Creditism - Global Credit Economy - 2004

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Gregory T. Morales

Creditism

the

Global Creditist Economy

A New Critical Theory

Fall 2003

First Present

Global Studies Association annual Conference

Spring 2004

-

American Sociological Association annual Conference

Fall 2004

-

California Sociological Association annual ConferenceWinter 2004

San Diego State University

1256 Sparrow Street

San Diego California 92114

United States of America

619-300-6570


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Gregory T. Morales Global Creditist Economy

Introduction

The dangers of credit use and expansion have been suggested through the works of

authors and playwrights for thousands of years. In sources ranging from the Christian Bible

to more recent works such as David Harveys The New Imperialism,1 these warnings

concerning credit have been clearly stated. Countries participating in the global economy,

even those with comparative skills like technologies and natural endowments, enjoy

different levels of access to world credit markets. These uneven conditions have been

brought about by a new imperialist credit culture that has taken root and is hidden in the

imperfections of the once powerful capitalist economic system. In this work, the source of

control will be referred to as the International Credit Consortium (ICC); by this

objectifying of both sources of credit investment and objectifying of labor, the ICC avoids

the risks of association with the Moral Hazard2of involving labor markets of periphery

and semi-periphery economies.

Economic System Behind a Veil of International Cooperation

The World Trade Organization (WTO) appears to support a general disassociation

of human/world cultural responsibilities for those countries participating in the floating

1 Harvey, The New Imperialism.2 The idea of the moral hazard is here used as associated with exploitation of labor as investigated by

Adorno and Horkheimer,Dialectic of Enlightenment. In this text, the objectification of the worker is said to

remove levels of social responsibility from the states thus removing the moral hazard from the state

apparatus as well as from those who have control over the means of production. See Notes and Drafts

and QUAND-MEME (Adorno and Horkheimer, 217-218). This term is also used in other works. One

example is found in Torres where he writes, El Estado no es para el hombre sino el Hombre para el

Estado (117).

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currency markets or the Creditist3economy. The population of each country is the

responsibility of its domestic governmental systems and not the ICC. Through the use of

direct foreign investment gaining access and control over localized labor markets and

resources, profits are gathered and centralized out of country to be used by multinational

corporations thus removing power and economic influences from local governments and

populations. The consumer market of the United States, the core economy4 appears to be

predominantly based upon consumption value and not labor value of the individuals in this

market place. A labor source under this condition neither serves only as a source of credit

value and collects real values of capital nor contributes to production commodity

production at any level.5

The Shifting of Economic Paradigms from Capitalism to Creditism

According to Thomas Kuhn, the shift from one paradigm to another is usually quite

sudden and disruptive. It seems that only through the use of conditional control over global

3 A Creditist Economy is realized when greater than 50% of positive economic indicators (or negative as the

case may soon be) are derived from credit, debt, applied interest, the multiplier affects of debt/credit, or

other loan/usury vehicles.4 Core, periphery and semi-periphery economies are models described in Wallerstein, The Capitalist World-

Economy.55

This theory is investigated by almost every non-North American author writing on the topic of labor

markets economy, wage value economics, and consumerism. (See Sweezy, chapter 9 Crisesassociated

withthefallingtendencyof the rate of profit.) This leads into the gathering increasing levels of profit

directly from labor befit of wages, or as Harvey puts it in The Limits to Capital, Chapter 2, part II, TheReduction of Skilled to Simple Labor, the simplest form of labor is that which does not involve labor but

that labor consumes and gathers debt. In the generally accepted condition of capitalism as denoted inMarxs Capital, it is imperative that labor exchange earned wage income for commodities produced in

order for capitalism to function. It is the loss of earned wage income and the accumulations of wealth into

the hands that control the means of production that mainly contributes to the trendy of profitability to

decline. Credit allows for shortfalls in earned wage incomes as well as removes the limit of value

accumulation. So long as greater amounts of credit are extended to labor and the means of measuring and

maintaining the associative values of credit are accumulated by the wealthy, the credit market economy

Creditism will continue to function.

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monetary systems and the eventual creation of a seamless world banking system did the

last economic paradigm shift result only in a global economic depression leading to World

War II and not anarchy. That such early economists and humanists as Marx, Henry James,

and C. H. Douglas realized the dangers inherent to the capitalist economy is testimony to

their brilliance; that we persist in attempting to redefine the terms and metaphors of long

defunct capitalist economic systems is not brilliant.6 There is a general tendency by state

structures to maintain the metaphors used in old paradigms. This creates a level of stability

and helps to control and to direct the workings of governmental systems and control over

economies.

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The Formula of Capitalism as Compared to the Formula for Creditism

Generally, capitalism is defined as an economy based upon the principle of a

transition of money into a commodity and back into money. More exact Marxist details

of the original capitalism can be found in Marx, Capital,Volume1.

6 I present the case in this work that the early theory of what I call Creditism (I have attempted to

copyright this term) is a new critical theory. Some mistakes were made and errors discovered as well.

During research of the topics access to credit, extension of credit, and use of credit, I found two, little

known articles that included the term Creditism. I later discovered (after years of effort and search) thatD.H. Douglas had, almost one hundred years earlier, coined the term Creditism. In his booksEconomic

Democracy, Credit Power and Democracy; The Control and Distribution of Production; Social Credit;

Warning Democracy; and The Monopoly of Credit(to name a few), a general understanding of how credit

had effected changes over the capitalist economy was outlined. What I had thought to be my lone

realization had already appeared and changed the very nature of the capitalist system itself. Moreover, over

the last 8 years, I stood to ridicule as I presented at conferences and conversations what I was told was acrack-pot idea that had appeared to be very much like the theories included in the works of Douglas and

Marx and the efforts of Henry James. Like McCarthyism in the United States of America, it is imperative(as noted in the works of Torres, Marx, Sweezy, Douglas, and Harvey) that a near fascist state need be put

in place in order to maintain control over the resulting decay caused by the two main crises of a capital

economy: exchange values and the tendency of profitability to decline over time.77

The methods by which powerful groups re-present metaphors have been examined and explained in the

lectures of Stuart Hall. These methods are not the main topic of this paper; interested readers may refer

directly to Hall.

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LP

M----C ----------- P ----------- C -----------M

MP

This is an extended formula for capitalism. M (money) is used to obtain C (commodity)

through LP (labor power) and MP (manufacturing power); this becomes P (product), and C

(products bought/consumed) becomes M (money). The full value of LP and MP added to

C is realized at the last stage as profit.

