When Big Tech Becomes the Guardian of Capitalism, Say Good-bye to the Competitive Free Market and the Hidden Hand

By Hugh Charles Smith

All those who believe the 'privatized totalitarianism' of Big Tech 'platform plantations' are 'capitalism' have been brainwashed into servitude by Big Tech's pretense of capitalism.

Though a small point, it is important to note that the author of this generally sound critique of America's present day economic organization misapplies the term capitalism. Capitalism is: an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. From the definition one sees that, contrary to the author's claim, capitalism is what America has got, there being no inherent inconsistency between capitalism and monopolism, the latter being the target of the author's criticism. What America has in large part lost, is competitive free market capitalism, and I say lost, not abandoned because America never had any serious commitment to restricting monopolism. Thus, America has capitalism, but in large part it is a viciously exploitive form of capitalism. Moreover it is something totally opposed to the competitive market capitalism to which Adam Smith attributed an invisible hand that led the capitalist to act in such a way as to promote the public good: As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value, every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Today American capitalism works unimpeded by the invisible hand and thus serves, not the interests of the American people, but only to maximize the accumulation of wealth by a tiny minority at the expense of the rest of society.

What do you call an economy of monopolies without competition or any regulatory restraints? An economy of monopolies that control both the buying and selling in the markets they control? Monopolies with the power to commit legalized fraud and the profits to buy political influence? Monopolies whose black box algorithms are all-powerful but completely opaque to public scrutiny?

Call it whatever you want, but it certainly isn't Capitalism, which requires competition and market transparency to price capital, labor, risk, credit, goods, services, etc.

Black Box Monopoly is the death of Capitalism as it eliminates competition and market transparency.

The American economy is now dominated by Big Tech Black Box Monopolies, and thus what we have isn't a "free market" system (a.k.a. capitalism), it's the pretense of capitalism, a slick PR cover for the most rapacious form of exploitation.

The SillyCon Valley model is simple: achieve monopoly power by scaling the network effect and buying up hundreds of potential competitors with stock "printed" out of thin air. Once monopoly is achieved, buyers and sellers are both captive to the Big Tech monopoly: both buyers and sellers of apps, for example, must submit to the profiteering and control of the Big Tech monopoly.

Once the profits flowing from monopoly pile up, buy back the shares you "printed" to eliminate competition, boosting the wealth of insiders to the moon. Since share buybacks were once illegal, this is nothing but legalized fraud.

Despite the immense destruction these Big Tech monopolies wreak on society, the political power they purchase protects them from any limits. That their platforms now control the flow of data, including political content and adverts, is brushed aside with the usual paradoxical claims of "free markets."

Ironic, isn't it? Big Tech Black Box Monopolies claim they shouldn't be exposed to any regulation because they've destroyed competition and transparency within the letter of the law. Monopoly platforms that control the flow of data, news and narratives are privatized totalitarianism, cloaked by the pretense of capitalism.

Like all totalitarian monopolies, Big Tech now claims "you can't limit us because now you depend on us." In other words, Big Tech is now too centralized and powerful to submit to any socio-political controls.

It's a neat trick, isn't it? Enrich the super-wealthy "investor class" with your buyback-juiced stock valuations, "buying" their loyalty and political pull with these outsized gains to keep your monopoly out of reach of any public scrutiny or limits on your profiteering and privatized totalitarianism.

That our society and economy are now in thrall to privatized totalitarian Big Tech monopolies is straight out of a Philip K. Dick story in which what's perceived as real has been manipulated by those who own the means of manipulation.

We're not just debt-serfs in central-bank feudalism, we're all serfs on Big Tech's platform plantations. If you don't love your servitude with sufficient enthusiasm, Big Tech has a special place for you: the Village of the Deplatformed, a village of ghosts who have disappeared from the platform plantations and who no longer show up in search, social media, app stores, etc.

Just as the Soviets snipped those sent to the gulag out of photos, the privatized totalitarian Big Tech monopolies cut out your selfhood and your income: Deplatformed doesn't just mean you disappear from view, it also means you've been demonetized-- your ability to earn money from your own content has been eliminated.

