Category Archives: Capitalism

It’s Not “Just Property”: How Looting Destroys Lives and Low-Income Neighborhoods, by Ryan McMaken

One of the obscenities peddled by the rioters is that it’s okay to loot and destroy businesses because looting is actually reparations. By that rationale anyone can take anything from anyone, including from the looters (almost all of whom, on a global scale, rank in the top 10 or 20 percent of income and wealth) themselves. From Ryan McMaken at mises.org:

It’s now become fashionable on the left to defend looting as a means of redistributing wealth from allegedly unworthy business owners to the more deserving looters themselves.

“It’s just property!” is the refrain, with the implication being that property owners should not defend their property with coercive means—such as calling in the police or using privately owned weapons against looters.1

This is the philosophy behind a recent declaration from a Black Lives Matter organizer. As the New York Post reported on August 11:

“I don’t care if somebody decides to loot a Gucci’s or a Macy’s or a Nike because that makes sure that that person eats. That makes sure that that person has clothes,” [BLM organizer] Ariel Atkins said at a rally outside the South Loop police station Monday, local outlets reported….“That’s a reparation,” Atkins said.

A more full apologia for looting now comes in the form of a new book titled In Defense of Looting by Vicky Osterweil, who identifies herself as “a writer, editor, and agitator based in Philadelphia.”

In an interview with National Public Radio, Osterweil states:

When I use the word looting, I mean the mass expropriation of property, mass shoplifting during a moment of upheaval or riot….

It tends to be an attack on a business, a commercial space, maybe a government building—taking those things that would otherwise be commodified and controlled and sharing them for free.

Osterweil then goes on to assert that looting is basically a poverty relief program and that it liberates the looters from having to work for a living:

It gets people what they need for free immediately, which means that they are capable of living and reproducing their lives without having to rely on jobs or a wage.

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The Best Virus Response Is Less Government, Not More, by John Tamny

No response at all from government would have been far better response to the coronavirus outbreak than what we got: lots and lots of government. From John Tamny at aier.org:

wanted to stay put in Colombia to build a better future for my daughter, but we have to go back.” Those are the words of Nelson Torrelles to Wall Street Journal reporter John Otis. As Otis reported in the August 31 edition of the Journal, the “haggard and hungry” Torrelles along with his wife and 5-year old daughter are walking back to Venezuela on a Colombian highway.

They’d initially moved to Colombia to escape Venezuela’s socialist hellhole, only for Torrelles to get a job as a waiter at a barbecue restaurant in Bogota. But when Colombia joined much of the rest of the alarmed world in shutting down its economy in March in response to the coronavirus, Torrelles lost his job and soon enough the family apartment that he couldn’t make rent on. Hard as it may be to imagine for those of us lucky enough to live in the United States, the hungry Torrelles and his family are moving back to Venezuela.

Please stop and think about this for a minute. Please stop and imagine the pain Torrelles is in. It surely extends well beyond hunger. Imagine not being able to adequately provide for your family, including a daughter too young to understand that your failures are largely beyond your control. Words don’t begin to describe what Torrelles must be going through, nor can someone lucky enough to be in the United States understand just how awful things must be for Torrelles and his family.

About the coronavirus shutdowns, this column will stress yet again what it always has: the greater the presumed lethality of any virus, the less of any kind of need for shutdowns or government intervention. Practicality is behind this simple assertion.

For one, economic growth has long been the biggest enemy of virus and disease precisely because economic growth produces the surplus resources that can be mobilized in pursuit of cures for what ails us. If something threatens us with sickness or even death, no reasonable person would respond with forced economic contraction.

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Sound Money Is Key to Defending Our Liberties, by Thorsten Polleit

If humanity is ever to be free, money must be private, with government having no role in it at all. From Thorsten Polleit at mises.org:

The title of this article epitomizes what the Austrian economist Ludwig von Mises (1881–1973) called the “sound money principle.” As Mises put it:

The sound-money principle has two aspects. It is affirmative in approving the market’s choice of a commonly used medium of exchange. It is negative in obstructing the government’s propensity to meddle with the currency system.1

And further:

It is impossible to grasp the meaning of the idea of sound money if one does not realise that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of right.2

Mises tells us that sound money is an indispensable line of defense of people’s liberties against the encroachment on the part of the state and that sound money is a kind of money that is not dictated by the state but is chosen by the people in the free marketplace. The world we find ourselves in is a rather different place. Our monies—be it the US dollar, the euro, the Chinese renminbi, the yen, or the Swiss franc—represent fiat currencies, monopolized by the state.

