Why: Iceland's Strong Economic Recovery after Complete Financial Collapse in 2008

By Martin Zeis for Global Research 

Iceland’s President Olafur Ragnar Grimmson was interviewed over the weekend (26./27.01.2013) at the World Economic Forum in Davos on why Iceland has enjoyed such a strong recovery after it’s complete financial collapse in 2008, while the rest of the Western world struggles with a recovery that has no clothes.

Grimsson gave a famous reply to the financial MSM reporter, stating that Iceland’s recovery was due to the following primary reason:

„… We were wise enough not to follow the traditional prevailing orthodoxies of the Western financial world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the poor, and we didn’t introduce austerity measures like you’re seeing here in Europe. …“

When asked whether Iceland’s policy of letting the banks fail would have worked in the rest of Europe, Grimsson replied:

„… Why are the banks considered to be the holy churches of the modern economy? Why are private banks not like airlines and tele-communication companies and allowed to go bankrupt if they have been run in an irresponsible way? The theory that you have to bail-out banks is a theory that you allow bankers enjoy for their own profit their success, and then let ordinary people bear their failure through taxes and austerity. 
People in enlightened democracies are not going to accept that in the long run. …“

Whole interview with Grimmson (02:56 min):

This article originally appeared here  

Who Owns The Federal Reserve?

The Fed is privately owned.  Its shareholders are private banks.

by Ellen Brown

“Some people think that the Federal Reserve Banks are United States Government institutions.  They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.”  

– The Honorable Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s  

The Federal Reserve (or Fed) has assumed sweeping new powers in the last year.  In an unprecedented move in March 2008, the New York Fed advanced the funds for JPMorgan Chase Bank to buy investment bank Bear Stearns for pennies on the dollar.  The deal was particularly controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of the New York Fed and participated in the secret weekend negotiations.1 In September 2008, the Federal Reserve did something even more unprecedented, when it bought the world’s largest insurance company.  The Fed announced on September 16 that it was giving an $85 billion loan to American International Group (AIG) for a nearly 80% stake in the mega-insurer.  The Associated Press called it a “government takeover,” but this was no ordinary nationalization.  Unlike the U.S. Treasury, which took over Fannie Mae and Freddie Mac the week before, the Fed is not a government-owned agency.  Also unprecedented was the way the deal was funded.  The Associated Press reported:  

“The Treasury Department, for the first time in its history, said it would begin selling bonds for the Federal Reserve in an effort to help the central bank deal with its unprecedented borrowing needs.”2  

This is extraordinary.  Why is the Treasury issuing U.S.  government bonds (or debt) to fund the Fed, which is itself supposedly “the lender of last resort” created to fund the banks and the federal government? Yahoo Finance reported on September 17:  

“The Treasury is setting up a temporary financing program at the Fed’s request.  The program will auction Treasury bills to raise cash for the Fed’s use.  The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters.”  

Normally, the Fed swaps green pieces of paper called Federal Reserve Notes for pink pieces of paper called U.S. bonds (the federal government’s I.O.U.s), in order to provide Congress with the dollars it cannot raise through taxes.  Now, it seems, the government is issuing bonds, not for its own use, but for the use of the Fed! Perhaps the plan is to swap them with the banks’ dodgy derivatives collateral directly, without actually putting them up for sale to outside buyers.  According to Wikipedia (which translates Fedspeak into somewhat clearer terms than the Fed’s own website):  

“The Term Securities Lending Facility is a 28-day facility that will offer Treasury general collateral to the Federal Reserve Bank of New York’s primary dealers in exchange for other program-eligible collateral.  It is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally. . . . The resource allows dealers to switch debt that is less liquid for U.S. government securities that are easily tradable.”  

“To switch debt that is less liquid for U.S. government securities that are easily tradable” means that the government gets the banks’ toxic derivative debt, and the banks get the government’s triple-A securities.  Unlike the risky derivative debt, federal securities are considered “risk-free” for purposes of determining capital requirements, allowing the banks to improve their capital position so they can make new loans. (See E. Brown, “Bailout Bedlam,” webofdebt.com/articles, October 2, 2008.)

In its latest power play, on October 3, 2008, the Fed acquired the ability to pay interest to its member banks on the reserves the banks maintain at the Fed. Reuters reported on October 3:

“The U.S. Federal Reserve gained a key tactical tool from the $700 billion financial rescue package signed into law on Friday that will help it channel funds into parched credit markets. Tucked into the 451-page bill is a provision that lets the Fed pay interest on the reserves banks are required to hold at the central bank.”3

If the Fed’s money comes ultimately from the taxpayers, that means we the taxpayers are paying interest to the banks on the banks’ own reserves – reserves maintained for their own private profit. These increasingly controversial encroachments on the public purse warrant a closer look at the central banking scheme itself.  Who owns the Federal Reserve, who actually controls it, where does it get its money, and whose interests is it serving?

Not Private and Not for Profit?

The Fed’s website insists that it is not a private corporation, is not operated for profit, and is notfunded by Congress.  But is that true? The Federal Reserve was set up in 1913 as a “lender of last resort” to backstop bank runs, following a particularly bad bank panic in 1907.  The Fed’s mandate was then and continues to be to keep the private banking system intact; and that means keeping intact the system’s most valuable asset, a monopoly on creating the national money supply. Except for coins, every dollar in circulation is now created privately as a debt to the Federal Reserve or the banking system it heads.4 The Fed’s website attempts to gloss over its role as chief defender and protector of this private banking club, but let’s take a closer look.  The website states:

* “The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks.  However, owning Reserve Bank stock is quite different from owning stock in a private company.  The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System.  The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”

* “[The Federal Reserve] is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.”