In effect, your labor, content and selfhood have been expropriated by Big Tech's totalitarian platforms. Big Tech monopolies don't just "own" the plantation of the mind, they own the platform plantations that control what we see, buy and sell, and what the algorithms collect and sell to everyone who wants to influence what we see, buy and sell.

All those who believe the privatized totalitarianism of Big Tech platform plantations are "capitalism" have been brainwashed into servitude by Big Tech's pretense of capitalism. Just because totalitarianism and fraud are now "legal" doesn't mean they're not evil.

Source

Abolish the Income Tax

Among nations of hunters, there is hardly any property. People usually have nothing to gain from injuring others, and there is little need for any formal administration of justice. But where property exists, things are otherwise. There are potential gains from theft. The avarice and ambition of the rich, or the desire for ease and enjoyment among the poor, can lead to private property being invaded. ...  It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. Adam Smith: The Nature and Causes of the Wealth of Nations

In Canada the rich have done well in recent years. The total wealth of the top 20% of the population exceeds $8 trillion, or more than $1.3 million per person, versus an average net worth of about $7,000 for the remaining 80% the population.

Why then should the 80% pay Federal tax on income in excess of a starvation wages of just over $11 thousand, to provide security for the 20%, with an average of 185 times as much wealth as they themselves possess?

Not only are ordinary working Canadians taxed on ridiculously small amounts of income, but they are subject to multiple other imposts from provincial income and sales taxes, the Federal GST, UI payments, and multiple hidden taxes and duties such as the gas tax, and taxes passed on to them in the price of goods and services that they purchase, including import duties, business licenses many other government imposed charges.

It is time to redress the balance between the rich beneficiaries of police and military protection from both domestic and foreign thieves and predators, and the poor who mostly respect the rights of the wealthy while themselves subsisting on, and possessing, very little. 

To start with, then, let's abolish the income tax, source of half the Federal Government's revenue. True rich people pay most of it, but by deferral of capital gains tax, tax shelters, offshoring of revenue to the Bahamas, Panama, or other tax havens, the rich usually pay rather trivial amounts of income tax relative to their total income.

To compensate for the lost revenue, the first thing the Federal Government can do is cut spending, including spending on programs to help poor people who, having been freed of the income tax, won't now be quite so poor. But assuming that pissing away about half the wealth of the country on mindless bureaucracy and the destruction of national resources such as the Atlantic cod fishery,  and the Pacific Salmon fishery is what governments in Canada are irrevocably committed to doing, then an alternative to the income tax as a source of revenue will be required. 

The best solution would be to jack up the GST from the current 5% to around 20%, which is less by a substantial margin than the sales tax, or VAT, levied in countries such as Sweden, Denmark, Hungary and Croatia where the rate is 25% or more.

True, the GST is a burden on poor people. But it can be refunded in full to the 80% based on their tax returns. The GST would then serve as a consumption tax on rich people. The rich would be able to avoid the GST by spending less, but in so doing they would contribute to the development of the economy by investing their saved income in productive ways that will, in general, be beneficial to all. 

In addition, if a shortfall of revenue remains, the gap should be filled by a yearly capital tax of one  percent on all  wealth in excess of, say, $10 million. Such a tax, which would affect only the O.01%, would bring in not much less than $80 billion, which would be more than enough to cover any gap that might otherwise exist in the Federal Budget. 

Niall Ferguson: The Decline of the West Explained – Not

First published by CanSpeccy on Wordpress, June 20, 2013

In his latest book, pot boiler, extended magazine article in hard covers for 28 bucks, whatever, Niall Ferguson sets out to explain why the nations of the West, so long dominant in scientific and technical skills, wealth and power, are now stagnating economically as China and much of the rest of the Third World rise in power and prosperity at an unprecedented rate.

The trouble, thinks Feguson, is the problem that Adam Smith identified as the cause of China’s economic stagnation in the 18th century: it is, he argues, our institutions. Our institutions of democracy, capitalism, the rule of law, and civil society, he says, have degenerated, resulting in the the concentration of wealth, the emergence of monopolies, a decline in educational standards and other ills that have resulted in a loss of Western competitiveness.

