models are both static and ignore banks and their role in the money creation process. Keen following up on the work of Minsky shows that these oversimplifications lead to the boom and bust cycles which are inherent to the capitalist system. If your models do not include the components which are causing the instability then they will be of no use for forecasting and avoiding choke points in the system. Keen is largely pro Capitalism and Markets and I personally find his analysis compelling but do not think his solutions are nearly bold or radical enough. Keen is a professor of Economics he is not a politician he studies in an intellectually honest way and reveals some inconvenient truths that the main stream and less plain speaking branches of his profession steer clear of , in my opinion in a fear of losing patronage ( funding).

Keens Blog is linked here I have been reading it for several years http://www.debtdeflation.com/blogs/

In a nutshell Keen and many others such as Michael Hudson single out the Federal reserve and its role on the Debt Fiat money swindle for particular criticism. My first introduction was through Tomlinson who has an excellent online book that can be downloaded here.

http://www.honest-money.com/

My favourite author on the subject is James Robertson and his book future Money.

1. http://www.jamesrobertson.com/futuremoney.htm 1. http://letthemconfectsweeterlies.blogspot.se/2011/11/james-robertson-real-critical-thought.html

David Greibers Debt the first 5000 years is also a classic on the subjects of the debt money artifice into which we have all been tricked.

https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

If capitalism is what it does and has done then the current problems which we face are due to Capitalism as it is practised. To say what is practised is not Capitalism is disingenuous, The Soviet Union Failed due to the Failure of Communism, most Capitalists have little problem claiming a victory over Communism, of course, the current troubles are due to what ( Communism dressed up in Capitalist clothing?)

Things To Know.

know exactly how the Fed says it works and how it actually works,

have a sound knowledge of Economics, Economic Geography and various different schools of thoughts in Politics( both National and International) Economics and Philosophy. It is a multi-faceted world in which we live and a dualist left / right , Capitalist /communist , red / blue fairy tale is not helpfulfor anyone

look for some real answers. On the oversimplifications in Economic modelling, leaving Banks and Money out of Economic modelling is something of an oversimplification wouldn’t you say? how can one make oneself any clearer than that?

Capitalism, as I state above, is the Ownership of the Means of Production by private interests for private benefit. It excludes in its deliberations externalities or costs to wider society. We have very little to be grateful to Capitalism for even though it is preached otherwise. Free Market or Laizzez Faire Capitalism is an anachronistic and wasteful system of distributing wealth it is a destroyer of wealth not a creator of wealth and the financialisation of the Economy is similarly destructive. Having established that neither of the two great tyrannical systems of the past 200 years are actually fit for purpose to serve the greatest benefit as custodians of the future husbandry of the common wealth for now and future generations what is needed is thought outside of the antiquated paradigm.

People like Charles Eisenstein have made a start in this direction talking of Resource-based economics, Roy Madron with his Gain Economics, Robertson’s future Money, Wilkinson and Pickets Spirit Level, Toby Russel and Econosophy with his writings on Guaranteed income and Ralph Boes and the Hertz iv laws in Germany

(http://thdrussell.blogspot.de/2012/03/ralph-boes-my-new-hero-part-i.html)

Now to the point of concision and the mindless shorthand of dishonest narratives parroted in Main Stream media and by mainstream media wannabees. Here is Noam

Chomsky.http://www.youtube.com/watch?v=A_gkS2ai3Wo

Some links to some more blasphemy against Capitalism.

http://en.wikipedia.org/wiki/Anti-capitalism 3.

http://en.wikipedia.org/wiki/Criticism_of_capitalism

And Finally on the dangers of Zealous Ideology.

123

The term Flogging a Dead horse shouldn’t need any introduction. Whether Capitalism is a Golden Goose or a Dead horse may require some further explanation.

Capitalism is the New religion, The Free Market is the New Heaven and a belief in Capitalism is an unquestionable stance. Criticise Capitalism and you are declaring the Earth Flat, the Sun revolves around the Earth and are dangerously out of line.

