Regulating Democracy

Regulating Democracy

Regulating Democracy

Thursday, 15 December 2011 13:46

Reason Wafawarova

In the play largely attributed to tragedian Greek playwright Aeschylus, the play being “Prometheus Bound,” the pathetic figure of one Hermes, who was the messenger and servant of the gods, appeals to the rebellious Prometheus to make his peace with the supreme beings of the time.

The response from the misery-afflicted Prometheus, who was being tortured for betraying the secret of fire to humans, is a good illustration of the politics of democracy today. He said:

“Be sure of this, I would not change my evil plight for your servility. It is better to be slave to the rock than to serve Father Zeus as his faithful messenger.”

It is not an exaggeration to say that a modern day politician in the West, regardless of them being neo-liberal or left leaning – operates as the messenger-servant of wealthy and powerful corporations, themselves the cornerstone of the evil called imperialism; defending them vehemently against any serious intended critics, and ensuring that any obstacles threatening corporate power are either prevented or eliminated.

The right to profit has become sacrosanct in word affairs today, and any alternative to this is to be rejected as a matter of survival for those at the core of capitalist power. This is why the Chinese incursion in Africa is cause of concern in every Western capital. The vilification of the Chinese economic ascendance is packaged in humanitarian wrappings, like the much denounced cheap labour propagandistic hoopla that has become synonymous with Chinese investment.

We are told Chinese investors are unthinking little devils full of brutality and carrying hearts of stone. They are accused of flooding African countries they invest in with cheap labourers from their own country, that way depriving the locals of an opportunity to provide the same derided cheap labour.

Chinese products are denounced as being of cheap quality, which many times they are; to the extent that being in possession of something from China is often seen as a sign of close proximity to poverty and lack. In fact to some nothing long-lasting or reliable can ever come from China.

There is a story that tells of a Chinese bloke that got married to a Zimbabwean woman; and the couple had the misfortune of losing their first baby son after just a few weeks from birth. During the funeral the Chinese bloke’s mother in law was wailing loud saying, “Mwanangu ndakagara ndazvitaura kuti zvinhu zvamaChina hazvigari,” (My daughter, I did tell you before that Chinese things do not last).

The deriding of the Chinese may be partly because of their mass production policy that clearly has flooded the world market with cheap quality products, in a way a good thing for lower class denizens who at least can now access things like televisions and computers even with challenges of durability. But more importantly this criticism is done on behalf of the traditional Western capitalist whose monopoly of the world market has been wrecked beyond redemption, at least for now.

It is important for the capitalist world that democracy be regulated in order to secure the survival of the richest – to secure profits. Genuine democrats seek to regulate and moderate capitalism so that true democracy can be secured.

This is where the duel is between Zimbabwe’s ZANU –PF and the Morgan Tsvangirai led MDC-T. The MDC wants to garner votes by protecting the interests of the richest of this world while ZANU PF wants to garner votes by regulating the wealth of the richest of this world – making the wealthy share their control of the country’s riches with the locals.

Morgan Tsvangirai openly preaches that he is a messenger-servant of large Western corporations – disguisedly referred to as “international investors.” To the ordinary people he vehemently promises jobs, essentially expense number one on any businessperson’s inputs list, followed by such items as rent, electricity, water and so on.

For Morgan Tsvangirai it is a lot better to be slave to Western Corporations than to change his political plight for the servility of local economic empowerment of Zimbabwean entrepreneurs. After all being an input in someone’s business is a feat easy enough for anyone not too happy with the challenge of initiative and sacrifice. It is a comfort zone that Morgan Tsvangirai hopes to capitalise on, not necessarily because he is shrewd enough to comprehend the socio-political dynamics of societies and the subsequent weaknesses, but mainly because he himself does not know any better. Not with his base level of education and apparent lack of advice.

Addressing a rally in Marondera recently this is what Morgan Tsvangirai said about Zimbabwe’s Economic Empowerment policy: “We are totally opposed to this programme being undertaken by (Minister of Youth Development, Indigenisation and Economic Empowerment Saviour) Kasukuwere and Zanu-PF.

There are some people who are moving around saying: ‘indigenisation, indigenisation’. How can you implement a party programme wakavanda neGovernment? Ours is a job plan. We cannot have a society where 90 per cent of our children are not employed. Our plan is of jobs and starts by encouraging investment. Our plan is not to take from Peter to pay Paul. We cannot have another situation like what happened with the land reform, taking away from a few whites and giving to a few blacks.”

How an aspiring candidate for the presidency of a country can be “totally against” the empowerment of his own people is quite unthinkable, until one is told that Morgan Tsvangirai is leading a Western founded, Western-funded, and Western-directed political project carrying the name and image of a political party in Zimbabwe.

ZANU PF remembered the way of the people in 2000, after playing client party to the diktats of the IMF and the World Bank in the aftermath of the Cold War, shamelessly embracing the murderous and ruinous Economic Structural Adjustment Program in 1992, privatising part of the economy and cutting welfare while vehemently instructing the populace to “tighten your belts” as “investors will be coming in.”

