Sunday 16 May 2010

THE PRESENT ERA of POLITICAL and ECONOMIC ALIENATION

The present system of centralised government in the west is divisive. Through its present bureaucratic, overly regulated and administered systems of taxation, restrictive regulation, subsidies, welfare, healthcare, education and policing, the government plays too great a role in controlling the lives of individual members of society.

“All of us who are concerned for peace and the triumph of reason and justice must be keenly aware how small an influence reason and honest good will exert upon events in the political field.” Albert Einstein

We currently lack the conviction, spirit and motivation, to review, reflect on and revise our attitudes and relationships to others. The self interest, corruption, deception and complacency of our leaders in western political democracies, along with the growing and disturbing trend towards right wing and violent religious fundamentalism, in both east  and west, has further increased the divide.

“Those who are too smart to engage in politics are punished by being governed by those who are dumber.”  Plato

"At a time of universal deceit, telling the truth is a revolutionary act"
H G Wells (written 1907 CE)

Saturday 15 May 2010

The case Against Usury and In Favour of Gold

USURY - The civil or criminal wrong of charging interest that is beyond the legal limit set by a State. The illegal profit which is required and received by the lender of a sum of money from the borrower for its use.

To constitute usury the borrower must not only be obliged to return the principal at all events, but more than lawful interest: this part of the agreement must be made with full consent and knowledge of the contracting parties.

Gold and it's Economic Importance

"[Dollar bills] have no value for themselves, but for what they will buy." – from the website of the U.S. Treasury:

Dollar bills actually have no value... And the US government actually tells us that.

But somehow, we believe they do. We save dollars like they're valuable... After your home, dollars in the bank are probably your second-largest asset. People seem to be completely oblivious to the fact that their second-biggest possession of wealth has absolutely no inherent value.

Gold and Economic Freedom

By ALAN GREENSPAN (Ex Chairman of the Federal Reseve)
An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense-perhaps more clearly and subtly than many consistent defenders of laissez-faire-that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society. Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.

Durability
What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible.

Luxury & Scarcity
More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.
In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value, will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale.

Whether the single medium is gold, silver, sea shells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has always been considered a luxury good. It is durable, portable, homogeneous, divisible, and, therefore, has significant advantages over all other media of exchange. Since the beginning of Would War I, it has been virtually the sole international standard of exchange.

If all goods and services were to be paid for in gold, large payments would be difficult to execute, and this would tend to limit the extent of a society's division of labor and specialization. Thus a logical extension of the creation of a medium of exchange, is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.

A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security for his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments.

When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth.

When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one--so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again.
A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold, and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post- World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline- argued economic interventionists-why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely--it was claimed--there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks (paper reserves) could serve as legal tender to pay depositors.

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates.

The "Fed" succeeded: it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's.

With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain's abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed "a mixed gold standard"; yet it is gold that took the blame.)

But the opposition to the gold standard in any form-from a growing number of welfare-state advocates-was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited.

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which-through a complex series of steps-the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets.

The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

As reprinted from the book "Capitalism, the Unknown Ideal"
by Ayn Rand with additional articles by Alan Greenspan - 1967.

Thursday 13 May 2010

The Significance of John's Book of Revelation

The year 246 AD was the year when the thousandth anniversary of the Roman Empire was going to be celebrated. It seems to have prompted some Christians, especially in the Eastern part of the empire to assume that this was the one thousand year event that John was talking about in Revelation.

Within two years following the thousandth anniversary of the founding of Rome, the Emperor Decius proclaims an empire wide sacrifice to the city’s deities. All citizens including Christians were expected to sacrifice or be liable to imprisonment or death. Read in the context of the Revelation of John, this was deemed by many to be a yet a further confirmation of John’s prediction of the end of time.

Following the death of Decius, who was killed in battle by the Persians, the Emperor Diocletian spends roughly ten years, from 303 to 313 CE persecuting Christians. A large number of arrests of Christians were made and many were martyred, as well as the destruction of church buildings. It was not until Constantine the Great took over as Emperor that Christianity was declared a legitimate religion of the Roman Empire..As long as the empire was pagan, Rome could be an historical stand in for Babylon. After all, that's what the text of apocalypse says.

The awkwardness for Christianity, with its own apocalyptic heritage, comes with Christianity's political success. When Constantine converts to one, remember, just one form of Christianity ... in 312, from the perspective of John, the writer of Apocalypse, the beast has entered the church. But from the point of view of Eusebius, one of Constantine's Bishops, it's God's working in history. It's the revelation of the messianic peace that Isaiah talked about. From Eusebius' perspective--I mean we're used to thinking of the empire being Christian, they weren't, it just happened in their lifetime--this is an unthinkable thought and yet it occurs.

So Eusebius, looking at these traditional apocalyptic texts, knows that the traditional apocalyptic reading has to be wrong, because now the empire is Christian. ...The empire isn't God's opponent, and therefore, interpretations that look at these texts as speaking about God defeating the evil empire of Rome are clearly wrong interpretations, because now God's servant is himself the emperor.