* “The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. . . . After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.”5

So let’s review:

1. The Fed is privately owned.

Its shareholders are private banks.  In fact, 100% of its shareholders are private banks.  None of its stock is owned by the government.

2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”

Here is how it works: When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off.  When the Fed wants to “expand the money supply” (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen.  These maneuvers are called “open market operations” because the Fed buys the bonds on the “open market” from the bond dealers.  The bonds then become the “reserves” that the banking establishment uses to back its loans.  In another bit of sleight of hand known as “fractional reserve” lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan.  It was this money-creating process that prompted Wright Patman, Chairman of the House Banking and Currency Committee in the 1960s, to call the Federal Reserve “a total money-making machine.” He wrote:  

“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”

3. The Fed generates profits for its shareholders.

The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders.  A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.

In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their “reserves.” The basic reserve requirement set by the Federal Reserve is 10%.  The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in “reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans.  Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion.  Ten percent of that is $700 billion.  That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.  

The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy.  Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%.  They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks.  A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.  

Time to Change the Statute?

According to the Fed’s website, the control Congress has over the Federal Reserve is limited to this:

“[T]he Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute.”

As we know from watching the business news, “oversight” basically means that Congress gets to see the results when it’s over.  The Fed periodically reports to Congress, but the Fed doesn’t ask; it tells.  The only real leverage Congress has over the Fed is that it “can alter its responsibilities by statute.” It is time for Congress to exercise that leverage and make the Federal Reserve a trulyfederal agency, acting by and for the people through their elected representatives.  If the Fed can demand AIG’s stock in return for an $85 billion loan to the mega-insurer, we can demand the Fed’s stock in return for the trillion-or-so dollars we’ll be advancing to bail out the private banking system from its follies.

If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves.  Among other benefits to the taxpayers, a truly “federal” Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades.  

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back.  Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine.  Her websites are www.webofdebt.com  and www.ellenbrown.com .

Find this article here.  

The Non Zero-Sum Society

by Robert Reich
January 28, 2013


As President Obama said in his inaugural address last week, America “cannot succeed when a shrinking few do very well and a growing many barely make it.”  

Yet that continues to be the direction we’re heading in.  

A newly-released analysis by the Economic Policy Institute shows that the super-rich have done well in the economic recovery while almost everyone else has done badly.  The top 1 percent of earners’ real wages grew 8.2 percent from 2009 to 2011, yet the real annual wages of Americans in the bottom 90 percent have continued to decline in the recovery, eroding by 1.2 percent between 2009 and 2011.  

In other words, we’re back to the widening inequality we had before the debt bubble burst in 2008 and the economy crashed.  

But the President is exactly right.  Not even the very wealthy can continue to succeed without a broader-based prosperity.  That’s because 70 percent of economic activity in America is consumer spending.   If the bottom 90 percent of Americans are becoming poorer, they’re less able to spend.  Without their spending, the economy can’t get out of first gear.  

That’s a big reason why the recovery continues to be anemic, and why the International Monetary Fund just lowered its estimate for U. S. growth in 2013 to just 2 percent.  

Almost a quarter of all jobs in America now pay wages below the poverty line for a family of four.  The Bureau of Labor Statistics estimates 7 out of 10 growth occupations over the next decade will be low-wage — like serving customers at big-box retailers and fast-food chains.  

At this rate, who’s going to buy all the goods and services America is capable of producing?  We can’t return to the kind of debt-financed consumption that caused the bubble in the first place.  

Get it?  It’s not a zero-sum game.  Wealthy Americans would do better with smaller shares of a rapidly-growing economy than with the large shares they now possess of an economy that’s barely moving.  

If they were rational, the wealthy would support public investments in education and job-training, a world-class infrastructure (transportation, water and sewage, energy, internet), and basic research – all of which would make the American workforce more productive.  

If they were rational they’d even support labor unions – which have proven the best means of giving working people a fair share in the nation’s prosperity.  

But labor unions are almost extinct.  

The decline of labor unions in America tracks exactly the decline in the bottom 90 percent’s share of total earnings, and shrinkage of the middle class.  

In the 1950s, when the U. S. economy was growing faster than 3 percent a year, more than a third of all working people belonged to a union.  That gave them enough bargaining clout to get wages that allowed them to buy what the economy was capable of producing.  

Since the late 1970s, unions have eroded – as has the purchasing power of most Americans, and not coincidentally, the average annual growth of the economy.  

Last week the Bureau of Labor Statistics reported that as of 2012 only 6.6 percent of workers in the private sector were unionized.  (That’s down from 6.9 percent in 2011.) That’s the lowest rate of unionization in almost a century.  

What’s to blame?  Partly globalization and technological change.  Globalization sent many unionized manufacturing plants abroad.  

Manufacturing is starting to return to America but it’s returning without many jobs.  The old assembly line has been replaced by robotics and numerically-controlled machine tools.  

Technologies have also replaced many formerly unionized workers in telecommunications (remember telephone operators?) and clerical jobs.  

But wait.  Other nations subject to the same forces have far higher levels of unionization than America.  28 percent of Canada’s workforce is unionized, as is more than 25 percent of Britain’s, and almost 20 percent of Germany’s.

Unions are almost extinct in America because we’ve chosen to make them extinct.

Unlike other rich nations, our labor laws allow employers to replace striking workers.   We’ve also made it exceedingly difficult for workers to organize, and we barely penalized companies that violate labor laws.  (A worker who’s illegally fired for trying to organize a union may, if lucky, get the job back along with back pay – after years of legal haggling.)  