The enthusiasm with which ESAP was preached could have been comical had it not been for the tragedy it caused through the wreckage of our economy. In fact Tsvangirai rose to prominence directly from the effects of ESAP, as a firebrand trade unionist, yet so unsophisticated that it took a single attempt with Western moneybags to convert him into a breathtaking puppet politician.

Now the man who yesteryear lambasted ESAP and propped himself as a popular pro-worker advocate now stands “totally opposed” to the economic empowerment of Zimbabweans, and believes the same investors that used ESAP to access the country’s resources will today come as generous providers of employment. It is called genuine gullibility caused by well-intentioned foolishness.

After realising its egregious errors in bed with Westerners, ZANU PF woke up to take over the land reform program from its authors – the revolting masses; going ahead to reclaim colonially stolen land in 2000 – distributing it among the landless masses.

The party has made a follow up correction to its earlier errors by embarking on the economic empowerment program – totally opposed by the country’s Prime Minister. It really does not matter that ZANU PF may be motivated by political interests like electioneering. They should if they seriously want to be elected. But the important thing is that land was reclaimed and redistributed to its rightful owners, just like the issue of import now is that foreign investors will have to partner with locals in the exploitation of our natural resources.

The community share scheme is particularly impressive if it is not hijacked by political rascals with vampire attributes, something not to be entirely ruled out. My friend and homeboy Takura Zhangazha believes our political parties are sizeably infested with thieves and crooks from across the divide; and that cannot be dismissed as a wild claim. Communities could easily develop their infrastructures if dividends from these shares were to be well managed, and one hopes this will be the case.

The inhumane exigencies of corporate power preclude policies like the land reform program and the economic empowerment policy. This is because such policies thwart profiteering, and to the rich profit is a sacrosanct right.

It is only the radicalism like we saw with the land reform program that pushes corporate power in a reformist direction. The Kimberly Process Scheme somersault over the sale of Zimbabwean Diamonds by the West was another sign of corporate power being tamed in a reformist direction by sheer radicalism. It does not matter that the US has thrown a tantrum by adding Mbada and Marange Resources on the sanctions list. It is a plainly futile and stupid gesture, given the irrelevance of the US factor in diamond trading at the moment.

When one is at the service of corporate power, they become unable and unwilling to deliver any serious reforms, just like what Barack Obama is doing in the United States.

The poor man has become the master of the sympathetic gesture, that understanding smile, the pained, hapless but friendly expression that tells us that the world is what it is and we cannot change it – that might is right; whether we like it or not.

So the system has made Obama escalate an unwinnable war in Afghanistan, bail out savvy elites from Wall Street, hire insurance companies to draft for him the new “health care” bill, listen to the rich suggesting nominations to his cabinet and to the Supreme Court, bomb and destroy Libya to steal its oil, massacre the people of Pakistan, and preach war against Syria and Iran.

Morgan Tsvangirai and the entire leadership of his party cannot openly criticise the illegal war on Libya, the massacring of the people of Pakistan, or any of the excesses of their Western masters, not exactly because they are evil hearted beasts with no humanitarian feelings, or because they are too unintelligent to distinguish between real and declared intentions of the West, but because they are hopelessly bound financial prisoners enslaved to their powerful funders.

It is bondage far stronger than the spirit that torments the PM with his inimitable lust and bed-hopping.

The vote fought for between ZANU PF and the MDC-T is a vote between the choices of regulating capitalism to create true democracy and that of regulating democracy to safeguard capitalism and to secure profits of the rich and powerful. The people of Zimbabwe will have to make a choice. Let no one be fooled by the preaching of aid and loans. No country was ever successfully built by NGOs and the IMF or the World Bank. Dambisa Moyo is quite clear on this one. Aid from the West is nothing but a tool to create dependency and to perpetuate poverty and that point is not an opinion but fact.

Zimbabwe we are one and together we will overcome. It is homeland or death!!!

Reason Wafawarova is a political writer based in SYDNEY, Australia.

Regulating freedom or regulating control

Adrian's picture

Hi Reason,

Good to be back if still resting, but whereas I would have full agreement with maybe the goal of this article if it means people that have equal access to resources and opportunities , the rich not exploiting the poor, sadly this will not deliver that society.

When people have suffered at the hands of others it is human nature to hit back in kind. It is the birth place of division and war. I was listening recently to an interview with Christopher Hitchens (a free thinking atheist) who died recently and he said division isn’t bad. It would surprise many I guess that Jesus himself said in Luke 12 v 51 “Do you think I came to bring peace on earth? No, I tell you, but division”. How can this be reconciled with his famous words in Matthew 5 v 9 “Blessed are the peacemakers, for they will be called sons of God”? Again James 3:18 “Peacemakers who sow in peace raise a harvest of righteousness”

The answer I am sure you know is of course is the battle between good and evil which cannot be at peace and it is amazing how quickly opposition comes when people start to do the right thing. The reason is simple, as soon as justice and equity are championed those who benefit from these very injustices they seek to address, are threatened. Yes, you are right that they are often the rich and powerful, but are they all white? No. Is it all the rich, No, just those who have gotten rich unjustly. Is it all the powerful, no; only those whose power has been obtained and sustained unjustly.