On the other hand, the formula for Creditism might be conceived as this:8

ALV

Cr------Cr*C ---------Cr*C -------- Cr *V ----- Cr *DI ------ Cr *VA

AMP

Where:

Cr = Credit; the power to produce credit does not require labor, raw materials, nor

manufacturing.

Cr*C = Credit creation or the creation of that idea labeled credit.

Cr*CALV and Cr*AMP = Credit created aesthetic labor value and credit created aesthetic

manufacturing value, points at which credit is used by both members the bourgeoisie,

proletariats and lumpinproletariats.9This gives credit created a strong aesthetic value

through association with the once strong reserve worth of manufacturing and labor.

8 Morales, Our Null Society: Creditism Theoretical Economic Model.

9 Bourgeoisie, proletariats, and lumpinproletariats are used by Marx in his work, Capital. The

bourgeoisie are those people who have control over the means of production, the proletariats are those

people who labor, and the lumpinporletariats are those people who makeup the labor reserve.

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Cr*V = Credit created vehicle is seen as a unit which is free from the ties of social

responsibility and cultural norms. This unit of indebtedness can be traded and represents

labors potential and manufacturings potential, not only at the time of creation but well

into the future potential of labor wedge earning potentials and manufacturing profit

potentials. Indentured servants, sharecroppers, peons, etc. equal credit slavery.

Cr *DI = Credit created debt interest. At this point, the associative values (Cr*CALV and

Cr*Amp) as represented in Cr*V is added aesthetic value of interest rates as they are

attached to the principal amount of the credit vehicle. This creates yet another multiplier

effect that is in turn attached to the overall aesthetic value of the credit vehicle. Estimation

of this value it typically calculated by use of credit scores, credit index, and insurance

information from data tables on both members of the labor and manufacturing sectors. This

is commonly referred to as moral hazard.

Cr *VA = Credit value accumulation. Unlike real wealth (capital, portable property) that

has a real value attached (before the currencies were taken the off gold/silver standards),

credit value creation and accumulations are limitless. With only aesthetic and associative

values attached to Cr*VA, the amount of wealth accumulation is limitless. The extent of

polarization and societal stresses placed upon our world society/societies due to this

limitless amount of wealth accumulation (greed) is also limitless. Only labor wage earnings

and manufacturing values added potential are limited, and credit economic expansion is

based upon credit creation formula.

How theLimits to CapitalHave Been Surpassed

It appears that there was something beyond theLimits to Capitaloperating within

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our national economic system. Where money once had a hard value, a direct link to a

prescribed amount of a commodity such as gold or silver in many modern western

economic systems, today there seems to be no end to the amount of wealth a country or

individual could amass. As the theory of continually expanding credit market had already

been presented,10 the methods used to control and re-present credit economies had to be

discovered and applied to the Creditist economic theory. That the methods of convincing

the masses that an economic system based only upon associative values of representation

of debt had worked was obvious. Everyone seemed to understand that the paper money of

the United State represented nothing more than government debt and that our stock markets

and bond markets were simply representations of debt, but then why had the economy not

realized the negative aspects of this hazardous condition? The public seemed to know all

this, and the wonder was that the populations suffering under these floating economies had

not yet lost trust in their fictitious economy, and this is why.

First, it is important to understand that value was not always represented by

numbers in a bank account or checkbook. In the not too distant past, either people would

carry all the money they had on their person, or if they happened to have ownership of

property, they sometimes stored the excess wealth somewhere about that property in the

form of portable property such as gold, silver, copper or some other indicator of value

accepted as such by their society. As the amount of gold or silver or whatever may be the

coin of the realm had an absolute limit (real items being of a finite nature), money was

almost never accumulated in one place very long, and unless lost, it was usually

redistributed over time. The economy was usually maintained or directed as part of a state

governmental system, and the state created the coin and a generally restrictive economy

10 Morales,Creditism Global Credit Economy.

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existed.

With the appearance of an ever more independent merchant class, coins from many

different state controlled economic systems were exchanged and valued by individuals, and

eventually trade/artist/merchant guilds eventually formed into banking systems. In

Alexandre Dumas The Count of Monte Cristo, an example of such an early banking

system can be seen in operation. Edmond Dantes is able to move across countries easily

because of letters of credit with the restriction that each location at which the letters

were exchanged for coin of the realm thus enabling the transaction exacted fee or

percentage. In the case of moving large fortunes across open water or lawless lands, the

predictable loss of a certain percentage of the value of the assets was much preferable than

the risks associated with transporting a few hundred pounds of gold and silver, paying for

guards, and perhaps risking a total loss at sea.

The shift important in the case of the credit economy in the United States of

America is the formations of the National Banking System. The NationalBankAct (ch. 58,

12 Stat. 665, February 25, 1863) was the beginning of the National Banking System in the

United States of America, and after that time, paper money of a static value was available

to the public. Eventually the banking system would be come what we see today, a source of

productivity expansion based upon interest rates, debt, and the likelihood of debtors

paying off the loan and not defaulting.11

The most noteworthy change in the way our national economy is valued and

gauged in the last thirty years was the shift which took place in the early 1990s. As noted in

Dr. Kepplers TheFictitious Economy, the formula gauging productivity and economic

growth in the United States changed in such as way as to include debts, interest on debts,

11 Outlined in Vilar.

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and profits made from trading and exchanging debt indicators (called Credit Vehicles

later in this paper.) Before the shift from a formula producing a number representing Gross

National Product (GNP) to a formula producing a number representing Gross Domestic

Product, slowing rates of consumption increased, and the oppressive reaction to

governmental revenue streams derived from taxation on earned wage incomes threatened to

pull the country from a condition of stagflation into depression. I will include the data

supporting this point,12 but the gist of it is that the formula used to measure economic

12 http://www.socialstudieshelp.com/Eco_indicators.htmprovides an explanation of this point.