In form, Ferguson’s book is reminiscent of those vaguely interesting and generally incoherent lectures to which so many have been exposed during undergraduate education: a few interesting facts and ideas with many loose ends, leaving unlimited scope for further debate and literary output.

But as an account of the stagnation and relative decline of the West, Ferguson’s effort is almost entirely futile other than as an exercise in misdirection, distraction and cover-up.

If the institutions of democracy in the West are degenerating, those of the extraordinarily dynamic China are essentially non-existent. If the rule of law in America is increasingly the “rule of lawyers,” in China it is a concept barely even understood. If free and fair competition in Western economies has diminished as capital has been concentrated in fewer hands, China’ state capitalism is the complete antithesis of the free and fair market that underlay Adam Smith’s invisible hand. As for the the institutions of civil society, the West is still incomparably free compared with China where even association for the purpose of religious worship is prohibited.

So while Western institutions are in decline, China’s are absolute crap. Yet still China’s economy booms as the West stagnates. Clearly, then, there’s more to Western economic decline than the inadequacy of some vaguely defined sets of institutions.

To discover what has stultified the West, it is necessary to consider what drives economic expansion, and the answer to that is quite simple: increased investment and production. But you cannot have increased investment and production unless there are markets for the increased output, and there will only be markets for the increased output if the new production is competitively priced. But how can new output in the West be competitively priced when the legally mandated minimum wage in America and Europe is between ten and twenty or more times the rate paid factory workers in the Third World?

This is the simple, obvious brute fact that explains Western economic stagnation, to which Niall Ferguson, like any other tenured professor at a top US or UK university, must carefully avoid drawing attention.

The consequences of the fact of Western wage uncompetitiveness with the Third World are as obvious as this one basic fact itself.

Once the Uraguay Round of the Gatt (which led to the creation of the World Trade Organization) was signed by the Western states in 1994, the Western economies were on the skids.

It took a while, naturally, to export Western capital and technology, accumulated through the sweat of generations, to the Third World.

Collapsed Bangladesh factory where Loblaws of Canada (62% owned by 

billionaire George Weston) outsourced manufacture of its "Joe Fresh" line 

of apparel. More than one thousand workers died in the collapse, but as 

George Weston remarked, they need the work. Garment workers in Canada

 presumably do not need the work, or if they do, would be much more 

expensive to hire.

It took a while, naturally, to construct the factories, build the research centers, train the engineers, biotechnologists, the computer scientists, and the millions of production line workers in China, India, Bangladesh and a hundred other countries before the Third World was in a position to take the jobs of tens of millions of Western workers.

But the system’s in place now and the jobs have been bleeding away rapidly during the last ten years, the loss masked in part by housing bubbles that stimulated the construction industry, which is among the few that cannot be off-shored wholesale.

But now the real estate bubbles have burst or are bursting and the shrinking Western economies are plagued by deflation, falling incomes, rapidly rising welfare costs and unemployment, and ominous rumblings of social discontent. Add to the mix mass immigration of culturally disparate elements, which displaces from the workforce the least competent members of the indigenous population, and you have a recipe for both economic decline and revolution.

Hyperventilating about the degeneration of our social, legal and political institutions or getting everyone to join the Lions Club won’t solve the problem created by the treason of our elites, who have sold out the working people of America and Europe for the benefit of the money power, which has gained enormous profits through the success of globalized corporations such as IBM, Apple, Microsoft, and many others.

The only remaining question of real interest is whether the money power will get away with the genocide of the Western nations in its bid for a system of global financial feudalism. And an answer to that question, we can be sure, will not be made available by Niall Ferguson or any other member of the academic elite until such time as the question has become entirely academic.

The Illogic of Libertarianism

Following Monday's announcement that the US Libertarian Party has nominated former New Mexico Governor Gary Johnson as its 2016 presidential candidate (he ran in 2012 and got 1% of the votes), we reproduce here our piece on the logical absurdity of libertarianism that first appeared on Wordpress, December 11, 2013.