”As Bakunin put it, property “is a god” and has “its metaphysics. It is the science of the bourgeois economists. Like any metaphysics it is a sort of twilight, a compromise between truth and falsehood, with the latter benefiting from it. It seeks to give falsehood the appearance of truth and leads truth to falsehood.” [The Political Philosophy of Bakunin, p. 179]
http://en.wikibooks.org/wiki/Anarchist_FAQ/What_are_the_myths_of_capitalist_economics%3F

Two Discussion caught my Eye this past Week, One the Question of Minimum Wages and Mc Donalds and the Other a Film about Artists rights and the devaluing of Creative property due to digitisation.

https://player.vimeo.com/video/58809695
Unsound: extended trailer rough cut from Count Eldridge on Vimeo.

This raises some interesting questions. How does a Capitalist economic system deal with the notion of abundance? WIth respect to the view point one takes on this initially the debate could be driven in an unhelpful direction for the majority of musicians and creative people as the perspective in legislation will be Capitalistic and focus on the interests of the winners, in the Music business as elsewhere in corparatised economy there are hardly any winners they are the top 1/10 of 1% and they advocate systems that syphon off most of the value of the work of those further down their Capitalistic food chain which they represeent as some immutable law of the Jungle as a natural consequence of natural laws which apply to a political economy as much as they do to the rate of acceleration due to gravitational attraction. 13 minutes ago · Like      

 
    Roger Glyndwr Lewis I have been having a discussion about the Minimum wage on linked in where the militant state monopoly capitalist right are having a field day doing the usual narrow thinking and saying those who demand living wages are killing the Capitalist Free Market golden goose. Well Capitalism is a dead horse that is flogging the 99% to death and is not a golden goose, the Music Industry as Golden Goose was never such a thing for the vast majority of musicians barriers to entry were easier to erect with older technology erecting false barriers to entry in a world with more than adequate resources for everyone is actually The Capitalist Dead horse dirtiest secret. 9 minutes ago · Like      

 
    Roger Glyndwr Lewis Heres a flavour of the discussion on Linked In.

Rami it seems the Huff Post and Forbes share your concern.

1. http://www.forbes.com/…/

I have read both of these articles as well.

Out of interest what is your view regarding income support policies I.E the minimum Wage is made up from a central fund so that no one had to survive on less than a living Wage?

There is a race to the bottom in Globalism which is beggaring our neighbors I find that this is uncivilised Blaming the poor for their Plight is a generalisation that I would hope you can see really doesn’t work. How can it apply to all cases I suggest it actually doesn’t apply in the vast majority of cases, did you read the Article I linked too regarding the French Language professor above?

I advocate the Guaranteed income scheme which in a post industrial society is inevitable at the moment it is only in place for the Banker sand High Rollers in the financialised economy. They should be duking it out not the folks at the bottom of the heap.

http://en.wikipedia.org/wiki/Guaranteed_minimum_income

Advocates[edit source | editbeta]

The first Muslim Caliph Abu Bakr introduced a guaranteed minimum standard of income, granting each man, woman, and child ten dirhams annually; this was later increased to twenty dirhams.[3]

American revolutionary Thomas Paine advocated a basic income guarantee to all US citizens as compensation for “loss of his or her natural inheritance, by the introduction of the system of landed property” (Agrarian Justice, 1795).

French Emperor Napoleon Bonaparte echoed Paine’s sentiments and commented that ‘man is entitled by birthright to a share of the Earth’s produce sufficient to fill the needs of his existence’ (Herold, 1955).

In 1962, economist Milton Friedman proposed a Negative Income Tax coupled with a flat tax in support of a guaranteed minimum income.[4]

In 1963, Robert Theobald published the book Free Men and Free Markets, in which he advocated a guaranteed minimum income (the origin of the modern version of the phrase).

In 1966 the Cloward–Piven strategy advocated “overloading” the US welfare system to force its collapse in the hopes that it would be replaced by “a guaranteed annual income and thus an end to poverty”.

In his final book Where Do We Go from Here: Chaos or Community? (1967) Martin Luther King Jr. wrote[5]

I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.

—from the chapter titled “Where We Are Going”

In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements.[6]

In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income in which he advocated the Guaranteed Minimum Income and discussed Richard Nixon’s GAI proposal.

Have a great weekend everyone.

Rog

Anyway, I am happy to commit this Capitalist, Free Market Blasphemy and fully admit that I do not believe in their Gods the whole edifice is founded upon a metaphysical confidence trick.