Republicans, in particular, have set out to kill off unions.  Union membership dropped 13 percent last year in Wisconsin, which in 2011 curbed the collective bargaining rights of many public employees.  And it fell 18 percent last year in Indiana, which last February enacted a right-to-work law (allowing employees at unionized workplaces to get all the benefits of unionization without paying for them).  Last month Michigan enacted a similar law.

Don’t blame globalization and technological change for why employees at Walmart , America’s largest employer, still don’t have a union.  They’re not in global competition and their jobs aren’t directly threatened by technology.  

The average pay of a Walmart worker is $8.81 an hour.  A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits.

Walmart is a microcosm of the American economy.  It has brazenly fought off unions.   But it could easily afford to pay its workers more.   It earned $16 billion last year.   Much of that sum went to Walmart’s shareholders, including the family of its founder, Sam Walton.  

The wealth of the Walton family now exceeds the wealth of the bottom 40 percent of American families combined, according to an analysis by the Economic Policy Institute.  

But how can Walmart expect to continue to show fat profits when most of its customers are on a downward economic escalator?  

Walmart should be unionized.   So should McDonalds.  So should every major big-box retailer and fast-food outlet in the nation.  So should every hospital in America.

That way, more Americans would have enough money in their pockets to get the economy moving.  And everyone – even the very rich – would benefit.

As Obama said, America cannot succeed when a shrinking few do very well and a growing many barely make it.


This work is licensed under a Creative Commons License

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley.  He has served in three national administrations, most recently as secretary of labor under President Bill Clinton.  Time Magazine has named him one of the ten most effective cabinet secretaries of the last century.  He has written thirteen books, including his latest best-seller, Aftershock: The Next Economy and America’s Future; The Work of Nations; Locked in the Cabinet; Supercapitalism; and his newest,Beyond Outrage.  His syndicated columns, television appearances, and public radio commentaries reach millions of people each week.  He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause.  His widely-read blog can be found at www.robertreich.org.

Editor's Note:  It is the perspective and purpose of PROUT to move commerce toward worker-owned co-operatives within economic decentralization and economic democracy.  The labor/management, and labor/owner bifurcations are garishly obsolete, viciously exploitive, and demonstrably parasitic like a malignant carcinoma on the body of humanity and the planet at large.  PROUT's economic democracy paradigm is progressively homeostatic, positively affecting every realm of life, both for humans and all other life forms conjugating the mysteries as to why they and we exist on this magnificent planet.  Explore PROUT further.  

Exhaustive Study Finds Global Elite Hiding As Much As $21 to $32 Trillion Offshore

Newly updated report reveals how wealthy individuals and their families have between $21 and $32 trillion of hidden financial assets around the world in what are known as offshore accounts or tax havens.  The actual sums could be higher because the study only deals with financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts.  The inquiry was commissioned by the Tax Justice Network and is being touted as the most comprehensive report ever on the "offshore economy."  It also finds that private banks are deeply involved in running offshore havens, with UBS, Credit Suisse and Goldman Sachs handling the most assets.  The report’s author, James Henry, a lawyer and former chief economist at McKinsey & Company, explains more in this video. 

We must remember that this information about offshore tax havens and the $21 to $32 Trillion dollars covers "individuals", not enterprises doing the same thing, which may add anywhere from $50 to $80 Trillion dollars or more. 




All too often people deliberate about taxation, tax codes, scaled taxation and such, yet there may be wholly fresher possibilities than shuffling round the way things are done now without making any truly substantial progressively sustainable choices and actions. 

PROUT offers an alternative perspective on this relatively necessary concern of taxes, which may also include some suprising factors.  Explore PROUT's perspective here

Explore this and other articles covering alternative economics, ethical leadership, economic democracy, and a society without the weal and woe of social and economic vicissitudes HERE

How does PROUT compare or contrast with capitalism or communism?  Explore the answers HERE

Too Big to Fail: The Movement -- And Everybody Needs One, Every Day

A Movement Too Big To Fail 

Chris Hedges, TruthDig 
October 17, 2011


There is no danger that the protesters who have occupied squares, parks and plazas across the nation in defiance of the corporate state will be co-opted by the Democratic Party or groups like MoveOn.  The faux liberal reformers, whose abject failure to stand up for the rights of the poor and the working class, have signed on to this movement because they fear becoming irrelevant.  Union leaders, who pull down salaries five times that of the rank and file as they bargain away rights and benefits, know the foundations are shaking.  So do Democratic politicians from Barack Obama to Nancy Pelosi.  So do the array of “liberal” groups and institutions, including the press, that have worked to funnel discontented voters back into the swamp of electoral politics and mocked those who called for profound structural reform.

Resistance, real resistance, to the corporate state was displayed when a couple of thousand protesters, clutching mops and brooms, early Friday morning forced the owners of Zuccotti Park and the New York City police to back down from a proposed attempt to expel them in order to “clean” the premises.  These protesters in that one glorious moment did what the traditional “liberal” establishment has steadily refused to do-fight back.  And it was deeply moving to watch the corporate rats scamper back to their holes on Wall Street.  It lent a whole new meaning to the phrase “too big to fail.”

Tinkering with the corporate state will not work.  We will either be plunged into neo-feudalism and environmental catastrophe or we will wrest power from corporate hands.   This radical message, one that demands a reversal of the corporate coup, is one the power elite, including the liberal class, is desperately trying to thwart.  But the liberal class has no credibility left.  It collaborated with corporate lobbyists to neglect the rights of tens of millions of Americans, as well as the innocents in our imperial wars.  The best that liberals can do is sheepishly pretend this is what they wanted all along.  Groups such as MoveOn and organized labor will find themselves without a constituency unless they at least pay lip service to the protests.  The Teamsters’ arrival Friday morning to help defend the park signaled an infusion of this new radicalism into moribund unions rather than a co-opting of the protest movement by the traditional liberal establishment.  The union bosses, in short, had no choice.

