Economic Democracy

Capital accumulation advantage increases or decreases exponentially with the differential in pay for equally productive labor: An equally productive worker in the poorly-paid Third World produces a unique model car, is paid $1 an hour, and produces one model car an hour. An equally productive worker in the developed world produces another unique model car, is paid $10 an hour, and also produces one model car per hour. Each equally productive worker likes, and purchases, the other’s model cars. (All true costs are labor costs [capital is stored labor] so we ignore monopoly capital costs, which go to the developed world anyway and calculate the cost of those model cars at the labor cost of production.) The $1 an hour worker must work 10 hours to buy one of the model cars of the $10 an hour worker but, with the money earned in the same 10 hours, the $10 an hour worker can buy 100 of the model cars of the $1 an hour worker. While in a homogenized market of many producers there is a 10 times differential in buying power, in direct trades between each other there is an exponential 100 times differential in retained wealth.

If the pay differential is 5 ($10 to $2), the wealth accumulation advantage is 25 to 1. If the pay differential is 2 ($10 to $5), the wealth accumulation advantage is 4 to 1. When all have access to technology and markets and pay is equal for equally-productive work, the wealth retained (and available for accumulation or consumption) by each nation is equal. (Chapter 1)

All wealth comes from resources and resources are in the countryside. Thus for 800 years the cities of the Middle Ages raided the countryside to destroy their primitive industrial capital, forcing the countryside to sell their natural resources to the city. City states fought city states over those same resources. The imperial city states evolved into imperial nations which continued to fight control of resources and trade, the source of their wealth. The imperial nations of Europe colonized the entire world and continued to battle over who would control the wealth producing process. (Chapter 2)

Military forces of the wealthy world spread all over the world are there for the same purpose as those raiding parties from the imperial cities of Europe, control resources, monopolize industrial technology and control markets-in short, controlling the rules of unequal trade.

Where are Japan’s resources? Where are South Korea’s resources? Where are Singapore’s resources? Where are Hong Kong’s resources? Where are Taiwan’s resources? Where are the resources of the old imperial nations of Europe who consume roughly 14 times the resources as lie within their borders? America, with 5 percent of the world’s people, consumes 28 percent of the world’s resources. The resources from which all wealth comes are primarily in the undeveloped world, the countryside of the developed world. (Chapters 15, 16, & 17.)

After World War II, the entire world was breaking free. Africa’s new leaders were planning to build a regional economy and emulating the United States. This is why potentially wealthy countries of Africa and Latin America were destabilized. If they had been permitted to develop, the wealth of the world would be in those countries, not in Europe. (Introduction and Chapters 2, 3, 4, 5, 6, 7 & 9)

Virtually every nation which developed did so under the opposite development philosophies being forced upon the developing world. This creates dependent nations trapped in debt and are the legal structures which-through the formula described above-lay claim to the natural wealth and labors of the impoverished world. Any nation which attempts to break out will be immediately ostracized, embargoed, quickly impoverished, and forced back within the fold. Like the raiding parties of the Middle ages, the IMF/World Bank/GATT/ NAFTA/WTO/MAI structural adjustments are enforcing arms of imperial capital maintaining the impoverished world in dependency. (Chapters 2, 3, 10, & 11.)

Where would America be if a powerful nation undersold their farmers? American farmers would go broke, farm equipment dealers would go broke, and businesses dependent upon the wages of those workers would go broke, simply because they imported their food instead of raising their own. The same principle works for all industry. If a country is unable to protect their internal markets and imports their needs, there is no buying power within the country to support local industries and they will stay impoverished. (Chapter 3, 4, & 13.)

Through organizing into trading regions and receiving full value for their resources and labor, the impoverished world can quickly break out of poverty. (Chapters 18, 19, 20, 21, 22, & 23.)

If only 14% of the industry producing arms for the suppression of the world’s break for freedom were turned to producing industry for the impoverished world, the entire world could be developed to a sustainable level and poverty largely eliminated in only 45 years. And Capital destroying Capital in trade wars wastes even more capital than that wasted on wars. (Chapters 18, & 23.)

The wealthy world gained the support of their citizens for the violence they imposed upon the world through propagandizing them that these people were dangerous enemies. Only by educating impoverished populations on every aspect of why and how they were kept in dependency for centuries can governments gain the support of their citizens for reorganizing into efficient production and trading regions.

Intellectuals in the wealthy world are moral, honest, and want to alleviate poverty. But they have never been taught how the impoverished world was kept dependent and thus they cannot honestly address those causes. Only by this full understanding of economic history can the impoverished world gain their freedom. Wealthy world intellectuals would not push their nonsense when they know that their audience knows a lot better.

Through abandoning control of the world through covert and overt violence and sharing both the world’s resources and the wealth those resources produce, world poverty can be quickly eliminated.

Reviews: I feel that this scholarly work will be viewed in the future as a milestone of the new Millennium. It is a work that turns the corner from the mode of thinking of one era to the mode of thinking in the next. — WM. H. Kotke, author of The Final Empire

This book constitutes an incisive review and analysis of the post-war political economy. J.W. Smith carefully integrates geopolitical, strategic, institutional and human rights issues into the understanding of post-war economic change and transformation. — Michel Chossudovsky, University of Ottawa, Professor.

With an unusual flair for historical prototypes, Smith strips the Washington Consensus to its underclothes and beyond. A dazzling performance. — William Krehm Editor, Economic Reform

Smith’s exposure of how conscientious professors and reporters are the unwitting carriers of disinformation, and thus unwittingly misinform their students and audience, provides researchers with an invaluable tool for unearthing truth. — Ralph McGehee, originator of the database, CIABASE, and author of Deadly Deceits: My 25 Years in the CIA.

The Introduction through Chapter Three turns the powerbrokers’ fundamental philosophy to dust and the rest of the book grinds it into powder. — The Author.