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and White Rabbits of our wonderland Humans bond for security: to insure and ensure: Adam and Eve bonded to ensure their mutual security; life’s desiderata impelled insurance.1

± ensure, insure. ‘Ensure’ is the usual spelling for “make sure or certain”; ‘insure’ for “arrange for money payment in case of loss, accident or death.” Government was mutual bonding to ensure common security. Insurances then were then rational appendages to government. Taxation ensures the administration of security, which includes the mutual Insurances. Seekers of a different or better security form gave American government its democratic uniqueness: leaving monarchy’s ‘not wanted’ tax-based sinecures and insurances, as the king’s wars; Lincoln described Seekers’ “to ensure” security wants when he declared that government was of the people, for the people, and by the people. An anthology of Politics that challenge Our Federal Savings Plan: DeYoung’s document about Social Security insurance. by Melvin H. DeYoung All rights reserved



FOREWORD 3 103 POLITICAL ECONOMY (and White Rabbits) 6 (For substance, see: 205 POLITICAL ECONOMY & . . .) 104 SOVEREIGNTY (and White Rabbits) 100 (For substance, see: 208 SOVEREIGNTY & . . .) The market system: our security 6 Whigs, The American System of Political Economy 6 Whigs gave us “loco parentis” 6 antecedent (logic) 7 The Good Society 8 Tory flux 19 Whig flux 19 Independent flux 22 fixed contracts v.s. sovereignty 22 “American System” determinism 22 Divine Right 23 Economic Determinism 24 Materialism 25 Classical Liberalism 25 sample of Kant’s pure liberal thought 29 Do corporations now populate a fictitious state


Economics is not value free Classical liberalism . . . described “moral approbation”


“Practical sovereignty” Taxonomy of interests 104 SOVEREIGNTY (and White Rabbits) Soverignty is individual responsibility 521 Population Changes Endemism and Inflation 103-104 FOOTNOTES

45 46 54 58 100 103 125 133 146



As subjects of old ‘divine-right’-based monarchies that insured the potentates, seekers’ insurance interests conflicted with patronage that sustained the kingdoms’ wealth and domain. But, while their values and interests conflicted, the dogmatic ‘old’ ways held fast. Seekers of better ways ensured the uniqueness of American government: prospects of insurances’ equanimity. Whigs, however, ensured American System Political Economy. Their property-based flux ensured the middle ground of old potentates’ ‘divine-right’-based insurances. Only Seekers moved the nation beyond Political fallacies: only in quantity will [Smith’s Economy] grow: more people, more

goods, more wealth ; its quality will remain unchanged forever . . .; it grows but it never matures. R. L. Heilbroner Colonial life under ‘divine right’ changed slowly even as feudal life of the dark ages. Only by enlightenment of reason was progress enabled. Tories, Federalists, and Whigs are ‘divine right.’ patrons and government’s privatized Political Economy insurances are prone to hidden paternalistic endemism. Whigs of the GOP made Political Economy into the ‘Fairy Godmother to business.’ 2 The Whig Republican was still Hamiltonian paternalistic, and the Democrat Republican was still Jeffersonian laissez faire, and until it was determined which wing should control the party councils there would be only confusion. The politicians were fertile in compromises but in nominating Lincoln and Johnson the party ventured to get astride two horses that would not run together. To attempt to make yoke-fellows of democratic leveling and capitalistic paternalism was prophetic of rifts and schisms that only the passions of reconstruction days could hold in check. In 1865 the Republican party was no other than a war machine that had accomplished its purpose. It was a political mongrel, without logical cohesion, and it seemed doomed to break up as the Whig Party had broken up and the Federalist Party had broken



up. But fate was now on the side of the Whigs as it had not been earlier. The democratic forces had lost strength from the war, and democratic principles were in ill repute. The drift to centralization, the enormous development of capitalism, the spirit of exploitation, were prophetic of a changing temper that was preparing to exalt the doctrine of manifest destiny 3 which the Whig party stood sponsor for. The practical problem of the moment was to transform the mongrel Republican party into a strong cohesive instrument, and to accomplish that it was necessary to hold the loyalty of its Democratic voters amongst the farmers and working-classes whilst putting into effect its Whig program. . . . Under normal conditions the thing would have been impossible, but the times were wrought up and blindly passionate and the politicians skillful . . . the party passed definitely under the control of capitalism, and became such an instrument for exploitation as Henry Clay dreamed of but could not perfect. Under the nominal leadership of the easy-going Grant a loose rein was given to Whiggish ambitions and the Republican party became a political instrument worthy of the Gilded Age. With unaccounted endemism, i.e., hidden, who ensures government’s insurances and whom does paternalistic endemism insure? The nation’s predicate values which called for independence from England, for which the Constitution was established, bound colonists together. But the predicate values, which distinguish liberals, as Jefferson, from the conservative Federalist-Whig following of Hamilton, lay deeper. About Daniel Webster, Parrington wrote. 4

His reputation was extraordinary, and he seemed as fixed and brilliant as the north star. After the reply to Hayne, his fame as the defender of the Constitution was in every mouth. That celebrated speech, perhaps the most celebrated in our congressional history, was delivered on January 26, 1830, and awakened as amazing response. Men were moved to tears by its



eloquence, and its circulation in pamphlet form exceeded that of any other pamphlet since the founding of government. It is not a great constitutional argument, but it better served the purpose of inspiring in the public a grandiose conception of national unity under the organic law, than any reasoned statement could have done. For political purposes rhetoric was more effective than historical argument, and its sonorous sentences, and in particular the stately conclusion vastly appealed to the taste of the generation. Three years later Webster applied himself more closely to the subtleties of the question. Calhoun’s masterly argument with its exposition of the theory of concurrent majorities could not be answered by rhetoric, and on February 16, 1833, Webster spoke on “The Constitution not a Compact between Sovereign States” (‘Works,’ Vol. III, p. 449). His argument is strictly legal and rests on four theses: that sovereignty inheres in the people; that as individuals acting collectively in their sovereign capacity, they ordained and established the Constitution; that the Constitution thus established is the supreme law of the land, acting immediately upon the individual citizen and recognizing no intermediary sovereign state; and that as an “executed contract” it is irrevocable and final, with the necessary functions to construe its powers and execute its will [The current Federalist dogma of the divine right of justice -- ‘vox justiciae vox dei’]. Of these four theses, two may be regarded as Webster’s chief contribution to the great debate: the doctrine of immediacy, and the doctrine of an executed contract. The latter, quite obviously, is no more than Burke’s theory of the British constitution as founded on a compact entered into



following the Revolution of 1688, and as such, by analogy from the common law, inviolable without the consent of both parties to the instrument. As developed by Burke the theory is somewhat tenuous, but as applied by Webster to the interpretation of a written document it is extraordinarily plausible to the legal mind [as ‘abstract justice’ also is]. The doctrine of immediacy, on the other hand, would seem to have been derived from Judge Story. The argument of Webster in expounding the principle of immediate compact between the individual citizen and the Constitution follows the argument of ‘Story’s ‘Commentaries too closely to escape comment. Theodore Parker explicitly states that Webster got his argument from Story, and circumstances bear out his assetion. . . . The deliberate metamorphosing of government’s purpose to install mechanist paternalism favored mechanist business political interests and has its legal roots in what Jefferson called ‘abstract justice’ (Calvinist ‘divine-right’-based justice, for instance). When logically evaluated for veracity, it amounts to tautological fallacy. And in any event, Lincoln had no part in government’s illogical metamorphosing. Parrington’s comments about Lincoln are quite clear: He was a free-soil liberal and won the presidency on the emancipation and the advocacy of ‘internal improvement’, as regards this objective. Parrington compared Lincoln to Andrew Jackson.5 Based on Parrington’s comparison, Lincoln’s democratic predicate with Whigs,’ politics went on only so far as emancipation, however, Whigs who gained government’s offices on his political coattails, then installed Clay’s American System of Political Economy. It is to wonder, therefore, about political motives to assassinate Lincoln.


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103 POLITICAL ECONOMY (and White Rabbits) Adam Smith postulated economy for universal utility. 6

The market system is a mechanism for sustaining and maintaining an entire society. R. L. Heilbroner While individual sovereignty ensures our Republic and Political Economy should insure the Economic Security of all, Political Economy fails to insure about one fifth of the population. Then, with ‘internal improvement’ doctrine, Whigs gained control of government and established “The American System of Political Economy”: Whigs established ‘Loco Parentis,’ or, ‘internal improvements’ via federal government paternalism for private entities of enterprise. This federal government insurance to ‘business’ was soon called ‘the pork barrel,’ or, about a state’s political clout in Washington, ‘bringing home the bacon.’ Whigs also gave us ‘for profit’ corporations. The flux of congressional debates never settles. While debate should be rational, seeking veracity in logical tautological agreement, politics is about sovereignty, authorities, power and control. All intercede. Whigs gave us “loco parentis,” government acting as a parent. 7

A democratic state stands in "loco parentis" to the economic interests of its citizens, and should guarantee the progressive well-being of strategic groups on whose prosperity depended the common well-being. The well-being of strategic groups (or trickle down theory) became economic policy and myriad programs and laws which supported business interests became the standard of "loco parentis" support (systematic insurance to general economy). About Adam Smith’s tautology, "Loco parentis" is logical fallacy that justifies all sorts of business and corporate welfare. Parrington observed this fallacy:8

The Whig party was the lineal heir of the old Federalism, but it denied its philosophical patrimony. It substituted expediency for



the old economic realism, and began and ended intellectually bankrupt. ----

What did Whigs change in Adam Smith’s thesis for “universal utility?” Was Smith’s tautological economic intent deliberately scuttled?


Concerning the logical tautology of Smith’s thesis, did Whigs compel fallacy, by ‘Affirming the Consequent’ or ‘Denying the Antecedent’ of Smith’s tautology? : When postulating a ‘slave class of wage-earners,’ did Whigs, by ‘Affirming the Consequent’ of Smith’s tautology, rationalize the Constitution? : Did Whigs lace the Constitution with endemism of mercantilist doctrine to ensure greater “profits” (In this, did they ‘Deny Adam Smith’s Antecedent’)? These questions examine veracity of political economy. They apply to the essence of life and also to the substance of life (section 205). An examination of veracity must begin with word meanings. In the sense of common understanding, word meanings are the logical principle (antecedent) to veracity (the consequent).9

antecedent 4. ‘Logic’ the part of a conditional proposition which states the condition and upon which the other part (the consequent) logically depends. When ‘the Antecedent’ is denied, common meaning is denied. And when the ‘the Consequent’ is affirmed, the original consequent is metamorphosed into the antecedent of a different meaning. But who pays political attention to such illogical, fallacious metamorphisms? The movie ‘Insider’ presents a case history of a logical metamorphism in which ‘the truth’ was made illegal: how tautological fallacies applied to ‘abstract law’ diabolically changed original meaning. The ultimate example, human essence is the antecedent to all reality: take away thought, and there is nothing: no worries, aspirations, truth, falsehoods, strategies, plans: nothing. So, if mind


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is antecedent to the consequent of all that is, etherial and substance, is not the dogma, materialism, a case of tautological fallacy: a denial of the antecedence of human essence? And of God, the Creator of all? Henry Clay was a Whig. The ‘American System’ was centered on him. However, the rapacious political flux of the Gilded Age made The American System of Political Economy into the ‘Loco Parentis’ ‘pork-barrel-insurance’ it has become. The Good Society addressed the ‘American System’ ‘growth’ but did not address ‘quality.’ 10

The United States was planned for progress. It was a commonplace among the country’s eigthteenth-century founders that economic life was not simply a neutral fact of nature, that political economy was a branch of political ethics and its practice an exercise in public morality. To agree presumes ‘quality.’ It overlooks the illogical fallacies that are now political economy endemism: of the amorality and vice that became packaged by dogma to appear “good” and ethical.' I found The Good Society empirically academic, about quantification without logically critical analysis of politics or economics. In the causal sense of theory and doctrine, facts, as polluted environment, abandoned factory sites, . . ., are logical


A dear friend, whose regular visits now are missed, mailed The Good Society to me. “We should get together for a gab-fest more often: never seem to run out of things to talk about and problems to solve. . . ., Love, Bea,” she inscribed. Natural determinism of age has its way, but the noetics, the beautiful noetics, enhance the years with tenderness. Natural noetic processes should happen to fictitious legal person entities: alas, this natural void excuses the egregious illogical tautological fallacies of legalized fictitious corporate entities that Whigs foisted onto the paternalistic endemisms of political economy.



inferences about errant values in the logos of orthodox prescriptions: these facts are the trash of the systemic paternalism of economic mechanisms. The values in logos of eighteenth-century founders are at best a collage and at worst enigmatic. The Good Society appeals to ethics and morality. And, substantially, it confirms my research. But about presumptions, I thought it failed to consider the philosophical foundations of Western Culture, Metaphysical, i.e., epistemological concerns as a necessary foundation of values that imbue truth, knowledge and justice, “positive” doctrines and theories (deterministic materialism, for instance), Immanuel Kant’s dilemma involving natural causal forces and the importance of the human “free will,” meanings of Latin words as nomos and physis, forgotten words as “usufruct,” “commonwealth,” and “commonweal,” cultural influence of men like Benjamin Franklin (forms of insurance in America), Roger Williams’ (1603-1683) homespun American democracy as influenced by Richard Hooker (1554-1600) before John Locke (1632-1704), sovereignty, compact theory, political factions and parties that (in homespun-prejudice) is called Conservative or Liberal. . . .. My efforts here, I hope, fills some voids? Historians, particularly, should not overlook the fundamental or natural born democratic influence of the American Commonwealths and their social experiments with forming our new nation. Mine are perspectives of the unique American government that fortunately adopted “democratic sovereignty,” maybe unfortunately, more, were influenced by orthodox old-world dogmas. Orthodoxy successfully sanctioned fresh cultural nomos for America: At some point, religious and political dogmas were sponsored by American political dialectics and successfully fused to transfer the Hobbesian-based doctrine to America, and this politics became the “whiggamore” driver of American political economy. About this, The Good Society refers to The Rise and Fall of the American Century. Parrington, almost a hundred years earlier,


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referred to the return to sixteenth century from which the seventeenth was a reaction. Both, I believe, refer to America’s political choice, for economic reasons, to adopt Hobbesian orthodoxy rather than build upon the rational path which Locke influenced and Adam Smith endorsed. The Hobbesian choice was tautological rationalization influenced by English and European orthodoxies. Parrington also mentioned Harriet Beecher Stowe as a source for his observation: The following excerpt is about this imported nomos: 11

In seeking for an explanation of the unhappy union of a reactionary theology and revolutionary political theory, Harriet Beecher Stowe suggested in ‘Poganuc People’ that the Puritan immigrants were the children of two different centuries; that from the sixteenth century they got their theology, and from the seventeenth their politics, with the result that an older absolutist dogma snuggled down side by side in their minds with a later democratic conception of the state and society. The three parties that emerged from the theological disputes, Anglican, Presbyterian, and Independent, followed, in the main, political divisions of Tory, Whig, and Democrat. ---The first [doctrine which followed Calvinism but was sympathetic to The Church of England and the powers of the “crown” (Tory)] stoutly upheld the absolutist principle in church and state. It stood for Bishop and King. Numbering probably a large majority of the English people, and led by the hereditary masters of England, it was dominated by the feudal spirit of corporate unity. It believed that social order, the loyal subjection of subject to ruler, was possible only through a coalescence of church and state. The subject-citizen



was born into the one as he was born into the other, and owed allegiance both to his spiritual and temporal overlords. Authority, whether in church or state, was of divine origin, and Bishop and King were the Lord’s appointed, answerable for their stewardship only to God. (Parrington continues following Hunt) While Parrington failed to address endemic acquisitiveness in Anglican and Presbyterian doctrine, E. K. Hunt wrote about property:12

Pierre Joseph Proudhon (1809-1865), in his well-known book “What is Property?”, answered the question posed in the title with a slogan that made him famous: “Property is theft.” He believed property was “the mother of tyranny.” The primary purpose of the state was the enforcement of property rights. Because property rights were simply sets of special privileges for the few and general restrictions and prohibitions for the masses, they involved coercion, of necessity, in their establishment and continued enforcement. Hence the primary function of the state was to coerce. ----

The second party [Presbyterian members whose religious doctrine also followed Calvinism (Whig)] was a compromise between aristocracy and democracy. It substituted the principle of elected stewardship for divine right. Rejecting the absolutism of the hierarchy, it turned to the system newly brought over from Geneva, a system that retained the principle of a state church, but which yielded control of the parish to the eldership, a select body of the best and wisest chosen by the laity, with final authority in doctrine and discipline vested in


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the synod. It drew its support largely from the London burgesses, but with a considerable following of country gentlemen. As the party developed it tended to merge with the nascent capitalism, restricted the doctrine of natural rights to property rights, and prepared the way for the later Whiggery of Pitt, or capitalistic imperialism. ---The third party [Independent] was more or less consciously democratic in spirit and purpose, the expression of the newly-awakened aspirations of the social underling. Numbers of rebellious individualists appeared who wanted to be ruled neither by bishop not elder, but who preferred to club with the like-minded and set up an independent church on a local, self-governed basis. They took literally the command of Paul, “Come out from among them, and be ye separate, saith the Lord, and touch not the unclean thing.” That was the true church, they asserted, which withdrew from all communion with sinners and rejected the authority of a sinful state; and so they call themselves Separatists. It was the doctrines of Separatism, quite as much as the principle of the independency of the congregation, that aroused the fierce antagonism of Presbyterians equally with Anglicans. In the main those doctrines did not derive from John Calvin; they go back rather to Wittenberg than to Geneva, to the principles of Luther and certain German sects. . . . The Quaker was a mystic, sprung from the New Testament, who denied the Scriptural validity of the Hebraized Calvinism and a hireling priesthood, and accepted the Holy Spirit as the sole guide to his feet. The Seeker, on the other hand, who may perhaps be



regarded as the completest expression of Puritan radicalism, was an open-minded questioner who professed to have found no satisfactory answer to his inquiry concerning the nature of the true church, and was awaiting further light. The Seekers were individuals rather than a sect, few in numbers yet greatly influential, men like Roger Williams, Sir Harry Vane, Cromwell, and perhaps Milton, outstanding figures of a great age, who embodied the final results of Puritan idealism before it was submerged into Restoration. During the long years of rule by divine right under the first Stuarts, the Anglicans held the Puritan unrest in strict control. Nevertheless a hundred years of debate and changing economic conditions had rendered the attempt to erect in England a counterpart of the French centralized state, no better than an anachronism. The Presbyterian opposition grew rapidly in numbers and prestige, and the early years of the Long Parliament marked the culmination of Presbyterian power. The bishops were overthrown and the elders were in a fair way to seize control of England. But unfortunately for Presbyterian hopes, the radical sects thrown up out of war clashed with the moderates and finally broke with them; whereupon followed the “root and branch” revolution that had been long preparing. The left-wing Independents secured control of the army and set about the work of erecting a government that should be a real commonwealth of free citizens. The voice of the underling, for the first time in England history, was listened to in the national councils, for the excellent reason that his sword was drawn to enforce his demands. But they were too small a minority to leaven the sodden mass of a people long subject to absolutist rule. The psychology of custom was against them. They could


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strike down their armed enemies in the field, but they could not liberate the minds of men unfit to be free. Militant Puritanism was overthrown and its idealisms became the jest of every drunken tapster in London. But fortunately, not before its political principles, long obstructed by theology, were sufficiently clarified to be laid open to the common understanding of Englishmen. Out of the debates around the camp fires of the army had come a new philosophy that rested on the principle that the individual, both as Christian and citizen, derives from nature certain inalienable rights which every church and every state is bound to respect. This far reaching doctrine of natural rights, to the formulation of which many thinkers had contributed and which received later its classic form from the pen of Locke, was the suggestive contribution of Puritanism to political theory, with the aid of which later liberals were to carry forward the struggle. The far-reaching liberalisms implicit in the rejection of a hierarchical organization of the church were to discover no allies in the major premises of the system of theology accepted generally by the English Puritans, and by them transported to New England. Calvinism was no friend of equalitarianism. It was rooted too deeply in the Old Testament for that, was too rigidly aristocratic. It saw too little good in human nature to trust the multitude of the unregenerate; and this lack of faith was to entail grave consequences upon the development of New England. That the immigrant Puritans brought in their intellectual luggage the system of Calvin rather than of Luther must be reckoned a misfortune, out of which flowed many of the bickerings and much of the intolerance that left a strain on the pages of early New England history.



Two divergent systems of theology, it will be remembered, were spreading through northern Europe during the years of the Reformation, systems that inevitably differentiated in consequence of certain variations of emphasis in the teachings of Luther and Calvin. Both thinkers accepted the adequacy of the Scriptures to all temporal needs, but Luther was at once more mystical and more practical than Calvin, deriving his inspiration chiefly from the New Testament, discovering the creative source of the Christian line in the spiritual union of the soul with Christ, and inclining to tolerance of differences of opinion amongst believers; whereas Calvin was ardently Hebraic, exalting righteousness above love, seeking the law in the Old Testament and laying emphasis on an authoritarian system. The one was implicitly individualistic, the other hierarchical in creative influence. The teachings of Luther, erected on the major principle of justification by faith, conducted straight to political liberty, and he refused to compromise or turn away from pursuing the direct path. If one accepts the doctrine of the priesthood of all believers, one can scarcely refrain from following Luther in his conception of Christian liberty. If the mystical union of the soul with Christ has superseded all lesser loyalties by a higher and more sacred, the enjoyment of spiritual freedom must be reckoned the inalienable right of every child of God. Neither the political state nor the official hierarchy can justly coerce the individual conscience. “One thing and one thing only,” said Luther in his ‘Treatise on Christian Liberty,’ “is necessary for Christian life, righteousness and liberty.” And from this he deduced the conclusion that “neither pope nor bishop nor any other man has the right to impose a single syllable of law upon a


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Christian man without his consent; and if he does, it is done in the spirit of tyranny.” 13 Clearly, this is the spirit of uncompromising individualism that would eventually espouse the principle of democracy in church and state; and it was their native sympathy with such liberalism that led the radical Separatists to turn more naturally to Luther than to Calvin. Many of the differences that set Roger Williams so greatly apart from the New England brethren must be traced to the Lutheran origins of his thinking. There was scant room in the rigid system of John Calvin for such Christian liberty. The Genevan thinker was a logician rather than a philosopher, a rigorous system-maker and dogmatist who knotted every argument and tied every strand securely into its fellow [the empirical-based dogma of ”mechanism”], til there was no escape from the net unless one broke through the mesh. The formalist who demanded an exact system, and to the timid who feared free speculation, the logical consistency of Calvinism made irresistible appeal; and this perhaps suffices to explain its extraordinary hold on the rank and file of middle-class Presbyterians. More original minds might break with it -- men like Richard Hooker and Roger Williams and Vane and Milton -- but academic thinkers and schoolmen, men whom the free spaces of thought frightened and who felt safe only behind secure fences, theologians like John Cotton and his fellows, made a virtue of necessity and fell to declaiming on the excellence of those chains wherewith they were bound. How narrow and cold was their prison they seem never to have realized; but that fact only aggravated the misfortunes that New England was to suffer from the spiritual guidance of such teachers.



Parrington’s depiction of “chains” and “prison” is Plato’s Allegory.

