Cooperative Capitalism by J.W. Smith

Smith, J.W., “Cooperative Capitalism: The Missing ‘Human Face’ of Economics,” Newsletter of the Concerned Philosophers for Peace, Vol. 26 (Spring – Summer 2006).

Thank you professor Martin for those kind words and thank you for the opportunity to speak to your fine audience. Good Afternoon ladies and gentlemen. It is indeed a pleasure to talk to you today. A thousand theorists can massage these concepts for 100 years. But if one is going to get anywhere one must come to some conclusions. Thus I am laying this out with firm conclusions. If you have a better plan philosophical plan for to bring peace and justice to this world, let me know when you write your book. This is written from a perspective of honest capitalism; though attaining all the goals of socialism, one could easily call it supercharged capitalism.

Ron Glossup, in your paper presentation you asked me what was economic democracy and what was cooperative capitalism? America gained only its political freedom from the revolutionary war; Britain’s warships denied Americans the right to control their own trade. It was winning the War of 1812 that gave us our economic freedom and economic freedom is the essence of economic democracy. Analyzing America’s creation of a bloc of wealthy nations (Western Europe, Japan, Taiwan, South Korea, etc.) to stop fast socialism was done through cooperative capitalism, not through Adam Smith free trade. It was through studying the imperial nations utilizing cooperative capitalism to build powerful blocs to protect their monopoly system which taught me the enormous powers of cooperative economics as opposed to classical and neo-liberal competitive economics.

Professor Nic Tideman: Property rights, as structured, is the problem. As structured, it is not only the foundation of capitalism it is the foundation of our monopoly structures. That we no longer have monopolies is not true; monopolies are structured right into exclusive title to nature’s wealth. All wealth is processed from humankind’s heritage, the natural wealth on or under land.

As our system of law slowly evolved from aristocracy, more and more people gained more and more rights; partly through gaining rights to those exclusive titles to human kind’s heritage, those natural resources. Each gain in rights was touted as full rights but this was not, and is not, true. Due to wealth stolen from the impoverished world, and its broad distribution through military and other unnecessary expenditures, this is hard to see.

We think we earned all our wealth. Not so! A large share was stolen. Eliminate that stolen wealth and the wasted expenditures through which it is distributed and it can be mathematically proven that, under these exclusive titles to all humankind’s heritage, only a tiny elite could ever own land or their proper share of the wealth produced. In short, our system of law is very close to aristocratic law from which it evolved.

We all know Henry George’s principles that no one produced land thus those exclusive titles should be restructured to conditional titles with society collecting the landrent. Immediately land prices drop to 0, land monopolies vanish, landowners retain title to lands upon which they are productively employed, all have rights to land, lost values are compensated for through bonds, all other taxes disappear, and economic efficiency increases equal to the invention of money. Note how, under conditional titles to land, use-values are distributed instantly and without cost.
Through elimination of monopolies we are taught are not there, economic waste is largely eliminated.

Technology is only a part of nature waiting to be discovered. Place patents in the public domain through society paying inventors and those huge monopolies disappear even as those inventors are far better paid and consumer prices, as measured by hours worked to purchase products, shrink.

Consumer prices drop and the gambling casinos called stock markets, where those technology monopoly profits are collected, shrink to a stable market for investments. Economic efficiency increases equal to the invention of the printing press as again massive waste is eliminated and use-values of mankind’s heritage are distributed at minimum cost.

Money is only a social tool waiting to be discovered; and it was discovered 5,000 years ago. Each region and each community having equal rights to money capital and to created money eliminates those monopolies. Economic efficiency increases equal to the invention of electricity and again massive waste is eliminated and use-values of mankind’s heritage are distributed at minimum cost. Those monopolies disappear even as rights of ownership, use rights, individualism, and competition are not only increased, they are maximized.

Walk into the heart of any city. Look up at the glass skyscrapers. Walk in and look at the names on the office doors. Once one understands how wealth is distributed through waste and unnecessary labor, one realizes that an efficient society does not need the entire building, or the industries which built and serviced it, or the industry that built and serviced all its furnishings.