If our goal is to right injustice and our focus righting the wrong rather than the wrong doer, we are more likely to act justly and allow the law to deal with the “transgressors” to use an old word. If on the other hand the focus is just to get even and avenge, then you become like the very people you hate. This is the problem I have with this article and others where we are talking about black, white, west, East, or whatever other group you want to mention as if these are a single entity either good or bad. They are neither and fighting the entity brings nothing but more of the same.

So now we have that straight to the article….

It is not an exaggeration to say that a modern day politician in the West, regardless of them being neo-liberal or left leaning – operates as the messenger-servant of wealthy and powerful corporations, themselves the cornerstone of the evil called imperialism; defending them vehemently against any serious intended critics, and ensuring that any obstacles threatening corporate power are either prevented or eliminated.
----------------------answer------------------
This is simply not true period (see above) and serves only to draw a division based not on deeds actions and words but on an entity “western politician” and is just untruthful and is an exaggeration.
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We are told Chinese investors are unthinking little devils full of brutality and carrying hearts of stone. They are accused of flooding African countries they invest in with cheap labourers from their own country, that way depriving the locals of an opportunity to provide the same derided cheap labour.
Chinese products are denounced as being of cheap quality, which many times they are; to the extent that being in possession of something from China is often seen as a sign of close proximity to poverty and lack. In fact to some nothing long-lasting or reliable can ever come from China.
---------------answer--------------------
Again a generalisation at best - like any employer there are good and bad, but the key is local regulation, employee’s rights which should be a legal obligation on the part of the employer etc. China itself is only just granting its own workforce with anything akin to proper welfare so it would be wise to be watchful but I wouldn’t single out China alone…the same could be said for any country. My point is the division is wrong. When I was buying myself from china I could buy the worst and pretty much the very best example of the product; just came down to the price you were willing to pay, and in no way at all is “Made in China” links to poverty and lack. Some of the best products in the world come out of china and cost thousands!
---------------------------------------------

This is where the duel is between Zimbabwe’s ZANU –PF and the Morgan Tsvangirai led MDC-T. The MDC wants to garner votes by protecting the interests of the richest of this world while ZANU PF wants to garner votes by regulating the wealth of the richest of this world – making the wealthy share their control of the country’s riches with the locals.
--------------------answer-------------
Sorry don’t believe it, and I think thousands of Zimbabweans would join me in this. Hearing Zanu-PF arguing against state ownership of the diamond fields (to protect the millions that they are looting for personal gain) would back this up, as would any audit of the past few years that have produced a number of very rich ‘friends’ , Politicians & Priests(!) of no particular ability or skill but having the ‘right’ connections (I guess they are locals as you say – but an elite band hardly fair or just)
-----------------------------------------

ZANU PF remembered the way of the people in 2000,

---------------answer ------------------
Quote: William Mpofu Mugabe - traitor against Africans
Only in the year 2000, when the British turned around to support the new MDC
party and Morgan Tsvangirai, a former Mugabe stalwart, did Mugabe start
seizing white-owned farms, mines, factories and other businesses British
nationals and whites to fix them for turning against him and his party that
had looked after their interests so well. It was for political expediency,
not principle, as we are told. At about the same time, the war veterans of Zimbabwe's liberation were clamouring for compensation for their war troubles and injuries and threatening to align with the ZCTU labour movement to topple Mugabe once and for all. Mugabe paid them off and turned them into his private reserve army which he used to punish the whites and MDC supporters in a storm of political violence. It was only then, when whites began to be killed by Mugabe's mobs that the British began to condemn Mugabe for human rights abuses and to impose travel and economic sanctions on him and his comrades.
See Full Source link below..............
http://www.sowetanlive.co.za/columnists/2011/11/29/mugabe---traitor-agai...

These are the words of a man who is not MDC or even close but this take on the motivation at the time sits very comfortably with the facts from other sources , and I believe is as close as we can get to the truth.

Though you rightly say the land program’s failure has been over played the results are out of chaos rather than a plan; righting wrong with wrong and any means is ‘justified’ has scared a generation. The damage to the society cannot be overstated. Obviously this line ‘for the people’ is the party line and food and drink to the Herald but is only political propaganda.

The dark depths that this manipulation of people can go has to be expressed in this YouTube clip showing ‘pastors & teachers’ saying political propaganda like biblical truth (sickening)

http://www.thezimbabwean.co.uk/news/zimbabwe/55375/church-manipulation.html

Democracy can only work in a free society, with a free justice system and free media. If you have a security service controlled by the government it can’t work (see Egypt now) and where there is talk of “regime change”, which happens regularly in a true democracy. Democracy & dictators are simply incompatible period, but dictators use elections as little more than an ego trip to support their fake legitimacy . If you want to control what people think then forgot about democracy but thankfully in these days of the internet, social networks, wikileaks etc. leaders are finding it harder to spoon feed their people lies!