In seeking for an explanation of the unhappy union of a reactionary theology and revolutionary political theory, Harriet Beecher Stowe suggested in ‘Poganuc People’ that the Puritan immigrants were the children of two different centuries; that from the sixteenth century they got their theology, and from the seventeenth their politics, with the result that an older absolutist dogma snuggled down side by side in their minds with a later democratic conception of the state and society. In England the potential hostility between Calvinist dogma and individual freedom was perceived by the more liberal Separatists, but in America it was not till the rise of the Revolutionary disputes of the next century that Calvinism was discovered to be the foe of democratic liberalism and was finally rejected. It is a fruitful suggestion, and in its major contention that the liberalisms implicit in the Puritan revolution were ill served by a reactionary theology, it is certainly in harmony with the facts. That Calvinism in its primary assumptions was a composite of oriental despotism and sixteenth-century monarchism, modified by medieval conception of a city-state, is clear enough today to anyone who will take the trouble to translate dogma into political terms. In recasting the framework of the old theology, Calvin accepted as sovereign conception the idea of God as arbitrary and absolute will -- an august ‘Rex regum’ whose authority is universal and unconditioned; and this conception he invested with Hebraic borrowings from the Old Testament. The principle of absolutism, indeed, he could scarcely have escaped. It came down to him through the Roman Empire and the Roman Church, from the ancient oriental


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despotisms, and it was interwoven with all the institutions and social forms against which the Reformation was a protest. But unhappily, instead of questioning the principle, he provided a new sanction for it and broadened its sway, by investing it with divine authority and erecting upon it a whole cosmology. . . . From this cosmic absolutism, that conceived of God as the stable Will sustaining the universe, binding together what otherwise would fly asunder, two important corollaries were derived: the universality of the moral law, and the necessity of divine judgment. From the former flowed that curious association of God’s will with natural causes which induced Cotton Mather, when suffering from toothache, to inquire what sin he had committed with his teeth, and which left no free spaces or non-moral impulses in the lives of men. From the later flowed the doctrine of theological determinism. If time is embedded in the eternity of God’s mind, if to Him past and future are here and now, fore-knowledge is an inevitable divine attribute, and predestination is only a finite way of expressing God’s understanding of how human fate works itself out. Ally this doctrine of determinism with the Biblical account of the fall of man, and the doctrine of the elect becomes the theological complement of the class prejudices of the times. Bred up in the current aristocratic contempt for the sodden mass of the people, Calvinist theologians easily came to regard them as stupid, sensual, veritable children of Adam, born to sin and heirs of damnation. Only the elect shall be saved. That there was a remnant in Israel whom God had chosen, Isaiah had long before pointed out; and the doctrine of the remnant was confirmed for Calvinism by the sinful heart whose daily actions testified to their lost estate.



According to such a theology, the individual clearly is in no effective sense a free soul. There is no room for the conception of human perfectibility. The heritage of natural freedom was long since cast away by the common forefather; and because of the pre-natal sin which this act entailed on all mankind, the natural man is shut away eternally from communion with God. He is no better than an oriental serf at the mercy of a Sovereign Will that is implacable, inscrutable, the ruler of a universe predetermined in all its parts and members from the foundation of the earth. Except for the saving grace of divine election, which no human righteousness can purchase, all must go down to the everlasting damnation that awaits the sons of Adam. In the eyes of such a philosophy it is sheer impertinence to talk of the dignity and worth of the individual soul. Men are no other than the worms of the dust. The boon of eternal life is not included in God’s enumeration of natural rights; it is a special grant from the Lord of the universe who is pleased to smile on whom he is pleased to smile. In the hard words of Paul, “Therefore hath he mercy on whom he will have mercy, and whom he will he hardeneth.” And those on whom he hath had mercy are his Saints, and they are gathered into his church, as the free city-states had risen out of the muck of medieval despotism. They are the stewards of his righteousness and are called to the great work of rulership on earth that God’s will may be done and righteousness may prevail over iniquity. It was an ambitious program, and so long as the Presbyterian party maintained its ascendency in England it endeavored to thrust its Calvinism down every throat, no matter how unwelcome; but with the passing of power from its hands,


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and the growth of a common-sense spirit of toleration, Calvinism long lingered out a harsh existence, grotesque and illiberal to the last. In banishing the Antinomians and Separatists and Quakers, the Massachusetts magistrates cast out the spirit of liberalism from the household of the Saints. From Parrington’s account, I conclude: ---Tory flux was American Federalist flux. It favored Anglican doctrine. This flux favors monarchy and disdains the independence of democracy: Hobbes as Burke argued “divine rights” and “fixed contracts”:

the loyal subjection of subject to ruler, was possible only through a coalescence of church and state. The subject-citizen was born into the one as he was born into the other, and owed allegiance both to his spiritual and temporal overlords. ----

Whig flux favored Presbyterian doctrine. Politically, Whig flux is opportunistic, self-serving and crafty. It intercedes both Tory and Independent flux. Atomistic Capitalism was tailor-made to serve its fickle nature. Whigs, by means of “property rights” protected by the politics called “States Rights,” would become the lords of American society.

The artful sponsors of the “American System” rationalized Smith’s economic assumptions to establish The American System of Political Economy paternally to serve acquisitive material interests of business. Of the ‘loco parentis’ metamorphism, Parrington wrote:14

Massachusetts . . . property interests were as secure as any old Federalist could have wished. Gentlemen of principle and property were still in control of the state; and if less emphasis was laid on principle and more on property -- if less regard seemed to be paid to gentlemen of breeding and manners, and more to assertive self-seeking -- business was no less secure



than in the good old days, and its profits were greater. And so, master of the looms and a growing home market, New England industrialism regarded genially the great western movement, fostered by a benevolent paternalism, confident of extending its markets with every mile of westward expansion. To encourage the development of the West and South by a Federal policy of internal improvement became, therefore, common business foresight, provided of course that the Constitution should follow population and safeguard business interests against local agrarianism and the menace of particularism. By the year 1830 both dangers lay black against the political horizon. The triumph of Jackson had enthroned the agrarian menace at Washington and produced such a scrambling of frightened interests -- such a rattling among the old bones of Federalism and scurrying among the young limbs of industrialism -- as the country had not seen for many a year. Henry Clay appealed to his followers in the West, and Webster marshaled his adherents of the East, and from the coalescing of these incongruous elements emerged the Whig party to do battle with Old Hickory. . . . In the hour of peril, principles go by the board. The Whig party was the lineal heir of the old Federalism, but it denied its philosophical patrimony. It substituted expediency for the old economic realism, and began and ended intellectually bankrupt. Parrington’s mention of materialism raises questions. Heilbroner’s comment about materialism follows Parrington.

Its bitter and unseemly squabbles over the Bank and tariff, its platitudes of patriotism and it pose of disinterestedness, the venom of its personal attack upon Jackson, were the earmarks


The Market System: Our Security


of shallow opportunism that failed to make use of such victories as fell to its lot, for the simple reason that it could never agree on what to do. Such cohesive power as held together -- aside from petty antagonism to Jackson -- was the vague assumption that the well-being of the American people was dependent on governmental patronage; the belief that each economic group and section must receive its special favor, and that through tariffs and bonuses and internal improvements the country as a whole must prosper. Of this principle of special favors -- a return to the seventeenth century from which eighteenth century liberalism was a reaction * -- the American System of


Parrington refers to John Locke’s contribution to “eighteenth century liberalism” and the deterministic conservative political reaction to economic theories of “classical liberalism..” Locke provided the philosophical foundation to Democratic Sovereignty in America. And it influenced Adam Smith’s postulations of economy.

Henry Clay was the chief expression, and it remains the most significant bequest of the Whig party to our political history. ----

Independent flux favored democracy and independent religious beliefs. ---Calvinism is the roots of Christian-based conservatism. And Lutheranism is the roots of Christian-based liberalism. Because they placate the extremes of politics, Whigs, in this scenario, are the masters of orthodoxy where, in the benign ignorance of dogma, acquisitive opportunities abound. Whig flux underpins “American System” insurance determinism, which political flux, in practical terms, underpins “mercantilism.” Unfortunately, these metamorphisms are the results of tautological fallacies. Tory flux favors absolute authority and power: a monarch. *



* During President Clinton’s impeachment trial, conservatives of the Tory-Federalist-Whig genre often based contentions on the ‘rule of law,’ as the supreme American sovereign authority. Their arguments always referenced Federalists as Hamilton, never Jefferson or Franklin. Whig flux favors absolute authority and power with monarchy metamorphosed to wealth and property. Independent flux favors atomistic sovereignty, i.e., authority and power limited to the consent of human sovereignty (Atomism holds that the individual is the fundamental antecedent reality to any group, or society.). ‘American System’ determinism The traditional debate between conservative and liberal is about Toryism, Federalism and Whigism on the conservative side and atomistic democratic independence on the liberal side: fixed contracts v.s. human sovereignty is generally the subject of debate. Only atomism considers the plight of unborn citizens: in situations where title to property perpetually belongs to the lords of society and their heirs the unborn have no property rights. And as Locke argued, if they intend to take property rights, they will take unalienable rights also. Considering the roots of Calvinism in American culture, it becomes clear why the struggle about free-agency continues. Also the religious foundations to Deterministic Materialism clarify how American Whigs were enabled politically to install The American System of Political Economy: founded on dogmatized Economic Determinism and thereby returned our culture to “the seventeenth century from which the eighteenth was a reaction.” Parrington’s account also confirms my view of liberals as the seekers of truth and Whiggish conservatives as sophists who make dogma into absolute fences of orthodoxy: to ensure that common belief in dogma dominates to preserve divine rights to determine truth as they want it (I call White Rabbits those of this dogmatic belief ).

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Philosophical foundations of orthodox dogma include: Divine Right -- dogmatic belief in divine authority: Divine Determinism is the logical consequent. Parrington wrote:15

That Calvinism in its primary assumptions was a composite of oriental despotism and sixteenth-century monarchism, modified by medieval conception of a city-state, is clear enough today to anyone who will take the trouble to translate dogma into political terms. In recasting the framework of the old theology, Calvin accepted as sovereign conception the idea of God as arbitrary and absolute will -- an august ‘Rex regum’ whose authority is universal and unconditioned; and this conception he invested with Hebraic borrowings from the Old Testament. The principle of absolutism, indeed, he could scarcely have escaped. It came down to him through the Roman Empire and the Roman Church, from the ancient oriental despotisms, and it was interwoven with all the institutions and social forms against which the Reformation was a protest. But unhappily, instead of questioning the principle, he provided a new sanction for it and broadened its sway, by investing it with divine authority and erecting upon it a whole cosmology. . . . From this cosmic absolutism, that conceived of God as the stable Will sustaining the universe, binding together what otherwise would fly asunder, two important corollaries were derived: the universality of the moral law, and the necessity of divine judgment. From the former flowed that curious association of God’s will with natural causes which induced Cotton Mather, when suffering from toothache, to inquire what sin he had committed with his teeth, and which left no free spaces or non-moral impulses in the lives of men. From the later flowed the doctrine of theological determinism. If



time is embedded in the eternity of God’s mind, if to Him past and future are here and now, fore-knowledge is an inevitable divine attribute, and predestination is only a finite way of expressing God’s understanding of how human fate works itself out. Ally this doctrine of determinism with the Biblical account of the fall of man, and the doctrine of the elect becomes the theological complement of the class prejudices of the times. Bred up in the current aristocratic contempt for the sodden mass of the people, Calvinist theologians easily came to regard them as stupid, sensual, veritable children of Adam, born to sin and heirs of damnation. Only the elect shall be saved. That there was a remnant in Israel whom God had chosen, Isaiah had long before pointed out; and the doctrine of the remnant was confirmed for Calvinism by the sinful heart whose daily actions testified to their lost estate. Economic Determinism -The dogma of Divine right and authority logically underpins the dogma of Economic Determinism. Tautologically speaking, however, Determinism is paradoxical and, therefore, Philosophical fallacy. Emmanuel Kant concluded that Determinism represented a synthetic a priori: synthetic meaning experience-based and a priori meaning prior to experience. In polite terms, Kant said that Determinism represented false deductive reasoning. What he really said, however, was that until experience is before experience, such reasoning is idiocy, the only value of which is found in dogmatic fictions of sophist acquisitiveness. Materialism -- The dogma of Materialism is the foundation of Positivism, i.e., Absolutism. This popular dogma cemented “divine authority” and “fixed contracts.” It also provided the foundation for economic mechanisms as Capitalism, Socialism, Communism and any other mechanist organization. Unfortunately, like Economic Determinism, Materialism represents tautological fallacy. As

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dogmatized doctrine, Materialism makes purely reasoned thoughts a servant of the dogma. It closes the doors of mind that open to pure truth where knowledge of ethical morality and true justice are found. As Thomas Paine responded to Edmund Burke’s irrevocable compact,

“that which a whole nation chuses to do, it has a right to do.” Parrington added, if granted, must destroy the reasoning not of Burke alone, but of American Federalism, for it rested on an interpretation of sovereignty that was vital to the question. (Ref. Main Currents . . ., Vol. I p 69) Over against Burke’s theory of a single, static contract, Paine set the doctrine of the reaffirmation of natural rights. Any generation -- as the generation of 1688 (England’s Revolution) -- is competent to deal with is affairs as it sees fit, but it cannot barter away the rights of those unborn; such a contract on the face of it is null and void. Paine wrote, “Every age and generation must be free to act for itself in all cases as the ages and generations which preceded it. The vanity and presumption of governing beyond the grave are the most ridiculous and insolent of all tyrannies. . . . Every generation is, and must be, competent to all the purposes which its occasions require. It is the living, and not the dead, that are to be accommodated.” (Ref. Main Currents . . ., Vol. I p 324-25) Classical Liberalism -- Varied assumptions about human motivations underpinning Classical Liberalism are negative and they bear deterministically, as license, on the U. S. political economy capitalistism. E. K. Hunt lists the following predicates to clarify Classical Liberalism’s creed:16 humans are, egoistic, coldly calculating, essentially inert, and atomistic. Hobbes observed similarly and concluded, man cannot govern himself. Considering this substantial, if not absolute, influence of



tautological fallacy, as to modifying it, we should not overlook the rational merits of homespun democratic development in America. Roger William’s theory of government, which is government by consent, had one central purpose: the commonweal and this end teleology cannot be separated from Smith’s universal economic utility. In William’s careful analysis, everyone (business entities in particular), is an agent of government. Government, in the view of Roger Williams (and Adam Smith) shares with each agent, proportionately, its vested responsibilities to the whole of society. Parrington provided this account of Williams’ contribution to American democracy.17

Since the single end and purpose for which the body of citizens erect the state is the furtherance of the communal wellbeing, the government becomes a convenient instrument to serve the common weal, responsible to the sovereign people and strictly limited by the terms of the social agreement. “The sovereign power of all civil Authority,” he asserted, “is founded in the consent of the People that every Commonwealth hath radically and fundamentally. The very Common-weals, bodies of people . . . have fundamentally in themselves the Root of Power, to set up what government and Governors they shall agree upon.” . . . The state, then, is society working consciously through experience and reason, to secure for the individual citizen the largest measure of freedom and well-being. It is armed with a potential power of coercion, but only to secure justice. Smith’s purpose, to sustain and maintain an entire society , was compatible with William’s intent for the new American nation. We do not need to look far for the usual economic failures: Somalia, the transition to democracy in Russia, and the many other troubled economies of the world serve to remind us that our economy has been far more than just a successful experiment. Still, the

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growing pockets of poverty in America (Sir James Goldsmith’s ‘The Trap’reminds that America is not alone here) must be of great concern. Parrington attributed growing poverty to the political economy which was prone to following its nose rather than its deliberate mind. Both here and in section 205 -- the substantial quintessence of Political Economy -- this concern is addressed. Markets exist naturally even at times and places of economic failure but the agencies of government must manage, with ethical determination (specifically meaning: to ascertain, calculate, discover, learn, . . . to fulfill) an effective market system that fulfills Smith’s purpose of universal utility. The pockets of failure in America, therefore, were not in results of Roger Williams or Adam Smith. Rather, they were prescribed by self-serving political influence that fallaciously rationaliszed tautology: as Whigs represent, for instance. Maybe disconcerting to avowed Conservatives of the

Kegan Paul, 1944; and Milton Friedman, Free to Choose -- London, Secker & Warburg, 1980. Economists call those of their members, who subscribe to the ultra-

Tory-Whig genre, is that Smith’s system fits better the ultra-liberal

Descartes’ “I think, therefore I am” might be recalled. Descates concluded by ‘critical reason’the comparative necessity of his body and mind. About critically evaluating his mind, Descartes concluded, “I cannot doubt that I am doubting, therefore I am.” Answering the scribes Christ admitted, “Before Abraham was, I Am.” 20 The Jews then threw stones at Christ for admitting that he claimed to be the Jehovah (The proper name of God, the Creator, is Jehovah, meaning “the eternal I AM.”). Eastern religions also believe in a cosmic Creator, they call I AM. ---Is there a connection between the soul of the Great I Am and the souls of humans? A few Quantum physicists are now seriously studying this possibility. Prefacing Kant’s thoughts, this recent News appertains:21

school of political economy than it does the school they embraced. C. K. Rowley described the ultra-liberal school:18 -- an extreme development, if not final retrenchment of, the general 'liberal' approach -- identifies a competitive economy which if left to its own devices, promises individual freedom and stability combined with the efficient use of productive resources and the greatest satisfaction of consumers' wants and needs. Adam Smith's postulations defined this ultra-liberal school of political economy as represented by the following and many more authors. R. J. Barry Jones compiled this list as an endnote to his description of the ultra-liberal school:19 C. K. Rowley and A. T. Peacock, Welfare Economics: A Liberal Restatement -- London, Martin Robertson, 1975; James M. Buchanan et al., The Politics of Economics, IEA Readings 18 -- London, IEA, 1978; F. A. Hayek, The Road to Serfdom -- London, Routledge &

liberal school , classical liberals, however, about politics, classical liberals often prefer to be called conservatives. * “Critical reason” means the rationalist approach, “a priori,” upon which philosophy, pure mathematics, and the scientific method derived. ** “Acquisitive rationalization” means to justify “a posteriori” dogmatic belief as materialism, mechanism, economic determinism with conscious intent to enrich personal gains (the tautological fallacy of trading birthright for pottage). Since politics seems invariably to derive foundation either from ‘critical reason’ * or ‘acquisitive rationalization’ **, a sample of pure liberal thought might prove helpful. And, about this,

Creationists who consider evolution bad science might purge Kansas’ curriculum of the controversial theory. For biology teacher Al Frisby, teaching evolution to the many students who take the Bible literally is like “banging his face

‘American System’ determinism


against a brick wall.” More than a third of the students at his suburban high school in Shawnee Mission, Kan., wrote in a final evaluation last year that they did not believe a thing their teacher had to say on the subject. The challenge Frisby faces is apt to get tougher next year. On Wednesday, a majority of the Kansas Board of Education might vote to pass a new statewide science curriculum for kindergarten through 12th grade that wipes out virtually all mention of evolution and related concepts: natural selection, common ancestors and the origins of the universe. . . . If the conservative majority on the school board prevails as expected, it will mark the decisive victory in recent years for the creationist movement: Christians who read the book of Genesis literally and believe that God Created human beings and animals fully formed. This excerpt is from Kant’s The Critique:22 I cannot even make the assumption [the positive value of the critical principles of pure reason] -- as the practical interests of morality require -- of God, freedom, and immortality, if I do not deprive speculative reason of its pretensions to transcendent insight. For to arrive at these, it must make use of principles which, in fact, extend only to the objects of possible experience, and which cannot be applied to objects beyond this sphere without converting them into phenomena, and thus rendering “practical extension” of pure reason impossible. I must, therefore, abolish “knowledge,” to make room for “belief.” The dogmatism of metaphysics, that is, the presumption that it is possible to advance in metaphysics without previous criticism, is the true source of unbelief (always dogmatic) which mitigates against morality.