The Occupy Wall Street movement, like all radical movements, has obliterated the narrow political parameters.  It proposes something new.  It will not make concessions with corrupt systems of corporate power.  It holds fast to moral imperatives regardless of the cost.  It confronts authority out of a sense of responsibility.  It is not interested in formal positions of power.  It is not seeking office.  It is not trying to get people to vote.  It has no resources.  It can’t carry suitcases of money to congressional offices or run millions of dollars of advertisements.  All it can do is ask us to use our bodies and voices, often at personal risk, to fight back.  It has no other way of defying the corporate state.  This rebellion creates a real community instead of a managed or virtual one.  It affirms our dignity.  It permits us to become free and independent human beings.

Martin Luther King was repeatedly betrayed by liberal supporters, especially when he began to challenge economic forms of discrimination, which demanded that liberals, rather than simply white Southern racists, begin to make sacrifices.  King too was a radical.  He would not compromise on nonviolence, racism or justice.  He understood that movements-such as the Liberty Party, which fought slavery, the suffragists, who fought for women’s rights, the labor movement and the civil rights movement-have always been the true correctives in American democracy.  None of those movements achieved formal political power.  But by holding fast to moral imperatives they made the powerful fear them.  King knew that racial equality was impossible without economic justice and an end to militarism.  And he had no intention of ceding to the demands of the liberal establishment that called on him to be calm and patience.  “For years, I labored with the idea of reforming the existing institutions in the South, a little change here, a little change there,” King said shortly before he was assassinated.  “Now I feel quite differently.  I think you’ve got to have a reconstruction of the entire system, a revolution of values.”

King was killed in 1968 when he was in Memphis to support a strike by sanitation workers.  By then he had begun to say that his dream, the one that the corporate state has frozen into a few safe clichés from his 1963 speech in Washington, had turned into a nightmare.  King called at the end of his life for massive federal funds to rebuild inner cities, what he called “a radical redistribution of economic and political power,” a complete restructuring of “the architecture of American society.”  He grasped that the inequities of capitalism had become the instrument by which the poor would always remain poor.  “Call it democracy, or call it democratic socialism,” King said, “but there must be a better distribution of wealth within this country for all of God’s children.”  On the eve of King’s murder he was preparing to organize a poor people’s march on Washington, D.C., designed to cause “major, massive dislocations,” a nonviolent demand by the poor, including the white underclass, for a system of economic equality.  It would be 43 years before his vision was realized by an eclectic group of protesters who gathered before the gates of Wall Street.

The truth of America is understood only when you listen to voices in our impoverished rural enclaves, prisons and the urban slums, when you hear the words of our unemployed, those who have lost their homes or cannot pay their medical bills, our elderly and our children, especially the quarter of the nation’s children who depend on food stamps to eat, and all who are marginalized.  There is more reality expressed about the American experience by the debt-burdened young men and women protesting in the parks than by all the chatter of the well-paid pundits and experts that pollutes the airwaves.

What kind of nation is it that spends far more to kill enemy combatants and Afghan and Iraqi civilians than it does to help its own citizens who live below the poverty line?  What kind of nation is it that permits corporations to hold sick children hostage while their parents frantically bankrupt themselves to save their sons and daughters?  What kind of nation is it that tosses its mentally ill onto urban heating grates?  What kind of nation is it that abandons its unemployed while it loots its treasury on behalf of speculators?  What kind of nation is it that ignores due process to torture and assassinate its own citizens?  What kind of nation is it that refuses to halt the destruction of the ecosystem by the fossil fuel industry, dooming our children and our children’s children?

“America,” Langston Hughes wrote, “never was America to me.”

“The black vote mean [nothing],” the rapper Nas intones.  “Who you gunna elect/ Satan or Satan? In the hood nothing is changing,/ We aint got no choices.”

Or listen to hip-hop artist Talib Kweli:  “Back in the ’60s, there was a big push for black … politicians, and now we have more than we ever had before, but our communities are so much worse.  A lot of people died for us to vote, I’m aware of that history, but these politicians are not in touch with people at all.  Politics is not the truth to me, it’s an illusion.”

The liberal class functions in a traditional, capitalist democracy as a safety valve.  It lets off enough steam to keep the system intact.  It makes piecemeal and incremental reform possible.  This is what happened during the Great Depression and the New Deal.  Franklin Delano Roosevelt’s greatest achievement was that he saved capitalism.  Liberals in a functioning capitalist democracy are at the same time tasked with discrediting radicals, whether it is King, especially after he denounced the war in Vietnam, or later Noam Chomsky or Ralph Nader.

The stupidity of the corporate state is that it thought it could dispense with the liberal class.  It thought it could shut off that safety valve in order to loot and pillage with no impediments.  Corporate power forgot that the liberal class, when it functions, gives legitimacy to the power elite.  And the reduction of the liberal class to silly courtiers, who have nothing to offer but empty rhetoric, meant that the growing discontent found other mechanisms and outlets.  Liberals were reduced to stick figures, part of an elaborate pantomime, as they acted in preordained roles to give legitimacy to meaningless and useless political theater.  But that game is over.