So what Eusebius will do is, he's one of a number of Christians who begin to discredit an apocalyptic frame of mind, now that Christianity, in a sense, with the consolidation of power under Constantine, settles down into history. Apocalypticism, for people who are prepared to settle down into history, is something that is old fashioned, is clearly wrong and is therefore heresy.

What you get when you have the Constantinian revolution is a principled opposition to the Book of Apocalypse. Once the weight of communities decide that the book is going to be kept in the collection, then your option is no longer to drop the text, your option is to reinterpret it, and that's what people do next.

Once Christianity became legitimate, and recognized by Constantine, then the Book of Revelation was a problem. Because one didn't want to insult the city of Rome or the Roman emperor. And it's very interesting the reinterpretation that occurred at that time. Instead of being read as a dichotomy between God and Christ as ruling in heaven, and eventually on earth, and this evil Roman power on earth in the meantime, there came to be a compilation of the two. That the Roman emperor came to be seen as a representative of Christ. And Christ came to be understood as, as ruling on earth through the current political system.

Augustine of Hippo, who later became canonized as Saint Augustine was probably the most important and influential thinkers of the early Christian period, is one of the leading thinkers. It is largely due to his influence that the Revelation of John is even in the New Testament at all.

What Augustine does by helping put the Book of Revelation in the Bible really accomplishes two things. One, he provides a normative reinterpretation of the book as symbolic representation and not literal history. This version is the one that eventually became the accepted view throughout most of later Christian tradition.

Secondly, by placing it at the end of the New Testament and declaring "You may not add to or take away from any thing in this book." it has the double effect of reinforcing John’s Apocalyptic message, and providing closure of the New Testament itself as the final legitimate vehicle of gods message.  

Saturday 8 May 2010

The Principles of the Buddhist Way

The Law of Impermanence
All things and events are subject to change and transformation.

Law of Contradiction
Fear and Desire are the primary emotional conditions, which when viewed from an irrational standpoint, give the appearance of two opposing states.

Desire can be reasonable or unreasonable

Reasonable
Need
Contentment
Patience
Tolerance
Shared Values
Empathy
Humility

Unreasonable
Want
Greed
Anger
Hatred
Jealousy
Selfishness
Pride

You don’t have to die to loose your life.

The Law of Impermanence and the Law of Contradiction when viewed from the standpoint of reason and experience, allow us to see the possibility of bringing about transformation within ourselves, freeing us from the effects of negative emotions and allowing us to reach the state of enlightenment through transformation of the mind.

The root of suffering is Ignorance (Maya), which means the misconception of self, which leads to Karmic reactions (negative actions)

The emphasis is on personal responsibility

Four Noble Truth’s
Suffering
The origin of suffering in delusion
Attachment,Anger,Pride,Ignorance and Wrong Views.

Types of Suffering
Pure Suffering
Suffering of Change
Pervasive Conditioning

The cessation of suffering is acheived through Love,Empathy and Compassion.

Principle of Interdependent Origination
Consciousness is the link between the objective, subjective and inter-subjective domains, the basic issue is one of ego attachment, consciousness is a process, a network of relations. The meaning of emptiness is not nothing, but an awareness of the pure interdependent nature of reality, which at its root is in a state of perfect equilibrium. There are only the interfaces between boundaries. Consciousness is more like a construct which arises out of a spectrum of complex events.

To paraphrase Mahatma Gandhi:
“Detachment is not a negation of responsibility but a prerequisite for active involvement.”

The objective is to equalize your feelings in order to feel responsibility for others.

Dependent Arising
Iinterdependency of parts or aspects, and the whole (Metonymy). The Buddhist view of reality is that entities have their own existence but also depend on the mind. Their mode is separate but not their existence. The underlying reality is impermanent. Consciousness is formed and moved by the level of energy invoked by the experience of an object.

There is a universal desire for Happiness (wealth/worldly satisfaction/spirituality/enlightenment) and avoidance of Suffering (caused by ignorance/craving and hatred).

The Field of Merit
Imprints positive actions from the point of view of the Buddha, and Sentient Beings.

Buddha viewpoint Sentient Beings
Respect Kindness
Faith Generosity
Confidence Tolerance

Death
“You should not fear dying, but dying too soon.”
Death is inevitable
Death is uncertain
We face it alone

Time
Internal – only the Present
External – Past is just a memory
Future is just imagination

Ten Prohibitions

Physical
Taking Life
Stealing
Abusive sexual behaviour

Verbal
Lying
Slander
Harsh words
Idle Gossip

Mental
Covetousness
Malice
Wrong Views

Six Perfections
Giving
Ethics
Patience
Effort
Concentration
Wisdom

Meditation
Analytical- Object orientated
Settled- Without analysis
Calm Abiding- Focus at will

Training
Morality
Concentration
Wisdom

The Act of Tong Len – Giving and Receiving