Thus, while it may be no very difficult task to bequeath a legacy to posterity, in the shape of a system of metaphysics constructed in accordance with the “Critique of Pure Reason,” still the value of such a bequest is not to be depreciated. It will render an important service to reason, by substituting the certainty of the scientivic method for the random groping after results without the guidance of principles, which has hitherto characterized the pursuit of metaphysical studies. It will render an important service to the inquiring mind of youth, by leading the student to apply his powers to the cultivation of genuine science, instead of wasting them, as at present, on speculations which can never lead to any result, or on the idle attempt to invent new ideas and opinions. But above all, it will confer an inestimable benefit on morality and religion, by showing that all the objections urged against them may be silenced for ever by the “Socratic” method, that is to say, by proving the ignorance of the objector. For, as the world has never been, and no doubt, never will be without a system of metaphysics of one kind or another, it is of the highest and weightiest concern of philosophy to render it powerless for harm, by closing up the sources of error. This important change in the field of the sciences, this loss of its fancied possessions, to which speculative reason must submit, does not prove in any way detrimental to the general interests of humanity. The advantages which the world has derived from the teachings of pure reason are not at all impaired. The loss falls, in its whole extent, on the “monopoly of the schools,” but does not in the slightest degree touch the “interests of mankind.” I appeal to the most obstinate dogmatist, whether the proof of the continued existence of the

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soul after death, derived from the simplicity of its substance; of the freedom of the will in opposition to the general mechanism of nature, drawn from the subtle but impotent distinction of subjective and pbjective practical necessity; or of the existence of God, deduced from the conception of an “ensrealissimum” -the contingency of the changeable, and the necessity of a prime mover, has ever been able to pass beyond the limits of schools, to penetrate the public mind, or to exercise th slightest influence on its convictions. It must be admitted that this has not been the case and that, owing to the unfitness of the common understanding for such subtle speculation, it can never be expected to take place. On the contrary, it is plain that “the hope of a future life” arises from the feeling, which exists in the breast of every man, that the temporal is inadequate to meet and satisfy the demands of his nature. In like manner, it cannot be doubted that the clear exhibition of duties in opposition to all the claims of inclination, gives rise to the consciousness of “freedom,” and that the glorious order, beauty, and providential care, everywhere displayed in nature, give rise to belief in a wise and great Author of the Universe. Such is the genesis of these general convictions of mankind, so far as they depend on rational grounds; and the public property not only remains undisturbed, but is even raised to greater importance by the doctrine that schools have no right to arrogate to themselves a more profound insight into a matter of general concernment than that to which the great mass of men, ever held by us in the highest estimation, can without difficulty attain, and that the schools should, therefore, confine themselves to the elaboration of these universally comprehensible and, from a moral point of view, amply satisfactory proofs. The change, therefore, affects



only the arrogant pretensions of the schools, which would gladly retain, in their own exclusive possession, the key to the truths they impart to the public. At the same time it does not deprive the speculative philosopher of his just title to be the sole depositor of a science which benefits the public without its knowledge -- I mean, the “Critique of Pure Reason.” This can never become popular and, indeed, has no occasion to be so; for finespun arguments in favor of useful truths make just as little impression on the public mind as the equally subtle objections brought against these truths. On the other hand, since both inevitably force themselves on every man who rises to the height of speculation, it becomes the manifest duty of the schools to enter upon a thorough investigation of the rights of speculative reason and, thus, to prevent the scandal which metaphysical controversies are sure, sooner or later, to cause even to the masses. It is only by criticism that metaphysicians (and as such theologians too) can be saved from the subsequent perversion of their doctrines. Criticism alone can strike a blow at root of materialism, fatalism, atheism, free-thinking, fanaticism, and superstition, which are universally injurious -- as well as of idealism and scepticism, which are dangerous to the schools, but can scarcely pass over to the public. If governments think proper to interfere with the affairs of the learned, it would be more consistent with a wise regard for the interests of science, as well for those of society to favor a criticism of this kind, by which aloen the labors of reason can be established on a firm basis, than to support the ridiculous despotism of the schools, which raise a loud cry of danger to the public over the destruction of cobwebs, of which the public has never taken notice, and the loss of

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which, therefore, it can never feel. This critical science is not opposed to the “dogmatic procedure” of reason in pure cognition; for pure cognition must always be dogmatic, that is, must rest on styrict demonstration from sure principles “a priori” -- but to “dogmatism,” that is, to the presumption that it is possible to make any progress with a pure cognition, derived from (philosophical) conceptions according to the principles which reason has long been in the habit of employing -- without first inquiring in what way and by what reason has come into the possession of these principles. Dogmatism is thus the dogmatic procedure of pure reason “without previous criticism of its own powers,” and in opposing this procedure, we must not be supposed to lend any countenance to that loquacious shallowness which arrogates to itself the name of popularity, not yet to scepticism, which makes short work with the whole science of metaphysics. On the contrary, our criticism is the necessary preparation for a thoroughly scientific system of metaphysics which must, therefore, be treated, not popularly, but scholastically. In carrying out the plan which the “Critique” prescribes, that is, in the future system of metaphysics, we must have recourse to the strict method of the celebrated Wolf, the greatest of all dogmatic philosophers. He was the first to point out the necessity of establishing fixed principles, of clearly defining our conceptions, and of subjecting our demonstrations to the most severe scrutiny, instead of rashly jumping at conclusions. . . . He would have been peculiarly well fitted to give truly scientific character to metaphysical studies, had it occurred to him to prepare the field by a criticism of the “organum,” that is of pure reason itself. That he failed to perceive the necessity of such procedure must



be ascribed to the dogmatic mode of thought which characterized his age, and on this point the philosophers of his time, as well as of all previous times, have nothing to reproach each other with. Those who reject at once the method of Wolf, and of the “Critique of Pure Reason,” can have no other aim but to shake off the fetters of science, to change labour into sport, certainty into opinion, and philosophy into philodoxy. By the phrase “shake off the fetters of science, to change labour into sport,” did Kant suggest that unprincipled dogmatists could metamorphose meaning by illogically applying tautological fallacy: for instance, employing dogma as “economic determinism” to establish a political economy that would guarantee, to the few, lives of leisure by maintaining the masses of workers in poverty? Did he also realize this metamorphism could be accomplished without stirring anxiety or concern by the masses? If so, is a form of lying to, or misleading, the masses represented? (President Clinton was Impeached for ‘lying(?)’: Was his ‘fraud’ anything like the fraudulent accounting of Enron, deliberately done to hide corporate debt to maintain allusions of profits for Enron’s stock?) Is Kant’s thought -for, as the world has never been, and no doubt, never will be without a system of metaphysics of one kind or another, it is of the highest and weightiest concern of philosophy to render it powerless for harm, by closing up the sources of error -- a plea to those who understand logical tautological veracity, to provide critical explication and commentary? Henry Clay's legislative successes provided the foundation for government administered insurance called the “American System

of Political Economy.” The “American System” is of the economic school described by some as national political economies and by others as neo-mercantilism . The following

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comment of R. J. Barry Jones describes the metamorphosed ultra23

liberal school of Political Economy : This perspective entertains a somewhat more mixed vision of contemporary economic reality. States and governments are seen to be inevitably involved in their economies, albeit an involvement of varying quality, intensity and consequence. Perfect competition is held to be largely a neo-classical fantasy in an economic world which is highly structured by differential distributions of power and influence. The operation of an uncontrolled and undirected free-enterprise system is moreover, seen to be somewhat uncertain: empirical confusion being the characteristic result, rather than the nirvana of the liberals and neo-classicists , or the inevitable collapse of the Marxists. F. A. Hayek's title, The Road to Serfdom (London, Routledge & Kegan Paul, 1944), I presume, is about official regulatory impediments to ultra-liberal Political Economy and market

systems. Impediments will end in Serfdoms, I believe, Hayek suggests. His concern is that politics, influenced by “liberal” attacks on laissez-faire provisions for Hobbesian materialism , makes the

ultra-liberal system into an enemy to freedom: to our constitutional heritage and to democracy as well. Oddly, we find the province of political conservatism is broad enough to include both above descriptions. Classical-liberal conservatives subscribe to the ultra-liberal school. Reform-liberal conservatives subscribe to the purposes of national political economies or neomercantilism. About “Political Economy,” A.Gamble provided this view:24

Adam Smith relied on observation of contemporary circumstances and historical evidence to fashion his pioneering study. But the economists that built upon his work, especially



Ricardo, elaborated Smith's insights into a systematic theory of market exchange. With the increasing universalization of exchange that accompanied the establishment of a capitalist economy, a new primacy came to be accorded to the economy over the state (systemic metamorphism should be noted). The political rationale for making the Federal Reserve system independent of government might be found in this economic observation. Why, however, should we, the sovereign subjects, allow our elected representatives to make the Federal Reserve independent of constitutional responsibility? (The answer is implicit of sovereignty: whether sovereignty is democratic or legally contractual) ----

As an agent of government which agency provides the central function of political economy (creating and maintaining the medium of exahange), should our representatives in government be required to charge the Fed with constitutional responsibilities (with appropriate accountabilities) to achieve the specified constitutional purposes, i.e, to support (do nothing to hinder) establishing justice, insuring domestic tranquility, promoting the general welfare, and securing the blessings of liberty to ourselves [we, the people] and our posterity? 25 Seminal comments about this are excerpted.

Alexander Hamilton, being the realist that he was about the oligarchical hierarchy of society, perceived correctly the tearing result of choosing democracy for America when he argued: 26

for no man or group of men [who, by their corporate positions, happen to become oligarches of the fictitious state] will be ruled by those whom they can buy or sell. Corporations, by definition, are fictitious legal individuals. fictions, there is no essence, no consciousness, no ‘I am.’


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Do corporations now populate a fictitious state which threatens the state designed for, by, and of humans? From the many who have raised concerns with corporations, Adam Smith’s reference notes in Wealth of Nations reveal Smith’s sentiments about corporations.27

Corporations, tendency of the exclusive privileges of, on trade, 30, 58; by what authority erected, 61; the advantages corporations derive from surrounding country, 61; check the operations of competition, 63; their internal regulations, combinations against the public, 63-4; are injurious even to the members of them, 64; the laws of, obstruct the free circulation of labour, from one employment to another, 67; the origin of, 192; are exempted by their priveleges from the power of feudal barons, 193; the European East India Companies disadvantageous to the eastern commerce, 214; The exclusive privileges of corporations should be destroyed, 225-26. Thomas C. Jorling’s concern is more pertinent: 28

With some reluctance, I have chosen to register independent views on . . . the exercise of power by large, often multinational corporations. Deep concern over accountability in the exercise of power, especially as it affects individuals, has been a hallmark of American society. In my view, the Commission (for a National Agenda for The Eighties) should have acknowledged, in the context of the eighties, the historic concern of Americans with the exercise of power. At the time of the framing of the Constitution, many provisions were adopted to constrain and make accountable an agent of power--the federal government. During the past 200



years, new aggregates of power have come into being, especially the large, multinational corporation. Brought into existence by state charter, these institutions were once constrained by limits on size and power, limits rapidly made obsolete by interstate competition. Justice Brandeis, in a descent in the 1932 case Liggett v. Lee, described the history concisely: 'Although they fully recognized the value of this instrumentality in commerce and industry, they commonly denied incorporation for business long after they had granted it for religious, educational, and charitable purposes. They denied it because of fear. Fear of encroachment upon the liberties and opportunities of the individual. Fear of the subjection of labor to capital. Fear of monopoly. Fear that the absorption of capital by corporations, and their perpetual life, might bring evils similar to those which attended 'mortmain.' There was a sense of some insidious menace inherent to large corporations. So at first the corporate privilege was granted sparingly; and only when the grant seemed necessary in order to procure some specific benefit otherwise unobtainable. The removal by leading industrial states of the limitations upon the size and powers of business corporations appears to have been due, not to their conviction that maintenance of the restrictions was undesirable in itself, but to the conviction that it was futile to insist upon them; because local restriction would be circumvented by foreign (other states) incorporation. Indeed, local restriction seemed worse than futile; Lesser States eager for the revenue derived from traffic in charters, had removed safeguards from their own incorporation laws. 288 US 517, 548, 557. Nothing took the place of the limits -- limits designed to

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control power -- once imposed by states. Subsequently, the corporation has continued to grow, and it now is the source of the exercise of the greatest amount of power in national and global society. Simply put, the large business corporations, separately and collectively, wield the greatest quantum power in our society. Power with many dimensions: to shape the form of society, to alter the landscape, to distribute new chemicals, to provide or withhold food, to determine income differentials, to make us dependent upon technology. On and on we could go, but for purposes here it is sufficient to assert that the power once thought of as the exclusive provence of government -- to exercise power to control others -- is now held and executed largely by large business corporations. Where government has such power, we establish measures to protect the individual, but not so with the corporation. While government cannot deprive a life experience for the exercise of speech, a corporation can deny employment providing the paycheck essential for survival for such expression. Specific multinational corporations wield power beyond the boundaries of any national jurisdiction. ----

Have states’ rights, as embodied in creations of fictitious legal persons (and as aided by Supreme Court decisions), nullified individual constitutional sovereign rights?


Are corporations, which were created by many if not all the several states (under powers not specified in the Constitution and therefore reserved to the separate states), effectively nullifying the Constitution and our sacred Bill of Rights? Excerpts address these questions

Political achievements of The American System of Political Economy include generous Land-Grants, grand allowances of special



privilege including natural resource grabs (as afforded to our nation's "Robber Barons"), protective tariffs, subsidies, licenses, codifications of laws and regulations, foreign policy, government contracts for armaments (“the military-industrial complex”), tax-based defense of domestic and foreign interests, the Federal Reserve Banking System (which, following large business -- corporations primarily) now must operate with international scope, Medicare, Welfare, and Social Security. All, remind one of Franklin's observation --

either political blunders, or jobs obtained by artful men for private advantage, under pretense of public good. And among many, many others we should highlight corporate charters. All are a part of the industrial-commercial-political economy that rose to prominence in America and set it apart from the ultraliberal system of economy which Adam Smith postulated. Corporate entities might be among the most critically important new factors of all Industrial Nations’ Political Economies: and now of our International Political Economy. Heilbroner wrote:29

For although he saw an evolution for society, he did not see the Industrial Revolution. [Adam] Smith did not see in the ugly factory system, in the newly tried corporate form of business organization, or in the weak attempts of journeymen to form protective organizations, the first appearance of new and disruptively powerful social forces. In a sense his system presupposes that eighteenth-century England will remain unchanged forever. Only in quantity will it grow: more people, more goods, more wealth; its quality will remain unchanged. His are the dynamics of a static community; it grows but it never matures. Each multinational corporation meddles in the American Political Economy not only to gain patronizing favor with its domestic markets

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but as well for practical sovereign protection (national defense) of its foreign resources and markets. Multinational corporations, in effect, rival States’ power and influence even while they freeload on the federal tax-based provisions for States’ security constitutionally intended for sovereign individuals. Their more direct influence in the universal market system of the world though, often surpass even the official influence and power of nations. Our national strategic interest in Mid-East oil, for example, cannot be set apart from direct and indirect multinational corporate interests. Also, this strategic interest cannot be set apart from the Mid-East war that resulted there (which threat of war continues?). Then, our nation's encounters with Nicaragua, Haiti and most other foreign states of the Americas cannot be separated from the interests of business: resources, products, commodities and infrastructure: Nicaragua furnishes an example. Trade with the U.S. is the greater share of Nicaragua's foreign trade. America’s spates with "Imperialism" and "Dollar Diplomacy" established much of this trade. For sure, our national interest in this trade has required U.S. tax payers generously to provide “foreign affairs” and “defense” dollars to secure the trade (these are all extensions of government ‘American System’ insurance. The American military also has been directly involved -- mostly because of the official economic policies that originated in and embroil American corporate interests. These official economic policies of the U.S. were based on the idea of “Manifest Destiny” which idea was contemporary with the political flux that gave us the “American System” of economy. Using Parrington’s analogy, the official economic policies were Whiggish “pigweed” in the garden of The American System of Political Economy. Parrington’s analogy was about “pigweed” that grows naturally in a garden to present a constant threat to intended produce of the garden. The seeds of Parrington’s pigweed were dogmatic



imaginations which succeeded politically to officially replace physisbased truth. On a less weighty but related note, why are the interests of the United State’s commonly called America’s interests. Is this more general reference in the results of “pigweed” springing from the same Whiggish garden that gave us the policy called Manifest Destiny? Is the “American System’s dogma still found in imaginations rather than in objectivity, in ideas of expansionism and superiority rather than in civilized physis-based democratic truth? Or, why do we continue to hear quips like the following:

“The Monroe Doctrine is our right to kick ass anywhere in the Americas.” This statement is, of course, an attempt at humor to depict the practical, rationalized version of the doctrine that promised to protect the Americas from “colonial expansionism” -- which at the time was the expansionist doctrine practiced by absolutist European Monarchies. Undoubtedly, however, the Monroe Doctrine provided fertile ground for the “pigweed” called Manifest Destiny, Imperialism and Dollar Diplomacy. And Whigs effected most of these imaginative acts of official American Political Economy policy, as Franklin perceived,30

[as] either political blunders, or jobs obtained by artful men for private advantage, under pretense of public good. Andrew Gamble’s comments continue:31

The 'economy' came to mean the market order, the sphere of exchanges between individuals, a sphere possessed of its own internal principles of order and its own internal momentum, governed by specific laws. The state retained only residual functions. By his reference to specific laws, I expect, Gamble means to convey a form of “natural law and order” as Smith had presumed, even as

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Smith had presumed that the culture of society would assure the constant presence of ethical governing determination which Smith called moral approbation. Clearly, Smith did not anticipate artful men armed with “for profit” corporations and unlimited sources of capitalization (stock and bond issues along with central bank fiat money financing). These artful men have achieved to form a “master group” with far different designs in mind than to sustain the whole of society. In a previous section I observed that these artful men created a “fictitious state” of “fictitious corporate individuals” which has grown to dominate not only the American political economy but also the International political economy. Andrew Gamble’s comments continue:32

Liberal political economy as it emerged in the nineteenth century was organized around the concept of a market order. Whereas Adam Smith's advice to the statesmen had been cautious and contingent, liberal political economy proclaimed universal laws of economic behavior which could not be transgressed without serious consequences. Many politicians of the liberal political economy movement were Classical liberals whom now might call themselves orthodox conservatives? Note how policy shifted away from universal utility.

The preservation of the market order itself became the main object for policy. Policy was not concerned with the aims and outcomes of market exchanges but only with the framework of rules that governed them. Here, Gamble provided how, by means of policy and contrary to Roger Williams view, economic purposes and results were deliberately made mutually exclusive: Political economy’s responsibility was about market conduct and not results. About this,



the following is recalled: When considering this substantial freedom for political influence, as to modifying it, we should not overlook the homespun development of democracy in America. When one considers Roger William’s theory of government, which is government by consent, one cannot separate “central purposes” from “end utility.” In Williams view, everyone, including business entities, is an agency of government: Government vests each entity with responsibilities to the whole of society. I expect this view was held by Adam Smith as well as Roger Williams? Orthodox economists (including many of our self-avowed conservatives) conceived what they claimed was “the science of economics.” George P. Brockway challenges this claim.33

Economics is not value free and no amount of abstraction can make it value free. ----

To achieve constitutional purposes which specify “universal utility,” government should require orthodox economists to secure by means of their “science,” so called, society’s constitutional, rather than orthodox dogma-based pseudo “classical liberal” values and interests?

The real question is, who should determine economic values: the Constitution (by consent of the governed) or pseudo “classical liberal” economists who value dogma over reasoning (values based on dogma are neither clearly homogenous nor stable over time)? Socrates’ requirement for knowledge is recounted:34

Theaetetus, when Socrates asks him for a definition of "knowledge," suggests that knowledge is perception. Socrates persuades him to abandon this definition, mainly on the ground that percepts are transient, whereas true knowledge must be of something eternal; but he does not question the occurrence of

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perception as a relation between subject and object. * * Economists whose science, so called, is based on dogma, consigns their science to what Socrates called perception instead of reason. And science, not based on reason, is not science. Opinion or Belief, but not science. Also, since rational standards for human perceptiveness are anything but precise, illusions, belief, needs, desires, . . ., (all subjective in nature) are the commonly assummed individual standards for judging factual truth or falsity. Truths of the subjective majority becomes a matter involving far less than objective reasoning: Bertrand Russell called objective reasoning “deliberate reason.”




and third, that when government is no longer able [or willing] to protect these rights, the members of society are justified in overthrowing their government and replacing it with a more effective one. Of these three notions, the second and third are frequently cited by intellectual historians especially because they formed the antiauthoritarian ideologies of both American and French Revolutions. Locke’s first notion, that society existed prior to government [Logic: society is antecedent to government, its consequent],

Laurence S. Moss described Classical liberalism: 35

encouraged a search for the factors promoting order and organization among individuals and in this way served as an important formative influence on social scientific thought in the eighteenth century. . . .

Classical liberalism may be defined simply as social philosophy that recognizes the need for open markets and for decentralized control of the means of production for individual liberty. John Locke, the celebrated philosopher of the so-called glorious revolution, is considered to be the father of classical liberalism, although elements of his teachings can be located in Roman stoic thought as early as the fourth century B.C. In his “Second Treatice” on Government [1690], Locke developed three important notions about the relationship between the individual and government: first, that individuals existed in cooperative social groupings prior to the creation of civil government; second, that individuals enter into political society with certain natural rights that cannot be legitimately traded away in commercial exchange or eliminated by government;

The eighteenth-century British philosophers, Bernard Mandeville, David Hume, Adam Smith, C. L. De Montesquieu, Edmund Burke, John Millar, Adam Ferguson, and later writers such as Sir Henry Maine, Carl Menger, Ludwig von Mises, and Friedrich A. Von Hayek, explored the actual social processes by which custom, business law, private property, money and banking institutions, and so on come into existence and are maintained. Frequently, those institutions most useful to humanity evolved as an unintended consequence of selfinterested behavior in the market. By way of contrast, those arrangements brought about by government planners often fail to meet their objectives and are chaotic and oppressive to individual liberty. For these reasons, modern classical liberals join company with traditional conservatives [followers of Burke] and warn of the dangers of damaging through intervention in business the wisdom of the ages as contained in established

In the light of the terrorism of 9/11/’01 who would put faith in absolute Islamic belief as orchestrated by bin Laden.

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customs and business practices [the idea of mechanism apparently bonds classical liberals with traditional conservatives]. Classical liberals are the arch foes of socialists who propose centralized control of the means of production and the substitution of central planning for impersonal market mechanisms, and the use of state power to restrict competition. By inculcating bias of any sort (“arch foes of socialists” in this instance), classical liberal bias (political tautological fallacy) vetoed the applicability of Adam Smith’s “moral approbation” (which is about human capability to judge objectively moral values and such). In damaging moral approbation, classical liberals raised the level and credibility of sophistries which politics succeeded to make endemism of the “American System.” ---In preferences dictated by bias, have we allowed our classical liberals to close our collective mind to political-

economy-ill-effects, similar to classical liberals’ disdain, that synergy management of “for profit” corporations has produced. In the following description of the evolution of classical liberalism, consider whether synergy management (mergers to achieve production efficiency and market consolidation) violates classical liberal philosophy. As public held corporations get large, then huge, are they as much a threat to the classical liberal philosophy as government is? ----

Is the stock owning public’s ownership of fictitious legal person entities, and more particularly their surplus profits, a hybrid form of socialism?


highly valued uses and thereby promote economic development. The role of open markets in eliminating waste and responding rapidly to changing consumer wants left classical liberals opposed to all those monopolization schemes that would restrict entry into markets and limit competition. Classical liberals generally oppose the creation of public utilities, the issuance of licenses and entry requirements into professions, the imposition of restrictions on international trade, immigration quotas. Still, classical liberals are not advocates of strict laissez faire. They offer a long agenda of duties and responsibilities for the state to perform such as national defense, police protection, regulation of public health and industrial safety, provision of large-scale capital projects such as harbors and dams, patents to encourage innovation, and the creation of a sound and secure currency. As constitutionalists, classical liberals believe the purpose of the law is to provide a framework or rule of law within which individuals may freely associate and interact for their mutual benefit. Law must be designed to create broad incentives for individuals regardless of race, religion, or personal wealth. At all times the political system must avoid substituting a rule of human beings for the rule of law because discretionary behavior on the political level can open the way toward abuses of state power in the form of political favoritism and corruption. ----

Has “The American System of Political Economy” open[ed]

the way toward abuses of state power in the form of political favoritism ?

Moss’s description of Classical liberalism continues: 36

In the eighteenth and nineteenth centuries, economists explained how markets contain a variety of self-regulating devices that move resources [constantly] toward their most



If “political favoritism” exists (it surely does), is a particular flux of politics to blame?

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The following statement by R. J. Barry Jones might help to clarify confusion embroiling the trite meanings of the often used words liberal and conservative:37

At the heart of the current [political economy] debates are alternative views of the central relationships between economics and politics: alternative views of both the actual and the desirable relationships. “Liberals,” while asserting the analytical separability of economics and politics, maintain an empirical association between modest, democratic government, on the one hand, and a “laissez-faire” economic system, on the other. The “classical mercantilists” of yore recognized the distinction between politics and economics but asserted, prescriptively, the need for the latter to be totally subordinated to the requirements of the former: for all aspects of a nation’s economic life to serve the political interests of the state or its ‘prince’. Contemporary “neo-Mercantilists” have extended This means to accord with dogma called “mechanism”, i.e., to accede to oligarchical custom, tradition and orthodoxy.

such an approach to incorporate a wide range of social and economic purposes within the list of considerations that should direct the state in its control of economic life. The following abstract of policy, exonerated from blame classical liberals for the social philosophy that achieved to establish the “American System” (but, should they be exonerated?):38

Classical liberals generally oppose the creation of public utilities, the issuance of licenses and entry requirements into professions, the imposition of restrictions on international trade, immigration quotas, and the use of state power to restrict competition. Still, classical liberals are not advocates of strict laissez faire.