Human history has amply demonstrated that once those in positions of power become redundant and impotent, yet retain the trappings and privileges of power, they are brutally discarded.  The liberal class, which insists on clinging to its positions of privilege while at the same time refusing to play its traditional role within the democratic state, has become a useless and despised appendage of corporate power.  And as the engines of corporate power pollute and poison the ecosystem and propel us into a world where there will be only masters and serfs, the liberal class, which serves no purpose in the new configuration, is being abandoned and discarded by both the corporate state and radical dissidents.  The best it can do is attach itself meekly to the new political configuration rising up to replace it.

An ineffectual liberal class means there is no hope of a correction or a reversal through the formal mechanisms of power.  It ensures that the frustration and anger among the working and the middle class will find expression now in these protests that lie outside the confines of democratic institutions and the civilities of a liberal democracy.  By emasculating the liberal class, which once ensured that restive citizens could institute moderate reforms, the corporate state has created a closed system defined by polarization, gridlock and political charades.  It has removed the veneer of virtue and goodness that the liberal class offered to the power elite.

Liberal institutions, including the church, the press, the university, the Democratic Party, the arts and labor unions, set the parameters for limited self-criticism in a functioning democracy as well as small, incremental reforms.  The liberal class is permitted to decry the worst excesses of power and champion basic human rights while at the same time endowing systems of power with a morality and virtue it does not possess.  Liberals posit themselves as the conscience of the nation.  They permit us, through their appeal to public virtues and the public good, to see ourselves and our state as fundamentally good.

But the liberal class, by having refused to question the utopian promises of unfettered capitalism and globalization and by condemning those who did, severed itself from the roots of creative and bold thought, the only forces that could have prevented the liberal class from merging completely with the power elite.  The liberal class, which at once was betrayed and betrayed itself, has no role left to play in the battle between us and corporate dominance.  All hope lies now with those in the street.

Liberals lack the vision and fortitude to challenge dominant free market ideologies.  They have no ideological alternatives even as the Democratic Party openly betrays every principle the liberal class claims to espouse, from universal health care to an end to our permanent war economy to a demand for quality and affordable public education to a return of civil liberties to a demand for jobs and welfare of the working class.  The corporate state forced the liberal class to join in the nation’s death march that began with the presidency of Ronald Reagan.  Liberals such as Bill Clinton, for corporate money, accelerated the dismantling of our manufacturing base, the gutting of our regulatory agencies, the destruction of our social service programs and the empowerment of speculators who have trashed our economy.  The liberal class, stripped of power, could only retreat into its atrophied institutions, where it busied itself with the boutique activism of political correctness and embraced positions it had previously condemned.

Russell Jacoby writes:  “The left once dismissed the market as exploitative; it now honors the market as rational and humane.  The left once disdained mass culture as exploitative; now it celebrates it as rebellious.  The left once honored independent intellectuals as courageous; now it sneers at them as elitist.  The left once rejected pluralism as superficial; now it worships it as profound.  We are witnessing not simply a defeat of the left, but its conversion and perhaps inversion.”

Hope in this age of bankrupt capitalism comes with the return of the language of class conflict and rebellion, language that has been purged from the lexicon of the liberal class, language that defines this new movement.  This does not mean we have to agree with Karl Marx, who advocated violence and whose worship of the state as a utopian mechanism led to another form of enslavement of the working class, but we have to learn again to speak in the vocabulary Marx employed.  We have to grasp, as Marx and Adam Smith did, that corporations are not concerned with the common good.  They exploit, pollute, impoverish, repress, kill and lie to make money.  They throw poor families out of homes, let the uninsured die, wage useless wars to make profits, poison and pollute the ecosystem, slash social assistance programs, gut public education, trash the global economy, plunder the U.S. Treasury and crush all popular movements that seek justice for working men and women.  They worship money and power.  And, as Marx knew, unfettered capitalism is a revolutionary force that consumes greater and greater numbers of human lives until it finally consumes itself.  The dead zone in the Gulf of Mexico is the perfect metaphor for the corporate state.  It is part of the same nightmare experienced in postindustrial mill towns of New England and the abandoned steel mills of Ohio.  It is a nightmare that Iraqis, Pakistanis and Afghans, living in terror and mourning their dead, endure daily.

What took place early Friday morning in Zuccotti Park was the first salvo in a long struggle for justice.  It signaled a step backward by the corporate state in the face of popular pressure.  And it was carried out by ordinary men and women who sleep at night on concrete, get soaked in rainstorms, eat donated food and have nothing as weapons but their dignity, resilience and courage.  It is they, and they alone, who hold out the possibility of salvation.  And if we join them we might have a chance.

An Alternative Economic And Spiritual Model For The Welfare Of All

  The Progressive Utilization Theory (PROUT): Alternative Economic And Spiritual Model For The Welfare Of All

By Acarya Maheshvarananda, Mariah Branch 

Introduction

To envision our future, it is vitally important to ask: what kind of world do we want?  Prout (the Progressive Utilization Theory) is a socioeconomic alternative model that promotes the welfare and development of every person, physically, mentally, and spiritually.  This article provides a brief introduction to some of the economic and social concepts of Prout, including guaranteeing minimum necessities to all, the right to jobs, a three-tiered economy, including small-scale private enterprises, cooperatives, and large-scale publicly owned key industries, food sovereignty, sustainable agriculture, proper utilization of natural and human resources, and economic democracy.  Prout promotes an ecological and spiritual perspective that is universal and nondogmatic.  Prout's holistic model provides an overarching framework to effectively measure and compare policies for the greater good of all people, as well as the planet.

“Another world is possible!” is the theme of the World Social Forum, which began in Brazil in 2001, and which has been growing exponentially ever since, with hundreds of thousands participating in global, regional, national, and local events that democratically educate people and rally to create social, political, and economic changes.  At these forums, it is common to proclaim that we are against the unjust global economy, based on profit, selfishness, and greed, which excludes more people than it benefits.  However, the Progressive Utilization Theory, Prout, offers the opportunity to champion what we are for and explore how we can achieve our goals.