The terms and identity of capital are re-presented in shift from Gross National Product (GNP) to

Gross Domestic Product (GDP).The difference between C + G + I + X = GNP and C + G + I +F = GDP is

not only that in GDP, the formula includes function F in place of function X but also what it includes as

part of F which was not a necessary part of X. At about the same time, functions of the consumer price

index (CPI) served as nearly a fully compensatory part of GNP when GNP was the norm of measuring

economic expansion or contraction inside the mainstream economic system of the United States ofAmerica. In the case of my application of these two formul, it is noted that X is physical economic

expansion as seen in modern capitalism and F is the associative economic expansion as realized by

extension of credit, use of credit and any and all gains, interest, and penitential associated with the past,

present, or future use of said credit. In the later case F, the CPI is factored in so that the inflationary

tendencies of credit issuance and use are removed (the economically negative aspects of credit use) so that

only the positive contributions of credit market expansion can be realized in the formula for GDP.

As CPI is factored from the use and inclusion of credit vehicles and all associated gains realized

from the use of credit (gains, interest and penitential associated with the past, present, or future use of said

credit or CC Credit Contributors), these second producers of profit (CC) appear as and solely positive

additions of the economy in which these false credit Conditions appear. (See Keppler).

Economists have devised numerous statistics designed to ascertain the overall health of oureconomy. Historically, the most quoted measure of economic activity is what is called Gross National

Product (GNP). The Gross National Product (GNP) is a nations total output of goods and services

produced by a country in one year. In obtaining the value of the GNP, only the final value of a product is

counted (e.g., homes but not the construction materials they were built with). The four major components

of GNP are consumer purchases (C), government spending (G), private investment (I), and exports (X). The

formula is thus: C + G + I + X = GNP.

The Gross Domestic Product (GDP) is the monetary value of all goods and services performed in anation in one year. GDP measures the economic strength of a nation. It is computed by multiplying the

quantity of all goods and services by their price. When this is done for all three categories, consumer

spending (C), government spending (G), and investments (I), the results are added to give the GDP: C + G

+ I +F = GDP.

In the last several years, GDP has gained favor as a more accurate barometer of the state of the

economy. With growing globalization, our economy is increasingly reliant on goods we produce beyondour national borders. While GNP does not calculate this, GDP does. Though the GDP and GNP are the

most widely used system of determining a nations economic performance, they are certainly not perfect.There are certain factors within the economy that keep the GDP and GNP from being the most reliable

measurements. The first factors are reporting delays. Because the reporting process of a nations monetary

flow is so difficult to document, GDP estimates are made quarterly. The figures are then revised for months

after that so it takes a while to discover how the economy actually performed. Thus, there is a disparity

between the actual GDP and the reported GDP.

The second factor is the composition of output. Generally, increases in the GDP insinuate that

people had jobs and earned an income. However, the GDP alone does not tell the composition of the output.

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growth pre-1991 GNP did not include secondary revenues streams from credit interest

whereas the formula used to measure economic expansion in 1991 GDP includes such

sources.

The GNP to GDP shift, coupled with the huge government spending increases of

the last six years, eventually contributed to the multiplier effect.13 We achieved the current

condition of creating an economic environment that is apparently greater than fifty percent

derived from various forms of debt or the economic arbitrage14between competing

An increase in a certain amount of dollars may not mean that there was more output by laborers but that the

government undertook production of, let us say, a certain weapon. A decline in GDP implies that the

country is not doing as well as it was before. Yet this does not always hold true because the decline could

indicate a positive innovation such as a reduction in the number of car batteries produced because a new

one entered the market that lasts for twice as long.

The third factor is quality of life. The GDP, while it measures the production of a nation, has little

to say about the state in which the citizens are living. For example, a new housing project may be built, butif its construction or location interferes with the surrounding wildlife, then the value of the homes could be

viewed differently.

The fourth factor is the exclusion of non-market activities. Non-market activities are those

activities that do not take place in the market, and most of them are not accounted for because of

measurement problems. Such activities include services people provide for themselves like home

maintenance and the services provided by homemakers.

The fifth and final factor encompasses illegal activities. The GDP also excludes many goods and

services because they are illicit. These include gambling, smuggling, prostitution, drugs, and counterfeiting.

These activities as well as some legal ones that are not disclosed because of tax reasons, are part of what is

called the underground economy.

In an effort to remove inflation from price measurements, economists use price indexes which arestatistical series to measure changes in prices over time. To construct a price index, a base year to compare

all others to is chosen. Next, a marketbasketof goods is selected. These goods are representative of the

purchases to be made over time. The number of goods in the basket must remain fixed after the selection is

made and thus captures the overall trend in prices. Lastly, the price of each item in the market basket is

recorded and then totaled. The final total is representative of the market basket in the base year and is

valued at 100%. This way allows us to determine an inflation rate.

13 The multiplier effect is a concept in economics that small changes in initial spending (such as

consumption, investments, government spending, or net exports) could amount to a huge change in the

Gross Domestic Product. I believe that the multiplier effect is most noticeable when looking at debt,

representations of debt, and interest applied to that debt (Morales, CreditistEconomy). Taking the simple

idea of an associative or aesthetic value, this idea of credit can be extended to all aspects and levels of

economic systems regardless of trade barriers or even the ability of the creditor to return the principleamount to the lenders. Therefore, we have the multiplier effect on the creation of the idea credit along

with association with the creditor (user when production consumption or labor value is give to the ideacredit). The interest to be paid is projected over time, the associative long term and short term trading

value of the credit association (Morales, GlobalCreditEconomy), and arbitrage (Morales, Global

Arbitrage) between the real value of the credit extended and the hard values of the thing credit was used to

accumulate and the believed value of the extended credit, the hard value of items, and the end value amount

added to the credit economic association. Creating Creditism (Morales) predicts the end (as per Marx,

James, and Douglas) of the old capitalist system as the limits and space of capital are realized (see Harvey).14 Economic arbitrage is the subject of Global Arbitrage Somewhere between Fact and Fiction

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economic systems at the national levels. The calculated growth is not from credit use

associated with the spending of earned wages, incomes, or production of products but

simply from the issuance of new debt, interest, and other values derived either directly or

indirectly from the debt that makes up the shrinking minority of world economic markets.

There has been a change in the ideal capitalist economy. The world does not have

a capitalist economy unless one considers the small isolated economies of the less

developed free countries of the world. If there is to be a change, it will only be brought

about when the proletariat refuses to gather and to use debt-vehicles and brings down the

Creditist economic system that has enslaved us all. Creditism has created an economic

environment in which even the most powerful countries are in debt, and their worldwide

actions are dictated to them by the greed for profits and the desire for credit-value

accumulation.