Parrington attributed the following Whiggish abstract to C. A. Dana who worked for H. Greeley’s Tribune:39

The objects of trade [are] to buy as cheap as possible, to sell as dear as possible, and to get control of the market as far as possible, The formation for these purposes of these gigantic and widely extended partnerships is just as natural and regular as the partnership of two shoemakers or of two blacksmiths. Selfish values clearly prescribe the above stated purposes of trade. Whigs who designed the American System of Political

Economy are central to the selfish values which prescribe the acquisitive purposes of “for profit” corporations. It was selfish values and purposes for which Thomas Hobbes concluded that society required an all powerful sovereign to control them, therefore, do the captains of the “American System” require a Hobbesian sovereign to regulate them?* * Recently, The U.S. gave most favored nation trading to China. Now it proposes to normalize trade with Vietnam. Both China and Vietnam have become “market system” oriented however have maintained strict oligarchical rule which might better be described as anti democracy. Have they retained a strict ruling hierarchy to control the powers which international corporations pose? While uncommon when Hobbes wrote his sixteenth century “Leviathan,“ corporations have since become the preferred form of business organization. Maybe the desire to conduct business impersonally is the reason behind this exploding popularity. Paul Baran presented the following to a forum of business executives some years ago (Since my notes focused on substance, the author’s name is of belated concern and probably inaccurate):

There are many ways to describe the contrast between the

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tycoon and modern manager [which position of pseudo aristocracy most in society now aspire for]. The former was the parent of the giant corporation, the later is its child. The tycoon stood outside and above, dominating the corporation. The manager is an insider dominated by it. The loyalty of the one was to himself and his family . . . the loyalty of the other is to the organization to which he belongs and through which he expresses himself. To one the corporation was merely a means to enrichment; to the other the good of the company has become both an economic and ethical end. The one stole from the company, the other steals for it. (Note the metamorphism) In our political-determinism-based fictitious legal illusions, we consider our nation most strong, however, in fact, are we rotting from the core? : Has the overpowering corporate influence made us, into the ‘hated’ society as seen by others? Do we excuse this as envy? Policies and legislation that fit constitutional purposes are now far afield from fictitious legal corporate concerns. Or, try to fit this excerpt from Property and Prophets with the Constitution. 40

Capitalism is defined by three essential features that are always present in a capitalist economy. First is the ubiquity of monetary exchange. For the vast majority of people in capitalism, one can get the things one wants and needs only if one has money with which to buy these things in the market. Second, capitalism always has at least four clearly identifiable socioeconomic classes: the class of wealthy capitalists, the class of small businesspeople and independent professionals, the class of working people and the class of destitute persons who live by various welfare programs or by theft, prostitution, or whatever means are available. . . . The working class has no significant access to or



ownership of productive resources. Individuals in this class must sell control of their power to labor (i.e., get a job) as their only means to escape sinking to the destitute class. . . . Income from ownership and the wages of workers are considered to be the only socially respectable sources of income. The destitute class must depend on the somewhat “less than respectable” sources of income, such as welfare, charity, or the fruits of quasilegal or illegal activities in order to get by. The stigma that attaches to members of this class motivates all propertyless individuals to try very hard to secure employment even if working conditions and wages are poor. ...

The important point is: What is a cost of production to the business represents income to an individual or another firm. The profit is also income -- the income going to the owners of the firm. Because the value of production is exhausted by the costs of production and profits, and all these are income, it follows that the value of what has been produced must be equal to the incomes generated in producing it. In terms of the entire community the aggregate picture is the same as that for the individual firm: The value of everything produced in the economy during any period is equal to the total of all incomes received in that period. Therefore, in order for businesses to sell all that they have produced, people must spend in the aggregate all their incomes. If an amount equal to the total income in society is spent on goods and services, then the value of production is realized in sales. In that case profits remain high, and businessmen are willing to produce the same amount or more in the succeeding period. Keynes called this a ‘circular flow’: Money flows from

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business to the public in the form of wages, salaries, rents, interests, and profits; this money then flows back to the businesses when the public buys goods and services from them. ‘As long as businesses sell all they have produced and make satisfactory profits,’ the process continues. This does not happen automatically, however. When money flows from businesses to the public, some of it does not flow directly back to businesses. The circular flow has leakages. To begin with, all people do not spend all their incomes. A percentage is saved, usually in banks, and therefore withdrawn from the spending stream. This saving may be offset by other people, who borrow money from banks and spend more than their income. Keynes, however, pointed out that at the peak of prosperity saving is usually greater than consumer borrowing: thus there is usually net saving, or a net leakage from the circular income-expenditure flow. Keynes also identified two other leakages: (1) People buy goods and services from foreign businesses, but the money spent on these imports cannot be spent on domestically produced goods. (2) The taxes people pay are also withdrawn from the income-expenditure flow. These three leakages (savings, imports, and taxes) may be offset by three spending injections into the incomeexpenditure flow: (1) Imports may be offset by exports. . . . (2) The government uses taxes to finance the purchase of goods and services. If it uses all taxes for this purpose and balances the budget, then government expenditures will exactly offset taxes in the spending stream. (3) If businessmen wish to expand their capital, they can finance investment in capital goods by borrowing the funds that were saved. Investment, then, may



exactly offset the savings leakage.41 . . . Keynes’s analysis was not, in its essentials, drastically different from those offered by Marx (Chapter 7) and Hobson (Chapter 11). The principal cause of a depression was, in the opinion of all three thinkers, the inability of capitalists to find sufficient investment opportunities to offset the increasing levels of saving generated by economic growth. . . . Keynes answer to the problem was realistic. Government could step in when saving exceeded investment, borrow the excess saving, then spend the money on socially useful projects. The political values ‘war’ is about the excess savings. Classical liberal conservatives covet paternalism entitlements while audacious liberals demand to share in it. Until campaign finance laws are changed, as they must and will, the economic licenses and entitlements of political economy to Fictitious corporate persons, as measured in ‘practical sovereignty,’ far exceed the licenses and entitlements to individual humans. Because corporations possess greater ‘practical sovereignty’ (capitalization that they spend with governments insurance and accounting entitlements for recovering it from the consumption of their product services): Although fictitious, they legally purchase (as a recoverable cost of business) human expertise and political persuasion to have policy and legislation favor their interests. By furnishing the largest share of campaign and lobbying funds (recoverable costs of business), they ensure that Political Economy paternalism favors them, or at least does not damage them or their acquisitive purposes. The only original purposes and ideas of classical liberals that ‘fictitious person’ corporation endorses, entitles them to act without constitutional responsibilities or purposes. This ‘American System’ is the work and purposes of Whig Reform liberal conservatives. Not only were charter agreements between specific individuals and a state’s authority (not specified by the Constitution) granted to create

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fictitious legal individuals, corporations also gained regulation, edicts, and laws establishing government paternalism which systemically transfers wealth, tax-based subsidies, and bail-outs when needed. Systematic forms of government paternalism (insurance entitlements) are provided to Fictitious person entities particularly and individual business entities generally. However, because no valid legalcontract exists for this arrangement, the ‘American System’ of political economy is an unofficial extension of government. Therefore, government will sometime be found liable for the nefarious acts of corporations, similarly as victims of terrorism now seek redress from sponsoring nations. Cost accounting and tax rules transfer business costs to consumers. These accounting and tax rules mechanize natural determinism (subsist or starve) making wage-earners consume to subside, thereby paying for all business costs: A fundamental reality is that the “American System” is absolute (no alternative economy of consumer goods and services). If edicts, licensing, and accounting rules did not exist, the incentives to organize (mechanize) a business or industry would diminish. Still, Whiggish interests succeeded to influence “incentive” expansions beyond the natural ‘necessities.’ They achieved discretionary accounting allowances that take advantage of consumer-tax-payers. For instance cost accounted business functions were expanded to include employee perks, public relations, and lobbying as business costs. Multi tiered wage and salary levels, pension and benefit packages (which managers of business, with accountants and auditors, decide are legal costs of business). Deciding who will benefit financially from higher incomes, better pension and insurance packages, business perks as personal autos and club memberships, lobbying, and political donations, are the function of each private business enterprise? Businesses are unconcerned that consumers will repay the cost of political economy entitlements: Businesses recover these and other costs when they sell their products/services. These privatized taxbased costs of government’s paternalism are far more than the trillions



of direct tax-based “corporate welfare” that perpetually is a political issue. ---Do fictitious legal person corporations substitute ‘rules of human beings’ for the ‘rules of law’ as R. J. Barry Jones expressed concern? 42

As constitutionalists, classical liberals believe the purpose of the law is to provide a framework or rule of law within which individuals may freely associate and interact for their mutual benefit. Law must be designed to create broad incentives for individuals regardless of race, religion, or personal wealth. At all times the political system must avoid substituting a rule of human beings for the rule of law because discretionary behavior on the political level can open the way toward abuses of state power in the form of political favoritism and corruption. Why have classical liberal conservatives been silently unconcerned about privatized corporate privileges and licenses? Do classical liberals, therefore, believe, “the purpose of the law is to provide a framework or rule of law within which [fictitious legal] individuals may freely associate and interact for their [exclusive] mutual benefit”? ---Do classical liberal conservatives disregard entitlement inequities (less paternalism given) to less privileged, poorly capitalized business or individuals? ---Have classical liberals abandoned their original “social philosophy that recognized the need for open markets and for decentralized control of the means of production for [ensuring] individual liberty”? Emphasizing the entire society, questions previously asked are: ---When will . . . Political Economy prove the promise of better economic times, in what we call The Information Age? ---Who can or will convince us that Service Industries, alone, ----

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can and do create wealth? For instance, who can or will explain how stock, bond, and money markets create wealth? These questions are now added: ---Do Service Industries depend on production for wealth creation? ---And when we depend on automated production in which fewer wages-earners are employed, what necessarily happens to consumption, the essential wealth generating function? ---Do we now need to redefine how wealth is created and distributed? And do we need to redefine capital ownership? As industrial businesses close and, with seeming impunity, walk away with the accumulated capital (and take from these communities the economic life blood of the market system), society has not acted effectively to redress the constitutionally provisioned general welfare lost at the behest of fictitious legal persons. While these instances show that the American System of Political Economy clearly fails at times, we did not and still do not generally exercise sovereignty to require our representatives in government to act to ensure that our market system is maintaining our entire society’s general welfare: We, of individual sovereignty, allowed Reform Liberal conservatives tautologically to fallaciously ‘affirm the consequent’ of Adam Smith’s postulations, thereby ensuring wellbeing only on the side of accumulation. And we allowed them to willfully and extorsively ‘deny the antecedent’ of Smith’s postulation, thereby aborting political economy’s equal responsibility to ensure the consumption function. Political Economy either relates to political influences that bear on things of economy or it does not. Which? If sovereign individuals are sovereign in name only and have no part or function in Political Economy (regarding license, edicts, regulations and laws that govern) then sovereign individuals have no part in politics. Political Economy is good or bad depending upon what we of



sovereignty expect and then act upon. As for Henry Clay’s “American System,” the Political economy in America is decidedly better for those on the side of accumulation than it is for wage-earners on the side of consumption. Sovereign political actions are required to regain Smiths tautologically balanced economic equation. Considering disorder, as in Somalia for instance, those concerned with Political Economy must first consider the establishment of civil order, and only then can the market system be evaluated for effectiveness. About economies like Somalia, we must conclude, they have no Political Economy because ethics and civilities are in disorder, and because of this, their market system is destined to remain chaotic and corrupt. (Somalia, it turns out, is symptomatic of the economies of most fundamentalist Islamic nations.’) ---When ethical morality, on the prescriptive logos side of business conduct, is clearly, deliberately tautologically suppressed if not aborted, how do we compare and in which direction is our general welfare headed? ---When we demand more freedom from regulatory restraints to our American System of Political Economy, do we invite general amorality to increase? Answers depend on government’s political economy values of logos. Correspondence truth of a political economy’s ‘prescription’ which posits the political economy’s ‘fact’ must rule: Correspondence truth, after all, is necessarily applicable to responsibilities of all human regimes (particularly including fictitious legal person regimes). Society’s interest in insurance provides a window through which to evaluate our Political Economy -- and in the light that our market system is considered the most competitive in the world, maybe this window emphasizes the universal and deplorable state of the world economy. Through this window, in particular, however, we can view the values of business in the affairs of our market system: While private systems of Insurance have proven their worth to

Taxonomy of interests


preserve and protect the wealth of business and industry, private systems of insurance have distinctly failed to preserve the wealth of sovereign individuals. The financial impact resulting from private Industry's inability to offer insurance that protects against the financial ravages of natural catastrophies falls heaviest onto taxpaying society. General revenue taxes are politically sequestered to pay for catastrophic losses. The failure of private systems of insurance to offer insurance to protect against financial ravages caused by natural catastrophe bares very sharp value thorns of our Political Economy . Tautologically, insurance is as justified for protecting an individual’s wealth as it is justified to protect the wealth of business and industry. So, for what reason do the “sharp value thorns” exist? Is the reason somehow related to the fact that wage-earner-consumers are relegated because they are the slaves of the political economy system to reimburse the full cost of insurance for business and government? Or, because nefarious values in logos of business and government fail to share insurance entitlements with sovereign citizens? Taxonomy of interests In the taxonomy of human interests, life sustaining interests are essential: They are ‘necessities’ of life. Other interests are supplementary interests: They are ‘contingent’ to life’s ‘necessities’ (Tautologically, we could say, life sustaining interests are the ‘antecedents’ to supplementary interests, the ‘consequents’). These naturally assigned predicates apply to the correspondence truth frame. And, therefore, they also apply to all human regimes. We must classify our “life sustaining interests” as, (1) essential to existence (about values of pure truth, “life sustaining interests” are the ‘necessities’ of life), while supplementary interests -- to secure, accumulate and preserve nonessential forms of wealth -- must fit,



(2) collateral classifications (about ‘contingent’ values of humans and their regimes which always will posit truth with opposits, i.e., falsehoods). Our federal government monitors economy and the economic threshold of poverty. This determination provides the economic threshold between economic necessities of life and discretionary economic contingencies of life. About mechanisms and responsibilities related to economic necessities of life, the values of organized logos must posit factual results that coherently correspond with truth which is of necessity (has no opposites): Call it minimum wages, subsistence insurance, negative taxation, welfare or a combination of these, the Constitution calls for governments to provide insurance for this basic security of the nation. About discretionary business cost and corporate profits, insurance (in the systemic sense of political economy) must be paid for without transference to, or aid from, economic consumption of life’s necessities. Given this natural taxonomy, one might reason tautological answers to the following question: ---To which taxonomy class should society assign “the interests of business” (which routinely rationalizes privileges for itself and favored others indiscriminately put onto consumption)? Enter Thomas Jefferson, as he deliberated and commented at length on the untoward effects of business on society. Jefferson emphatically resisted the incursions of business interests to our nation's economy. Business was a supplementary or collateral (contingent) interest rather than essential public utility (necessary) interest. About the entrenched agrarian economy as opposed to the ultra-liberal system proposed by Adam Smith, then sponsored by pseudo liberal political economy business interests, Jefferson’s favor of the existing agrarianbased, democratic economy made him, etymologically, the staunch conservative of his day. Classical liberals were the ‘liberals’ then. The nation’s general interests in business, at the time, clearly

Taxonomy of interests


fit class (2): collateral (or contingent values). However, as industrialization increased, society’s general dependence upon business for life’s essentials also increased. Business interest then usurped the primary regimes of human interest: Business interest supplanted values related to class (1) of ‘necessary’ sustaining public utility interest to the nation. The eventual incursions of business on Political Economy, forced our ‘necessary’ sustaining public utility interest into absolute conformity with economic values related to the economic ‘contingencies’ of Reform Liberalism: about potentially fatal prescriptive values in business organizational logos, dogmatic values of deterministic materialism replaced human values (Adam Smith’s moral approbation, for instance) to drive the market system. With this human determined, tautological fallacious metamorphoses in mind, reconsider, the purposes of our Constitution that society framed when business was still a category (2), supplementary or collateral interest (of ‘contingent’ economic value):

We the people, in order to form a more perfect Union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution. Where, in this Preamble, is business mentioned? Nevertheless, explain how government can now achieve these Constitutional ends without cementing a strong partnership with business? Clear, is the fact that government can not now achieve Constitutional purposes apart from this partnership. With this fact, political economy gave entitlements to Business , through processes of licensing and accounting-taxation laws, partnership-rights (to Loco Parentis sovereignty, security, insurance) without constitutionalresponsibilities -- to promote the general welfare (Enron symbolizes the results of irresponsibility).



Business that is not licensed, simply and surely is allowed no legal existence in this partnership. Said differently, orthodoxy does not allow, outside the business-government “American System” partnership, individuals on their own, to legally provide for their own ‘necessary’ life sustaining interests. Legally, the “American System” partnership is an absolute system of mechanisms (‘The Trap,’ as one contemporary author calls it). Also, the restrictive licensing practices (which is anathema with conservative ‘classical liberals’), are one of many Reform Liberalisms that existing licensed businesses of the “American System” have since tautologically fallaciously achieved. Like protective tariffs, licensing is a legal fence to protect the existing businesses from unwanted competition. Such Reform Liberalisms, when added to political economy, modified the ‘ultra-liberal system’ of Adam Smith to make the competitive American market system into something less-liberal and more dogmatically conservative: About central banking and money creation, ours now is a National Political Economy. Then, because of licensing and zoning, as imposed locally to accord with business influence, if not at the behest of existing businesses, ours is also Neo-mercantilism. As historians have observed, Orthodoxy successfully sanctioned fresh cultural nomos for America: At some point, religious and political dogmas were sponsored by American political dialectics and successfully fused to transfer the Hobbesian-based doctrine to America, and this politics became the “whiggamore” driver of American political economy. About this, The Good Society refers to The Rise and Fall of the American Century. Parrington, almost a hundred years earlier, referred to the return to sixteenth century from which the seventeenth was a reaction. Both, I believe, refer to America’s political choice, for economic reasons, to adopt Hobbesian orthodoxy rather than build upon the rational path which Locke influenced and Adam Smith endorsed. The Hobbesian choice was tautological rationalization fallacy influenced by English and European orthodoxies. Parrington also mentioned Harriet Beecher Stowe as a source for his observation:


Taxonomy of interests The excerpt is about this imported nomos:43

In seeking for an explanation of the unhappy union of a reactionary theology and revolutionary political theory, Harriet Beecher Stowe suggested in ‘Poganuc People’ that the Puritan immigrants were the children of two different centuries; that from the sixteenth century they got their theology, and from the seventeenth their politics, with the result that an older absolutist dogma snuggled down side by side in their minds with a later democratic conception of the state and society. About constitutional responsibilities


to promote the

general welfare -- we allowed to Business an agency role of government to secure life sustaining public utility interests which are (1) basic or essential to human existence : by disbursing pay checks -- convertible to money issued by the U.S. treasury through the Federal Reserve system of banks -- businesses were made the licensed agents of our National Political

Economy to secure essential human welfare. ----


Is it a coincidence that the Federal Reserve Banking system is the central bank of business and wealth and the primary driver-manager of political economy ? How did this coincidence occur in the values, designs, and prescriptions of American System politics? Were “public utility” purposes for central banking, as clearly specified in the Constitution, considered when our representatives in government reassigned to private businesses the class (1) ‘necessary to human existence agency role’ of government? (When considering Airport Security, did we the public reject privatization of this security



necessity?) ---Were responsibilities of promoting the general welfare specified when political economy transferred this agency role of government to businesses allied to the Federal Reserve banking system? (Should banks of the Federal Reserve be government employees for the same security reasons?) ---Should such specificity of purpose exist in the Federal Reserve Bank’s Charter? Unfortunately, political economy did not specify constitutional responsibilities of government’s purpose

-- to promote the

general welfare -- in the agency role transferred to the Fed. William Greider commented: 44

When the [Federal Reserve] building was still new, Representative Wright Patman of Texas, the last of the genuine populists to serve in Congress, offered a mischievous suggestion. Patman was a brilliant eccentric, self-taught and stubbornly independent in his views, and he devoted nearly fifty years in Congress to methodically assaulting the Federal Reserve System and its privileged powers. This building, Patman observed at a House hearing in 1939, did not actually belong to the federal government. It belonged to the twelve Reserve Banks of the Federal Reserve System -- and the twelve Reserve Banks were owned and controlled by private commercial banks, which held stock in the Reserve Banks as a condition of membership in the System. Therefore, the congressman reasoned, the Fed's headquarters was not tax-exempt like other public buildings. It should be subject to local property taxes, like any other private enterprise. . . . After all, the Board of Governors had purchased the land from the federal government in 1935 for $750,000 and the

Taxonomy of interests


Treasury Department had signed over the deed, relinquishing "all the right title and interest of the United States of America." If the Fed was part of the government, why would the federal government sell real estate to itself? . . In the end, each of the twelve Reserve Banks was compelled to execute a quitclaim deed, asserting that they did not own the building on Constitution Avenue, that the U.S. government owned it. Nevertheless, the Federal Reserve System enjoyed the ambiguity over its status and exploited it. Philip E Coldwell, who served nearly thirty nine years in the System, as the president of the Dallas Reserve Bank and on the Board of Governors, observed: "To some extent, the Federal Reserve considers itself government. Other times, when it serves, it considers itself not government.” Still, according to Adam Smith, the market system [is] a [public utility] mechanism for sustaining and maintaining an entire society. Those who believe that Smith’s purpose is the purpose of the “American System” must explain the rationale for deliberate targets of unemployment: how the Federal Reserve, through achieving unemployment targets, maintains our entire society. In this blatant nomos-based rationalization is found the negative human value which depicts the greatest ammoral breach of constitutional purpose prescribed by the amoral logos of our Political Economy, I believe. As government representatives allow such faulty macro controls for regulating the economy to the Federal Reserve Bank and, in this, to the politics of the Feds community of wealth and business, they confirm great travesties (corruption, distortion and miscarrage) of purpose to our Political Economy and its Constitutional function to

promote the general welfare.