When audiences are asked, “What kind of world do you want?” in the Philippines, Poland, the United States, Brazil, or the slums of Caracas, the answers are almost invariably the same: a world without war, hunger, or poverty, with human rights, democracy, environmental protection, etc.  The truth is we all want the same thing: peace and justice on earth!  There is tremendous power in this shared dream, and there are many people who are struggling to help create it.

We believe that the process of answering this question, envisioning what kind of society we want, is so fundamental to creating a better future that students should be asked it in every school from the first year to postgraduate level, plus the society as a whole.

Indian philosopher Prabhat Ranjan Sarkar (1921–1990), author, composer and spiritual master, devoted his life to exploring and answering this question in the most practical way possible.  He first formulated Prout in 1959, and formed an organization called Proutist Universal to work to implement it.  From 1971 to 1978, he was a political prisoner in India due to Prout's stand against corruption, the caste system, the exploitation of women, and political exploitation.

Prout promotes economic self-reliance, cooperatives, environmental balance, and universal spiritual values.  The essential characteristic of Prout is economic liberation, freeing human beings from mundane problems so that all will have increasing opportunities for intellectual and spiritual liberation.  Prout is not a rigid mold to be imposed on any society.  On the contrary, it is a holistic set of dynamic concepts that can be applied appropriately by citizens and leaders to help their region or country prosper and achieve self-reliance in an ecological way.

We provide a brief introduction to some of the economic and social concepts of Prout below, and explain the importance of its nondogmatic ecological and spiritual perspective. 

Minimum Necessities

People in all nations must have their minimum necessities met in order to be productive and develop their full potentials.  The five minimum necessities are: food (including pure drinking water), clothing, housing (including adequate sanitation, energy, communication, and information), medical care, and education.  These must be provided in a sustainable manner so that future generations can also meet their minimum necessities.  The Brazilian spiritual activist Frei Betto called attention to this need when he said, “The degree of justice in a society can be evaluated by the way food is distributed amongst all of the citizens” (F. Betto, letter to the author, Dada Maheshvarananda, 2002).

The right to meaningful employment with fair wages is also a fundamental human right, because it ensures an adequate income to purchase the above basic necessities.  Prout recommends using cooperatives to sustainably produce the minimum necessities as well as other goods and services. 

Physical Wealth

Prout's solution to economic inequality is based on the obvious truth that the world's physical resources are limited.  When certain individuals accumulate too much, there is not enough for everyone else.  We have to make decisions about how wealth is distributed, how our economy is organized, which resources we will use, and which resources we will leave for future generations.

If our goal is to create a fair society that meets everyone's minimum necessities both now and in the future, we need to develop distribution methods to achieve that goal.  Allowing one person or a small group of people to hoard resources, including wealth, is counterproductive.

National and state governments need to determine how much wealth one person can own and how much of that wealth can be passed from one generation to the next.  These laws should be evaluated and adjusted so that they foster a fair distribution and provide economic opportunities throughout society.

National governments should also promote self-supporting decentralized local economies and full employment, with transparent economic opportunities that discourage law breaking and encourage fair salary structures.

Sarkar proposed a three-tier system of enterprise management to create a healthy economy: privately owned small-scale enterprises, worker-owned cooperatives, and state-owned public utilities.

Small-scale private enterprises can produce nonessential or luxury goods and services.  They are a vital component of an economy, because they encourage creativity and personal initiative.  They allow individuals, families, and small partnerships to develop innovations, as well as identify and fulfill needs that benefit their communities and themselves.

Prout recommends that a ceiling be set on sales volume and number of employees for private enterprises, in order to prevent unlimited concentration of wealth in the hands of one person, which would be to the detriment of the community.  If a firm reaches one of those limits, it must then choose whether to transform itself into a cooperatively managed enterprise, to divide itself or to curtail further expansion.

Cooperatives form the second level of a Prout economy: industrial, agricultural, consumer, banks, and services co-ops.  It is a basic right of workers to own and manage their enterprises through collective management.  These cooperatives can produce the minimum necessities and most other products and services, forming the largest part of a Prout economy.  Cooperative banks can invest in local housing, farms, students, and businesses.  They can avoid much of the speculation that has contributed to the recent economic hardships felt around the world.

Large-scale key industries, such as transportation, energy, telecommunications and steel, form the third level of a Prout economy.  They require large capital investment and are difficult to decentralize.  Prout recommends that such key industries should be managed as public utilities, and should never be privatized.

Many economists have suggested that salaries within companies and cooperatives should be tied together to reduce the large wealth discrepancies that we see in many industrialized societies.  Economist John Kenneth Galbraith wrote, “The most forthright and effective way of enhancing equality within the firm would be to specify the maximum range between average and maximum compensation” (Gailbraith 1973).

While some cooperatives choose to evenly share profits among all their members, most choose to simply link their starting salary with their highest salary at a ratio of, for example, three to one.  Thus the people with the most seniority or most skilled jobs are paid a certain percentage more than the basic starting wage.  Thus salaries in a cooperative might range between $30,000 and $90,000 per year, depending on what the members agreed. 

Proper Utilization of Natural and Human Resources

Prout supports the maximum utilization of the planet's resources, which means to make the best use of them, with economic and mechanical efficiency, while still protecting the natural environment.  It is our conviction that everyone can experience a high quality of life if we use our resources wisely.  Mark Friedman quotes the American scientist and visionary R. Buckminster Fuller as saying, “We have enough technological know-how at our disposal to give everyone a decent life, and release humanity to do what it is supposed to be doing—that is, using our minds, accomplishing extraordinary things, not just coping with survival” (Friedman 2001).