The communist models have never been given a chance. In all the international

communist societies that were attempted, little men/women have put themselves above the

desire of the masses and placed themselves in power thus leading to life styles separated

from the masses. This has proven to be a style of single-minded self-serving ideology that

has led only to failure and violence. We must accept that due to the greed of those who

come to power, each system of government is doomed to corruption from inside. Another

reason is the economic isolation of even small counties that try to create a true democracy;

in a real democracy, there is no room for greed or the desire for more (anything) than those

around who are presumed to be our equals.

(Morales). Competing and conflicting credit values associated with the electronic transfers involved in

floating currency exchanges often creates small anomalies in values of exchanges. These values of

exchange disparities are exploited by the world banks electronic credit exchanges clearing houses in

nanosecond speed thus creating over the course of a day millions of dollars (if we use USD as a reference)

of credit value accumulations.

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The Creditist economy is powerful because it requires only the ideal of money

(credit-extension); this ideal of money (credit) requires no labor to produce, no physical

resources for its creation, only a population willing to put itself into ever-greater amounts

of debt. China is the only real large economy left, an economy with a real value and a

currency with a real value (not floated like the rest of the large counties of the world).

Capital Economy versus Credit Economy

The Credit Markets

Trade models point to a trend biased towards a kind of general asymmetry in modes

of production wherein a specialization in these modes of production that dictate whether a

country is to be considered wealthy or not wealthy. In the past, the latter (wealthy elites)

were believed to be concentrating their manufacturing production capacities on products

involving high degrees of precision (scientific application); the non-wealthy focused the

limited powers of production on relatively labor intensive production models or in products

of lower or intermediate scientific (technical) origin. The preservation of the ideal (that this

asymmetry is a static function) is not only desirable but also absolutely necessary so that

differences in labor/consumer markets endowments will be attributed to the general

developmental markets stage of the periphery and semi-periphery economic systems of the

countries hosting the oppressed labor force if the idea of a capitalist economic system is in

place.15 If the nature of production were to be related to the innovations in the world credit

markets over the last 40 years, the accumulation in credit debt of the consumer in what was

once thought of as the core economy (the United States) would lose all isolative value; this

15 The capitalist economic system is an all-inclusive version of Marxs model of the capitalist world-

economy described in Lukacs.

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would effect a correction to real value in what is actually the debt credit maintenance

system of the United States and other countries fettered with floating currencies (currencies

with values set by comparative action control by the ICC).

Only in the periphery and semi-periphery economic systems is there still a dynamic

economic system whereby compared to the scale of the overall gross domestic product of

those periphery and semi-periphery economic systems, could an economic system even

remotely comparable to what is popularly thought of as a capitalist system be found. The

richness of these countries lies not in their access to credit value but in their very control

over the labor aspect of the means of production. This control over the external control by

the ICC is the largest concern and danger to the continued expansion and influence of the

ICC.

These factors of the world economic system cannot be denied if we still hold

onto the importance of a true global economy as an absolute necessity. These factors,

instead, shall be explored in an abstract form of absolute credit value; the contribution of

the credit value associated with a labor/economic system of Wallersteins model of core,

semi-periphery, and periphery economies; and the aspects of market functions as they relate

to inter-country production/consumption/compensation and accumulation/access to credit

debt. Most particularly, I mean to show that world credit markets and the ICC control and

exude more influence over the world economy than all technologies, raw material wealth,

access to labor, and production combined. Even if all variables were identical within,

without, and between countries and economies and an inertial scale of economic worth

were not absent, the moral hazard derived from the very means of collecting wealth (credit

value) from the maintenance of credit debt would if realized by the general populations

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of the world cause the collapse of the international credit markets. The resultant would be

the ICCs being held responsible for the theft of surplus labor value through the application

of a system of indentured servitude more acute than debt-peonage, more cruel than share

cropping, and more dehumanizing and just as real as black slavery as it existed for three

hundred years in the USA.

The level of influence and control maintained by the ICC can be seen more readily

in the use of cost of credit contract and the forced cooperation between independent

countries to submit to the enforcement (and punishments) for those seeking to free

themselves from the yoke of credit oppression. The only differences in the form of credit

management of countries are facilitated in the form of domestic institutions by which the

ICC manifests itself and the method by which contract enforcement is enacted.

Credit The Sword of Damocles

Over all, oppressed populations have a higher interest rate or rationed credit, and

this may lead to either a full rebellion of labor (those not part of the ICC or the world credit

markets) or the complete and total submission of all labor/consumer populations whereby

they become less than consumer cows being milked for their credit maintenance value by

those who control world credit markets. Within this atmosphere of non-comparative

advantage in means of production and the processes of normal capitalist economic means,

the basic idea of capital investment, commodity cost, labor, and transport cost are invalid.

What is more desirable is the ability of the ICC to make profit from no capital risk, paying

nothing for commodities used, little to nothing for labor, and having all costs associated

with the transportation of consumer goods paid for in advance by use of a credit vehicle by

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the consumer.

In this new world credit economy, where the only motive for production is greed

for profit, not consumer demand or need for product, it is now necessary only to create an

ideal value associated with the item. In addition, the idea of obtaining these items gives

the credit consumer an instant cultural worth as each item (product) has an associated

cultural value that is assured by thousands upon thousands of images presented in

advertising media. It is at this point that the old idea of the comparative advantage is mute;

the processed goods, created by an ever grow questing for profit (not only credit value),

requires little, if any, working capital.

The control of the credit markets on consumer/merchandise exchange has been

only relatively explored, and it focused mainly on the antiquated ideas such as supply

and demand on conflict theory as it applies to labor and those controlling the means of

production. These empirical abstract studies have not realized the absolute worthless

value of our paper economy, the ability of credit is being the enabling force behind not

only production but also labor payment and consumer forces as well.

The dream of a real American (whatever that means) is Antaean. It is as if

there were some inward call to embrace capitalism at all cost, risking everything by

investing all his capital in a quest to produce an item of higher quality and great

functionality in order to gain the trust of the American consumer and thereby making a

profit by gathering the reserve labor value only theatrically (as if it were all an just a act

in the play Capitalist Economy) represented in the coin of the realm (paper money). This

dream is no longer considered a feasible business model. How is this not a viable

business model? Construct a business model based upon a product of higher quality and

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greater functionality; invest all your capital with only those two ideas included in your

business model.