The following authoritively 45

speaks to the fallacy of this allowance:



One reason for the worsening budget deficits . . . was the widespread belief . . . [of] a stable trade-off between the annualized rates of price inflation and the rate of unemployment . . . The macro-economic "debacle" induced by this viewpoint, with governments generating inflation by loose monetary policies associated with profligate fiscal deficits in essentially hopeless attempts to lower real wages, and thereby to generate output growth and to lower the rate of unemployment . . . By the mid 1970s, most governments began to recognize that the trade-off was worsening to their disadvantage . . . Our basic and essential security has therefore become contractual in nature, with representative government and the “American System of Political Economy” (paternalism to banking and business entities) the primary parties of the contract. Essential life sustaining concerns of individuals no longer were the primary purposes of government. Political Economy transformed “the promotion of our general welfare” and the “securing” of our individual “liberties” into a contractual matter with no specified responsibilities. This contract between government and business (and banking) has no more than Political Economy in support of it: There is no legislated law that I have found reference to, in constitutional support of it. With business (and banking) assuming no constitutional responsibilities, or having no consent of the governed, veracity is seriously in question? Then, about allowing the Fed to manage the economy by maintaining a certain level of unemployment ostensibly to secure the value of wealth accumulation is objectionable if not egregious. In this practice, the politically determined economy of accumulation systematically devastates the essential human interests of low and no income segments of society. (Why I call “the economy of accumulation our “Surreal Economy” is for other sections to explore)

Taxonomy of interests ----


Is it because government assigned its constitutional role -- to promote the general welfare -- to the “American System of Political Economy” without specifying and assigning commensurate responsibility-accountability to the private entities of political economy, that the partnership routinely acts to socialize private businesses’ debts and failures while allowing owners to accumulate then privatize the capital of business simply by increasing corporate debt? Is Enron an example of this and of which political influence was extreme? ---Is this symbolic of the grandest form of government paternalism entitled by political economy to business? In the news, not many years ago, was a report of changed lifestyles in Tarrytown, N.Y. which followed the closing of the General Motors assembly plant. Maybe this report caught my attention because a manager at this plant was my next door neighbor who chose to reside in West Nyack, NJ rather than in Tarrytown. In the article, a resident lamented that GM had just spent several million dollars for a new painting system that GM never used. At the time GM still owned the vacated facility and, of course, political economy allows GM to ‘write-off’ as a cost of business, the remaining or unaccounted value of this facility (including the several million expenditure for the new painting system). Also, in comparrison to Enron, GM was mentioned among the corporations that paid no taxes Wage-earning taxpayers will eventually pay for it (to the extent required to offset the reduced taxes that GM pays). This accounting allowance also is a paternalism of the American System of Political Economy. Former resident wage-earners specifically and all wage-earners generally suffer the loss while GM continues to distribute normal profits to its stock holders: the Tarrytown community suffered most severely. The Industrial Revolution aligned business with government in such essential areas as national defense to render separation impossible. Business capabilities have not only augmented wars,



often we fight wars because the primary interests of what we call private enterprise (which political economy made into a misnomer), is now as well the Strategic Interests of the United States’ government.' In this fact, business that is conducted internationally, now enjoys front line constitutionally-based security from wars and insurections in the name and function of National Defense. The evolution of Political Economy influence caused our representatives in government to rationalize the Gulf War as serving our national interest, even while Political Economy found no national interest for a military action to assure success of a fledgling democracy (as constitutionally established in Haiti in the early '90s). Also, before the Gulf War, Political Economy dogmatically supported foreign political movements that opposed communism: with crass disregard for negative dispositions toward democracy. The roots of this political chasm are found in the continuous discussions which produced our Constitution: business materialism on one side and democratic freedoms on the other. The American Constitution apparently deliberately, maybe wisely, did not settle the argument. Again, about (public utility) responsibility -- to promote

the general welfare -- we allowed to Business the agency role of government to provide for our life sustaining interests that are basic or of necessity, essential to existence . Surely, as citizens, we must understand the travesties (corruptions, distortions and miscarrages) of the metamorphosed purpose, and we must demand that our representatives act on our behalf to restore original constitutional purposes. However, our work as citizens will still not be done. We must also address collateral classifications of human


As of 1996 the U.S. was number one on the list of exporters of war implements.

Taxonomy of interests


individual interests which are supplementary or contingent interests to the sustaining of life -- to secure, accumulate and preserve nonessential private wealth. Currently, Political Economy insurers private enterprise and provides security that is limited to the interests of enterprise. The loco parentis design does too little with providing similar insurance for the interests of individuals. The private insurance systems of enterprise do not offer insurance security for essential interests, as no insurance company can, will, nor should insure against self inflicted failures. The moral hazard is simply uninsurable. About interests that are insurable -collateral interests -- the differences between the insurable interests of business and those of society are invariably swept along by the political broom of the misnomer called free enterprise (Considering the formidable political influence of private sector business enterprise on Political Economy metamorphisms of the constitutional purposes, we might better call it ‘wired-enterprise’). All business enterprise is conducted in the political frame of a legal economic agent of the “American System of Political Economy,” which mechanism now dominates the politics of government: it is neither free nor independent of government. Therefore, all business enterprise that enjoys being properly licensed and sanctioned, is a partner of government. In this partnership, private businesses enjoy the “practical” influence of sovereignty which the Constitution had specified exclusively for the democratic sovereignty of We, the people. With this transformation in mind, I reason that the “American System of Political Economy” was transformed to become our national fictitious state of fictitious legal persons and rapidly is becoming the fictitious state of the world economy. William Greider, in his recent book Who will tell the People, wrote about the whys and hows of democratic sovereignty usurpations.46

Americans have never achieved the full reality in their history or even agreed completely on democracy's meaning. The



democratic idea has always been most powerful in America as an unfulfilled vision of what the country might someday become -- a society advancing imperfectly toward self-realization. Grider warns:47

American democracy is in much deeper trouble than most people wish to acknowledge. . . . What exists behind the formal shell is a systemic breakdown of the shared civic values we call democracy. Understanding the foundations of what I call collateral interests, require one to think more deeply in the abstract. Generally, collateral interests of business are singular and independent whereas collateral interests of individual humans are collective and dependent. The transition from individual independence to dependence resulted from changes in lifestyles caused by the Industrial Revolution: The agrarian economy fostered independence and in this regard Thomas Jefferson warned:

Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the design of ambition . . . Generally speaking the proportion which the aggregate of the other classes of citizens bears in any state to that of its husbandmen, is the proportion of its unsound to its healthy parts, and is a good enough barometer whereby to measure its degree of corruption. While we have land to labor then, let us never wish to see our citizens occupied at a work-bench, or twirling a distaff . . . for the general operations of manufacture, let our work-shops remain in Europe. It is better to carry provisions and materials to work-men there, than bring them to the provisions and the materials, and with them their manners and principles. . . . The mobs of great cities add just so much to

Taxonomy of interests


the support of pure government, as sores do to the strength of the human body. It is the manners and spirit of a people which preserve a republic in vigor. A degeneracy in these is a canker which soon eats to the heart of its laws and constitution. Singular and collective refer to technical aspects of an insurance risk related to business: Singular recognizes that the collateral interests (as an insurance risk) of a business are more distinct (and less homogenous); Whereas, collective recognizes that the collateral interests (as an insurance risk) of individuals are less distinct (and more homogenous). The collective interests of individuals are swept-along by the political “broom” of singular interests which are privately insured. By this, I mean the political influence of the private sector insurance industry, as justified by the successful practice of insuring singular interests, overrides (but should not) more efficient considerations for insuring the collective interests of individuals: We should not allow political influence of business interests to dismiss more efficient insurance alternatives for insuring homogenous collective interests of people. A political economy aspect of insurance regulation encourages private insurance companies to practice “risk spreading.” This regulatory aspect monitors loss reserve adequacy to assure that funds are available to pay losses caused by catastrophic events. * * The 1906 San Francisco earthquake and fire caused $600 million of loss (the value of today’s dollar compares to pennies in 1906). Major private companies did not have adequate loss reserves to pay their insureds. Rather than bankrupting insurers, political economy influenced regulators, for many years, to allow the private insurers to continue doing business with inadequate reserves. “Risk spreading” coupled with modestly inflated pricing, allowed insurers to ‘grow’ their loss reserves. So, who owns the loss reserves? : Insurers



This voluntary practice encourages each competing insurer to spread its singular interest insurance risks. Myriad mechanisms and organizations were created to achieve the results of “risk spreading”: reinsurance, pools, associations, syndicates and reciprocal arrangements with other insurers are among the alternatives. Clearly, it is imprudent to allow the political influence of the fifteen hundred (plus some) private insurance companies to cause political economy to dismiss universal considerations for insuring a particular homogenous category of collective individual humans’ interests. If we can insure wealth, as a homogenous collective interest (FDIC and SAIF programs administered by government), we can provide similar efficient programs to insure the homogenous collective category (1) interests involving life and health. Also, because the cost of pensions, perks, and insurance for corporate officers are accounted for recovery when the goods and services of the business are consumed, making consumers the ones who ultimately pay the costs, then a cost efficient mechanism to provide basic benefits to wage-earning consumers is surely an appropriate ‘necessary’ idea for right, i.e., ‘necessary truth’ minded political consideration. Also noteworthy about the Constitution's charge to promote the general welfare is that non-business minded individuals are generally confused or disinterested. About selecting “good” or efficient insurance coverage, they lack both information and sophistication. In this fact, we might note that the constitutional charge to promote the general welfare surely means more than licensing business enterprise, then allowing businesses to prey on the unsophisticated "denizens" (as Heilbroner described unsophisticated human tranquility). Great diversities in the size, nature, and scope of business operations are what make the insurance risks of business singular

Taxonomy of interests


and nonhomogeneous. Insurance companies have become sophisticated in detailing their underwriting and risk management applications to accommodate the diversities of business risks: This insurance is more difficult and specialized. Successes with insuring singular insurance risks depend entirely on the careful classification of each distinct category of risk, then actuarially determining the appropriate “price” for insuring the risks of each classification. Risk-spreading, to escape devastation of insurance reserves due to paying natural catastrophic losses, is equally important and why many private insurance companies must exist to underwrite all insurable risks in a particular area. Even when the risks are spread broadly, some insurance companies each year will face forced disbandment for the lack of sufficient reserves, because they experienced too many catastrophic losses. The Lloyds (many separate underwriters) of London specializes in insuring large risks as the World Trade Center, for instance [I expect, however, that WTC (built by the tri-state Port Authority) was largely self-insured]. Without actuarial classifications and risk spreading, insurance applications to the singular risks of business and industry would cease as a separate industry of private enterprise. While true, the private sector insurance industry has successfully (it enjoys stable profits) insured borderline collateral risks of individuals (their homes, automobiles, and other personal possessions); it is also true that society is increasingly critical of the cost of private sector personal insurance: classifications (particularly those that apply naturally defined criteria as age, sex, and race), non coordinated policy contracts (as designed and administered by more than fifteen hundred insurers), and increasingly the unjustified cost of delivering the insurance (commissions paid to insurance agents, who are the business owners of policies underwritten by their offices, increasingly advocate that government should mandate that insurance is purchased).



The force of law in most areas now allows insurance agents to open their doors each day to the unsophisticated “denizens” that must seek-out an agent to be screened and classified for insurance. Mandates of law have resulted in practices of greater screening and greater (more arbitrary) classification and, of course, when accidents happen, as they always do, an almost certain denial of renewal in the same "low" rate classification (low being an improper reference to the arbitrarily high premiums for all private insurance classifications these days). The forces of law shifted Regulation from its traditional focus on business conduct and rate adequacy to an enforcement of laws which required that individuals purchase the insurance. Our official "watch dogs" of business practices -- our Insurance Regulators -- are forced to cater to business interests rather than promote the

general welfare, which constitutional job requires a watchful eye on "sharks" of the business-world. Notions of public service, in the sense of free enterprise , are now found in that forbidden place frequently called Hades: as also all credible statistical bases on which to review insurance price adequacy has gone. Anyone without an established insurance record with a particular company, is now charged a premium that is arbitrarily set.' Without credible statistical facts, the premium charged is comfortably, artfully high to assure profit margins for the insurance company. (Incidently, the casinos of Nevada review their risk statistics with about the same veracity: more artful than actuarial; regulation of both insurance and gaming is a sham: for appearances of propriety rather than effect.) Of course, despite mandates of law which requires the insurance to be purchased, the traditional service fee, so called, has


Incidently, this is written following a career, serving private sector insurance, finally as the CEO of a statistical-actuarial association.

Taxonomy of interests


remained (as also Rate Regulation has remained as an official function of state government): official forms of feather-bedding, I expect. Maybe more fortunate than careful, with a clean accident history and having remained with one auto insurance company for many years, I pay more than $1,000 in premiums each year for two old (one 10 the other 15 years) but good running vehicles (one mostly occupies the garage when the other is driven). The insurance company pays $150 of the annual premium I pay to their agent who follows up on and collects billings made by the company: with whom I have spent less than an hour during the past five years (as a rate of pay, this amounts to $750 an hour). The company operates a computerized network which requires agents to spend most of their time on marketing. Only a few minutes each year is dedicated to review of my account. When I visit his office with a payment in hand, a secretary greets me and calls up the computer file, then adds my payment to it. The streamlined operation is as efficient as it is impressive. There are no “good” alternatives for me: I must pay this or more to another company and I consider my agent and his company backed operation, as good as they come. If I’m typical, and the agent is approaching market saturation, his net annual income has reached the high end of a professional salary. And to this, I contribute only $150 annually. Then again, considering that an agent’s commission has become a gift of sorts, I spend less than $150 for Christmas presents. This personal fact of my retiring years, has made me cynical of the political-economy-system that forces me to pay for services that increasingly requires far less personal time and effort to accomplish. Particularly now, when honesty, truth, and integrity are becoming greater social concerns, how can we justify calling examples of our political economy, such as this, free enterprise ? After all, free

enterprise is what keeps prices in line with market reality; this, it is not? More troubling, I’m systematically forced to pay for auto



theft, and stolen auto parts have become a necessity of this political economy: if I’m among the unfortunate few to have an accident, my insurance company, in management prudence, will likely use the less costly parts which were taken from stolen vihicles. * * In Las Vegas, statistics show that one of every ten insured automobiles is stolen. And political economy, influenced by the insurance industry, offers no effective theft prevention. With no political support emanating from financial casualties (insurance compensates the primary victims of thefts), an effective theft prevention program is rendered impractical. Insurance companies are not responsible for auto thefts and paying theft losses from insurance loss reserves is a specified insurance coverage. The insurance companies’ authorities, to spend insurance reserves, do not include paying for effective law enforcement. Still, political economy-based laws require owners of automobiles to purchase insurance and thereby contribute to the insurance company’s loss reserves: Political economy thereby commissions insurance companies to pass this insured cost of auto theft onto consumers of insurance. The ‘good as new parts’ that come from stolen vehicles, undoubtedly cost less than new parts. And the argument can be made that stolen parts lower the insured repair costs: which savings is passed onto the consumers of insurance? However, this argument fails to consider efficacy of justice regarding who is made to pay the cost of thefts: Insurance is made into an enforced social tax. And, because prudent insurance managers, who control the “purse” of insurance loss reserves have “good” (which is to say, “legal”) incentives in mind when they require repair shops to use the most cost effective parts, the incentives of thieves becomes socially legitimazed. The official mechanisms of political economy have made auto theft (many other similar thefts) victimless crimes. Officials of society have little justification or incentive to prosecute.

Taxonomy of interests


Auto manufactures create critical demand for used parts by explainable routine shortages and delays with providing new parts. Then, as stolen parts increase, the demand for new parts decreases: as for price, the cost to assemble a car using new parts (at wholesale prices), is greater, by more than twenty times, the cost to purchase a factory assembled new car. The market value of stolen cars, when parted out, are always far more than the market values of the whole cars. What sweet deals for quasi-legitimate businesses fronting for auto thieves and the myriad others (who receive small amounts of quick untraceable cash), all of which political economy condones as free enterprise? When considering the origins of property and commerce, as set forth in the following account, auto thefts covered by insurance is, in fact, a forward step for civilization. About theft by conquest and pillage, Heilbroner wrote:48

An aspect of the political change that was revolutionizing Europe was the encouragement of foreign adventure and exploration. . . . And in turn the great national adventures of the English and Spanish and Portuguese sailor-capitalists brought a flood of treasure and treasure-consciousness back to Europe. “He who has gold,” Christopher Columbus said, “makes and accomplishes whatever he wishes in the world and finally uses it to send souls into paradise.” The sentiments of Columbus were the sentiments of an age, and hastened the advent of a society oriented toward gain and chance and activate the chase after money. Be it noted, in passing, that the treasures of the East were truly fabulous. With the share received as a stockholder in Sir Francis Drake’s voyage of the ‘Golden Hynd,’ Queen Elizabeth paid off all England’s foreign debts, balanced its budget, and invested abroad a sum large enough, at compound interest, to account for Britain’s entire overseas



wealth in 1930! Back then successful buccaneers flew official flags and sometimes were knighted. About ethics, human values have perpetuated the ‘acquisitiveness’ of feudalism: “He who has gold,” Christopher Columbus said, “makes and accomplishes whatever he wishes in the world and finally uses it to send souls into paradise.” Only as humanity has achieved to ease the economic plight of poor commoners, has social ethics become an evident part of political economy. In the legalese of insurance policies, and assignments of liabilities, insurance (which consumers purchase) protects banks and loan companies’ collateral interests (at no cost to them) before it protects the collateral interests of those the law requires to purchase insurance: Which bank or loan company pays any of the cost for financial protection which laws of contract assign when insurance losses occur? Loss payable clauses are settled first. Why is insurance, including the nefarious insurance for fraud, auto theft, and bank (and loans) business interests, a business we call Free Enterprise? Free enterprise entails risk of one sort or another, does it not? As it turns out, the insurance that ostensibly protects me from financial loss first must provide payment to the bank that made me the loan and it provides free financial means for all sorts of fraudulent business to abound: my insurance subsidizes auto theft as it provides the means to “Chop Shops” for obtaining their raw goods for little direct financial cost, and without fear that auto owners as myself will pursue the theft (in high density areas, one of every ten vehicles routinely goes to a “Chop Shop”).* As fraud goes, so does a premium increase. * When the cost of pursuing theft or fraud is greater than paying for it, an insurance company will pay rather than fight. Business values, at bottom line, are to make financial gain. Claims are routinely paid!

Taxonomy of interests


On the eve of the new millennium, The L.V. Review Journal reported:

According to [a report from] the insurance fraud agency of the attorney general’s office . . . 21 arrests, 25 convictions and the awarding of $2.1 million in court-ordered restitution [was achieved during 1999]. The National Insurance Crime Bureau estimates the average American household pays $300 a year in additional insurance premiums to pay for insurance fraud. The truism -- we privatize profits -- even fraudulent profit -- and socialize loses -- applies to the workings of insurance and to the increase in revenue taxes to cover the increased cost of government. With the Bail-Out of the failed banks, we have now experienced the fact that the federal government provides a deterministic form of Social-based Perpetuity Insurance to the banking business that we must classify as category (1) basic or essential rather than category (2) collateral. In this fact, our Political Economy increasingly accords more preferential treatment to businesses, large banks particularly, than to people. These special businesses enjoy a form of social-based insurance that should never be and cannot be offered to people! Business entities, which were allowed creation and existence under State Laws, are now provided Perpetuity Insurance by administrative edicts by the Federal Reserve and otherwise by Legislative enactments. Examples of Perpetuity Insurance include the Continental Illinois Bank and Chrysler Corporation: The first by an edict from the Fed, the other by an act of Congress. Basic or essential interests -- in the sense of Perpetuity Insurance for people -- are naturally limited: life simply stops when it stops and no insurance can perpetuate a dead person’s life but this natural reality does not apply to huge corporate entities that we legally defined as fictitious legal persons. Basic questions about human sovereignty are of concern. In the light of Social Perpetuity Insurance for the basic or essential



business interests and correctly, I believe, has become an essential function of Political Economy, what in “Hades name” is wrong with Social Insurance for classification (2) collateral, collective interests of the citizenry? Or, when, if ever, did our unique Sovereignty (of We, the people) decide to allow tax-based Perpetuity Insurance to happen for business in the first place? We didn't! It simply evolved as a political determination of Political Economy! We, the people must somehow organize sovereign influence to see that Perpetuity Insurance has a limited destiny! Otherwise, with another submissive and trustful embrace with our economic seducers, our beloved American democracy will be left farther behind in a greater cloud of international dust. Logical underpinning for society's dissatisfaction with privately administered personal insurance rests squarely in the homogenous nature of society's collective insurability. We are slowly coming to a general realization that collective and dependent collateral interests of society have not and cannot be insured effectively or efficiently in the manner of singular and independent collateral interests of business and industry. Being homogenous, the basic insurance risks of people are not nearly as effectively handled by the (more than 1,500) insurance companies of private industry whose fees for agent service and overhead costs involve fully 25 percent of the total premium cost. Then, when adding a profit load, the service cost to coerced consumers often increases to beyond 35 percent of the premium. They specified these service loads, so called, in the policy term sometimes to repeat in intervals as short as three months. Thirty five percent, compounded four times each year, amounts to service (so called) that costs more than the annual premium each year. Nevertheless, try to change this form of systemic paternalism; the inertia of conventions and in the sophist inculcation of social inefficiencies has so far overwhelmed all constructive proposals for change.

Taxonomy of interests


We have social insurance for repairing and rebuilding Highways. Taxes provide this insurance fund that is in results of Clay’s ‘American System’ collected at the gasoline pump. Try to get a similar insurance fund that will pay for damage to vehicles and put teeth into a unified fight against auto theft and other frauds (that together amounts to nearly half the insurance cost), and proponents for the alternative will experience the fierce conventional politics of established business interests. We have witnessed the political strength of conventional business in the attempts to revise the healthcare systems: In huge amounts of PAC money that suddenly appeared, we saw that the profits (so called but in reality, the results of taxsubsidized paternalism), in conventional systems of business are worth the political fight. More than $300 million in PAC money was spent during 1993-94 to dissuade passage of the administration's health-care proposal. What is saddest, however, is the fact that political economy allows this cost to be accounted as a cost of doing business. It is thereby socialized onto consumption and taxes. Then, as we look again at the structure of Deposit Insurance, we find an example of efficient insurance for homogenous collateral interests. Here we find no renewals, no agent commissions, and little overhead expense. This is a system designed by banking interests to serve banking interests. Businesses are not shy to wield their politics to serve their interests efficiently but they lack probity when it comes to allowing similar efficiencies to consumer-wage-earners. Considering these sad realities of private insurance, Social Security was a deliberate and correct choice and it is just a single step in the climb to provide collateral security protection in many other worthy areas of collective, collateral interest to society. Providing insurance, for a society's collective, collateral interests is not a new pursuit. Early in March 1993, the system installed in biblical times was explained. I failed to note the presenter and can only hope my notions of the system will convey accuracy.



Life insurance was the subject and according to the presenter was an outgrowth of the biblical system to provide for economic security to society: The father, under the penalty of the law, was responsible for providing for his family. Upon death, all holdings went to the eldest son who then became responsible for his father's family (I recall a similar tradition existed in Thomas Jefferson’s life and experience): A brother would marry a deceased brother’s wife was also based on this economic order. The question is not, ---should systems of insurance protect and preserve society's common collective, collateral interests in wage security, health care, etc.? The question is: ---What system and basis of the insurance is most efficiently suited to protect society's collective, collateral interests? The '80s provided, unsuspected parameters of experience to this question. The near failure of Federal Deposit Insurance (FSLIC) for the deposits in Savings and Loans, and then the use of general tax revenues to bail-out the near failure has shown that the Federal Reserve was not the lender of last resort as banking has always told us. Society (the taxpayers, that is) was, is in fact, the real provider of last resort. Then, persuaded by the argument of business lobbyists, that those purchasing the goods and services of business ultimately pay all the taxes levied on business (Business lobbyists often make this argument to arrest laws imposing taxes onto business). One must similarly conclude that the buyers of insurance not only pay all insurance premiums, they also pay the premium taxes (about 3 percent of the premiums which insurers routinely pay to the state), the agent's fee (about 15 percent), the administrative costs (about 5 percent), the fraud (as much as 50 percent of loss payments), and the profit load (6 percent of the premium) as well. My analysis conveniently omits legal aspects of title to

Taxonomy of interests


"owning money." Despite legal ownership, at bottom line, private business pays no cost to provide their goods and services. Taxes, insurance, lobbying, perks to management, pensions, rent on corporate debt (now heavily leveraged with junk-bonds), all costs of labor, raw materials, and overhead are passed on to consumers in the price paid for goods and services, and, for sure, when businesses fail to turn a profit, the businesses surely fail (when they are not bailed out by Perpetuity Insurance provided as political economy based government paternalism). As our lesson with bank and business grand failures has taught, government's dual role with business and society has indulged the lobbying influence of business to

privatize the profit and socialize the debt. ----

Who, in the end, pays for the lobbying influence of business and industry? Looking at the legal title aspects of money, a business authorizes lobbying and it pays the bill for this influence service; still, the question is neither completely answered nor so easily excused. The question arises and rests in the role (purpose) of government. And if a business was of the same consideration as humans, it would also consume to subsist and account its cost to consume as humans must. A business is an abstracted service entity which was conceived to provide services to humans: which must be allowed to recover its costs of existence or fail? Still there must be concern for the unfairness to humans when government treats businesses on par with humans. Arbitrating fairly society's interests requires the government to negotiate with its welfare and security providing agency: the business community that drives the American market system. Which, as to net cost to itself, is allowed to influence the affairs of government. Sovereign citizens should reject solutions inspired by “American System” Whiggery if only for the fact of inevitable compromise to democratic Sovereignty.