The natural resources gifted by nature belong to everyone and are to be used for the welfare of all.  The economically developed nations of the world amassed their wealth by taking natural resources from other nations, first through colonization and later through very favorable trade policies and debt manipulation.  To counter this detrimental practice, local processing industries should be created nearby the sources of raw materials, ensuring full employment for all local people, who can then trade or sell the finished goods to other regions for the economic prosperity of the local people in both areas.

Prout also proposes the maximum utilization of all human resources, emphasizing the value of both individual and collective well-being.  According to Prout, there is no inevitable conflict between individual and collective interests.  Rather, their true interests are shared.  Healthy individuals create a healthy society, just as a healthy society fosters the development of healthy individuals.

In contrast, a materialistic consumer society pressures people to increase their own pleasures and comforts, indifferent to the needs of others.  The results of excessive individualism can be seen in the breakdown of the family and the selfish “me-first” attitude, which is sadly all too prevalent throughout the Western world.

This principle, however, does not support abandoning all individuality for the intended good of collective society.  Communist governments have amply demonstrated the danger of excessive collectivism.  Society needs to respect human diversity, and to allow people the freedom to think for themselves, to express their creativity, and to form diverse relationships.  An important goal of Prout is to encourage individuals to realize their full potential and achieve their dreams and goals.

Wastage of metaphysical or intellectual resources occurs when people lack education, or are denied opportunities to develop their different talents and contribute their ideas because of racial or sexual discrimination or economic exploitation.  How wonderful it will be when all the creativity of human beings is encouraged and channeled toward improving our world, instead of it being wasted or misdirected in advertising to convince us to purchase what we do not need. 

Economic Democracy

Prout promotes economic democracy, which shifts decision-making power away from a small minority of corporate shareholders and vests it with the local people.  It proposes a dynamic economy of the people, by the people, and for the people.  Through democratic cooperatives and decentralization, the people can meet all their basic needs with adequate purchasing power.  In addition, special amenities, facilities, and services should be provided to deserving individuals who contribute to society.  When each region and state, and, as much as possible, each community is self-reliant in food, then the people will not suffer from food shortages or inflated prices due to transportation breakdowns or a rise in oil prices.

Another requirement for economic democracy is that outsiders must be strictly prevented from interfering in the local economy or taking away profits.

In fact, effective political democracy with full political rights is not possible without economic democracy and corresponding economic rights, including the guaranteed minimum necessities.

One of neoliberalism's clever tricks was to put so-called “economic freedom,” which implies the freedom of persons and corporations to amass wealth beyond measure, on the same footing with fundamental human rights.  The idea of “economic freedom” contradicts the reality that the world's resources are limited and that the actions of individuals affect the opportunities others.  In law, we grant individual rights to the extent that they do not harm others.  Prout's concepts incorporate this idea into economics.  Sarkar further states that, “The entire wealth of the universe is the common patrimony of all” (Sarkar 1992). 

An Ecological and Spiritual Perspective 

Prout contains an ecological and spiritual perspective that many economic philosophies lack, but which is present in many traditional societies.  Indigenous spirituality throughout the Americas, Africa, Asia, and Australasia invariably revolved around nature.  Indigenous people did not believe that the land belonged to them; rather, they believed they belonged to the land.  Indigenous oral traditions and writing expressed intense pain at seeing miners ripping open the earth, loggers felling all the trees, the water being poisoned, the animals being slaughtered (Giblett 2004; Stevens 1997).  These traditional cultures were mostly cooperative by nature and treated most of the land as a common resource.

Black Elk, Oglala Sioux spiritual leader, said, “The first peace, which is the most important, is that which comes within the souls of people when they realize their relationship, their oneness, with the universe and all its powers, and when they realize that at the center of the universe dwells Wakan-Taka (the Great Spirit), and that this center is really everywhere, it is within each of us” (Neihardt 1932).

Today environmental sciences demonstrate that an interconnected web of living systems and organisms in dynamic balance exists throughout nature.  The interdependence and interrelation of all forms of life is astounding.  From the single-cell bacteria to the most complex animal, each creature inhabits its niche and plays its unique role.  The cycles of birth, life, death, and decay continue in a fluctuating state of balance.  In fact, one can view the environment as a factory that produces no waste at all—everything is recycled.

Prout includes the ecological perspective of traditional peoples that we all belong to the natural world.  Planet Earth, her wealth of resources, as well as the rest of the universe, are the common inheritance of all humanity.  Collectively, like brothers and sisters in a human family, we have a duty and a responsibility to utilize the earth in a sustainable manner and to fairly distribute the world's resources for the welfare of all.  As the elder sisters and brothers in a family, we also have a duty to protect our younger siblings, the animals and plants and Creation.

Prout's notion of ownership is based on this spiritual concept that Sarkar terms “cosmic inheritance” (Sarkar 1993).  He reasons that the Creator is not separate from the creation, but permeates and resonates in every particle of it.  There is a divine essence in each human being.  Prout encourages the protection of biodiversity, natural habitats, and reforestation, as well as aggressive control of air, water and soil pollution.  Efforts to reduce carbon emissions and greenhouse gases are supported.  Every living being has existential value in addition to utility value.  Humans do not have the right to destructively exploit plants, animals, or the Earth, without regard for their well-being.  The Creator invites us to use these with respect, but not to abuse them.

The spiritual potentialities of people, that which allows us to develop peace, harmony, wisdom, wholeness, and lasting happiness within, remain for the most part undiscovered in materialistic societies.  Yet throughout history, a few mystics of all cultures have dedicated their lives to practicing spiritual techniques to realize this inner treasure and share it with others.