(A) That a better product may be produced, this product may function at a

higher capacity than others of its type, but without this products being

included in the pantheon of product/image created cultural value (a form of

mimesis much like that explained in Marcuses One Dimensional Man),

profitability will only be driven by the consumers willingness to risk

association with an item of no implied cultural value. It is the branding and

associative qualities of the products name recognition which adds the

greatest value to a product in todays western marketplace.

(B) That the consumer, being a creature now programmed and controlled

by the desire to become part of a culture which rejects him (the idea of a

self or a cultural identity other than that created instantly by association

with products obtained) will only, through accidental purchase or perhaps

some vaguely remembered memory of independent thought, spend part of

his earned credit value on an item whose only value is functional and only

satisfaction gained from a personal (individual) aesthetic interpretation of

its form. The identity of the product and the success of item branding are of

more value in western market places than the inherent identity value of the

consumer.

No, in todays credit economy, success is directly linked to comparative advantages

of credit application and the access/association to a credit value. This is a dynamic force

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now emphasized in the ICC and the world industrial financial economy. This can be seen in

relating Wallersteins periphery and semi-periphery economic models to the access and

allocation of credit investment versus capital investment in non-core economy countries.

Two differences in comparative advantage as represented in the business models as

shown on page 16 are: (1) the processed goods requiring more working capital, marketing

costs, or trade finance. Additionally (2) that we presume that more sophisticated

manufactured finished products require more credit to cover selling and distribution costs

than primary or intermediate products.

In general, the impact of financial markets on merchandise trade is a relatively

unexplored area of trade theory. In the empirical literature on East Asian success

stories, the link between dynamic comparative advantage and easier financial access

has often been emphasized. In the related literature on trade and industrial policy, the

use in those countries of selective allocation of credit and loan guaranteed to achieve

targets of trade and industrial restructuring has been cited as more effective than the

more standard practice of trade restrictions and exchange control. We do not intend to

take up many of the relevant issues here; our limited goal is to attempt an integration of

one part of traditional trade theory with the growing theoretical literature on credit

markets under imperfect information.

The following section will focus upon basic economic models of the relationship

between differential cost (or availability) of credit and comparative advantage, but even

credit based economic systems differ (proportionally with recognition of credit condition)

with respect to the underlying source of credit market imperfection along the lines noted in

this section. In the next, we have a model of international borrowing with potential

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repudiation and sovereign immunity.

How the Dual Economies of Creditism and Capitalism Exist

It is not how these two seemingly adverse economic systems can exist

simultaneously but that they must exist together in order to ensure the continued expansion

of the world economy as it is controlled by the ICC. In the late 1960s, it became painfully

obvious that the system known as capitalism was falling short of its promises of being

able to include all cultures and assimilate all other functioning in place economic systems

and forms. It was at this time that the necessity of constructing a system of economy able to

encompass diverse cultural, societal, and economic values under a single world super-

system that would be accepted, at least in form, by the worlds population.

As a function of economy, the deception of the economist was easy to accomplish.

It is not the main focus of economist to discover where the ideal values of GPD, national

debt, profit, margin, cost, loss come from but to use formul to prove that the values the

data have are useful and to apply this obtained information to project future incomes and

expenditures.

The capitalist ideal was another matter and somewhat more difficult to deal with.

Three hundred years of depending on the idea of a capitalist economys being able to serve

all members of a society were deeply entrenched in not only the minds but in the culture of

the United States of America. The American wealthy elites, having majority control over

the world credit banking systems as well as control over the means of production, and

realizing the limitations and hazards of capitalism to a world economy and a world

population, enacted a means of investment which assured not only the minimization of all

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risks associated with the methods of productions (by removing real capital from the

equation). Also, by removing attached representations of labour reserve value from paper

currency (floating the currency), a way to replace the failing system of capitalism with an

economic system more akin to Marxist-communism was implemented; this system is

expanding access to credit values of society.16

The first step was to remove all real value to the world monetary systems. This was

done by removing the gold standard (all hard currency standards) for the core consumer

economies. With only a superficial value (a value believed to be held in paper-notes) now

represented in money. The next step was to remove all real value of saving-investments.

This was done in two steps. The first step was that the restriction of reserve monies

held by the banking systems was removed. This allowed for investment of credit where

before only real capital was realized. As no real value was held by companies/corporations,

their combined public and private debt (pension, drip investment, corporate bonds, inter-

corporate loans, commercial loans, and the sale of share of stock) being far in excess of

the capital all risk through maintaining control over the means of production is removed.

The real or hard value of all companies assets became a credit worth of a company making

the investment system, once the corner stone of the capital system, little more than a cover

for credit value accumulation.

The second step was that the wage scale had to become static variable. This would

remove any control over spending by the consumer. This control over consumer spending

was further reinforced by allowing credit debt to the consumers. This variable was under

the complete control of the ICC. However, this served and created a means for allowing for

16 The repressive effects of limiting access to credit was invested by C. H. Douglas in The Monopoly of

Credit. The extension of credit to all people (or replacing the failing system of capitalism with an economic

system more akin to Marxist-communism was implemented as this system is expanding access to credit

values society) is also investigated by DouglasEconomic Democracy.

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compensation for the lack of ability to earn a liveable wage for the greater part of the

population. This form of communism was unknowingly accepted by the general population

because those identifying the mode of economy continued using the economic principles of

a fully realized core credit economy as they redefined capitalism in a way that allowed a

paradigm shift without the typical sharp transitions normally associated with such a

transition. The maintained belief by the general population of the core economy that the

method of the economic existence remains capitalism popularly persists.

The recession of the mid-1970 was a result of the stresses assaulted with

fundamental change in the core economic system. As consumer savings and investments

were converted from real/hard value to a credit value, some few hold out economies

refused to embrace the new world order of the ICC and caused a momentary pause of the

planned and controlled expansion of the new economy. This new credit economy, based

almost solely upon debt credit expansion, consumer credit purchases, debt maintenance

payment, and even the profits made from the debt vehicles themselves, required a

juggernaut of debt maintenance payments to provide a source of static income to the ICC.