And my point? Truth matters and access to said, is a sound regulator in arriving at a just democratic society that respects the needs of all its citizens regardless of status, colour or religion.

Till the next time,

God bless,
Adrian

Thank you Adrian and welcome back!

admin's picture

I must say I do agree that the example of "Western politician" is limited to the Western political system, but it does not mean only Western politicians operate at the service of the wealthy and the powerful. Not at all. If you look at Zimbabwe now, the so-called "common ground" between MDC and ZANU PF is more a story of common wealth now acquired through political office than it is a political matter.

No doubt Tsvangirai and Mugabe share the same views on homosexuality. But we have seen an artificial shift on the part of Tsvangirai which one can relate easily to the influence of wealthy funders from outside Zimbabwe. Mugabe wants sanctions lifted in order to restore this relationship with the wealthy of this planet.

As for China I did say that the accusations are real in Africa and Zimbabwe, but I did not say they are correct.

The duel between ZANU PF and the MDC is about investors and local participation in business. That is not even hidden. ZANU PF want investors attached to the empowerment of locals and you are right in saying this largely benefits the powerful and the already rich. I too alluded to that in this essay. The MDC-T wants investors attached to job creation and they make no secret about that.

Oh yes. Land reform was induced by waning political fortunes for ZANU PF and that started with ESAP as I said in this essay. I have in the past raised this very issue myself. My point is that the motivation does not really matter for us Zimbabweans. The most important thing is that land was finally given to the people.

Love your new system!

Deitric Muhammad's picture

I like the analogy of Prometheus and Zues! However, I believe that Zimbabwe do not need any external investors. They can grow the economy from a purely domestic basis.

All Zimbabwe needs

admin's picture

All Zimbabwe needs is an external market for its products. We can do our production if we set ourselves to it.

Agreed

Deitric Muhammad's picture

But there is away that Zim can grow from the domestic market and keep a much larger portion of the revenue generated while having the external markets become "icing" on the cake--adding to the surplus. This would cause Zim's economy to grow exponentially and independently--making the currently-poor masses into wealthy beneficiaries and domestic direct investors in the Zim economy... and China's!

We have a problem

admin's picture

The problem we have is that we are enslaved to our dependency on Western hegemony to the point of dying to defend our bondage. Sometimes I get so bitter with the thinking of some of our people. Many do not only want to be employees but actually die to be employed by white people.

You are Correct

Deitric Muhammad's picture

It is unfortunate. The mentality of those in positions of power prove themselves to be powerless. You are already aware of the communications that I have sent forth. You would think there would be excitement over such prospects! However, they act so afraid to offend white people--even many of the so-called revolutionaries in Africa! Case in point: Julius Malema. He is being persecuted by the revolutionary--now traitorous--ANC for publicly singing a song that represents Azanian pride and liberation from white domination. Now it is considered "offensive" to white people??? Yet it is ok to have "gay rights" in Azania which is "offensive" to the culture and people of Azania as a whole??? This is sickening. I hope Africa enjoys Africom and colonialization by the West and East because this is what their cowardness is leading up to. Really... what is the difference between shedding one another's blood in these civil wars and intracontinental conflicts and sheddingblood to defeat the West once and for all in unity? Which would create the bigger gain? What is the fear?

The frustration

admin's picture

The frustration kills. I was in Zimbabwe and I met Cde Chimurenga fro the United States. He is trying to talk to these people directly and many of them are just not getting it Deitric. It is so sad.

It is sad

Deitric Muhammad's picture

I know. It is sad to see Pres. Mugabe go around the world for investment capital when he already has it. I had spoken with Dr. Mapuranga some years ago, and he stated that I understood the economic reality in Zimbabwe really well. I believed he communicated my offer back then when the Zim dollar was still the national currency. The problem is that these politicians believe that money has value in and of itself, and it does not. What makes things worse is that they see the US and Europe collapsing before their very eyes, and yet cannot see that they can only rely on themselves as Africans and the Diaspora in order to survive. Here is my latest report:

http://www.mge19.com/DisrespectLaw.pdf

Maybe this can open their eyes on what has happened to their economies and why their economies react the way that they do. Although it deals mainly with the US economy, but what affects the US affects the world. I also gave hints and clues on how monetary policy is supposed to work. Pass this on to any of your contacts in Zimbabwe. Hopefully it will open some eyes.

Blind Leaders

admin's picture

We have blind leadership. African leaders must open their eyes and see abounding opportunities they are certainly unaware of.

For the moment Africa is in

Deitric Muhammad's picture

For the moment Africa is in loss until a better stock of leadership is produced.

One hopes

admin's picture

One hopes this will be soon.