Accounting rules, as influenced by politics and codified at the behest of business interests, allow businesses to recover the costs of business from consumers. Also, at the level of economic governance, political economy has allowed, administered, and regulated an implied contract in which society licenses businesses to conduct their business and sell their goods and services for a profit. This, briefly, is our Political Economy in which business income is not subject to taxation until they have deducted all the costs (and as conceded, if this were not so, businesses could not exist). Nevertheless, because political economy allows that business costs are deducted before taxation, political economy allows business a fundamental advantage that government denies to individuals incomes. The advantage does not end here. Political economy also allows business to account as costs the depreciation of real property and to recover from consumers the depletion of nonrenewable assets (oil reserves, for instance).* * Jack Anderson in colaboration with James Boyd wrote:49

The percentage depletion allowance was Oil’s creative leap beyond the hackneyed, confining principle that business, in arriving at its taxable income, may deduct its capital expenses over a fixed time period. “Depletion” opened up the exciting, unconfined universe of deductions that were not connected to expenses, that soared infinitely beyond expenses, and that, while the oil flowed on, knew no limitation of time. Under its provisions the owner of an oil well could subtract from his income, before figuring his tax bill, 27.5 percent of the value of the oil it pumped out. . . . For the country as a whole “oil depletion” forgave taxes that amounted to between thirteen times and nineteen times the total drilling and developmental costs.

Taxonomy of interests


In both instances, political economy allows capital to accrue ostensibly to replace business assets and to expand business capital and capability. However, instead, business owners have often closed businesses expressly to privatize the paternally allowed accumulations of business capital to their individually profits. This has happened with greater frequency (When non business individuals, under similarly rational but not codified or endorsed by law, do what business does, they are charged with tax fraud and government confiscates their assets). Business requires capital to produce its goods and services and without the lure of profit, it is folly to conclude that private enterprise could flourish. While this is reasonable and good, moneyed political influence has succeeded to codify inequities into our political economic system. Egregious, collusive actions of political powers and government have abused the trust of society. The net result is that non-business consumers must, in the end, not only pay the taxes to run the government, they pay for the lobbying by business to benefit business (in this, consumers pay to have their sovereignty taken from them). And eventually, they must pay for the socialized debt that business politics influences to accrue as our nation's public debt. Political economy provides non-business consumers no clout equal to that of business. Often, those, who flaunt the sovereign duality inherent to our government, call the adversities the result of the golden rule with the quip:

He who has the gold, Rules. Considering the success of Hamilton's Property Rule and the capture of the democratic sovereignty of we the people by this practical sovereignty wielded mostly by our ‘fictitious person’ corporate business sector, try to argue with this practical reality. The Constitution deliberately ordained the duality of sovereignty: Alexander Hamilton, the main architect of our government's duality of sovereignty, advocated and named it, property rule. Since then,



others have since called it practical sovereignty. Like fictitious person corporations, it also is fiction. About this duality, Walt Whitman's ideal as contrasted with Parrington's realism comes to mind. Whitman wrote:50

Where thrift is in its place, and prudence is in its place, Where the populace rise at once against the neverending audacity of elected persons, Where the citizen is always the head and ideal, and President, Mayor, Governor and what not, are agents for pay, Where children are taught to be laws to themselves, and to depend on themselves, Where equanimity is illustrated in affairs, There the great city stands. Parrington wrote:51 A just and liberal government is an excellent ideal, but it is one for which few amongst the mass of men greatly care; and because America chose to follow its own [acquisitive] nose, . . . it would not become like the America of its dreams. In the conduct of government, the affairs of society have not been regulated with deliberate intent to measure up to the ideal of Whitman or to the ultra-liberal system of economy which Adam Smith conceived. Rather, as laws-rules-regulations of taxation and accounting were formulated, non influential individuals of society were literally left out of political consideration: What the non monied sides of society got was the proverbial shaft of conventional serfdom? Paternalism was catered to the power centers: Industry on the one hand and unions on the other, otherwise human equality or equity was neither represented nor properly considered. About issues embroiling taxable income, two are briefly addressed: 3 employee benefits, as greatly disproportionate pay scales

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and perks to owners and managers, and 33 insurance for collateral business interests. Political economy decided that business should account these as costs of conducting business: as deductibles to business income when determining taxable income. What comparable accounting allowance was provided to individual wage-earning tax payers? --Political economy makes who to pay for tax-based government paternalism? Political decisions for both issues above yielded laws and codifications which allow businesses to reduce their taxes? However, the paternalistic allowances have another down side: individual wageearning taxpayers systematically are made to makeup for the reduced taxes paid by business. In tax matters, the greater the paternalism allowed to businesses results in a proportionately greater tax burden on wage-earners. Union's clout with government is the culprit of gaining paternalism involving the first issue and business is the culprit of the other. In both instances, free tax rides are provided as paternalism to these special interests (and they are paid for by wage-earning tax payers): Political economy furnished union members’ non taxed benefits that amount to an ever increasing economic value. On the flip side of the benefit, political economy systematically transferred the cost of this value to wage-earning tax payers and consumers. Also, political economy furnished to business, private insurance security at no net cost to business. In the end when goods and services are consumed, consumers reimburse both non taxed values, and political economy makes consumers pay with fully taxed dollars. The paternalism of political economy totally provides for reimbursing each business entity cost (as employee benefits and health insurance). In too many instances, however, the reimbursement is paid by consumers who -- because of extremely limited after tax



income -- cannot themselves afford to buy health insurance. If insurance provided as a free-tax-ride benefit is valid, there exists a more valid argument for tax-based universal health care insurance coverage. And, the argument put forth in the proposals for universal health care is also valid:

Those who pay for insurance have born the cost of hospital care provided to those without insurance. However, the question:

Who pays for the insurance that business provides as a benefit must also find answeres. Political economy makes consumers pay for business costs and profits. Wage-earners pay the general revenue taxes to make up the paternalistic shortfalls in business revenue taxes due to deductions allowed by political economy paternalism, and since the cost of employee benefits reduces the taxable business income and is recovered when business goods and services are sold, businesses therefore, do not pay for employee benefits. However, the thorns of inequity designed into our Political

Economy (for instance that requires wage-earner consumers to purchase the goods and services of business from income that political economy has fully taxed, is blunted by the system's implied promise of the trickle down of an easier lifestyle, and by the collective power of suffrage to ensure our constitutional heritage and promise of general welfare and liberty. This -- trickle down -- promise is broken each time the economy fails, and when the system fails, as it did in 1990, the thorn of inequity is particularly sharp. In fact, this official -trickle down -- political economy has failed a large sector of society ever since unemployment rates became a deliberate target of Political Economy management: with intent to control inflation. Economists

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formalized this Political Economy target during the early '70s. The result will eventually and hopefully soon be as Walt Whitman suggested that it should be: 52

Where the populace rise at once against the neverending audacity of elected persons, There the great city stands. Whoever now thinks the American Way of doing business has no socialization (not to be confused with socialism), must somehow argue that our society's problems -- our federal deficit (largely skewed to secure business interests), major bank and business failures, the Deposit Insurance inadequacies, and, more recently, private pension funding deficiencies -- do not target solutions paid for by general tax revenues. Then, they might explain how business has or ultimately will resolve these impossible financial problems on their own -- which, of course, they cannot without the sophistries of smoke, mirrors and such. Nevertheless, I expect an answer, moving society in the direction of tranquility, will come naturally in an evolution of the corporate form: In corporations owned and run by the employees themselves. The United Air Lines could become another prototype of the stellar business success of the employee owned business and, I trust, remove much of what is currently threatening to people, the consumers, and tax payers. On the plus side of multinational corporations engaged in so called "free enterprise" but more appropriately called International Political Economy -- of national political economies or neo-mercantilism -- managed markets , the World itself is becoming more homogenous and tranquil. The NEW WORLD ORDER could not have found any hope of existence but for the influence of our multinational Corporate Giants. However argued, the societies of origin ultimately bear governments and their costs of operating and arbitrations. Governments, by nature, and particularly democracies, are socialized entities that hopefully fulfill the ideal expressed by Walt Whitman in



his poetry:

Where the populace rise at once against the neverending audacity of elected persons, . . . . Where outside authority enters always after the precedence of inside authority, Where the citizen is always the head and ideal, and President, Mayor, Governor and what not, are agents for pay, Where equanimity is illustrated in affairs,53 If we believe Adam Smith, we believe that those who labor, to make industry and enterprise work, are the real source of wealth -as Adam Smith postulated, labor, not land or money, is the real source of a nation's wealth -- Smith persuades us, the proper and ethical processes of consuming and possessing wealth make laborers (everyone receiving a paycheck for their efforts, then spending most of it on the goods and services of industry) the primary, if not the only, tax payers of society.54 The managers of our Political Economy have not minded the processes of consuming and possessing wealth in equanimity with creating and regulating money (now Fiat Money) and our society suffers because of this. Whitman's ideal --

Where equanimity is illustrated in affairs -- has not even been a goal of the managers of our economy? The sole emphasis has been on the creation/distribution of money and on the incentives allowed to businesses to capitalize and accumulate (And more recently to Capitalist Captains who, by way of leveraged buyouts, political economy has allowed them to take the cash and leave greater corporate debt for the consumers, workers and tax payers to bear: reported in 2001 to have surpassed $5 trillion). Our experience of the '80s (and ‘90s) should now convince us that when political economy allows labor to suffer extended hardships for lacking adequate pay, the system eventually chokes the normal

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processes of consuming (We might call this economic constipation). This eventually chokes off the ethical processes with possessing wealth and finally our American Way system fails. Sadly, our economy has been in process of displaying this malady since the mid '70s. The prosperity of the '80s may have been mostly an illusion purchased by printing new money and spending beyond revenues. Political economy seldom achieved the definition of full employment -- 5.8 percent unemployed -- adopted as a Political Economy goal during the ‘70s. This fact provides emphasis to expectations of economic illusion. Our economy has had no lack for money or business capital but it could and should have had more vitality: the economic lifeblood that only the wages of labor can provide. Thomas Jefferson's mentor, Dr. Francois Quesnay, provided the notion of wealth-flow as economic lifeblood that our economy has lacked in fullness for some years. Robert L. Heilbroner wrote: 55

Quesnay devised a chart of the economy called a 'tableau ĂŠconomique.' In contradistinction to the ideas of the day, which still held that wealth was the solid stuff of gold and silver, Quesnay insisted that wealth sprang from production and that it flowed through the nation, from hand to hand, replenishing the body social like the circulation of blood. The 'tableau' made a vast impression--Mirabeau the elder characterized it as an invention deserving of equal rank with writing and money. But the trouble with Physiocracy was that it insisted that only the agricultural worker 'produced' true wealth and that the manufacturing and commercial worker merely altered its form in a 'sterile' way. During the '80s we did not replenish the body social with its essential lifeblood . Instead, we stimulated the economy by issuing far too much new fiat money.

Then representatives in



government allowed our banks and financiers to short-circuit the economic lifeblood provided to economy by labor. The '80s were a decade of restructuring business and dividing what I call the booty capital among the Captains of the restructuring. The restructuring continues! Jeffery Hoffman of the Associated Press wrote an article printed in the Las Vegas Review Journal, September 7, 1994. An excerpt is:

When Scott Paper Co. announced a major joint venture in China, the company characterized it as a shrewd expansion in a promising foreign market. A few days earlier, Scott had accelerated a drastic cutback at home. An insert accompanying the article showed that Scott was eliminating 10,500 positions worldwide by the end of 1994 (about one third in the U.S.). Its expansion plans were to invest $20 million to build a joint venture tissue factory in China that will employ 200. Xerox Corp. was said to be eliminating 10,000 jobs by 1996 and closing some factories and service centers and this was the second big cut in two years. Xerox's expansion includes joint venture factories in Wahun, China, making fax machines and in Suzhou, China, making copiers; employing a total of 700 people. The lifeblood of Quesnay's body social was usurped to accommodate the funding of the huge financial packages including the creation of junk-bonds to captivate a lot of loose investor's money. Huge amounts of capital (more than $5 trillion in capitalized corporate booty reported as corporate debt in 2001) were set free by the short circuits of the market system processes to transform and transfer ownership positions but also the pirates used precious little of this booty capital to sustain employment and wages or to underwrite new ventures of enterprise. Our economy now suffers and must endure for many years the ill effects of short-circuiting the economy to privatize the corporate capital. This reality relates to interest rates that are far too high in relationship with expectations of inflation: This now

Taxonomy of interests


includes the noncontrollable value of the dollar with far too much of our loose fiat money in the hands of investors who have foreign investments in mind. John Hobson observation comes to mind:56

The consequence [John Hobson] saw was most surprising. The inequality of incomes led to the strangest of dilemmas -- a paradoxical situation in which neither rich nor poor could consume enough goods. The poor could not consume enough because their incomes were too small, and the rich could not consume enough because their incomes were too big! In other words, said Hobson, in order to clear its own market, an economy must consume everything that it makes: each good must have a buyer. Now, if the poor cannot afford to take more than the bare essentials, who is there to take the rest? Obviously, the rich. But while the rich have the money, they lack the physical capacity for that much consumption. . . . Hobson's answer was devilishly neat. The automatic savings of the rich could be invested in one way that would put them at sue without the troublesome accompaniment of more production at home. They could be invested overseas. While for sometime I have considered our economy of the '80s a Casino Economy, I now realize that this expression was observed by others. Still, the '80s economy was a Casino Economy. Our banks including the banks of the Federal Reserve acted as the slot machine with Corporate Captains (often Corporate Raiders), and investment bankers themselves, playing the machine with its money trough open for the taking. Great amounts of fiat money were infused into this banking industry slot machine which made loans to secure stock positions to effect corporate takeovers and otherwise for restructuring corporations with large accumulated capital.



Little to no capital went to bolster production or to furnish risk capital to underwrite new business ventures. We need be concerned about our markets at home and this means that we must learn to maintain -- Political Economy wise -- our economic lifeblood: Jobs that pay decent wages. It is implicit in the fact that Xerox and Scott, among the many others, are cutting back since they cannot compete with the foreign produced products but also implicit in their decisions is that our own market is in process of having its lifeblood siphoned off. Until they make more just arrangements, our Captains of industry must become sequestered of the privatized accumulated capital -- that our Political Economy paternalism allowed to accumulate with intent to bolster the economy. Yes, we should invest in foreign production but by means of our Political Economy we must do more to protect our own markets. Maybe, a just solution is to mandate corporations as Scott and Xerox to require them to work out ownership deals with employees to assure that they invest the accumulations of capital (which, if Adam Smith is right, labor created) in foreign production to return just dividends to the displaced workers. A round table of experts discussed the economic problems of 1996. It all sounded professional. Labor made its points clearly. Academia had a valid focus. Industry defended its position very well. They promised solutions. Maybe most telling was the acknowledgment that industry is operating below capacity as administered by political economy objectives. Hobson prophecies were evident. Markets are overstocked and in fear of inflation the Fed maintain economy targets of unemployment. With negligible economy growth, the panel expected the Fed will raise the rate of discount interest higher to slow economy even further. Not one expert foresees an improving political economy scenario. Still, a panel member had pointed to the grand success of Hewlet Packard with maintaining its staff and growth. Today, July 11, 1996, the stock market tumbled, the announcer said,

Taxonomy of interests


because Hewlet Packard had failed to sell its products. Despite political turmoil of Clinton’s Impeachment that cost the nation more than $70 million to prosecute, the economy held strong and inflation remained low while the Feds discount rate remained high ostensibly to control anticipated inflation that never occurred. The bottom line of economy, as Clinton left office, showed unemployment and inflation remained low and the Feds discount rate high. The poverty rate had dropped to 16% of the population, lower than any year of last half of the Twentieth Century. Then, with the fresh administration, inflation concern was abandoned. The Fed lowered the discount rate eleven times to stimulate the economy. But credit and mortgage rates did not respond in kind. Because of indebtedness, Political Economy remained ‘constipated’ with personal and corporate debt both reaching past $5 trillion. Events of 9/11/’01 terrorism, unemployment rose drastically; the poverty rate rose again. In the aftermath of cutting high end taxes, the era of federal deficits had returned with political economy vengeance. About SS surplus, the government’s ‘pork barrel’ requires to again misuse it. Lincoln’s presidency introduced this section. Because Lincoln was not culpable for the fallacies, it ends with these cites of Parrington. 57 Long an ardent Whig of the Clay school, and thoroughly indoctrinated in a paternalistic nationalism, he was brought, as every thoughtful American of the times was brought, to weigh the program of slave imperialism in the scales with the Declaration of Independence. The doctrines of that great document lay before every man’s feet in those uncertain days, to get over as one could. They could not easily be evaded or got around; they must be dealt with. Rufus Choate, representing Boston Toryism, had come upon them and dismissed them as ‘glittering and sounding generalities.’ Calhoun, representing southern imperialism, had come upon them and essayed to destroy them by a critical realism. Lincoln, embodying the



spontaneous liberalism of the West, came upon them and paused to take his bearings afresh. He could neither wave them aside nor destroy them. The deep-rooted equalitarianism of his simple social philosophy found in them and eloquent pronouncement of its democratic faith, that set him upon considering how such doctrine might be squared with the reality of slavery. The agrarianism of John Taylor and the Whiggery of Henry Clay could tell him nothing about that; he must seek elsewhere; and the solution he found in an amalgamation of equalitarianism and free-soilism, in an adaptation of western Whiggery to Jeffersonian principles. Whatever party name he might call himself by, in his love of justice and his warm humanity Lincoln was essentially Jeffersonian. He respected property rights, but other rights he believed more sacred. And as he watched the emergence in the South, of the ideal of a Greek democracy, as he considered how the party of Jackson had become the party of Calhoun and Douglas, bent solely on strenthening as spreading the institution of slavery, his equalitarianism took alarm. He could not sit quiet while the principles of the Declartation of Independence were being openly flouted; he must speak out; he must arouse the idealism of the people to deal with the iconoclasts. In an important pronouncement written in 1859, he set the problem before them thus:“Remembering . . . that the Jefferson party was formed upon its supposed superior devotion to the personal rights of men, holding the rights of property to be secondary only, and greatly inferior . . . it will be . . . interesting to note how completely the two [parties] have changed hands as to the principles upon which they were originally supposed to be divided. The Democracy of today hold the liberty of one man to be absolutely nothing, when in conflict with another’s right to property; Republicans on the contrary, are for both the man and the dollar, but in case of conflict the man before the dollar. . . . But, soberly, it is now no child’s play to save the principles of Jefferson from total overthrow in this nation. . . . The principles of Jefferson are the

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principles and axioms of free society and yet they are denied and evaded, with no small show of success. One dashingly calls them ‘glittering generalities.’ Another bluntly calls then ‘self-evident lies!’ And others insidiously argue that they apply to ‘superior races.’ These expressions, differing in form, are identical in object and effect -- the supplanting the principles of free government, and restoring those of classification, caste, and legitimacy. . . . They are the vanguard, the miners and sappers of returning despotism. We must repulse them or they will subjugate us.” (Letter to H. L. Prince and Others, April 6, 1859, in Works, Vol. V, pp. 125-126)

Two conceptions were here competing in Lincoln’s mind, the older equalitarianism that sprang from French humanitarianism and the newer economics that came from English ‘laissez faire’; and the attempt to reconcile them suggests how far he had traveled along the path of western Whiggery. With the spirit of enterprise he had no complaint; the ideal of progress was associated in his mind with a fluid economics that permitted the capable to rise through skillful exploitation. He had no love for the stable economics of the eighteenth century that Jackson preferred; the profit motive, functioning freely, he regarded as the legitimate driving force of society; but he was concerned that competition should be open to all on equal terms. As he watched the transition from an agrarian to an industrial order, he found himself more in sympathy with the new than the old. Accepting the principle of exploitation he came to the position of the little capitalist who believed that in America capitalism could be democratized by the simple method of keeping the opportunities for exploitation open to every citizen [Political Whiggery succeeded to obtain corporate ‘fictitious-legal-person’ rights equal to the natural rights of humans and this opened exploitations in America to foreigners while substantially closing opportunities to individual citizens]. It was common view of western Whiggery, and in so far as Lincoln remained a Whig, content with a system which he

accepted as peculiarly suited to the genius of the American people. In a late speech he summed it up thus: “What is the true condition of the laborer? I take it that it is best to leave each man free to acquire property as fast as he can. Some will get wealthy. I don’t believe in law to prevent a man from getting rich; it would do more harm than good. So while we don’t propose any war on capital, we do wish to allow the humblest man an equal chance to get rich with anybody else. When one starts poor, as most do in the race of life, free society is such that he knows he can better his condition; he knows that there is no fixed condition of labor for his whole life. . . . I want every man to have a chance -- and I believe a black man is entitled to it -- in which he can better his condition -- when he may look forward and hope to be a hired laborer this year and the next, work for himself afterwards, and finally to hire men to work for him. That is the true system.” (Speech at New Haven, March 6, 1860, in Works, Vol., V, pp. 360-361) But as a western man Lincoln was far more concerned over the application of ‘laissez faire’ to the problem of western lands, and as he contemplated the practical workings of ‘squatter sovereignty’ he learned how the free functioning of ‘laissez faire’ may be interfered with by economic imperialisms. That lesson determined his final stand. The virgin prairies beyond the Mississippi were coveted equally by northern and southern exploiters; and who should finally possess them, whether the small freeholder or the slave-master, was a question that could not be put off forever. None knew this better than the small farmers who were already staking out homesteads there. If Congress yielded to the pro-slavery demands, their economic future would be endangered. It was the free-soil West that sent the first anti-slavery men to Washington and provided the backbone of the new party. Not the respectable West, but the plain people, Whig as well as Democrat. ‘Much of the plain old Democracy is with us,’ said Lincoln in 1858, ‘while nearly all the old silk-stocking Whiggery is against us. I don’t mean nearly all the old Whig party, but nearly all of the nice exclusive sort.’ (Letter to A. C. Henry, in Works, Vol. V,

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p. 95) . . . The free-soiler hated slavery because it threatened his immediate interests; never the less as the great struggle developed, the moral injustice of slavery was thrust to the fore and imparted a humanitarian motive to the free-soil argument. The humanitarian motive Lincoln seized upon, wedded it to the ideal of national union, and thus doubly armed went forth to the fight. To amalgamate idealism and economics is not an easy task. ‘Public opinion,’ he said in a speech at Hartford, ‘is founded, to a great extent, on a property basis.’ But it is not the sole basis. The ideal of justice comes in to upset all purely economic calculations. ‘The property basis will have its weight. The love of property and a consciousness of right and wrong have conflicting places in our organization, which often make a man’s course seem crooked, his conduct a riddle.’ (Works, Vol. V, p. 330) Beyond question it was this recognition of the perennial conflict between economics and justice, between realism and idealism, that explains the hesitancies and harassing doubts that marked Lincoln’s development. To reconcile the principle of exploitation with the Declaration of Independence it was necessary to stick like a flea to ‘laissez faire’ -to eliminate slave labor and accept only free labor. Lincoln was a slow man and cautious, and he pulled himself forward to such a position by main force. He was not a rare intellect like Thoreau, to think swiftly to a conclusion and abide the consequences. He was a political leader rather than an intellectual, and he could advance only a little ahead of the slow-moving mass he sought to draw after him. A hundred invisible ties held him back -- his belief in the rights of local democracies, his respect for law and order, his devotion to the Constitution, his recognition of property interests in the slave, his understanding of the complexity of the problem, with the entire economy of the South resting on a slave basis. Here were difficulties enough to trouble an honest mind. His practical sense, which is only another name for political realism, restrained his idealism and made him of necessity an opportunist, willing to yield much to save the



Union. A simple, tolerant, easy-going man, he was at bottom a realist who had come to understand what may be considered the greatest truth in political science, namely, that an enduring state must rest on willing allegiance. Force cannot compel loyalty; authority may put down revolt but it cannot destroy the seeds of discontent; for that only the sovereignty of good will is competent, and in free states the sovereignty of good will must rest upon compromise. Lincoln was a better democrat than Jackson, for he would rather persuade than drive. If Hamilton embodied the aristocratic principle of coercive government, Lincoln embodied the democratic principle of give and take, that prefers compromise to bayonets. With a cause resting on the common good will it might safely be trusted to muddle through.