This was realized in the growth of and the maintenance delivered to the ICC by the national

debt of the core economy (the United States of America). Thus increases in national debt

coincided with decreases in the rate of increase in consumer spending (consumer debt)

served now to offset only the loss on credit income to the ICC.17 This was one to produce

permanent increase in GDP (see GDP/GNP shift in introduction) as it included functions of

gains from credit expansion and profits realized in associative credit values. Any shrinking

of the national debt is hazardous to the core credit economy as proved by the few years in

17 The ICC, as noted in newer works such as Confessions of an Economic Hit Man, exerts control over not

only credit markets but also the nations of the world that have been incorporated into the use of floating

market economies or creditism.

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the late 1990s when the fear of being able to pay down the principle of the national debt

was nearly realized. The reaction and increases of the current Bush Administration was not

only functional but also necessary in order for credit economic expansion to continue.

For the use of this paper, I will end this discussion here and interject some figures

to illustrate these points.

1): Ideal global economy as presented by the World Trade Organization (WTO)

shown in figure 1, The Dream (ICC Caret).

2): Accrual global economy as functioning today shown in figure 2, Present World

Economic Interactions Model.

3): Past global economies and economic interaction shown in figure 3, Past

Capitalist Global Economies as They Functioned.

4): Predicted global economic functionality shown in figure 4, The Number

Machines.

These figures are used to show the interaction of economies within either their

close set of control guidelines or international guidelines as the case dictates. These latter

countries/economies existing as part of a worldwide Creditist economy are therefore

headless, leaderless, and rather not independent, self-empowered cultures. As such, the

cultures and societies existing as subservient economic systems are under extreme levels of

external stress and cannot freely develop as independent viable cultures. This can be

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readily seen in colonized nations/states throughout history; the effects of removing local

cultural norms, societal ties, and economic systems is crushing to the indigenous culture

(and the future development of that culture), and the societal ties linking the people to each

other and the local economic system can now exist only to be exploited by the colonizing

culture. In the case of creditism, there is no culture other than perhaps the culture of greed,

nor is there any societal norms but the normalized goal, profit.

Figure 1. Ideal global economy as presented by the WTO.

(1) The Dream (ICC Caret). The ICC operates as an adjustment to world economies

where all economies work together for the greater good of the world economy.

Showing a fully integrated form of global economy in which although not all

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members are the same size or level, they function in one economy. In this model, all parts

(sub-system economies) are of equal value and all-important to the one economic system.

If this equality is not fully realized, the ideal global economy can never exist.

One ring gear: the global economy in which all other gears (economies) regardless

of size are included and functioning.

(2) Present World Economic Interactions Model:

Figure 2. Accrual Global Economy Functioning

A) Economies controlled by ICC: United States, Mexico, Canada, England, etc.

B) Economies tied directly to the ICC: European Union, the former CCCP, etc.

C) Economies/Countries supplying resources to credit economy but

operating/trading within limits with the ICC: South East Asia, Middle East,

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Pacific Islands, Africa, Central & South America, and Canada, etc. (Canada

having both Socialist and Western economic attributes, exists as part of both

structures.)

D) Independent economies/Countries (not under control or influence of ICC):

China. (China is currently in an economic position of only accumulation credit

values from the core economy.)

The ideal of a world capitalist economy functions only if all members are given

access to investment, opportunity, and level of life existence. The use of Wallersteins core,

periphery, and semi-periphery economic systems illustrate just how one sided the levels of

production and consumption are and how the core (supposedly capitalist) economy gathers

in the excesses in value (labor reserved) by expansion.

Ring Gear = core creditist economies: encompasses those nations that have fully

embraced the Creditist economy model (ICC gaining profit from all encompassed

economies).18

Inner gears = planetary gears/Periphery creditist economies. The sun gear

represents the US still thought of as the driving force and controller of creditist economy.

Planetary gears represent those credit based economies that share and support socio-

political identity periphery gears outside the ring gear yet still are attached to drive ring

gear need only a socio-political identity shift in order to be fully included in the creditist

economic model that represent other economies (countries) that still see themselves as in

control of there own economy yet function under the influence of the controllers of the

Creditist economy and have almost limitless have access to credit/capital investments.

Satellite gears = semi-periphery not directly attached to the ring gear core Creditist

18

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economy more than just to supply that economy with labor and raw material needed to

produce products from which profit can be gained.

(3) How Independent Capitalist Markets Operate and Co-existed in the World

Economy. Loosely connected free economies operate at levels of production and

consumption that could be achieved with little or no use of credit but are dependant on real

capital.

Figure 3. Past Capitalist Global Economy as it functioned.

In the past, small economic systems even those not capitalist were able to

function in a world economy; each had its own means of holding reserve labor value inside

itself for use as national (economic) power. Though perhaps not as efficient, these older

economic models allowed for a smaller focus on trade, workers, and production. This

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independence created the almost universal appeal of capitalism.

A set of gears much like a power train or a ship-power driving it from a source

(labor/production/consumption) propels the economy forward through history.

(4) The Number Machines: Credit collecting cogs removing excess credit value for

use in world credit markets are powered by the world consumer markets and their growing

debt.

For the future inside the ICCs ring gear, all value is controlled and valued by the ICC

and real growth and real change are not possible. Only a perceived change that is little

more than a change of position in the completely controlled economic environment is

possible.

Figure 4: (A&B) Predicted Global Economic Functionality.

In this model, we see that all economies function outside the core economy. This

core economy is not capitalism but a thing that will be referred to as Creditism. In this

model, all labor reserves are only seen as a credit value. Labor, production, commodities,

and consumption are realized in the form of credit value, and all exchange of compensation

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is realized as a form of credit.

There is no money (as such) but only a personal credit value. The worth of this

personal credit value can be adjusted instantly by those who control the comparative values

of credit markets the ICC. Although all workers will be living at the same level (in reality),

the perception that they have the ability to succeed must still be installed into their thinking

in order for this stage to begin. Once fully in place, an economic environment in which all

production, consumption, and so on, is fully monitored would allow for nothing to be

gathered or created that is not fully supported and authorized by the creditist state (as

placed by the ICC.) It is in this world that our childrens children will live; at the end of this

century, the present credit economy will bring about a world direr than that envisioned in

George Orwells novel, 1984. Group behavior as described in Lawlers works allow (have

noted) uneven reciprocity, even to rates lower than forty percent is acceptable in a human

society. It is this willingness to accept less than equal reciprocity that has allowed this

economic condition to exist and to grow into what it is today.