Fiat money is economically and socially destructive—with far-reaching and seriously harmful economic and societal consequences, effects that extend beyond what most people would imagine. Fiat money is inflationary; it benefits a few at the expense of many others; it causes boom-and-bust cycles; it leads to overindebtedness; it corrupts society’s morals; and it paves the way toward the almighty, all-powerful state, toward tyranny.

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Standing at a crossroads, by Claudio Grass

We have two choices: totalitarianism and a command economy, or freedom and capitalism. From Claudio Grass at claudiograss.ch:

“The more we gained knowledge of these new totalitarian systems of mass-rule, the more we realized not only their similarity of structure, but also the fact that we had to do with a type of dominance that had been known in earlier epochs. We discovered that what the ancients called “tyrannis,” or ‘cheirokratia,” what Sulla or the tyrants of the Italian Rennaissance had practised, and what finally alarmed the world in the French Revolution and under Napoleon, had surprisingly many similarities with modern totalitarianism, although this latter had elements with which they cannot be compared, and although it possessed means of domination unknown in past ages.”

Willhelm Röpke

This is an old quote I very much admire, it is as relevant today as it was in the past. History does not repeat but it does rhyme. Therefore, I believe it is fair to say that the world has already changed tremendously over the past few months in an irreversible way. The current central planners are already promoting the future reality they have in store for us – to let the old economy and system crash and prepare for government-controlled and planned transition into a new economy that is “green and emission-free”. The new Modern Monetary Theory (MMT) is ready to finance this “man-made paradise” that we have analyzed in detail in the previous two issues of this magazine. The digitalization shift that occurred over the last 20 years also massively contributes and accelerates this process.

Of course, this technology, like any other, can be used for good or evil, for decentralization and increased independence, or for the concentration of power in the hands of the few and for the exertion of control over everyone else.  The government naturally prefers the latter, as it recognized its practical value. We see real-life implementations of this more and more over the last few years. The establishments and promotion of “anointed experts”, who practice the art of divination while playing God and making decisions “for the greater good”, will inevitably lead to a relentless technocratic system of governance, if it hasn’t already, where individuals as treated as units, to be counted and to be tallied, in a vain attempt to forcefully balance a meaningless equation.

In the end, and this must be clear by now, this path leads to the full-scale nationalization of the private economy, to a system without private property rights and without individual liberty. The political measures in connection with the Corona crisis have already served as a preview to that bleak future. They also highlighted that the greatest losers in that system are the poorest, the weakest and the most marginalized among us, as low-income workers and small business owners were the hardest hit by the lockdowns and the shutdowns and they’ll be the last to recover, if they recover at all, which seems increasingly unlikely.

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Cloward-Piven Strategy To Destroy America Resurgent Amid BLM/Antifa-Led Riots, by Zero Hedge

Meet the intellectual firepower behind the drive to install a Marxist order. From Tyler Durden at zerohedge.com:

Richard Andrew Cloward and Francis Fox Piven are two names that are largely unfamiliar to the average American, but, as Jason Brown notes, their historical relevance is being seen all over the country today as we watch civil unrest in the form of riots ensue.

As Brandon Smith detailed previously, in the mid-sixties at the height of the “social revolution” the line between democratic benevolence and outright communism became rather blurry. The Democratic Party, which controlled the presidency and both houses of Congress, was used as the springboard by social engineers to introduce a new era of welfare initiatives enacted in the name of “defending the poor”, also known as the “Great Society Programs”. These initiatives, however, were driven by far more subversive and extreme motivations, and have been expanded on by every presidency since, Republican and Democrat alike.

At Columbia University, sociologist professors Richard Cloward and Francis Fox Piven introduced a political strategy in 1966 in an article entitled ‘The Weight Of The Poor: A Strategy To End Poverty’.

This article outlined a plan that they believed would eventually lead to the total transmutation of America into a full-fledged centralized welfare state (in other words, a collectivist enclave). The spearpoint of the Cloward-Piven strategy involved nothing less than economic sabotage against the U.S.