Through a system of stolen wealth distributed through the waste of wars and monopolies, roughly half the labor, capital, and resources are wasted unnecessarily. It is through this system of wasted labor, capital and resources—not through a system of rights—that we have a good living.

We have all read the statistics on wealth distribution; the top 1% own more wealth than the bottom 90%. Eliminate the wasted labor, capital and resources through which this wealth is distributed and we stand exposed as nothing less than a duplication of the aristocratic system that supposedly disappeared centuries ago.

Eliminate military waste protecting these monopolies, and the waste of those monopolies themselves, and there are enough resources on this earth for all. Under cooperative capitalism poverty can be eliminated in 10 years and a quality life for all can be attained in 50 years. That is “Capitalism with a Human Face.” Under Cooperative Capitalism the average standard of living would rise rapidly even as the GNP and the hours worked per person would drop by possibly half. That drop in GNP and hours worked measures the previously wasted labor, capital and resources, as the money flowed through those monopolies to drop into the coffers of those who produce nothing.

I will now demonstrate that the power brokers know all this very well. Where does this violence throughout the world come from? Many reasons are cited but lets push the rhetoric aside and follow some hidden threads through history.

(1) You are in China building one model car an hour and are paid $1 an hour. I am in America building one model car an hour and am paid $10 an hour. You like and purchase my model cars and I like and purchase your model cars (which of course is world trade.) We will price these model cars at the labor cost of production which, in an efficient society, is the true cost of production. At $1 an hour, you must work ten hours to buy one of my $10 model cars. At $10 an hour, working those same 10 hours, I can buy 100 of your $1 model cars. The capital accumulation or consumption potential is not mathematical it is exponential.

If the pay differential between equally-productive labor is 5, PUSH BUTTONS: the difference in wealth accumulation potential is 25-to-1. If the pay differential is 10, the wealth accumulation advantage is 100-to-1. If the pay differential is 20, the wealth accumulation advantage is 400-to-1. If the pay differential is 40, roughly the differential between China and America, the wealth accumulation advantage is 1,600-to-1. Your good living and my good living are based upon the theft of the wealth of the impoverished world as per that formula. High pay divided by the low pay squared SHUT OFF.

Immediately I will be challenged that China is industrializing rapidly. The truth of the matter is that, if cooperative capitalism had been our philosophical underpinning instead of exclusive title to all humankind’s heritage and other forms of monopolization the entire world could have quickly industrialized generations ago. Adam Smith free-trade philosophy and structural adjustment policies openly lower wages for the weak and thus increase the take for the powerful. This simple 6th grade math exposes the fundamentals of plunder-by-trade and turns neo-liberal free trade economics to dust.

The potential wealth produced by technologies under truly free and honest trade is many times that of a monopolized economy. Powerful people have always known this and have utilized diplomatic warfare, economic warfare, financial warfare, covert warfare, and, when all that failed, they turned to open warfare to keep those monopolies in place and that wealth flowing to the imperial centers of capital. That same suppression of equal rights to the wealth-producing-process is on in full force today.

Powerful societies once plundered-by-raids. But 800 to 1,000 years ago they learned to plunder-by-trade. Within the walls of the walled cities of Europe during the Middle Ages, also called the Free Cities of Europe, there were no resources. And remember, all wealth is processed from resources. When the serfs came to town and observed the looms and fulling vats and other primitive industrial capital that produced cloth, leather, and other consumer goods, they said, “Why we can do that.” Back to their villages they went to produce their own cloth, leather, etc.

Now what happens to this city if it does not challenge the villagers? Down the tube they go. That is their living. Here is a quote is right out of the classics on the Middle Ages: “The struggle against rural trading and against rural handicrafts lasted at least seven or eight hundred years. All through the 14th century regular armed expeditions were sent out against the villages and looms and fulling vats were broken or carried away.” Ladies and gentlemen: That battle over who will control resources, control the wealth-producing-process, and thus who ends up with the wealth produced is the violence and wars ongoing throughout the world today.