The ring gear ICC Creditist economy is now fully realized. All economic

functions of all nations, countries, pseudo-economic systems (all other economic systems

are by this time defunct) are serving only as gears inside this totally controlling ring gear

that is Creditism. In this final economic scenario, China floats its currency, credit-elitist

ICC gains influence and control over all governmental systems, even that last free large

modern economy of the northern hemisphere. All industry, investment, consumer, and

independent credit markets also become fully integrated into and controlled by the world

creditist economy.

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Immanuel Wallerstein, in The Essential Wallerstein (2000), defines the World-

system: simply a unit with a single division of labor and multiple cultural systems (75).

However, in todays world economy, labor instead of working as an important part of the

capitalism/world-economy has become little more than a pool of no longer needed beasts

of burden. If the themes expressed in The Tendency of the Rate of Profit to Fall in the

United States (Dumenil, Glick, and Rangel) are correct, then why does the ideal capital

persist even though most agree that the capital/consumer markets reached their zenith in

the 1970s? The ICC has found a way to make profit without labor or even a product. For

while it does show what was going on in the economys M-1 and M-2 money supplies, its

model does not take into account the profitability of credit and its M-3 creations.19It is

right about the rate of consumerism; it is right that more profits could not be gathered

because we were limited by how much we could buy, but it left out the M-3 creation of

debt interest! More and more credit-value is created by credit alone. Consumer buying is

secondary to profit. Even production (real) and labor are unimportant. Credit interest is

where the real values are being created and accumulated. M-3 money supply is unreal,

worthless but for the value, we let it have.

Labor, or each isolated labor pool, competes with each other and all others in this

worldwide group of proletariat for lower and lower amounts of monetary compensation and

fewer benefits including but not limited to health, insurances, and retirements. In this case,

Wallerstein seems to suggest, This is kind of like marginal as none of the semi-brogans

19 M-1 money supplies represents hard money in the form of gold, silver, or other hard tangible labor

reserve representation. M-2 money supplies represents representations of hard value representatives

credit voucher backed by hard deposit or paper money/checks supported by collaterals or deposits in a

central banking system of a trust of some form. M-3 money supplies represents a credit note that has no

value other than an associative value (worth only as much so someone is willing to give you for it). This

type of money in reality represents a debt responsibility of the issuer and not a value in position of the

owner.

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tries to stabilize the situation.20Wallerstein thinks that this approach is just reification and

cannot account for an understanding of historical evolution. For Wallerstein, there is only

one economic system. Nevertheless, that kind of thinking is now more than thirty years

behind the true condition of the real world economy, which is Creditism. The replacement

of capital in the wars for dominant economic policies with the expansion and ever more

pervasive credit market economy was so unheralded that many researchers did not notice

the shift occurred. Researchers like S. Bichler and J. Nitzan, continue to look for answers

to the continuation of buy-to-build ratios growth of 3% per annum and cooperate earnings

per share (EPS); increases/wage rates for the most part remain stagnant and do not realize

the exponentially expanding credit markets, allowing for ever greater numbers of

productive and economic growth to place positive indicators into an overextended credit

market like the one in the United States. In our markets the average debt of the adult

American consumer (what ever that means) is one hundred thousand dollars, and the

average credit card debt carried and maintained by these self-same consumers is more than

eight thousand dollars.

The expansions of credit markets replacing real productivity in economies can be

readily seen in new emerging credit markets such as that of Turkey. In the early 1980s, less

than 2% of the GDP of that country was created by credit, credit maintained, and credit

vehicles. Today, the credit markets and the banking systems create more than 25% of the

nations GDP. Production, wage rates, and the creation of new jobs remain stagnant.

Later in Wallersteins works, Wallerstein states, We must start, instead, with how

one single division of labor exists. DOL: Economic actors operate on some assumption

[]. That the totality of their essential needs of sustenance, protection, and pleasure will

20 Wallerstein (The Essential Wallerstein), 75.

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be met over a reasonable time-span by a combination of their own productive activities and

exchange in some form.21 Again, there seems to be an assumption that the conditions of

our world labor force is of some concern. In the case of a creditist economy, neither labor

nor commodities play that large of a part in the economic condition of countries or the

world systems culture. Greater than 50% of the western worlds GDP comes from (in some

form) credit vehicles, and it is an ever growing credit economy with a product of M-3

money (credit values) produced in the forms of not only loans, but re-loans, re-financings,

and decapitalizing all aspects of industry and government. This is done by removing the

capital wealth of a system in way such as was facilitated by hostile takeovers and the

selling off of pension, retirement, and capital assets in the 80s and 90s and the use of the

Social Security accounts in the United States such as the use of forced workers savings in

the Social Security System in the 80s that continues to todays governmental policies.

What May Follow

There are only three visions of the future indicated by present socio-economic

conditions. The workers, all workers, see through the fog of greed, consumerism, to do-

ism, and vulgar political propaganda and rise up against the ICC and create a world of

trade within the created/controlled creditist economy. This would set value for labor

between the forces producing the commodities being traded and not by an outside

controller who does nothing other than profit from the market; for this controller

contributes nothing of real value. The newly created economic model will be similar to an

economic democracy. An Economy in which each participant in the economy will not

21 Wallerstein (The Essential Wallerstein), 82.

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necessarily have the same thing, but will have something that something necessary for

life in our shared human environment. This may not appeal to the masses and will most

likely only come about after a brief stint of total anarchy as the set world credit market

collapses and is a clear choice over the second future of our world.

In the second future, we, the proletariat (labor/human), are seen as little more than

chattel used in everyway to satisfy the desire, wants, and demands of those few in power,

those who have access to the vast accumulated credit values realized from credit profits,

credit maintained, and debt. In this world, all things are controlled, and reality changes

daily. I do not need to rewrite this kind of world, for this world will be worse than that

described in 1984 which is itself a nightmare. What is worse, we, the citizens of this planet,

are already so far down the road that leads to this result (abject control) that we may not be

able to halt the decline of the race of man. Untenable levels of debt will effectyly redirect

larger and larger portions of reviews, profits, and wages towards the maintainance of

interest payments alone; at this point only the forgivness of debt at all levels will restart the

failed credit expansion economy. If this is truly the case, then it is the opinion of this

watcher of the human society that we search for, find, and enjoy what pleasures we may for

the time will come when only Hell waits in our dreams and oppression in our waking

hours. For those who are gathers ever-greater levels of credit value will continue to refuse

to share with the creators of this associate wealth the fruits of their labors. The continued

militarization of the worlds most powerful nations, invasive and inclusive state monitoring

systems, and the installation of first regional then global currency as a way to control

wealth value and the arbitrage associate with value disparities. In so many words we will

have allowed the putting into place of, a Military Enforced Economic Fascism.

