by Tim Di Muzio
13 In his Theories of Surplus Value (1861–63), Marx traces this back to Hobbes. See www.marxists.org/archive/marx/works/1863/theories-surplus-value/add1.htm#s1 (accessed 5 February 2014).
14 Hall and Klitgaard (2012) come closest and their study comes highly recommended.
15 The complaint of not enough money for even a basic livelihood seems ubiquitous in market culture. I recall asking my Pop (my Italian grandfather) why they emigrated from Italy to Canada. He was a peasant farmer but did have some land. His answer? No money!
16 Of course, some workers will have shares in banking corporations, but, given our knowledge of the distribution of wealth, there is no way in the world that they would ever come to own them outright or in a significant proportion. For example, Warren Buffet’s Berkshire Hathaway owns about 8% of Wells Fargo but it is impossible to tell who all the owners of Berkshire Hathaway are. Either way, the owners of Berkshire Hathaway are getting wealthy from Wells Fargo’s ability to create money as debt.
17 As I was making some revisions for publication, two telling articles appeared confirming what bankers already know – Wolf (2014b) and Graeber (2014). The documentary ‘97% Owned’ should also be viewed by anyone who wants to understand modern money.
18 Each year I ask my students to do an exercise. I ask them to write down how they think money is currently created and then ask them to research how it is actually created. The myths of money could not be more divergent from the truth of its creation, as they soon discover.
19 See im.ft-static.com/content/images/a858f40e-ca80-11e1-89f8-00144feabdc0.pdf (accessed 9 February 2014). Banks appear to be the leading sector of capitalisation in this list, but it is misleading. The majority of oil is owned by state-run oil companies; if we added their projected market value to the existing value of firms on the list, oil and gas companies would rank highest (Di Muzio 2012).
20 Strangely, scientists discovered nuclear fission two decades before they came to understand the process of photosynthesis (Smil 1994: 2).
21 I am not suggesting here, as do Hall and Klitgaard (2012: 95), that the expansion of debt money corresponds in an exact way with energy consumption. What I merely suggest is that we can observe that countries with greater outstanding debts – national, commercial and private – will be larger consumers of energy.
22 I cite Arrighi here for his work on hegemonic transitions and less for his focus on energy as a key determinant of credit growth and capitalisation.
4 Differential consumption
1 I treat differential consumption as being synonymous with conspicuous consumption, and I thank James McMahon for pressing me on this at the Capital as Power conference in 2012.
2 It is never made entirely clear what they mean by ‘overseas conquests’. At one point, the report also suggests that dopamine levels in the population may have something to do with the ‘successes’ of plutonomies (Citigroup 2005: 9).
3 The index represents 6,000 global stocks and is typically understood to be a benchmark for global securities.
4 See information on the MSCI Index’s performance at www.mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html (accessed 20 February 2013).
5 To put this in perspective for the majority of wage or salaried workers, suppose your annual income is the median salary of a plutonomy, roughly US$45,000. Now, imagine that your employer gave you a raise of 2,548%. Your new annual income would be US$1,146,600 in addition to your median salary.
6 While it may not be definitive, there is significant evidence for this claim in three recent popular studies. Two consider the newly affluent in the United States: Frank (2007) and Taylor et al. (2009). The study by Taylor et al. is the most generous to the global wealthy and found through surveys that many of the super-wealthy prefer ‘stealth wealth’ or to have their wealth go under the radar. These people are assumed to avoid displays of conspicuous consumption. Whether there is a difference between what they say and what they do is unknown. A third study has a slightly more global focus: Freeland (2012). An additional study from the Center on Wealth and Philanthropy at Boston College entitled ‘Joys and dilemmas of wealth’ suggests much the same. The study was reported on in The Atlantic but unreleased (see Wood 2011).
7 Frank notes that about half the wealth in the United States was owned by ‘the richest 1 percent of families’ (Frank 2007: 38).