Libertarians consider freedom the highest value and government the greatest restraint on freedom, from which they conclude that government is an evil to be eliminated.

But given human nature, the variability of human desires and the scarcity of resources to satisfy those desires, human existence in the absence of government, or in what Hobbes called a state of nature, will degenerate into a war of all against all:

… there is no place for industry, because the fruit thereof is uncertain, and consequently, no culture of the earth, no navigation, nor the use of commodities that may be imported by sea, no commodious building, no instruments of moving and removing such things as require much force, no knowledge of the face of the earth, no account of time, no arts, no letters, no society, and which is worst of all, continual fear and danger of violent death, and the life of man, solitary, poor, nasty, brutish, and short.
Thomas Hobbes, Leviathan

This fact, libertarians can never grasp, for if they did, they would not be libertarians.

To deny the miserable lack of freedom under a condition of anarchy, libertarians make claims about rights as though such pious talk would tame the will of those intent on a course that infringes the liberty of others. That their rights, God-given or otherwise, can nowhere be exercised freely except where they are enshrined in law and enforced by government seems beyond libertarian comprehension.

Travellers ambushed during the chaos of the 30 years war.
Sebastian Vrancx (1573-1647). Image source.

Bizarrely, libertarians may invoke authority in support of their ideology, Adam Smith being often cited. Indeed, in Edinburgh, the Adam Smith Institute claims to be “Britain’s leading libertarian think tank” (is there really more than one?). But Adam Smith was no anarchist. He was a social scientist whose great work The Nature and Causes of the Wealth of Nations was concerned with the factors underlying not liberty but the creation of wealth, and to Smith it was clear that general prosperity could be achieved only under a government.

Smith devoted an entire section of the Wealth of Nations (Book V) to the nature of good government, identifying four necessary functions:

National Defense:The first duty, and necessary expense, of the state is defence: protecting the society from the violence or invasion of others.

Justice:Just as the state must protect people from foreign enemies, so must it protect them against domestic ones. …

Among nations of hunters, there is hardly any property. People usually have nothing to gain from injuring others, and there is little need for any formal administration of justice. But where property exists, things are otherwise. There are potential gains from theft. The avarice and ambition of the rich, or the desire for ease and enjoyment among the poor, can lead to private property being invaded. The acquisition of valuable property – which may take years to build up – necessarily requires the establishment of a civil government and a magistracy to preserve order and justice. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security.

Thus, according to Smith, the accumulation of wealth, which so many libertarians believe should occur on a tax-free basis, is in fact possible only under publicly funded government protection:

Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.

Public Works:
The third role for the state is to build and maintain public works that could never yield a profit to individuals: institutions to facilitate commerce, the education of the young and the instruction of people of all ages.

Education:
In the matter of public education, Smith, himself the beneficiary of publicly supported schooling, was ambivalent. There was a strict limit, he believed, to the value of education for the masses:

The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur.

But Smith would likely have taken a different view had he lived in a technological age where the returns to investment in education are great but its cost exceeds the means of many students.

Monopoly:

Smith made numerous references to the harm inflicted on the public by monopolies, which he described as conspiracies against the public:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

Smith may have advocated no laws against monopoly, but he recognized them as an evil inherent in the system of trade regulation that he wished to see replaced by a competitive free market:

Monopoly of one kind or another, indeed, seems to be the sole engine of the mercantile system.

Recognizing the necessity of government, Smith recognized also the necessity of taxation and proposed principles of taxation that any small-government conservatives would approve. Certainly, he would have considered absurd, the notion that taxation is necessarily theft.

Why Western Elites Are Destroying Their Own People By Mass Immigration and Multiculturalism

The Saker has an article over at the Unz Review in which he argues that the ongoing racial and cultural genocide of the European peoples by mass immigration and multiculturalism is unstoppable, first, because of the decadence of the European people, and second, because of the malign manipulation of the Anglo-Zionist money power. 

This is a plausible but entirely mistaken analysis of what is happening to the European people both in Europe and in North America.