Those city states became nations and a share of the natural resources it took to be a powerful and wealthy nation still lay beyond their borders. Thus the empires of old, there were only seven of them, rushed across the world to claim every square inch of the earth. That there can be more than one empire is a contradiction in terms. The most powerful always set the rules of unequal trade. So those battles over the control of resources and the wealth-producing-process continued.

In World Wars I and II those empires broke themselves battling over who sets the rules of unequal trade. They now no longer had the wealth to maintain control and the whole world started breaking free. Africa was planning on a United States of Africa. If that continent ever organized as one nation they would in short order be the wealthiest and most powerful nation on earth. The world’s darker races would now dominate history. Equally important, they would now have equal power to write history. They who write history control history. What I am telling here are only corrections of falsifications of history whose purpose was to control history.

That the world broke free and there are no empires today is pure fiction. That struggle over resources and the wealth-producing-process continues to this day; witness the current effort to gain control of what was admittedly a brutal Iraq which was only the initial move to gain firm control of the oil of the Middle East. Trying to figure out the reason for our massive covert actions kept secret from our citizens was once my passion. I finally found that answer. The reason we do not see it is that we are at the heart of this empire and we live within its created beliefs of enemies. Created beliefs in enemies—that is how the masses of every society are controlled.

Americans are not aware of it, but over the past 50 years we have covertly destroyed countries breaking free, whose only threats were that they were establishing governments more democratic than ours. This would cause the loss of control of those resources, loss of control of the wealth-producing-process, and would expose and destroy the current monopoly structure.
Notice how neatly the inconvenient history of America’s destabilization of emerging free nations and the reality that we have a monopolized economy are buried through the false writings of history. Today’s professors are not to blame. This system of control through control of belief systems of the masses has been in place for centuries. The academic and financial rewards for supporting these belief systems are high and the penalties for standing against them are normally devastating.

If you challenged the system 300 years ago, off came your head. Today is not that much different. If you in academia were to stand up and seriously challenge the system you would be immediately ostracized, you would get no promotions, your research projects would not be funded, and you may lose your job. So essentially your head still comes off today.

Each new crop of students trust what they are taught and they go on to teach the next crop of trusting students. Thus what I have laid out, no matter how simple and solidly cited, is largely unknown. How does one get better citations than 6th grade math, the classics on the Middle Ages, America’s founding fathers, and all this evident in today’s fast moving current events?

That the soft sciences teach beliefs protecting wealth and power, as opposed to an open discussion of truth, is easy to prove. America’s founding fathers rejected Britain’s attempt to impose Adam Smith free trade philosophy upon America. Friedrich List came to America, became an American citizen, and helped educate Americans on how to protect their industries and markets. He then returned to Germany to write his classic, The National System of Political Economy.
Every nation which successfully developed did so under the principles of Friedrich List. None, zero, zilch, not one, ever developed under Adam Smith monopoly rules hiding under the title of free trade. Yet, once the U.S. was industrialized, and as the old imperial powers collapsed, America immediately replaced Britain as the imperial power imposing Adam Smith fictitious free trade upon the world.

This reversal of reality can only have been accomplished through the power structure having firm control of what was taught in the university system. When America first formed, academia can only have taught the positives of Friedrich List and that Adam Smith free trade was a system of theft of weak nation’s wealth. For a century or so we mouthed support for sister colonies even as behind the scenes we backed imperialism. Then, after WWII, reversal of reality was imposed full bore by academia and full faith in Adam Smith free trade, as far away from reality as it is, is solidly in place today. We are all unwittingly, until we expose these simple truths, a part of that system imposing those fictitious beliefs.

That the imposed beliefs of society protecting a power structure and their unearned wealth can be so far from reality is a matter of deep concern; not only for the massive violence and oppression it imposes upon weak people but for its potential of mankind destroying itself. Twice before, each over a millennium ago, societies were poised for an industrial revolution. I have not researched what derailed the imminent Industrial Revolution in China, but I have looked into what derailed it in our culture. It was through imposing belief systems protecting a power structure, just as I outlined is ongoing today.