A spiritual perspective then would include respect for all beings, gratitude for all beings, and eventually ever-expanding feelings of compassion, altruism and unconditional love for all beings.  This involves self-transcendence, wisdom, and connecting with the sacred, the infinite, to reach a state of perfect peace and infinite happiness.  The endeavor to attain this blissful state is the human quest known as spirituality.

“Neohumanism,” a term coined by Sarkar, is the process of expanding one's sentiment or allegiance from one of self-interest to one of empathy and identification with an ever-larger share of humanity.  It stands for the practice of love for all creation, including plants, animals, and the inanimate world ( Sarkar 1982).  Prout advocates that education should be based on this, incorporating a harmonious blending of oriental introversial philosophy and occidental extroversial science.  It seeks to redefine the human experience from one that is competitive, desiring to dominate and control, to one that is cooperative.  Neohumanist education unleashes infinite learning capacity into our lives by expanding our understanding of ourselves and our potential.  Spirituality, creativity, and love are at the center of this new force.  (Inayatullah, Bussey, and Milojevic 2006). 

What Spirituality is Not: Dogmatism 

This universal spirituality is different from religion, a particular faith tradition or doctrine.  It is also not about dogmas, which can be defined as any intellectual barrier beyond which one may not question.  Examples of religious dogmas include: the idea that we are the chosen people of God and others are not, that ours is the only way, that we are going to heaven and everyone else is going to hell, that only our holy book is the word of God, that men are spiritually superior to women.  All of these are terribly destructive, dividing humanity by creating a mentality of Us and Them, superiority and inferiority.  Dogmatic leaders have incited fanaticism, hatred, intolerance, and violence.

Unfortunately, fundamentalism and religious fanaticism are increasing in many parts of the world as a reaction to the economic injustice that many people are facing.  Unemployment, debt, insecurity, urbanization, and westernization are marginalizing millions.  When people feel they have no future, when they are alienated because they are not a part of the capitalist dream presented by beautiful, rich, happy American actors and models, they sometimes turn to dogmatic religion in order to reclaim their hope.  Religious institutions sometimes manifest structural violence, instilling fear, guilt, and inferiority.

Sarkar defended Karl Marx's condemnation of religious dogma as “the opiate of the people,” writing: “A group of exploiters loudly object to a remark that was made by the great Karl Marx concerning religion.  It should be remembered that Karl Marx never opposed spirituality, morality and proper conduct.  What he said was directed against the religion of his time, because he perceived, understood and realized that religion had paralyzed the people and reduced them to impotence by persuading them to surrender to a group of sinners” (Sarkar 1963).   

Evaluating Social Policies with Prout 

Sarkar's work is exciting because it allows policy makers and activists to effectively measure and compare policies for the greater good of all people, as well as the planet.  The goal is for all people to maintain themselves, to develop their potentialities, and to balance their individual expressions with collective interest, instead of allowing one group's interest to trump the needs of another interest.

Prout's holistic model provides an overarching framework that combines the strengths of many disciplines, including, for example, economics, political science, public health, environmental sciences, sociology, finance, administration, engineering, and law.  Below is a list of sample questions to consider:

• Are everyone's minimum needs being met in a sustainable way, both now and in the future?

• Do federal and state governments provide: Support for balanced regional economies?  A fair monetary and banking system?  Rational limits on the personal accumulation of wealth?  A coordinated national infrastructure and public health?  A fair judicial system based on restorative justice and transformation?

• Are communities able to provide full employment, fulfill their needs, determine their economic future, and process local resources in a sustainable manner?

• Do individuals have all the personal freedoms included in the Universal Declaration of Human Rights?  Are there continual efforts to expand these rights according to changes in consciousness?

• Is the structure flexible enough to change as needs change?

Policy evaluators, to accurately answer these questions, will need to draw on varied expertise.  For example, to determine if everyone's minimum necessities are being met, we need to consult social workers and nongovernmental organizations, evaluate indicators of health, poverty, and unemployment, study the pricing of essential goods and whether a person receiving a minimum wage could afford them, survey housing needs, explore issues of class, gender, race, age, and education, as well as check for environmental sustainability. 

Conclusion 

Prout proposes the maximum utilization and rational distribution of all natural and human resources, emphasizing the value of both individual and collective well-being.  It is a holistic model of economic, social and spiritual concepts that include guaranteeing minimum necessities to all, the right to jobs, a three-tiered economy, including small-scale private enterprises, cooperatives, and large-scale publicly owned key industries, food sovereignty, sustainable agriculture, and economic democracy.

Normally, a spiritual perspective is considered a personal affair.  However, Prout and neohumanism assert that an ecological and spiritual perspective that is universal and nondogmatic is essential to creating a truly just society.  To feel connected with everyone and everything, to feel compassion for all, to develop even love for all, suggests that our social and economic system cannot exclude anyone.

The authors suggest that an evaluative policy framework based on Prout be developed to effectively measure and compare policies for the greater good of all people as well as the planet.  This would allow both activists and policy makers to decide campaigns and raise awareness about key issues in the best way possible. 

Political Democracy can and will be fortuitous when Economic Democracy is established.   Explore this and other articles covering alternative economics, ethical leadership, economic democracy, and a society without the weal and woe of social and economic vicissitudes HERE   How does PROUT compare or contrast with capitalism or communism?  Explore the answers HERE What are essential ingredients assuring progressive sustainability bereft of the vicissitudes of economic or political predation, privation or disparity?  Learn more HERE  http://gplus.to/ProgressiveSustainability