Deitric Mohammad has

Deitric Mohammad has interesting articles but premised on a fundamental flaw: confusing currency for all money and misunderstanding of national and international credit supply dynamics including the inherent un-sustainability of compound interest as a model for pricing credit. It is this confusion and misunderstanding that leads to a conviction that commodity backed money (money whose value comes from a commodity like gold out of which the money is backed) provides the enduring panacea to national and international financial circumstances, which he seems to conclude are predominantly a result of the use of fiat currency in national and world economies.

Deitric appears oblivious to these facts: (1) world current misunderstanding of inflation as relating to “price stability” is the significant flaw. Contrary to popular misconception, inflation is the increase in money supply and not increase in prices. The obsession with price stability is at the core of the inherently absurd and disruptive increases in money supply and speculative liquidity management in economies. (2) The prevailing and dominant compound interest funding model decouples money from production and opens up significant opportunities for speculative behaviors in finance. The world economies have dismally failed to enforce a rule of law that reaffirms a truth that finance (money and credit), like road infrastructure in an economy, only supports wealth creation but in itself creates no value and consequently every “financial deal must be firmly anchored to the real performance of the asset (production) from which it originated.” (3) Consumption should be a function of wealth created not credit acquired. Credit should facilitate wealth creation and not consumption. The western economies failed to save and became addicted to external borrowing to finance not wealth creation but consumption. The western economies exported entrepreneurship and production to Asia and only retained innovation and idle speculation inherent in financial engineering.

To help him better understand the deteriorated western economies, Mr Mohammad needs to familiarize himself with the complications and implications of balance sheet recession as both private and public sectors embark on deleveraging exercises. One has to add to the phenomenon of balance sheet recession the dynamics of international trust, reserve and international currency of trade. It is a concoction of these factors that explains the economic and financial circumstances of western economies not the simplification of commodity backed money.

With regards to economies like Zimbabwe, one has to simply investigate the morbid destruction of national and international trust by a Reserve Bank Governor hell bent on increasing money supply to the economy by all means and manner. No money, fiat or commodity backed, can facilitate wealth creation in an economy where national and international trust is under assault from the calculated or ignorant will of a Central Bank Governor. The blacksmith lost trust back in the beginning of gold as the commodity backing money and indeed and similarly Governor Gono lost national and international trust and with it the fiat money, the Zimbabwe Dollar. We need the rule of financial laws and not simply the introduction of commodity backed money.

Unfair judgement

admin's picture

While largely valid, Taurai's judgement on Zimbabwe's Central Bank Governor is shrouded in emotion, intolerance and a measure of irrationality. It totally ignores all other factors, resting all of Zimbabwe's monetary policy challenges squarely and only on the shoulders of one man.

Not all his fault

Deitric Muhammad's picture

Unfortunately, the RBZ does not belong to Zimbabwe. It is still owned by the World Bank--more specifically the International Reconstruction and Development Bank--1/2 of the World Bank. The governor only responded to the crisis as he was trained to. The formation of policy is still done by the owners of the RBZ. Seriously, what nation you know that owned its economy would seriously consider using another nations' currency and shelf its own? That situation did not have to be. I offered Dr. Gono the opportunity to save the Zimbabwean economy without shelfing its currency on numerous occasions. Dr. Gono is not totally at fault. ESAP had already scortched the earth before sanctions and hyper-inflation came along. The hording of goods and necessities began the inflationary pressures. The response by Dr. Gono only exasperated them--not created them. Again, this is due to his training. You see this type of economic response to inflation even in US and European history.

Our sovereignty

admin's picture

Our sovereignty is undermined all the more with this idea of using currencies of other nations.

Good to have your back, Taurai!

Deitric Muhammad's picture

God, I miss having intelligent debates with you! The beauty of an asset-based currency is stability. That is the purpose for it. Since price is measured in currency, the supply and demand of currency has the most dominant effect on price. Hence, price manipulation and price instability. As far as wealth creation, capital and credit are definitely important. However, it is the manipulation of price (and value denoted in price) that wipes out wealth and destroys credit and the ability to sustain credit. Production is also affected by price instability and manipulation because one cannot produce if they can no longer afford the means to produce, if credit is difficult to attain, and people are not buying what you produce in the same quantity or the same rate as before. Wealth generation can also be created through taxation policy. If people are able to keep a portion of their income after paying off their financial obligations would enable the people to increase savings and increase capital. This would not only give them disposable income, but it would position them to become potential investors. Please do not be so hard on Dr. Gono. He did what most economists would do in such a situation--based on what they were trained and taught in terms of economics. He attempted to increase the "velocity of money" in order to increase production levels. This was the same reasoning that led to many developing economies to de-value their currencies. However, as I explained on several occasions, the economic condition of Zimbabwe was in downfall BEFORE Gono took governorship. Read this:

http://www.cepr.net/a-survey-of-the-impacts-of-imf-structural-adjustment...