”As Bakunin put it, property “is a god” and has “its metaphysics. It is the science of the bourgeois economists. Like any metaphysics it is a sort of twilight, a compromise between truth and falsehood, with the latter benefiting from it. It seeks to give falsehood the appearance of truth and leads truth to falsehood.” [The Political Philosophy of Bakunin, p. 179]
http://en.wikibooks.org/wiki/Anarchist_FAQ/What_are_the_myths_of_capitalist_economics%3F

John Ruskin tackles this question in unto this last regarding what is a fair payment.
“I choose my physician and my clergyman, thus indicating my sense of the quality of their work.” By all means, also, choose your bricklayer; that is the proper reward of the good workman, to be “chosen.” The natural and right system respecting all labour is, that it should be paid at a fixed rate, but the good workman employed, and the bad workman unemployed. The false, unnatural, and destructive system is when the bad workman is allowed to offer his work at half-price, and either take the place of the good, or force him by his competition to work for an inadequate sum.
Essay I: “The Roots of Honour,” section 29.
There is no wealth but life. Life, including all its powers of love, of joy, and of admiration. That country is the richest which nourishes the greatest numbers of noble and happy human beings; that man is richest, who, having perfected the functions of his own life to the utmost, has also the widest helpful influence, both personal, and by means of his possessions, over the lives of others.
Essay IV: “Ad Valorem,” section 77.
‘Wealth, therefore, is “The possession of the valuable by the valiant”; and in considering it as a power existing in a nation, the two elements, the value of the thing, and the valour of its possessor, must be estimated together. Whence it appears that many of the persons commonly considered wealthy, are in reality no more wealthy than the locks of their own strong boxes are, they being inherently and eternally incapable of wealth; and operating for the nation, in an economical point of view, either as pools of dead water, and eddies in a stream (which, so long as the stream flows, are useless, or serve only to drown people, but may become of importance in a state of stagnation should the stream dry); or else, as dams in a river, of which the ultimate service depends not on the dam, but the miller; or else, as mere accidental stays and impediments, acting not as wealth, but (for we ought to have a correspondent term) as “illth”, causing various devastation and trouble around them in all directions; or lastly, act not at all, but are merely animated conditions of delay, (no use being possible of anything they have until they are dead,) in which last condition they are nevertheless often useful as delays, and “impedimenta” ‘ (Unto this Last, 1860)

I have a great sympathy for the notion that the highest paid employee in a corporation should not be paid more than a societal consensus on what the multiple should be.

Here the head of Barclays has had difficulty with the question in the past. Mondragon offers a good example in Spain.

Wage regulation[edit source | editbeta]
At Mondragon, there are agreed-upon wage ratios between executive work and field or factory work which earns a minimum wage. These ratios range from 3:1 to 9:1 in different cooperatives and average 5:1. That is, the general manager of an average Mondragon cooperative earns 5 times as much as the theoretical minimum wage paid in his/her cooperative. In reality, this ratio is smaller because there are few Mondragon worker-owners that earn minimum wages because most jobs are somewhat specialized and so are classified at higher wage levels. The wage ratio of a cooperative is decided periodically by its worker-owners through a democratic vote.[19]
Compared to similar jobs at local industries, Mondragon wages are 30% or less at management levels[clarification needed] and equivalent for middle management, technical and professional levels. Lower wage levels are on average 13% higher than similar jobs at local businesses. Spain’s progressive tax rate further reduces any disparity in pay.[19]

Delete
4 days ago

People need to be wary of both state and corporations, Corporations are but the Government in the sun casting its shadow over government as Dewey described. Society and societal institutions will still exist in the absence of a State and Trans national corporations. Through the monetary system the established power State and Capital pull of our strings most of us do not see what puppets we are and believe we are free.

corporations would not grow to their positions of power in the absence of the monetary system we have which allows private banking corporations to create 97% of all money as debt thereby guaranteeing a Syphoning of wealth from the poorest and least powerful in society to the top. Marx’s Labour theory of value is actually rather solid and most arguments against minimum wage are thin justifications for the theft of the Labour of those powerless to
object.
I find the initial argument put forward by Rami very unconvincing, one has to consider Political economy and any employer paying less than a living wage should not be in business they are parasites on the rest of society.

on the subjective theory of value I find this an interesting Native American insight.
When all the trees have been cut down,
when all the animals have been hunted,
when all the waters are polluted,
when all the air is unsafe to breathe,
only then will you discover you cannot eat money.
~ Cree Prophecy ~