‘In those days our Declaration of Independence was held sacred by all, and thought to include all; but now, to aid in making the bondage of the Negro universal and eternal, it is assailed and sneered at and construed, and hawked at and torn, till, if its framers could rise from their graves, they could not at all recognize it. All the powers of earth seem rapidly combining against him. Mammon is after him, ambition follows, philosophy follows, and the theology of the day is fast joining the cry. They have him in the prison-house; they have searched his person, and left no prying instrument with him. One after another they have closed the heavy iron doors upon him; and now they have him, as it were, bolted in with a lock of a hundred keys, which can never be unlocked without the concurrence of every key -- the keys in the hands of a hundred different men, and they scattered to a hundred different and distant places; and they stand musing as to what invention, in all the dominions of mind and matter, can be produced to make the impossibility of his escape more complete than it is.’ (Speech at Springfield, June 27, 1857, in Works, Vol. II, pp. 327-328)

Taxonomy of interests


... Even more than Washington has Lincoln suffered at the hands of the myth makers. Of late years he has come to be looked upon too often as the invaluable asset of the political party that he honored in its founding, and too rarely as the impediment of the kindly, liberal soul of our native democracy in the simpler days of a fluid economics and an unsophisticated equalitarianism. With his instinctive kindliness, his abiding faith in the good will of men, his dislike of coercion, his readiness to compromise, he may seem old-fashioned to a generation that has grown intolerant -- but that is a reflection on our own times rather than on Lincoln. The real Lincoln can grow old-fashioned no more than Jefferson. As he went back in a day of sordid imperialisms to the earlier liberalism of the great Virginian, seeking to rescue the idealism of the Declaration if Independence from the desecration of the market place where it was openly flouted, so in a day of vaster imperialisms and greater complexity we may take counsel of his humanitarianism, his open-mindedness, his trust in tolerance and good will, his democratic faith that held firm in spite of disappointment. The market place is mighty now as it was then, and liberalism finds few friends there; but when did its gods become immortal? Considering this with Parrington’s following statement, in 1865 the Republican party was no other than a war machine that had accomplished its purpose. It was a political mongrel, without logical cohesion, and it seemed doomed to break up as the Whig Party had broken up and the Federalist Party had broken up, Slavery and western ‘internal improvement’ made ‘Lincoln’s democratic predicate compatible with Whigs who gained official offices with his presidency. Clay’s American System of political economy, brought tautologically fallacious values of cause to wonder



about the responsible motive for assassinating Lincoln.’ American System’s slavery has metamorphosed only to eliminate race and color.

104 (and White Rabbits) Humans bond for security: to ensure and insure. Insurance began with Adam and Eve, desiderata of life, for ensuring, with life itself.58

± ensure, insure. ‘Ensure’ is the usual spelling for “make sure or certain”; ‘insure’ for “arrange for money payment in case of loss, accident or death.” Fundamentally, government is insurance, taxation the required means for underwriting government’s insurances. Seekers of better ways of life ensured the uniqueness of American government with prospects of insurances-equanimity. Whigs ensured American System Political Economy: property-based flux ensures the old potentates’ ‘divineright’-based insurances, and reject insurances that American Seekers of better ways of life envision. Only Seekers can move us beyond Political Economy’s fallacies:

only in quantity will it grow: more people, more goods, more wealth; its quality will remain unchanged forever . . .; it grows but it never matures. R. L. Heilbroner Colonial life under ‘divine right’ changed slowly even as feudal life





of the dark ages. Only by enlightenment of reason is progress enabled. Tories, Federalists, and Whigs are ‘divine right.’ patrons and government’s insurances are Political Economy’s endemism. So who ensures government’s insurances and whom do the insurances insure? Tautologically, which antecedent flux makes the Preamble to the Constitution a fraudulent insurance statement?

Humans, are the natural sovereigns of life. In groups, sovereignty is either by human consent or contrived. Consented sovereignty never departs (with impunity) the cardinal human essence. Tautologically, sovereignty contrived is an illogical metamorphism (the logical antecedent sovereign essence, ‘sum,’ is fallaciously metamorphosed to be consequential to life’s ancillary substances).

An anthology of Political Economy fallacies that paradoxically challenge Our Federal Savings Plan: DeYoung’s document about SS. by Melvin H. DeYoung

It is the uniqueness of individuals, as they are encouraged to develop responsibly, into which the essential ethereal beauties of life and nations bloom. The American heritage is pure ETHEREAL-GOLD. The unalienable qualities of individuals are priceless; not compatible with anything that we produce, particularly on a production line. mine, from ‘Civitas’

Sovereign referred to kings and their kingdoms. Then during the rein of James I in 1489 to honor the uniting of Scotland with England, conscientious meaning was given to sovereign by calling Englands money unit a sovereign: The Pound Sterling (^) as also the one pound gold coin was called a sovereign. Money was then quantified by the count of sovereign units.59 As money has value ‘Consequents’ identified with goods and property, human’s sovereignty also has. Mathematically, this meaning compares sovereignty to the uniqueness of counting numbers: with cardinal and ordinal values (if substantial consequential value relates to ancillary cardinal value, then it also relates to ancillary ordinal value). The cardinal unit #1 is a prime integer that identifies with all integers (#1 is called the ‘identity element.’). Analogously, human are ‘identity elements’ of ordinal (group) sovereignty (ancillary value added to ordinal sovereignty requires that ancillary cardinal value is proportionately yielded). The definition of sovereignty is:60 A person, group, or nation having supreme control or dominion. Entities of cardinal authority, power or value depict sovereigns.

The quintessence of American constitutional sovereignty is the collective unalienable essence (‘sum’without the ‘substance,’ or ‘soul’ of life), as bestowed by nature to every human being; sovereignties that individually or collectively are unalienable because nature is unalienable; cardinal because nature is supreme. Nature does not discriminate to make any individual, group or race supreme, as power aspiring “White Rabbits of our wonderland” often fallaciously avow. Thomas Hobbes gave us attractive theory of greed as based on his belief and experience. It is tautological fallacy: ‘Divine Rights’ and other dogmas are all fallacies that “White Rabbits” put their faith in. Still, Hobbes conceded human equality. C. Thomas wrote:61

Nature hath made men so equall, in the faculties of body, and mind; as that though there bee found one man sometimes manifestly stronger in body, or of quicker mind then another; yet when all is reconed together, the difference between man, and man, is not so considerable, as that one man can claim to himselfe any benefit, to which another may not pretend, as well as he. Thomas Hobbes

Sovereignty is individual responsibility


And, in their Declaration of Independence, Colonial America proclaimed these natural human ‘essents’ (Heidegger’s word).62

In Congress, July 4, 1776. The unanimous Declaration of the thirteen united States of America, When . . . it becomes necessary . . . to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them . . . We hold these truths to be self evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. . . An overwhelming subscription of these cardinal truths won for Americans their independence and sovereignty. --Does the cardinally leveled sovereignty of nature endow privilege or responsibility? Sovereignty is individual responsibility John Locke’s philosophy about the naturally endowed values and powers of each person supported the American independence movement. Locke intellectually ruled the Eighteenth Century.63 Cicero’s thoughts on natural law clearly were considered by Locke. However, Locke reasoned not to draw upon the controverted theories of natural law to explain his empiricism. Locke’s philosophy sidestepped sophistries spun by classical orthodoxy’s dogmas: divine right, materialism, determinism, positivism, . . .. He directly confronted the fallacies of rank by appealing to each individual’s natural ‘essents’ (as Heidegger called the faculties of the human soul) to confront the dogmatized superiority-inferiority castings of society. Leaving natural laws uncontested and apart, Locke’s experiencebased reasoning alone defined the unalienable essence of individual equality, i.e., the democratically "leveled" sovereignty for which Colonial America aspired. While Locke’s clear explication was



commonly revered, the Constitutional Convention held fast to Hobbes’ materialist view. Reluctantly, democratic-sovereignty became the cardinal anchor of constitutional purposes: the Convention adopted democratic-sovereignty as the physis-based Strategic plan but then isolated it by adopting nomos-based republican representation as the Operations Plan. While the Convention adopted “leveled sovereignty” as the governing strategy, as with England’s unit of money, the American nation’s sovereignty is quantified by the ordinal value of the individual sovereign units. Our ‘White Rabbits’ then further infused nomos-based practical sovereignty: as measured by property value. The Convention proposed individual democratic-sovereignty, i.e., naturally endowed human rights that we each claim as our own cardinal sovereign property: constantly requiring dynamic and responsible individual presence. And by infusing practical propertybased sovereinty into the mix, they infused perpetual paradoxical challenge to individual responsibility. We each exercise this responsibility by thinking clearly, proclaiming candidly and acting upon what we think. This exercise provides the constantly renewable reparation of constitutional Strategy, i.e., each fresh generation of dynamic sovereign citizens quantifies and qualifies the nation’s sovereignty. However, the constitutional reparation, we call freedom, also requires of each individual (and political factions) an outwardturned (objective) perspective with all common aspects (the whole) of society. Each individual is naturally accountable to admit to all others the liberty and freedom that they themselves require. 64

[Locke] assert[s physis-based natural law] in the contemporary,' to 'claim' that it is true by the admission of any individual that his or her requirements of liberty and freedom must be admitted to others, 'unless' the form of political society under which they live is unjust. Craig Thomas

Sovereignty is individual responsibility


Our individual responsibility is to pursue knowledge and this cardinal essence requires that truth-based ethical responsibility is pursued, that when benignly neglected, allows power aspiring “White Rabbits” to proliferate and nullify democratic-sovereignty; in benign neglect we abdicate our unalienable individual sovereign rights to those armed with orthodox dogmas and superior accumulated material value as they, in orthodox nomos, influence the acts of government to favor themselves. William Grider summarized the latent effectiveness of American sovereignty; in his recent book Who will tell the People, he illuminated whys and hows of unalienable sovereignty usurpations:65

Americans have never achieved the full reality in their history or even agreed completely on democracy's meaning. The democratic idea has always been most powerful in America as an unfulfilled vision of what the country might someday become -- a society advancing imperfectly toward self-realization. Grider warns:66

American democracy is in much deeper trouble than most people wish to acknowledge. . . . What exists behind the formal shell is a systemic breakdown of the shared civic values we call democracy. William Grider All aspects of life must embroil the issues of our material world: material aspects surely embroiled the “great debate,” as Parrington called the debate about the Constitution and sovereignty. Concerning the tenuousness, i.e., the ethereal essential status of American democracy and before laying blame for the high cost of ineffective government, each citizen should refer to Parrington’s statement about Benjamin Franklin:67

He sat in the Constitutional Convention as one of the few democrats, and although he was unable to make headway against the aristocratic majority, he was quite unconvinced by their rhetoric. . . . when he heard eloquent young lawyers argue



that a single-chamber legislature, responsive to a democratic electorate, must lead to mob legislation, and that good government required a carefully calculated system of checks and balances, he remarked: It appears to me . . . like putting one horse before the cart and the other behind it, and whipping them both. If the horses are of equal strength, the wheels of the cart, like the wheels of government, will stand still; and if the horses are strong enough the cart will be torn to pieces.68 When in 1790,it was proposed to substitute a bicameral system for the single-chamber in Pennsylvania, Franklin came to the defense of the simpler, more democratic form, with a vivacity little stalled by years: Has not the famous political fable of the snake, with two heads and one body, some useful instruction contained in it? She was going to a brook to drink, and in her way was to pass through a hedge, a twig of which opposed her direct course; one head chose to go on the right side of the twig, the other on the left; so that time was spent in the contest, and before the decision was completed, the poor snake died with thirst.69 Both his economic principles and his views on government have been condemned by Federalistic critics as tainted with populism. They both sprang from the same root of agrarian democracy. Whether Franklin or his critics more adequately represented the larger interests of eighteenth-century America is beside the present question; it is enough to note that all such criticism is leveled primarily at Franklin’s democratic philosophy as a thing in itself undesirable, if not dangerous.



Franklin may often have been wrong, but he was never arrogant, never dogmatic. He was too wise and too generous for that. In the midst of prosperity he never forgot the unprosperous. All his life his sympathy went out to whoever suffered in person or fortune from the injustice of society: to the debtor who found himself pinched by the shrinking supply of currency; to the black slave who suffered the most elementary of wrongs; to impressed seamen; to the weak and wretched of earth. He was part of that emerging humanitarian movement which, during the last half of the eighteenth century, was creating a new sense of social responsibility.


Sovereignty is individual responsibility

“Social responsibility” and “democratic sovereignty” is the grist of continuing political debate in America as well in all parts of the world. Hamilton had argued prescriptively to favor absolutely the English mercantilist doctrine of causal-determinism:70

A commercial people understands that a government that serves the interests of men of property, serves the interests of all, for if capital will not invest how shall labor find employment? -------



Does Hamilton base his prescription exclusively on mercantilist doctrine which Hobbesian materialism is about? In this, does he disregard the causal nature of the human essence of will, i.e., the noetic-states of humanity that Christ referred to when he said: man doth not live by bread only?71 Is this non material Provence the Provence of lasting truth, knowledge and justice? The Provence of human tranquility? Does Hamilton’s prescription found American politicalconservatism? Is this prescription a form of “Divine Rights” dogma? Does Hamilton prescriptively ignore Immanuel Kant’s “synthetic a priori”, i.e., false reasoning about deterministic materialism (Kant’s tautological dilemma)?


What dogmatized doctrine, theory or law exists to enssure that men of property will invest in ways to insure that labor finds employment (Economists, Veblen and Heilbroner, among others, voiced great concern about this)? While officially the Constitutional Convention neither adopted nor rejected Hamilton’s prescription, dogmatized deterministic materialism eventually became the nation’s dominant influence of legislation and administration of the new nation’s Operating Plan (insurance) that we call The American System of Political Economy. While our Operating Plan presently is based on absolute dogma (it is nomos-based) the political flux in America is dynamic and flexible to adapt to the political flux of natural unalienable human sovereignty. The will of human nature is complex. It is capable to generate dogmatized doctrines and mechanisms of deterministic materialism and it also looks to socialization such as “social usage” as Roger Williams observed. As we ponder the antecedent cause of the members of Heaven’s Gate committing mass suicide, we should also ponder the doctrines that we seldom freely select on our own to command our individual actions and prescriptive pronouncements of truth. The cultural nomos of society represent a collage of dogmatized theories and doctrine that we individually, in hope, willingly subscribe as the truth. Unwittingly, we too often subscribe to fraud, however. (About our cultural corner on truth, ours is similar to the Islamic culture that too often we in dogmatic prejudice brand for being evil.) The Operating Plan for the United States is politics about economics. It embroils the influences of mind with emotion, values with passions, will with essence . . . Rationalizations are inevitable and Aristotle’s spectrum of virtue is applicable (Virtue, Aristotle explained, is the middle ground between the vices: the mean of excess and deficiency.): At the extreme of excess, controlling by commanding materialities and their deterministic values is an inevitable cause of collective and

Sovereignty is individual responsibility


collusive rationalization that Adam Smith warned posed the greatest threat to the universal benefits of the nature-based “market system” that he carefully explicated as the foundation of a natural economic revolution. While his observations about economic revolution are universally evident, our “White Rabbits” have not subscribed to his warning about monopoly. While the Strategic Plan is based on ethics (giving of self in the sense of acting together to secure common values), the Operating Plan is based on individually taking and securing what we want as our own property. The difference between giving and taking is, of course, diabolical. While strategy is each individual’s responsibility, about the preserving every individual’s self evident unalienable rights, operationally speaking, we expect selfishness and we want absolutism with ownership, contracts, and such. Often we confuse unalienable strategic rights with our absolute wants involving property ownership. In this, our wants often qualify as extreme vices on the spectrum of virtue: they intend to legally nullify others’ physis-based sovereignty. In this, our wants often abuse laws of Nature while they violate no manmade law (which Jefferson called abstract justice) of the land. Therefore, we need to be clear about definition and purpose. Christ may have said it best: man doth not live by bread only. About political economy, we especially need be clear and balanced in reason when enacting laws that define the administrations of government, with its agents, codifications and regulations. Particularly, as we officially consider adopting or licensing forms of mercantilism, for instance, we should consider the nature of our “fictitious legal person” corporations, that agencies of state government licensed to act as human entities. Nature’s God did not create them and according to Natural Law, they have no unalienable sovereignty rights. Still, with lawful impunity corporations engage in competitive and collusive forms of neo-mercantilism. We should not only recognize this, we should be concerned that large multinational corporations are today, larger than our nation was and that as “fictitious legal individuals,”



they represent the greatest threat to nullifying individual sovereignty. They represent Leviathan entities, nations that make their own rules we might say, with which human entities individually cannot compete. The following describes mercantilism:72

Mercantilism was an economic policy pursued by almost all of the trading nations in the late sixteenth, seventeenth, and early eighteenth centuries, which aimed at increasing a nation’s wealth and power by encouraging the export of goods in return for gold. . . . As part of the mercantilist program, individual governments promoted large investments in export industries; built high tariff walls to restrict imports, which could be produced domestically; restricted exports of domestic raw materials, which could be used by the domestic industry; interfered with the emigration of skilled workers; encouraged immigration of skilled workers; and, in several cases, prohibited sales of precious metals to foreigners. . . . Adam Smith accused mercantilists of not being able to distinguish between wealth and what they called treasure, pointing out that the accumulation of treasure is merely instrumental to the acquisition of wealth [consumable and usable goods]. Douglas Greenwald Not only should we be concerned about corporate mercantilism, we should also be concerned about their organized monopolist politics, free speech and “foreign” contributions to political parties. * * Whether from foreign countries where they conduct corporate business or in the sense that they represent something other than human sovereignty, political contributions from corporations to political parties are foreign, if not alien, contributions. This also applies to all organizations and particularly to Political Action Committees

Sovereignty is individual responsibility


Confusion and conflict are inevitable in the dual realms of democratic-sovereignty. We might distinguish these realms by their dominant characteristics: intangible responsibility (metaphysical and eternal) and material acquisations (tangible or real and temporal). I distinguish these realms as physis-based and nomos-based. * * Consider, for instance, the institution of marriage. The vows taken in pure love are physis-based, the responsibilities of which, to each other and those procreated, are supposed to be understood. However, the realities of the marriage contract are nomos-based and primarily material. When society acts to formalize the fused rights in marriage -- as to liberties, license, powers, prerogatives and privileges, society inevitably discriminates against those to whom it denies an official marriage. However argued and despite honorable and ethical intents, society appears to violate the individual sovereignty of some with favor to others. When society sanctions marriage expressly to strengthen vows of responsibilities, particularly involving procreation (the physis-based purpose of marriage), then singles of the same sex cannot naturally qualify for fused rights and privileges. Society should still clearly define the responsibilities inherent to all nomosbased favoritism to avoid confusion that leads to sanctioning same sex marriage and by that compromise the natural purpose of marriage. One might note that the partnership inherent to the physis-based marriage contract involves three principal entities (a particular male, a particular female, and the organized whole of society): each has naturally implied interests and responsibilities regarding each new sovereign entity of procreation. With the implied responsibilities understood, the favoritism becomes recognized instead as natural responsibility: In democracy, favoritism without natural responsibility is unwarranted as it damages leveled-sovereignty. In my view, this contemporary concern clearly provides an example of proper nomos-based laws that appear to compromise physis-based natural law. Responsibility mitigates the perception of fused rights



and privileges! Anyway, marriage does not always provide advantages: tax laws often discriminate with favor to single individuals and Society has no specially implied partnership interests in same sex unions. Constitutional exemptions specified in the Bill of Rights apply to inhibit actions of government: to provide guarantees to individuals that they have an equal importance and influence in the determination of their individual situations and circumstances under law. ---To what extent should the Bill of Rights apply to “fictitious legal person” corporate entities? ---To what extent should America’s Operational Plan be allowed to nulify America’s Stretigic Plan? By exercising free speech, assembly and suffrage, all humans in citizenship have equal rights to actualize the commonwealth’s sovereign intent for government and the law in all its mechanisms. Still, regarding matters embroiling the dual realms of sovereignty, nomos-based laws, i.e., laws that representatives base in custom or tradition, as sponsored by those of wealth and their dogma of positivism or determinism, rather than what is “natural” or “right,” must inevitably discriminate and in this they violate the Constitution’s intent. As to property ownership, for instance, without mutual consent, a contract of multiple ownership is difficult if possible and those, to whom laws governing contracts deny ownership, will always want another’s property. Those of wealth will always desire to possess the prime parcels if not all parcels (Is inheritance all that the unborn get?) ---Should fictitious legal person corporate entities that by law are perpetual and to which we systemically give unlimited access to capital from the nation’s central banking system, no less, be allowed to control society by controlling property? ---Should the amount of a corporation’s property represent a

Sovereignty is individual responsibility



form of free speech? The Supreme Court apparently did not consider corporations separately when they decided that wealth spent to deliver a message or influence an action represents a form of free speech! Did the Supreme Court infer that corporations enjoy human status as regards Natural Law? Should they have? In his recent book, Carl Sagan referred to the meta-mind -undoubtedly referring to the cosmos side of man’s origin. Is there a meta side to corporate origins? *

* Organizations, as churches and public works, required land and facilities. Legislative rationalization about a “corporate soul” provided the legal means for such not-for profit organizations to own property. On this foundation, groups of individuals organized for nomos-based enterprise (at the state level of government) eventually achieved to gain licencing of their “for-profit” corporations. Roger Williams “social usage” had medieval notions of corporations in mind. The concern about preserving democratic-sovereignty is a constant concern the physis-based answers to which are always naturally founded in phenomena of life, as the natural span of human life for instance. Rights and justice of future generations depend on the transference of individual knowledge and usufruct opportunities involving the material aspects of life and ownership. “Positive” laws damage usufruct and they damage unalienable natural sovereignty. ---Do corporations, which are perpetual, pose the greatest threat to the unalienable rights and justice of those whose sovereignty is the constitutional reparation of future generations? Craig Thomas commented:73

Locke deliberately employs the idea of the 'state of Nature' rather than the 'law of Nature.' He insists not upon uncovering any 'laws' of nature (i.e., human nature) but rather upon the



capacity of human 'reason' to promulgate a code of civil law that is the 'constitution' of a just political society. . . . Human reason alone was 'universal' among human beings, and by its application would men be able to develop a concept of equivalence linked to necessary justice . . . The 'State of Nature' is that which is governed by a 'natural' law or 'right Rule of Reason' (i.e., the admission of the equivalence of others). [While] not out to prove the existence of any law of nature . . . ' [Locke radically] assert[s natural law] in the contemporary,' to 'claim' that it is true by the admission of any individual that his or her requirements of liberty and freedom must be admitted to others, 'unless' the form of political society under which they live is unjust. Craig Thomas Thomas then commented to explain Locke’s reasoning: 74

The right to property is defined as an essential or basic right for the purpose of defining the sovereignty of the individual and the necessity to guarantee his rights and property 'against' others, 'not' so as to allow him to acquire, to control, to achieve domination through [the material wealth of] landed property. ---Every Man has a 'Property' in his own 'Person.' ---Men living together 'according to reason' are properly in the 'State of Nature.' ---No individual has a right or power over the life of another. . . . ---Force without Right, upon a man's person, makes a State of War. . . . ---It is a 'right,' a possession of each individual which must be protected together with his other freedoms, protected from others who are in a 'State of War' against the individual . . .