8 The population figure is an estimate based on the censuses of 1890 and 1900. See www.census.gov/ (accessed 20 January 2013).
9 As will be discussed further below, this is now surpassed in size and value by the Indian petrochemical tycoon Mukesh Ambani’s billion-dollar home in Mumbai. Called Antilia, the 27-storey home dwarfs Biltmore with 400,000 square feet of living space (Hanrahan 2012). As a reference point, consider that the Great Pyramid of Giza, once the world’s tallest structure, was 181,818 square feet.
10 See www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf (accessed 22 January 2013).
11 See www.biltmore.com/our_story/our_history/ (accessed 22 January 2013).
12 The fall of the ‘Bamboo’ and ‘Iron’ curtains in the 1990s doubled the global workforce (Freeman 2010). The fact that by 1991 communism no longer posed a serious ideological threat to the private ownership of power and wealth can also be viewed as a chief characteristic of this age.
13 Data are from the World Bank Development Indicators; GDP is expressed in current US dollars: data.worldbank.org/indicator/NY.GDP.MKTP.CD (accessed 9 December 2012).
14 See www.forbes.com/sites/seankilachand/2012/03/21/forbes-history-the-original-1987-list-of-international-billionaires/ (accessed 9 December 2012).
15 The growth in the number of ultra-HNWIs is also increasing the desire for intelligence on the behaviour of the wealthy and the willingness to service them. As a recent notice from Wealth-X notes: ‘Having seen significant growth in 2012 on the back of a surge in global demand for Ultra High Net Worth intelligence, Wealth-X announced its plans to accelerate expansion in 2013. With over 160 researchers covering 35 languages, the global research team plans to recruit another 150 new employees worldwide.’ See www.wealthx.com/articles/2013/wealth-x-announces-aggressive-expansion/ (accessed 12 February 2013).
16 See www.forbes.com/sites/luisakroll/2013/03/04/inside-the-2013-billionaires-list-facts-and-figures/ (accessed 17 February 2014).
17 Could it also be a law of history: the less you deserve your fortune, the more you aim to conspicuously consume? And if this ‘rule’ is in any way correct, what reasons might we give for it other than power and status-seeking?
18 The CLEWI for 2012 is at www.forbes.com/sites/scottdecarlo/2012/09/19/cost-of-living-extremely-well-index-our-annual-consumer-price-index-billionaire-style/ (accessed 12 February 2013).
19 According to Frank, it is now commonplace for the uber-rich to have a fleet of yachts – some with shadow boats: ‘At the Ft. Lauderdale boat show in 2005, I got a glimpse of the latest innovation in boater bling – the 170-foot Paladin, known as a “shadow boat.” A shadow boat is a floating garage that tags along with the main yacht and carries all the extra “toys,” like cars and smaller boats. It’s a kind of yacht for your megayacht. The Paladin, now owned by a Saudi, holds four to six cars, several motorcycles, jet skis, a submarine and a helicopter. It’s also got a decompression chamber, a walk-in freezer, gym and night-vision cameras’ (Frank 2007: 126–7).
20 See www.industrytap.com/worlds-largest-superyacht-comes-with-a-bullet-proof-master-suite-missile-defense-system/12014 (accessed 17 February 2014).
21 Frank (2007: 126) informs us that it costs 10% to 15% of the purchase price of a yacht to maintain it yearly.
22 See ‘ShowBoats International 2013 Global Order Book’ at www.sanlorenzoamericas.com/photos/articleDocs/20.pdf (accessed 12 February 2013).
23 See www.ussubmarines.com/faq/luxury.php3 (accessed 14 February 2013).
24 See www.forbes.com/india-billionaires/ (accessed 12 February 2013).
25 See
povertydata.worldbank.org/poverty/country/IND (accessed 12 February 2013).