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The Fed and the looming capital market meltdown, by Tuomas Malinen

Massive fiat debt issuance is just digging the hole deeper. From Tuomas Malinen at gnseconomics.com:

The Federal Reserve system made a future financial panic or currency panic impossible. It made stable for the first time in the history of the United States the credit system of the people of the United States. – Senate Documents, 64th Cong., 1st Sess., December 6, 1916

We have been watching the “shock-and-awe” bailout of the financial system by the Federal Reserve with astonishment.  Never before has a central bank tried single-handedly to rescue both the financial system and a large proportion of U.S. corporations. We were taken aback then by Fed actions and are now just as worried about what it has given birth to.

We are unfortunately now in a situation where we cannot speak of “markets” anymore. The Fed has nurtured a dangerous, centrally controlled financial system, á la the Soviet Union. Like its ‘role model’, monolithic systems always fail, as the complexity of financial interactions and the economy will eventually overwhelm the central planners.

Alas, we fear that we are approaching the breaking point of the modern financial order.

The Federal Reserve

After the collapse of banks of the families Peruzzi and Bardi in 1343 and 1346 (the first financial crisis of the Middle Ages), a discussion about a ‘liquidity back-stop’ of the banking system began. The idea of the modern central bank emerged.

For the same reasons, the ‘Panic of 1907’ was a game-changer in an attempt to create a central bank in the US. To put a stop to the bank runs, a coalition led by the illustrious banker J.P. Morgan repeatedly intervened to restore the solvency of several New York banks, which in turn gave more impetus to demands that the U.S. banking system required a permanent institutional source of liquidity.

However, the creation of the Federal Reserve system, in 1913, was beset by worries that it would lead to the “socialization” of the economy. To calm these fears, the authority of the Fed to issue legal tender (or “currency”) was restricted by both the ‘real bills doctrine’ and the distribution of financial power.

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The Zombie Companies Are Coming, by Wolf Richter

Endless money for deeply indebted companies that have no prospect of making a profit is not a feature of capitalism. From Wolf Richter at wolfstreet.com:

By Wolf Richter. This is the transcript of my podcast last Sunday, THE WOLF STREET REPORT. You can listen to it on YouTube, and you can find it on Apple Podcasts, Spotify, Stitcher, Google Podcasts,  iHeart Radio, and others.

Through the first half of August – which is normally a quiet period for the bond market in the US – a total of $56 billion in junk bonds and leveraged loans were issued by junk-rated companies, according to S&P Global. That was nearly 50% higher than the prior records for the same period in 2012 and 2016, and more than double the amount issued in the entire month of August last year.

The Fed’s announcement on March 23rd that it would start buying corporate bonds and bond ETFs set off a huge rally in the bond market, including in the junk-bond market.

The rally started before the Fed ever actually bought the first bond. And then the Fed hardly bought anything by Fed standards. Through the end of July, it bought just $12 billion in corporate bonds and bond ETFs, including a minuscule $1.1 billion in junk bond ETFs. It’s not even a rounding error on its $7-trillion mountain of assets.

But the announcement was enough to trigger the biggest junk-debt chase in the shortest amount of time the world has likely ever seen. And it kept the zombies walking, and it generated a whole new generation of zombies too.

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A critique of modern socialism, by Alasdair Macleod

The welfare-warfare-regulatory-state model of socialism is the next model that will collapse. From Alasdair Macleod at goldmoney.com:

ocialism has moved on from the Marxist version of the state owning the means of production to one whereby production remains in the hands of individuals but are heavily regulated — echoing Mussolini’s fascist-socialist model.

But after nearly nine decades this model faces collapse, much like the Soviet collapse after sixty-seven years. This article explores the modern socialist model, updates the economic calculation problem identified by von Mises in 1920 and explains why it still fails in today’s socialism. And finally we predict the consequences for governments and their state-issued currencies.

Introduction

It is presidential election year in the United States. The choice is between the Republican’s or the Democrat’s socialism, the former being a milder version of the latter. A further difference is President Trump’s administration increasingly pays the government’s bills by socialising money, while great-uncle Joe wants to tax the rich even more (which in practice means not the rich but the middle and lower classes) as well as defoliating  the magic money tree.

In Britain, those of us who rejoiced at a free marketeer becoming Prime Minister with a strong electoral mandate have experienced a greater clampdown on personal freedom than imposed by any British government since post-war rationing. Admittedly, Covid-19 and its lockdowns were not foreseen, but will the British ever regain any of their hitherto restricted freedoms? And those of us with long memories are reflecting that the imposition of taxes — the socialising of our earnings — under the Conservatives is almost always more onerous than under Labour. It was not meant to be like that.