Dr. Gono was deceived by his training--as most economists are. This is why I made the statement about the Keynesian and monetarist schools of economics--which is taught in most Western universities. With the increase in prices, he should have lowered the money-supply to bring prices down. In war, this occurs most often. A nation sees inflation and increases the money-supply to "pay for necessary armament and supplies". However, it only leads to increased inflation. To make things worse, the people are taxed at a higher rate to "pay for those necessary armament and supplies". This only proves to wear-out the economy because inflation increases and production levels fall. The only alternative left is to borrow. Bam! There goes the economy! There is wisdom in what I am stating, Taurai. It may seem archaic, but look at it like this. Exponentials are a more sophisticated form of multiplication as multiplication is a more sophisticated form of addition. However, all of the more sophisticated mathematical forms are still based on addition and subtraction. All of the things you spoke of are based on money--which is only an unit of account of real value which is determined by the scarcity and/or productive value of a real resource or commodity. In other words, it is all based on land and the resources that that land produces. Economics is, has been, and will always be commodity-based.

Doctor Gono

admin's picture

Doctor Gono did not create the shrinking economy. He only reacted to it. Without the economy expanding again no Central Bank Governor can perform miracles with money alone.

Actually, it can.

Deitric Muhammad's picture

Actually, economic expansion or contraction can be induced by money supply. The reduction of money-supply coupled with the raising of interest rates is what caused the so-called World Financial Crisis. See here. Production can also be induced or reduced by money supply factors also.

Not in an economy

admin's picture

Not in an economy where capital is flying out and the country is sanctioned and isolated.

Actually, it can!

Deitric Muhammad's picture

Actually, it can! This is what makes my offer so potent. Currently, all nations are dependent on external economies and external markets. Any nation can grow itself domestically from its own domestic economy if it is structured properly. International trade should be and can be icing on the cake as opposed to being the cake itself. This is why I say that sanctions can become no more than tolietry if the economy is structured properly.

I wish

admin's picture

I wish this model could be given a try.

You raise interesting but

You raise interesting but flawed concepts on money:

One: "However, it is the manipulation of price (and value denoted in price) that wipes out wealth and destroys credit and the ability to sustain credit." WRONG.

Wealth is destroyed by the manipulation of money supply. Price is just a mathematical result of the quantum of money and production in an economy. It is the increase and decrease in the money supply that debases money. Movement in price is just an inevitable consequence of manipulating money supply. Consider an economy with $100 and 100 widgets. The purchasing power or base of that money is $1 per each widget. A central bank governor who prints from thin air an additional $100 debases the currency by the very act of increasing money supply and not through the inevitable consequence of the price of the widget increasing to $2. Thus it is not the manipulation price but the manipulation of money supply that destroys wealth.

Two: "With the increase in prices, he should have lowered the money-supply to bring prices down." WRONG.

I have said price is merely an inevitable and indeed mathematical consequence resulting from the changing relationship of the quantum of money to the quantum of production in an economy. It is naive for any central banker to focus monetary policy on manipulating price, which is an inevitable mathematical factor. In the context of this debate, increase in prices is inevitable from one of two: increase in money supply or decrease in production.

Governor Gono ought to have known that production in the Zimbabwe economy had significantly slumped due to poor farm production or trade sanctions (or both). His monetary policies should have thus focused on increasing or restoring production and NOT manipulating money supply. His solution of increasing money supply in an economy with decreasing production was double trouble. To illustrate, take a central bank governor who faced with an economy whose production has decreased from 100 to 50 widgets responds by increasing money supply from $100 to $200. The laws of mathematics tells us that under that scenario the price of widgets increases from $1 to $4!

Your proposed solution does not work either! To illustrate, take a central bank governor who faced with an economy whose production has decreased from 100 to 50 widgets responds by decreasing money supply from $100 to $50. Indeed, the laws of mathematics tells us that under that scenario the price of widgets would remain constant at $1. Using your approach, when the production further decreases as happened from 50 to 25 widgets, the money supply would be decreased from $50 to $25 and still maintain price of a widget at $1. Notice, that this strategy ignores the problem, which is decreasing production. The wealthy of this illustrative economy is destroyed from $100 to $25 nothwistanding that prices have been maintained constant.

INFLATION IS INCREASE IN MONEY SUPPLY. Any economy that increases money supply is inflationary whether or not prices remain constant. I am very hard on Governor Gono because he increased money supply in an economy with decreasing production, which is even more of a monetary policy disaster.

There is no stability whatsoever from asset backed currencies. This is because currency is an insignifcant portion of money in an economy. An economy thrives on credit and credit is a function of trust and the rule of financial law.

No ways

admin's picture

An economy thrives on production and there is no credit without meaningful production.

That is very true. Credit is

Deitric Muhammad's picture

That is very true. Credit is based on production. Production can never be based on credit. You are given credit on the ability or perceived ability to produce something that will enable one to pay back what was borrowed or generate a return for the investment made. This is why it pains me to see Mugabe and other African leaders so quick to ask for FDI. If they create the right conditions in their nations with proper fiscal and monetary policy, then direct domestic investors can be created or generated from amongst their own nations' ranks.