‘Marx describes capitalism as having an institutional framework in which a small minority (the capitalists) oligopolize the means of production. The workers cannot survive except by working for capitalists, and the state preserves this inequality of power. In normal role of force is structural, part of the usual workings of the system. The reserve army of unemployed workers continually threatens employed workers, pushing them to work hard to produce for the capitalists.”
http://en.wikipedia.org/wiki/Labor_theory_of_value

How do we as individuals value things ? there is an immediate dualist problem distinguishing between satisfying needs and insatiable wants? it goes on to be even more complicated than that, If one does not consider the market than anything other than another flawed and manipulated construct how then do we establish a fair use value.
I have considered this question at length with respect to housing prices. It is a particularly interesting question in that area of fundamental human need and human rights ( to that of Shelter) and its commodification as a speculative playground for the wealthy. ( Mea Culpa, former property developer, gamekeeper turned poacher)

1. http://letthemconfectsweeterlies.blogspot.se/2011/05/further-thoughts-on-distressed.html

2. http://letthemconfectsweeterlies.blogspot.se/2011/06/some-more-notes-on-mortgages.html

Your essay is mercifully short, perhaps an indication of how little analysis the anti minimum wage stance actually has.

Applying your analysis to one example of Mc Donalds and applying some fairly cursory arithmetic based on reducing the ceos pay and upping the pay rates leading to a large increase in what needs to be charged for the product does not actually stand up to scrutiny and constitute a serious analysis.

Further There are a whole host of other practices that large corporations indulge in regarding not making fair payments to their suppliers which need examining but you analysis seems firmly set in the main stream Democrat/ republican puppet show which is always unconvincing at best.

From WIkipedia,

http://en.wikipedia.org/wiki/Minimum_wage

In 2006, the International Labour Organization (ILO)[7] argued that the minimum wage could not be directly linked to unemployment in countries that have suffered job losses. In April 2010, the Organisation for Economic Co-operation and Development (OECD)[78] released a report arguing that countries could alleviate teen unemployment by “lowering the cost of employing low-skilled youth” through a sub-minimum training wage. A study of U.S. states showed that businesses’ annual and average payrolls grow faster and employment grew at a faster rate in states with a minimum wage.[79] The study showed a correlation, but did not claim to prove causation.
Although strongly opposed by both the business community and the Conservative Party when introduced in 1999, the minimum wage introduced in the UK is no longer controversial and the Conservatives reversed their opposition in 2000.[80] A review of its effects found no discernible impact on employment levels.[81] However, prices in the minimum wage sector were found to have risen significantly faster than prices in non-minimum wage sectors, most notably in the four years following the implementation of the minimum wage.[82]
Since the introduction of a national minimum wage in the UK in 1999, its effects on employment were subject to extensive research and observation by the Low Pay Commission. The Low Pay Commission found that, rather than make employees redundant, employers have reduced their rate of hiring, reduced staff hours, increased prices, and have found ways to cause current workers to be more productive (especially service companies).[83] Neither trade unions nor employer organizations contest the minimum wage, although the latter had especially done so heavily until 1999.

There are a whole host of US government policies that are damaging to the interests of what Americans call the ´middle class´of America, Google, the hollowing out of America for the myriad examples. Opposition and propaganda falsely citing minimum wage as a factor in decline of American employment is dishonest intellectually or just plain intellectual laziness ( and probably both.).

The race to the bottom so beloved of the Trans Global corporations and Banks is found in these specious minimum wage opposition arguments. Wider policy issues regarding the end of growth, the leisure society as machines replace human labour and future policies such as guaranteed income whereby no one is excluded from the common wealth are all up for examination clinging onto a Dickensian view that the poor should be grateful for the crumbs condescending from the top table is to me repugnant. The main stream political puppet show is fully complicit in our corrupt and fundamentally unworkable monetary system, should this be fixed along with other government welfare policies for the large corporations and banks we would find the real economy would remove the garrote of financialisation and debt and allow the economy to function properly again to the wider benefit of society.

Ghandi said and I agree with him that poverty is the worse form of violence. saying there is an absence of coercion in desperation is flase Ricky. There is not a lack of coercion the coercion is latent, covert and pernicious to the self justfying and amoral nature of capitalism and the profit motive absent any appreciation of externalities.

1. http://nationalpriorities.org/cost-of/ As OF June 2018 US Figures.

Costs of the War on Terror since 2001

https://www.nationalpriorities.org/cost-of/war/js/