One way or the other, the establishment’s socialisation of our wealth, money and freedom “creeps in this petty pace day to day until the last syllable of recorded time”. Whether we like it or not, we are all socialists now. It is a fact of our lives, if not our inclinations. The destruction of our money and what wealth we have left is claimed to be for the common good, as opposed to capitalism, which the socialists tell us enriches the few and is deeply immoral. They, the socialists, have captured the moral high ground, leading us to their higher plain. They allege it is progress towards a better humanity. Their utopian view sees the end of social inequality as its final goal, and as Man progresses towards it the human race will discard capitalism and the class wars that go with it.

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Marxism is Coming at Breathtaking Speed—Do This Before It’s Too Late, by Chris MacIntosh

Marxism is one of the more extreme variants of government theft, perhaps the most extreme. Americans have protested very little against such theft since the passage of the Sixteenth Amendment (Income Tax) in 1916, so they shouldn’t be surprised that the latest generation, educated by Marxists, are hopping on the bandwagon.  They want your income, money, wealth, property, and ultimately your life (see “No Lives Matter,” SLL. From Chris MacIntosh at internationalman.com:

nternational Man: So-called “Woke” culture and political correctness have spread like wildfire across the West.

What do you think are the ramifications of this?

Chris MacIntosh: The “woke culture” is simply Marxism writ large.

It’s been with us for at least two generations, educating our children in the West with neo-Marxist ideologies. They’ve simply become more and more egregious. It started with gender studies and feminism studies.

We’re at the point now where we’re having debates around whether two plus two should equal four—because it’s a white supremacist ideal.

It’s the notion that science, technology, engineering, and mathematics, also known as STEM, is a white, male patriarchal construct that should be abolished.

I don’t know about you, but when I drive across a bridge or walk into a building, I’d like to know that mathematics and science have played a part in constructing that.

I don’t want to drive across a bridge built by somebody who won’t acknowledge that two plus two equals four.

So, what are the ramifications? Where do I start?

I had a conversation many years ago, which only came back into my consciousness three or four years ago. I was still about 20 years old at the time. I met a gentleman who said something about how to figure out where our country is going.

He was an asset manager who I just bumped into while doing a hike up Table Mountain.

He said, “If you watch what’s taking place in the universities, if there’s a very strong zeitgeist in one way or the other, watch that. Whatever that zeitgeist is, you’re going to find that, within five to ten years, in the country.”

The reason is that the leaders of the country—the CEOs, the people in management, in politics, in the courts, all come from those universities. If you look at what has been transpiring in the West over the last decade at least, in the universities—it is frightening.

It’s not a surprise now that we find these people are in positions of power. They’re instituting their vision of how the world should work. Their ideology—their zeitgeist—is Marxism. So, this woke culture is just Marxism.

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The Most Dangerous Period for Your Savings and Individual Freedom We’ve Ever Seen, by Chris MacIntosh

Will capital and opportunities shift to the East from the West? From Chris MacIntosh at internationalman.com:

Doug Casey’s Note: There aren’t too many newsletters that I can recommend wholeheartedly. Chris MacIntosh’s is one of the few. It covers the entire investment waterfront, it’s thoughtful and well-written.

Let me add I’m completely on the same page with Chris and his views. I urge you to read what he has to say.


International Man: I’d like to introduce Chris MacIntosh.

After working for many top-tier investment banks, Chris left the corporate world. He has since built and sold multiple million-dollar businesses, built a VC firm allocating $35m into early-stage ventures, and become a full-time trader.

He now manages money for clients of Glenorchy Capital; a macro focused hedge fund. Chris is the founder of Capitalist Exploits, with its flagship investment subscription letter called Insider.

Alright, let’s get into our discussion.

As countries destroy their national currencies, middle- and lower-class individuals will disproportionally be affected.

Are we seeing global destruction of private savings? What are the implications?

Chris MacIntosh: There’s a lot to unpack there.

What we’re seeing is the wholesale destruction of the middle class, certainly in Western democracies.

I think it’s by design.

We’re also seeing a wave of neo-Marxism taking place across the Western world, and they see it as an opportunity.

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