26 The literature on this topic is too vast to consider here, but see Rockström et al. (2009) as well as Kempf (2008: 71) and Jackson (2009: 47ff), who demonstrate that material consumption puts extreme pressure on the environment and the myth that growth and environmental stress have been decoupled.
5 Society versus wealth
1 For a more comprehensive account of radical ideas during this time, see Hill (1991) and Kennedy (2008).
2 According to Wood and Wood (1997: 50), the right of resistance can be traced back to Ponet’s A Shorte Treatise of Politike Power (1556).
3 The ensuing discussion draws on Locke’s ‘On Property’ in Two Treatises of Government. I cite the text only when quoting it directly.
4 Macpherson notes: ‘the structure Locke had built on his unhistorical postulate’ read back ‘into an original natural condition of mankind the later apparatus of money, markets, trade for profit, and wage-labour’ (Macpherson 1978: 31).
5 In this sense, Bentham may be thought of as the originator of the private for-profit prison.
6 Bentham writes: ‘Property is nothing but a basis of expectation; the expectation of deriving certain advantages from a thing which we are said to possess, in consequence of the relation in which we stand towards it’ (quoted in Macpherson 1978: 51).
7 Nitzan and Bichler (2009: 72–3) demonstrate why perfectly competitive equilibrium is an impossibility.
8 We will not dwell on this concept, but to provide an example for those unfamiliar with the term, consider a chocolate bar. The first chocolate bar you buy and eat will likely give you a great deal of satisfaction. Having an additional chocolate bar will probably still be quite satisfying but less so than the first. A third, still less, and by the fourth chocolate bar you may start to feel sick. In simple terms, this means that you should stop eating chocolate after your third bar. This, of course, does not seem to be the case with accumulating money. If the satisfaction of owners with money obeyed this law of diminishing marginal utility, we would have far fewer capitalists!
9 The authors also note the biological explanations of Herbert Spencer, William Graham Sumner and Ayn Rand.
10 See Chapters 5 and 6 of McQuaig and Brooks (2012) for an enlightened discussion on the same theme.
11 Katrina Browne has made a documentary of her discovery called ‘Traces of the Trade’; see www.pbs.org/pov/tracesofthetrade/. Her story is detailed in the document in footnote 126.
6 The party of the 99%
1 To which we add that it is not passivity alone, but a lack of knowledge concerning the operations of the 1%. Ignorance is just as much a breeding ground for passivity as despair.
2 See www.ilo.org (accessed 18 February 2014).
3 See www.theguardian.com/news/datablog/2011/oct/17/occupy-protests-world-list-map (accessed 18 February 2013).
4 See www.adbusters.org/blogs/adbusters-blog/occupywallstreet.html (accessed 18 February 2013).
5 I would like to thank Adam Harmes and Art Piatek for the Warsaw conversations on this matter at the shacks.
6 Perhaps not surprisingly, Quigley’s book was suppressed by his publishing house.
7 7 On rampant insider trading in the United States, see www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/to-catch-a-trader/preet-bharara-insider-trading-is-rampant-on-wall-street/ (accessed 19 February 2014).
8 One thing that might be pursued is a law that stipulates that every lending institution has to reveal its owners – down to the individual.
9 After this book was submitted for review, an important article appeared on this matter: see Graeber (2014).
10 For example, suppose you take a $100 loan at 5%. The bank creates the $100 out of thin air and puts numbers into your account on a computer. You have to pay back the initial $100 plus $5 in interest, or $105. Since banks charge but do not create interest, this is why there is always more debt in the system than there is money to pay it.
11 See www.positivemoney.org/ (accessed 21 February 2014).
12 The documentary by the brilliant Adam Curtis – The Mayfair Set – also explores this relationship.
13 This idea appears to originate with the British engineer and founder of the Social Credit Movement C. H. Douglas and is discussed at length by Rowbotham (1998: 227ff). My thoughts in this paragraph were developed in dialogue with Rowbotham’s work.
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