We need

admin's picture

We need to develop local investors and local producers.

You must love disagreeing with me.

Deitric Muhammad's picture

You must love disagreeing with me because your first example is EXACTLY what I said using different words. The second example makes no sense. Decrease the money-supply, prices will fall. You know this. Production can be slowed or quickened using money-supply forces such as inflationary and deflationary pressure. Credit does not run an economy. Credit, or the misuse of it, is what is running economies down to the ground. Tell me, Taurai, if it is credit that an economy thrives on, why is not that credit passed on to poor people who are told that they have no credit and cannot be given credit or that bad credit is better than none. Then you have people who have great credit scores but are denied credit because they have no assets in which to use for collateral? Hence, an asset of some sort--something real--like REAL estate. Production is impossible unless there is something to produce. Products are made from the productive use of raw materials that come from the land--whether it is milk, honey, cotton, sugar, rum,gold, plutonium, etc. That raw material must be made into a useful product by laborers that find and manufacture that raw material into the useful product. This can be accomplished without credit. This is why banks and governments are quick to give away currency because they want what is in the land--commodities. Labor itself is considered a commodity as well, and most like labor cheap. However, during slavery, labor was valued acoording to its productive use--just like cotton. Slaves were sold at exchanges like any other commodity! That's when cotton was king! That's why slavery in its New World form was so popular! That's why we were kidnapped and sold by the hundreds of millions--our productive use! Let me introduce you to a couple of books: The Secret Relationship Between Blacks and Jews vol. 1 and vo1. 2 Labor and commodities go hand in hand as the engine of an economy. However, it is currency that represent value for real things. Currency is a proxy to real value. That value is reflected in price. This is why the supply and demand of currency is most important in any economy. Contrary to popular belief, economics is a behavioral science--not a mathematical one. The main engine of economics is people, and people will respond a particular way when certain things are done. This is why with all of my flawed concepts, I am able to accurately predict future market movements and economic events up to many years in advance with a high level of precision--every time. Go back into the report and see how early I predicted this so-called Financial Crisis, and see how I predicted how the bankers would respond to TARP BEFORE they got the first bail-out moneys, and see how I predicted the newly-ensued inflation in my letter to Latin American and Southern African governments that no one believed would come true. Yet, it did with high precision and accuracy--from the World Health Organization response with the H1N1 flu vaccine to the food inflation that even China is experiencing now. How can I be wrong when I have not been wrong yet?! Not bragging, because I wish I was wrong in some areas, but the Keynesian and monetarist concepts have not worked for any developing country (consider how many economists African nations produce yearly) nor has it worked for Europe and the US. My teachers, Jude Wanniski and Robert A. Mundell taught China how to rise from a command economy into a market economy, but still left them pegged to the US dollar. Very deceptive, I must admit. Sneaky devils! They wanted China to become a competitor with the US and Europe, but not to dominate them. I desire for Africa to dominate. The slave model that we are taught is "economics" is a dying model. Tell me you did not know that the economic concepts that we study are based on the slave economies of Europe and the Western Hemisphere during the 1500-1900's?! Slave economics and real economics are two different things! This may be why we differ. The economic concepts that we study in school are based on the economic principles that supported slavery and colonialism (still slavery). Remember, the West was built on the backs of slaves--whether from Africa, Southeast Asia, Oceania, or the Americas. Real economics was twisted in order to support the slavocracy concept. That's what I explained in this report: What will African Economies Do Once the US Dollar and the Euro Collapse? All economies are commodity-based--from the roota to the toota. ;)

Kick the ladder

admin's picture

The West uses the kick the ladder strategy where they climb first and then tell all others to follow suit after they kick away the ladder.

Are you heading down to Bondi

Are you heading down to Bondi Beach on Sunday Waffa to meet your friend Ruffius... or are you afraid?

he has asked to see you in person, so why don't you reply, or is it that you are all mouth and no substance!!

Don't abuse

admin's picture

Don't abuse the privilege of posting here, because it can be taken away from you.

So its a priviledge to

So its a priviledge to respond to your nonsense? Get your head out of your arse Reason.

For sure it is

admin's picture

For sure it is. This site does NOT belong to your sorry old mother. It is private property and you gotta understand that loud and clear.

Still deleting post I see...

Still deleting post I see... some things just never change

He doesnt want to be exposed

He doesnt want to be exposed as the ZANU Puppet he is. He cant handle the debate so he deletes the posts that show him to be a fraud. He's been shown to plagiarise his work of mulitple authors multiple times.

You have a choice

admin's picture

You have rights and choices here. You stick to debating the issues at hand or you decide to have your posts excluded on the grounds of irrelevance. It is a free world.

If its a free world then why

If its a free world then why do you delete posts?

Precisely because

admin's picture

Precisely because it is a free world and I have every right to open a website and run it the way I see best.If that is not acceptable to you then you are free to hang yourself or do whatever else makes you feel better.