The elite are destroying their own people because the have no respect for them, or sense of kinship with them, and because it pays. This goes back to the beginning of the industrial revolution, when an urban proletariat, with no family connection to the landowning and capitalist class that dominated Parliament,* rapidly expanded and became a perpetual threat to the security of the state. Hence Disraeli’s recognition of the existence of “Two Nations” between whom, as a character in his novel "Sybil" (1945) remarked:

there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets. The rich and the poor.

The Great Chartist Meeting on Kennington Common, London in 1848
by William Edward Kilburn. Chartism was a movement for workers rights
and political representation.

In Disraeli’s time, free trade with input factor mobility, i.e., the import of cheap labor, or the export of capital and technology to cheap-labor areas whence products could be imported to the home market, was rarely if ever an option for the owners of capital, which meant that the industrial proletariat, though considered by the elite to be both dangerous and disgusting, had to be tolerated.

But input factor mobility is not only possible today, but the underlying reason for globalization. Thus there is a massive flow of cheap Third-World labor to the high-wage West, a flow of products of sweat-shop labor in the same direction, and a flow of capital and technology in the opposite direction, all of which negatively impacts wages in the West. Multiculturalism is the inevitable, and from the elite point of view, desirable consequence of the Third-World migrant flow. Desirable, that is, because a culturally divided proletariat is much less of a threat to the elite than a united nation.

But the Saker is right about two things. First that mass migration means the complete cultural and racial extinction of the European peoples. Second, that mass immigration will continue inexorable for the foreseeable future, the reason being that, for every worker in, say, England (pop. 53 million), there will certainly be many better qualified people (higher IQ, more energy, more ambition, little if any commitment to workers’ rights, etc.) in the Third World (pop. 5 billion plus), who are paid a fraction of what an English worker is paid. And among these potential migrants,  rickshaw drivers earning a dollar or two a day, for example, there will always be some ready, if they are permitted, to migrate to London to earn twenty or thirty dollars an hour driving a bus? And naturally, the elite welcomes such people. If the newcomers hassle the local girls, squeeze the natives out of decent housing, build mosques, etc., so what? What can the natives do about it? Nothing, as it now is clear. And if it means ever rising taxes to pay for new maternity hospitals, roads, schools, etc., that's very satisfactory: it keeps the construction industry prosperous and it allows a growing bureaucracy to soak up the educated middle class who might otherwise begin to think seriously about what is going on. And if the net result is that the native working class becomes an underclass — i.e., white trash despised by all and sundry, again, so what? There’s not a damn thing they can do about it: the supposedly left-wing workers parties being funded by the same plutocratic donors as the so-called conservative parties.

As for the Saker's assertion that the genocide of the Western nations is an Anglo-Zionist Money Power plot, that is just thoughtless conspiracy theory. One might as absurdly impute the Rothschild's or the Illuminati. Many members of the elite are Jews, for sure, but many are Anglos, and many more are Asians, Middle-Easterners or Africans. The issue is that genocide by immigration and multiculturalism pays. The ethnicity of the genocidal elite is irrelevant.

———
* An understanding of the change in relationship between the landowning classes in Britain, i.e., the elite, and the common folk that occurred with the industrial revolution was provided by Adam Smith in his treatise on economics. There he explained that, before the industrial revolution, there was close kinship between the upper and lower classes due to differential mortality between the rich and the poor. Overall, the population remained relatively constant, but because of high child mortality, the poor failed to fully reproduce themselves and the resulting population deficit was made up by the excess fertility of the rich. Thus, the rich were permanently downward mobile with two results. First, most of the rich had poor relatives for whom they had a personal sympathy, second the poor, many not so long descended from the rich, tended to adhere to the conservative values of their better off relatives. These factors made for a united nation. This unity fractured with the rise of the urban working class, which though living in seeming squalor and bestial ignorance, achieved well above replacement reproductive rates and which, as it swelled in number, adopted socialistic ideas. Thus, in purely hereditary terms, the industrial proletariat became much more distant from the elites than had been the rural poor of the pre-industrial era. In addition the political ambitions of the proletariat came to threaten the security of the elite, as they do to this day.

Related: 

CanSpeccy: The Ongoing Destruction of the European Nations Is No Mistake