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Lastly, that the huge economic and consumer engine yet untapped, China, in its

near debt free condition both in government and population, will assert its position as the

sole intact still free-developing culture. The fact that both the population and the

government of China are debt free allows it to function freely without the damage and

control by the creditist economy that has not only fettered the rest of the developed

countries of the world and their populations. However, it also makes it necessary to

continue this extreme desire for credit value accumulations and expansion for all those

countries and populations with less political and military might to function as serfs under

the rule of the ICC. As the cultural aspects and social attributes which represent what is the

Null Society condition of mainstream China (that construct said to represent Chinese

cultural / societal norms) gain in power, strength, and influences the field of power of that

identity (Chinese Iconoclastic Identity) will supplant that of the old Anglo dominated credit

expansion world systems model with a new global economic model of its own.

(2006)As such China has, as predicted in Creditism - Global Credit Economy

(Morales 2004) has floated it currency; saving the Creditist Economies of the United States

from its near collapse as Credit Expansion approached its end and moving the Limits of

Credit economy some 10 years into the future. The reaction of speculative Credit

expansion economy reaching its limits (Globally) will be very much like the crash of the

speculative capital markets of the last 1920s (internationally). The Credit Expansion

necessary for a Creditist economy is now collapsing around us. In Creditism or the our

current Global Credit Economy it is not only absolutely necessary to have it realized

continued levels of Credit Expansion; any lack in this expansion (regardless of it reaching

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the space or limit of debt increase or created by the inability of debtor to pay the required

debt maintenance payment while taking on greater levels of debt) will cause it to become

unstable to the point of dysfunction.

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_____.DialecticofEnlightenment. John Cumming, trs. New York: Herder and Herder,

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Baudrillard, Jean. The Consumer Society Reader: The Ideological Genesis of Needs. New

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Douglas, D. H. The Control and Distribution of Production. London: The English Review,

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_____. Economic Democracy, Credit Power, and Democracy. Suffolk: Bloomfield, 1974.

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Durkheim, Emile. The Division of Labor in Society. Macmillan: New York, New York,

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Dumenil, Gerard, Mark Glick, & Jose Rangel. The Tendency of the Rate of Profit to Fall in

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Gottlieb, Roger. Marxism: 1844-1990. Routledge: New York, 1992.

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Marx. Karl. Capital. (volume I) New York: International Press, 1967.

Morales, Gregory T. Creating Creditism. Pacific Sociological Association, Portland,

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Appendix

Definitions of Terms

International Credit Consortium (ICC) and the Imperialist Credit Culture (ICC): These

terms are used to represent the same cultural ideology that is embodied in the functionality

of creditism and the world credit economy (WCE). They are, therefore, freely

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interchangeable, but for effect as to how they are being used in each perspective case in the

word represented by the acronym is changed. Creditism is a System of non-culture, to

which one might even concede a certain unity of style if it really made any sense to speak

of stylized barbarity.22

Creditism: the floating of major world currency markets, de-capitalization of companies,

corporations, retirement accounts, and the formation of the world banking system has

removed sovereignty from the once free nations of the world, and under stresses of debt

and credit maintenance, we have stopped the development of the human race and have

arrested the very hallmarks of civilization.

Sword of Damocles: used as a metaphor for the genius of producing a product and

gathering profits from a non-commodity. In this case, the non-commodity is credit. Credit

debt allows not only for the creation of extended credit values (a value attached and

estimated from conception of an extension of credit, i.e., loans or some other credit vehicle)

and may to an existing level of credit value. The projected end credit value attached in

attributed to the idea of a capital asset or earning potential of the credit victim can by used

to create even great levels of indebtedness by creating in the credit victims mind the

illusion of wealth when only greater level of indentured servitude is realized. The double

edge sword in this care is the seemingly positive gain of access to ever-growing levels of

credit-value extensions while also accruing ever-greater levels of indebtedness. A sword

that cuts both ways.

22 Nietzsche, 187.

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each wants to be treated due to the fact that each has the complete and total understanding

of how all other members of what society at large holds to be normal and correct in every

situation/event. This narrow interpretation serves only to preserve the idea of the cultural

elitists having the right to privilege. This is seen clearly in Goffmans other works, Stigma

andInteractionRitualand also is supported in part in Dick Hebdiges Subculture: The

Meaning of Style.

Marcuses One Dimensional Man: In this case, I use the title to describe the simple

consumer creature we have become, limited in thought and action by fetters placed upon

ourselves in the form debt.

After much investigation, it seemed to this observer that most of the research and work in

social economics have noted the disparity of wage non-growth with the ever-increasing

levels of profit growth of large multi-national corporations. If real product and real

consumption were factors in these capital economic models and research, then wages

would have to increase, as the consumers would have to realize greater amounts of income

to acquire and to relieve the stresses of ever-growing levels of production and supply. But

with the growth being focused in the creating and expanding M-3 money markets, there is

no need to increase the buying power of labor/proletariat/consumer or to increase their

access to credit and therefore not only create an ability for consumption thus recouping

wages but reclaiming those wages in the form of debt-maintenance payments or interest

payments.

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Today last sustained Credit Expansion area (housing) is crashing:

Amid all the confusion over subprime lending, it's worth bringing one fact to the fore:

Alan Greenspan was recommending adjustable-rate mortgages in February 2004 -- just as

short-term rates were making their lows. Then, in a speech on April 8, 2005, he extolled

subprime lending:

"With these advances in technology, lenders have taken advantage of credit-scoring models

and other techniques for efficiently extending credit to a broader spectrum of consumers. . .

. As we reflect on the evolution of consumer credit in the United States, we must conclude

that innovation and structural change in the financial services industry have been critical in

providing expanded access to credit for the vast majority of consumers, including those of

limited means. . . . This fact underscores the importance of our roles as policymakers,

researchers, bankers and consumer advocates in fostering constructive innovation that is

both responsive to market demand and beneficialto consumers." By Bill Fleckenstein

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/BlameGreenspanFor

ThisBubbleToo.aspx

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Documents

Creditism - Global Credit Economy - 2004