Sixteen hundred years ago, all around the Mediterranean, societies were well developed with substantial educated populations and with large libraries and cultural centers. In short, they were intellectually and culturally advanced much as we are today. Under the alliance between the Roman Empire and the church in 324 AD, all other religions and the empire’s educated came under assault. Over a period of 350 years all the libraries within the Roman Empire were burned, education was taboo, Hellenic culture centers were destroyed and their priests and educated were assassinated or forced underground.
Those 350 years of assassination and suppression of the educated classes dropped Western Society into the Dark Ages. They no longer had the educated people necessary to run their economy.

In the Library of Alexandria was a functioning steam engine. An artifact dated to those times was deduced as could only have been a battery. This means that, except for those suppressions of other people’s rights, the phones, trains, cars, planes, and TV sets of today could have been invented and in use 1,200 to 1,500 years. Run an Internet search using the keywords “libraries, burned, Christian” and you can read that story.

The irrational belief system we function under today is not that much different than the belief system which dropped us into the Dark Ages 1,600 years ago. The 40-year nuclear Cold War standoff could easily have destroyed the earth. A Pentagon study just released concludes that a global warming of six degrees is imminent and could make much of the earth uninhabitable.

Most will say there is no indication of suppression of the educated today. What about this wasteful and destructive monopoly system being touted as efficient and peaceful? What about the suppression of nations breaking free being recorded in history as a suppression of dictators and us as the bearers of the flag of peace, freedom, justice, rights, and majority rule?

The successful breakup of Yugoslavia and the current assault on Iraq under the same cover stories are only doing openly under a cover story what was done covertly for 50 years. Worldwide, between 12 and 15 million were killed and tens of millions more died due to the destabilization of their economies. Plain and simple, we are living under an imposed belief system of enemies which suppresses freedom and rights even as we tell each other how good we are and how we are trying to help other poor souls; just as that alliance of church and state did when it destroyed its own culture 1,600 years ago.

Eliminate the waste of battling over the earth’s resources and there is enough on this earth for all. It is time we shared with the world’s impoverished. After all, all wealth is processed from nature’s wealth and most those resources lie within their borders. We are wasting the very wealth that should be producing a quality lifestyle for both those impoverished people and ourselves.

Ladies and Gentlemen of academia and the media look at burden on your shoulders today. Either we break out from under these imposed beliefs protecting a power structure and their stolen wealth or we are riding a run-a-way train to disaster.

Those of you struggling to get reality out there this is your moment in history. The belief system put together to justify control of Iraq’s resources is in tatters. Where for 50 years good books, in the soft sciences, were published only on the fringes and sold only a few, today, quality books, in the soft sciences are published by the mainstream press, sell millions of copies, and there are so many good titles I quit trying to keep up.

For 50 years the mainstream media and the university system faithfully blanketed society with a belief system of enemies. This hid the real purposes of violence imposed upon the world by the very nations putting out the propaganda; suppressing those nations attempting to gain control of their resources and thus control of their destiny. Now there is substantial reality as to those depredations right on the evening news. Dish TV has three channels of full-bore reality alternative news interviewing people by the dozens who lay out reality just as I am laying it out to you today.

People are good. If they knew, they would never tolerate oppressing weak people. With your help, the reality that we are the suppressors of rights, not the carriers of rights, should burst upon them. Ladies and gentlemen. You have the opportunity to go down in history as the generation that brought peace and freedom to this earth with a quality life for all. Lets do it.

With a Ph.D. in political economics, J.W. Smith has written broadly and lectured widely at conferences around the world. He is founder and director of the Institute for Economic Democracy and author of Economic Democracy; The World’s Wasted Wealth; and Co-operative Capitalism. This keynote speech was delivered at the Seventh International Conference of the International Philosophers for Peace (IPPNO), Radford University, Virginia.

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