And why delete posts that

And why delete posts that show you to be a plagiarist? Clearly the credibility of the blog writer here is important in determining how seriously his work should be taken...

That allegation

admin's picture

That allegation is just not true. You accuse me of plagiarising someone who has reprinted my article and you want me to take you seriously?

I could not agree with you

Deitric Muhammad's picture

I could not agree with you more.

We sure come from different

We sure come from different economic schools.

In Christianity they talk of different gifts: those who have a gift to prophesy do not necessarily have the gift to minister. Indeed you may be gifted to "accurately predict future market movements and economic events up to many years in advance with a high level of precision" but perhaps my brother you need to be open to the possibility the gift, strength or skill ends there.

You say: "Production can be slowed or quickened using money-supply forces such as inflationary and deflationary pressure." WRONG.

What you are calling money supply forces is largely compound interest, a weapon of haphazard economic destruction, which bears no relationship to production and is prone to speculation and is the cause of asset-liability mismatch and asset bubbles that have to burst periodically. What is true is this: national wealth is always destroyed by an increase in money supply.

You say: "However, it is currency that represent value for real things. Currency is a proxy to real value. That value is reflected in price. This is why the supply and demand of currency is most important in any economy." WRONG.

A basic rule of financial law says: Money, like infrastructure, only supports wealth creation but in itself has and creates no value. Money is not a commodity. Only commodities have value. Money is not a proxy but only facilitates the creation of value. Speculators have violated this rule and started trading money not to facilitate creation of wealth but as a commodity and source of wealth.

This is precisely the reason why in finance we talk of "cash flow" acknowledging that money has no inherent value and suggesting that money should be constantly flowing facilitating wealth creation and never stored or hoarded as a commodity that stores value.

Money is a symbol

admin's picture

Money is a symbol. It is not the economy.

Very true

Deitric Muhammad's picture

Very true. It is only used as a symbol or representation of real value. The real value of an economy is in the ground and in the people. Economics is a behavioral science--not a purely mathematical one. Economics is not arbitrary as we are taught. It is very finite and is very real. The people are the basis and the focal point of any economy. To treat them as commodity, laborers, and consumers only serve to weaken and destroy any economy. This is why war is so prevelant. People are sick and tired of being exploited like any other material from the ground.

Economies

admin's picture

Economies must be modelled alongside the needs of the people and not the desire to make profit.

What are your thoughts, Reason?

Deitric Muhammad's picture

What are your thoughts on the exchange between Taurai and myself concerning the implementation of a monetary standard--the gold standard in particular?

I do agree

admin's picture

I do agree with the idea of a pegged currency in as far as controlling inflation is concerned. My only worry is that the value of the commodity against which the currency is pegged is not guaranteed and it could inflate, go down or strengthen any time.

So I would say more importantly currency flow must be guided by collective production.

Perfect and well well said.

Perfect and well well said.

The demand and supply of the commodity backing the currency is unstable, limited, not evenly distributed geographically, can be the cause of wars as nation states without compete to accumulate and hoard the commodity to back their currencies, was a cause of colonialism and imperialism as nation states plundered Africa of the commodity to back their currencies, can be manipulated, has historically been manipulated, and can and is speculated on. The result: inflation or deflation.

Perfect summary.

You are right

admin's picture

You are right about this history. But perhaps what Deitric is saying is that the pegging must be doneby individual resourced country on a country by country basis, not the internationalised pegging you seem to be referring to.

Money Supply Forces

Deitric Muhammad's picture

I will give you this excerpt from the above report concerning the stimulus packages and why they did not work:

(*Since we are on this note, I must state something about the so-called stimulus packages
and why they did not stimulate the economy as proposed. If a car dealership were to recall 1
million cars, would it have any effect on the car market? Probably not, because those cars are
still in the market. They were recalled by a car dealership—one out of many car dealerships that
sell the same cars, and it only affects that particular dealership and its customers. However, if a
car manufacturer recalled those same 1 million cars, would it have an effect on the car market?
Of course it would! Those cars would be considered out of the market because the car
manufacturer is the maker of the cars and are the ones responsible for putting them in the market
in the first place. Well, the US government does not manufacture, or create, the US dollar. The
central bank does. This is why the stimulus packages did not work. It was nothing more than
recycled tax dollars that were already in circulation. Therefore, it had no effect. There was no
change in the supply of dollars in the economy. )

The supply and demand of currency is the most dominant factor because it effects the direction of price. Bubbles do not exist. Free market forces do not exist. Market forces are deliberate, directed, and controlled. Market forces are money-supply forces. Who controls the money-supply controls the forces. It's that simple. Interest rates just control the rate, velocity, or speed, in which those forces are applied--period. If the markets were not manipulated, I would not be able to predict them the way I do.

OF COURSE

admin's picture

Of course there is no such thing as free market forces. We wouldn't have imperialism if there were such a thing.

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