He that in the State of Nature, 'would take away the Freedom,' that belongs to anyone in that State, must necessarily be supposed to have a design to take away everything else, that 'Freedom' being the foundation of all the rest.


Sovereignty is individual responsibility


Vernon Louis Parrington called the effects of Locke’s philosophy of individual sovereignty “The Glorious Revolution.” Locke’s philosophy influenced Adam Smith’s postulations for economy. More important, Locke’s philosophy influenced the individual sovereignty endowed by the American Constitution. Locke’s philosophy founded the Declaration of Independence and it united Colonial Americans to demand their independence from England. “Classical Liberals” believe in Locke’s as well as Adam Smith’s philosophy concerning postulates for economy and markets. L. S. Moss provided the following account of Classical liberalism: 75

Classical liberalism may be defined simply as social philosophy that recognizes the need for open markets and for decentralized control of the means of production for individual liberty. John Locke, the celebrated philosopher of the so-called glorious revolution, is considered to be the father of classical liberalism, although elements of his teachings can be located in Roman stoic thought as early as the fourth century B.C. In his “Second Treatice” on Government [1690], Locke developed three important notions about the relationship between the individual and government: ---first, that individuals existed in cooperative social groupings prior to the creation of civil government; ---second, that individuals enter into political society with certain natural rights that cannot be legitimately traded away in commercial exchange or eliminated by government;


and third, that when government is no longer able [or willing] to protect these rights, the members of society are justified in overthrowing their government and replacing it with a more effective one. Of these three notions, the second and third are frequently cited by intellectual historians especially because they formed the antiauthoritarian ideologies of both American and French Revolutions. Locke’s first notion, that society existed prior to government, encouraged a search for the factors promoting order and organization among individuals and in this way served as an important formative influence on social scientific thought in the eighteenth century. Classical Liberals Are Foes of Socialists The eighteenth-century British philosophers, Bernard Mandeville, David Hume, Adam Smith, C. L. De Montesquieu, Edmund Burke, John Millar, Adam Ferguson, and later writers such as Sir Henry Maine, Carl Menger, Ludwig von Mises, and Friedrich A. Von Hayek, explored the actual social processes by which custom, business law, private property, money and banking institutions, and so on come into existence and are maintained. Frequently, those institutions most useful to humanity evolved as an unintended consequence of selfinterested behavior in the market. By way of contrast, those arrangements brought about by government planners often fail to meet their objectives and are chaotic and oppressive to individual liberty. For these reasons, modern classical liberals join company with traditional conservatives [followers of Burke] and warn of the dangers of damaging through intervention in business the wisdom of the ages as contained in established customs and business practices [the idea of mechanism appears as the bond between classical liberals

Sovereignty is individual responsibility with traditional conservatives].


Laurence S. Moss

The theory of “mechanism” is that everything in the universe is produced and can be explained by mechanical or material forces, i.e., determinism. Immanuel Kant called this theory a synthetic a priori. Classical liberals are the arch foes of socialists who propose centralized control of the means of production and the substitution of central planning for impersonal market mechanisms. However pertinent, each political economy extreme, by inculcating their particular bias, damages applicability of Adam Smith’s moral approbation and in particular biases, extreme theories of political economy raise sophistry to the norm of political purpose. In the eighteenth and nineteenth centuries, economists explained how markets contain a variety of self-regulating devices that move resources [constantly] toward their most highly valued uses and thereby promote economic development. The role of open markets in eliminating waste and responding rapidly to changing consumer wants left classical liberals opposed to all those monopolization schemes that would restrict entry into markets and limit competition. Classical liberals generally oppose the creation of public utilities, the issuance of licenses and entry requirements into professions, the imposition of restrictions on international trade, immigration quotas, and the use of state power to restrict competition. Still, classical liberals are not advocates of strict laissez faire. They offer a long agenda of duties and responsibilities for the state to perform such as national defense, police protection, regulation of public health and industrial safety, provision of large-scale capital projects such as harbors and dams, patents to encourage innovation, and the creation of a sound and secure currency. As constitutionalists, classical liberals believe the purpose of the law is to provide a framework or rule of law within which individuals may freely associate and interact for their mutual benefit. Law must be designed to create broad incentives for individuals regardless of race,



religion, or personal wealth. At all times the political system must avoid substituting a rule of human beings for the rule of law because discretionary behavior on the political level can open the way toward abuses of state power in the form of political favoritism and corruption. Locke’s “Glorious Revolution” faces strong opposition. Nomos presents a constant values battle for each generation individually to decide. The battle between mind and emotion is constant -- between essential (physis-based) and material (nomos-based) values -- that each individual must win or lose in the conduct of life. Democracy is a voluntary, essential, common value that stands or falls in results of synthesized individual sovereign actions. Nullification results from actions that foreclose on others’ sovereignty. Grand nullifications result from factional orchestrations of tautologically fallacious values, the actions of which are in pursuit of some nomos-based advantages in disregard for the commonwealth’s essential tautological values: Sans the natural responsible essential part of sovereignty, organizations are always motivated by a substantial nomos-based agenda in disregard for the physis-based commonweal. As corporate mogul Paul Baran presented to a forum of business executives some years ago (Since my notes focused on substance, the author’s name is of belated concern and probably inaccurate):

There are many ways to describe the contrast between the tycoon and modern manager [which position of pseudo aristocracy most in society now aspire for]. The former was the parent of the giant corporation, the later is its child. The tycoon stood outside and above, dominating the corporation. The manager is an insider dominated by it. The loyalty of the one was to himself and his family . . . the loyalty of the other is to the organization to which he belongs and through which he

Sovereignty is individual responsibility


expresses himself. To one the corporation was merely a means to enrichment; to the other the good of the company has become both an economic and ethical end. The one stole from the company, the other steals for it. (Note the metamorphism) Locke’s logical ‘Glorious Revolution’ proved that individual sovereignty is the only sovereignty of creation. It is, therefore, the only legitimate antecedent source of governing authority and license. Also, it is the only antecedent source of nature endowed responsibility for ethical behavior: Each sovereign individual either must respect the sovereignty of each other individual or, when they are not, social penalties are logically appropriate and legally just. However, because ethics and morality cannot effectively be made into law, or adjudged, Society is often unjust. Unfortunately, the spoils of life are easily taken by the aggressors (more often corporate now) of Society. Still, Society necessarily makes laws to arbitrate the aggrieved situations in which actions of some have violated the sovereignty of others. Political economy and the licensing of corporations have adversely confused or complicated justice (fictitions persons cannot be brought to justice). The politics of accumulated hoards (“treasure” as Smith distinguished hoards from capital that recycles in productionconsumption processes) makes justice more complicated: to serve surreal economic purposes. And the cost of justice is now prohibitive foreclosing individual commonfolk from justice. One American political faction introduced this confusion of mercantilism, fictitious legal person corporations, and the American System of political economy to accommodate them: The American Whig Party that took the Grand Old Party name, Republican (I call them “White Rabbits of Wonderland”). They are the contemporary “conservatives” of American society, which politics gave us dogma-based doctrines. Willfully and absolutely disregarding Immanuel Kant’s dilemma, they deduced “deterministic materialism” with dogmatic Determinism as



their antecedent axiom. Kant had shown Determinism as a “synthetic a priori” (making experience the antecedent of logical thought rather than its consequent, as if experience is the natural ‘antecedent’: They who do this commit the logical tautological fallacy of ‘affirming the consequent’). In patent falsehoods, ‘White Rabbits’ absolutely perpetuate self-serving dogma. “Liberals” are on the other horn of Kant’s dilemma: they emphasize that the human ‘free will,’ is the antecedent causal force required to underpin metaphysical values as truth, knowledge and justice. In this, liberals perceive that physis is the only “right foundation“ on which to base official laws and actions. Fortunately, individual sovereignties that nomos-based laws have nullified, have not been muted. And the experiences of those whose sovereignty was nullified must also be reconciled with the trueness aspect of consequences of nomos-based laws. Give deterministic materialism a little more time, however. It will nullify all individual sovereignty. Life in America, not only changes economically, it also evolves socially: the barbarism of frontier life yielded to civilization. In the transition, however, free-will-based individual sovereignty was metamorphosed into determinist materialism: by reasoned tautological fallacies, materialist sovereign groups metamorphosed culture from the antecedence of rugged individualism to the consequences of determinist mechanisms. American Colonial culture was voluntarily associated for commonweal benefits as rooted in the notion of “compact” that came to America on the Mayflower. This migration was clearly in results of Locke’s “Glorious Revolution.” As a guide to preserving the effects of Locke’s “Glorious Revolution,” the Constitution furnished a clear strategy for untold benefits to each state, city, town, village and all individuals within this grand American nation’s scope of sovereign authority. Americans should ponder how the Bill of Rights portion of the Constitution ensured naturally endowed sovereignty. Democratic, leveled sovereignty of the Constitution’s bequest faces constant

Sovereignty is individual responsibility


challenge by mechanized sophistries of rationalization to justify nullifications. These sophistries of our ‘White Rabbits’ embroil tautologically fallacious sovereignty interests in materialism: property, contracts, title, social position and such. ‘White Rabbits’ have always perpetrated tautological fallacies that ‘deny the antecedent,’ ‘affirm the consequent,’ or both. When, for instance, individual sovereign responsibilities to society are forgiven, for whatever reason, to ensure a personal profit, a tautological fallacy is perpetrated. Democratic, sovereignty is level. None is greater than another. But, in a kingdom (fascism), the king’s sovereignty is supreme and his powers of allocation, with sinecures and such, awesome. Caste societies always distribute sovereign privileges unevenly to favor the privileges of class. By the condition of sovereignty’s value and distribution, one can determine the state of democracy. ----

Does democracy exist in America? Did it ever exist? Can it ever exist? The answer, of course, depends on the natural sovereignty quality in each of us: individual responsibility, and collectively, our exercise of sovereign responsibility. With these essential comments, I call attention to the sovereign quality of individuals that will decide the commonweal interests and solutions: interests that sponsored Social Security and eventually will sponsor universal health care insurance. Government, of the people, by the people and for the people, does not have sovereign authority to deny commonweal interests and the peoples’ choice for providing insurance for the common interests. Particularly, common interests are not for private enterprise with impunity to exploit. Even as society acts to punish parents who do not use due diligence and care with parenting or to punish corporations for knowingly selling cancer producing products, as society now aggressively pursues, society will also eventually indict entities of private enterprise for profiting from exploitations that forestall the



commonwealth from providing for the peoples’ common interests. Private insurance companies -- that collectively are incapable to act uniformly and efficiently -- are particularly vulnerable to the indictments that will surely come. Damaged sovereign common interests of society have pierced the corporate shield. Corporations can no longer guarantee to protect business owners from their responsibilities to society: as the tobacco industry has learned. ‘White Rabbits’ would limit corporate liability with favor to protect business properties. But what ‘antecedent’ of truth do ‘White Rabbits’ claim? Tautologically, they have ‘affirmed the consequent’(property or dogma can never be an antecedent of tautology) to the point that it has been metamorphosed to be the ‘White Rabbits’ antecedent of truth as they want it to be. Rather than limiting liability, society must make the principals of private businesses accountable for their corporate actions: for democracy to exist, businesses must assume full responsibility for the deterministic effects of their corporate actions. Nullifying the sovereignty of only one individual with impunity is an unacceptable compromise to democracy. While the processes of civilization are slow, society is progressing to make the ‘strategic’ sovereign aspects of democracy inevitable. Advances in communication technologies help this progress. Errant mechanistic ‘operational’ aspects of society must eventually conform to the pressures of democratic sovereignty or suffer severe penalties. Cicero had such as this inevitable scenario in mind. Cicero favored to preserve Roman democracy. He advocated a natural law of right reason to support his call for the "leveling" of sovereignty. Cicero's eloquent advocacy -- purely appealing to perceptions of physis alone -- was possible because of the unusually enlightened Greek democratic society which greatly influenced Cicero, if not the Roman Empire. But democracy still threatened those of oligarchical power. When Cicero refused to join the

Sovereignty is individual responsibility




Triumvirate of Julius Caesar, Pompey and Crassus, they had him banished from Rome. His outspoken physis-reasoned advocacy eventually incited his death warrant. Of Cicero's perception of natural law, Craig Thomas wrote:76

along with wages and other production related costs, for recovery when they sell the product/services of the business. This fact makes the illusion, as spun, a tautological fraud. Ultimately, it is the mass of consumers that will pay for the cost of these benefits.

Cicero encapsulates the whole theory of natural law when he says: "There is in fact a true law -- namely, right reason -- which is in accordance with nature, applies to all men, and is unchangeable and eternal . . . The man who will not obey it will abandon his better self, and, in denying the true nature of a man, will suffer the severest of penalties, though he has escaped all the consequences which men call punishments.”


Before leaving the essential for the substantial quintessence of sovereignty (for which another section is reserved), focusses are momentarily returned to private “for profit”insurance. Intended, is to confirm a direct relationship of political economy with sovereignty. Until ‘White Rabbits’ mechanisms of The American

System require that employee benefits are paid from business profits rather than costed to consumption, this indictment holds. Insuring employees as a cost to business is the pure nonsense of sophistry: The American System of Political Economy provides a sort of Teflon protective coating to business accounting to assure that business related costs do not stick to them. Instead, these costs are added to the prices that consumers pay. In the end, political economy allows businesses to collect for these benefits cost from consumers. By this systemic taxation, political economy (government’s insurance for businesses) makes consumers to pay for all that is cost accounted including executive perks and political lobbying. Insurance -- whether health care, Social Security, Life, Business Interruption, Fire, Casualty . . . -- paid directly by employers has spun the illusion that employers bear the cost of employee benefits. They in fact do not. Political economy allows them to account these costs,

Is ‘new wealth’ the Wealth of Nations?

By the ultimate authority of centralized sovereignty, as administered or allowed by political economy, nations create new wealth with purpose to sustain the economic equation of ‘production and consumption.’ The economic system, as authorized and licensed, intends that the “new wealth” is recycled in increased production and wages to create more ‘new wealth.’ While measures of added value created by the efforts of wageearners in the processes of producing and delivering goods and services accumulate to represent ‘new wealth,’ it is only as consumers purchase the goods/services, i.e., when the wages earned are mostly spent to consume the product-services, that business entities realize the accumulated incremental values that labor provided (Adam Smith’s thesis). As business entities sell all goods and services, they systematically shift the cost of producing and delivering goods and services onto the base of Consumption: mostly onto fully taxed personal wages that have been (and in instances of personal debt, are expected to be) ‘earned.’ ----


Does ‘new wealth’ belong to the entities of production, the system of economy, or to the collective sovereign sponsor and licensor, i.e., the whole of society? Why did Smith call his postulations “The Wealth of Nations”?

If ‘new wealth’ belongs to the sovereign sponsor (the nation) or its agency (the political system of economy), why does the sovereign sponsor (the nation) allow its administrative agents, the licensed businesses of political economy, to claim it as their own?

Sovereignty is individual responsibility


Employers organize enterprise, deploy capital and are supposed to assume the risks of business enterprise. Surely, they do this with full faith and intent to accumulate profit and new wealth. When we believe in Adam Smith, then we should believe in his postulations about wealth. Employers do not create new wealth. Instead, Smith concluded that wage-earners are the creators of wealth not because of their creative efforts in earning wages but in the fact that they spend most of their income to consume the products/services. As consumers, wage-earners purchase the product-service costs along with the marginal increase in product/ service value (which their work effort provided). In Smith’s view, therefore, labor is the creator of wealth. This process of creating wealth intends to provide reciprocal value. Each nation, which by license allows business enterprise to accumulate new wealth, does so with teleological intent to accommodate natural increases in wage-based consumption. Smith’s postulation is an equation that government should maintain' : increases in accumulation should balance with increases in consumption.* see (cont’d) * The American System of Political Economy is a neoclassical economy for which many models and theorems exist. The following excerpt is about the models which gave rise to a theorem called “the golden rule of accumulation”: 77

Both models [Kaldor and Robinson] have the common property that the respective shares of income received by capitalists and workers are determined simultaneously with the rate of profit, the capital-output ratio, and the overall growth rate of the


Roger Sherman was satisfied that Article I, Section 8 (5) (. . . fix the standard of weights and measures) had specified this as the assigned congressional responsibility.



economy. They give rise to such elegant results as the Pasinetti theorem . . . The import of the Pasinetti theorem is unclear; equally unclear is the importance of theorems that flow from certain alternative neoclassical growth models, such as “the golden rule of accumulation,” which tells us that consumption per head is only maximized in an economy growing at a steady state when the rate of return on capital is equalized with the growth rate. On March 25, 1997, the Federal Reserve set the official policy for the U.S. economy: to sustain moderate “economic growth” (the trend of which is about 2 percent) with the expected “rate of return” to capitalists of 6 percent or more. No official attention was paid to “the golden rule of accumulation.” Both wages and consumption were the targets (scapegoats) of our official policy to forestall inflation. About this, inflation is neither consumption nor employment caused: Still, about an unexpectedly low rate of unemployment, Fed Chairman Alan Greenspan observed that pressure could arise to increase wages and inflation would rise (Officially, fallaciously, do wages cause inflation?). John Maynard Keynes had referred to the rate of employment as a ‘symptom of inflation’ rather than the ‘cause.’ Anyway, the low rates of unemployment during the 1990s are the result of a demographical phenomenon that political management of the economy cannot change. I include here analysis of another research section. Particularly, note the changes in population indicated in the column labeled NET CHANGE (Lower “net changes” indicate that fewer workers are entering the population of potential wageearner-producers): 521 POPULATION CHANGES IN THE 20 - 65 AGE GROUP (in millions of potential producers)* * Mortality used to reduce the birth counts are from the Table of



Population Changes

Mortality furnished by the Census Bureau for 1990. They are 0.9869 for age 18, 0.7822 for age 65 and 0.7451 for age 67. Of note is that mortality claims 3.7 percent of the population whose ages are between 65 and 67 (for every 100 individuals that enter retirement at age 65, nearly four of them are no longer in the retired population that starts at age 67). My population model shows that, for the birth boom with others that are retired coincident with them, the reduction in the retired population is greater than 6 million. Notes that follow the table relate to the numbers in parentheses. YEAR

ENTER (Age 18)

EXIT (Age 65)


TOT. (18-64) (1)

TOT. (65-?)

1965 1966 1967 1968 1969

3.65 3.59 3.60 3.58 3.77

(1) 1.49 1.49 1.56 1.64 1.72

2.16 2.10 2.04 1.94 2.05




ENTER (Age 18)

EXIT (Age 65)


TOT. (18-64)

TOT. (65-?)

1970 1971 1972 1973 1974

3.86 3.91 4.02 4.05 4.16

1.80 1.88 . . . . 1.96 2.03 2.17

2.06 2.04 2.07 2.02 2.00


(2) 20.1

1980 1981 1982 1983 1984

4.11 4.04 3.97 3.71 3.56

2.32 2.31 2.31 2.31 2.31

1.80 1.73 1.66 1.40 1.25



OUR FEDERAL SAVINGS PLAN 1985 1986 1987 1988 1989

3.47 3.46 3.55 3.68 3.51

2.30 2.29 2.29 2.28 2.28

1.17 1.16 1.26 1.40 1.23


1990 1991 1992 1993 1994

3.22 3.10 3.12 3.10 3.13

2.23 2.18 2.14 2.09 2.05

.99 (3) .91 .98 1.01 1.08

148.1 (4)147.0

1995 1996 1997 1998 1999

3.28 3.29 3.45 3.56 3.60

2.01 1.97 1.93 1.90 1.86

1.27 1.32 1.51 1.67 1.74








ENTER (Age 18)

EXIT (Age 65)


TOT. (18-64)








(6) 2.57





(5) 3.75






(5) 3.75





(5) 3.75





(5) 3.75





(5) 3.75




(7) 28.8 (4) 31.1

(7)26.15 TOT. (65-?)




Population Changes


(5) 3.75





(5) 3.75





(5) 3.75







(1) Reliable birth counts for the years before 1910 are unavailabel from the Census Bureau. The following note explains:78

The rates of mortality among the general population in the United States have been calculated and published after each decennial census since 1890. However, the earlier tables did not represent national mortality since they were based only upon data from states which require statewide registration of births and deaths. By 1940, all the states were in this category, so that the mortality rates of the tables published thereafter do reflect nationwide experience. (2) Census Bureau’s estimates.79 (3) This net change is the lowest since 1965 (those entering retirements in ‘65 were born at the turn of the century). The net change suggests a lighter level of competition for jobs. One might anticipate that this natural phenomenon of demographics will cause unemployment rates to abate during the ‘90s (as it now has) and again following 2010. (4) My population projection appears reliable through 1990. The Census Bureau’s more recent projection (published in the 1986 World Almanac) confirms this.80 (5) The counts are estimates as empirical counts were not available from published data beyond 1993 81 (6) The age of retirement begins a gradual shift from 65 to 67. (7) based on my model in section 522. With the shift in retirement from 65 to 67, the counts of those retired are reduced by approximately 6 million. The counts in the table of section 522 are 25.55 for 2015, 33.25 for 2025 and 29.09 for 2050.

end of excerpt from my research 521



Does Congress or the Federal Reserve track with similar analysis to monitor inflation? Is the overall population growth of less than 2 percent a natural reason for maintaining economic growth to less than 2 percent? Is the growth in consumption related more to the growth in the wage-earner population of those aged 18-65, 67? Is the target of unemployment (just less than 6 percent) for containing inflation realistic? Should the target change as the net change in population is lower than usual? Should this target exist at all?

Economists determined the target during the 1970s when the “net change” population counts were greater than 2 million each year. Still, the greatest cause of inflation during the late ‘70s had nothing to do with employment rates. Instead, inflation was caused by the U.S. policy to import oil and OPECs oil embargo. More important, the fixed target of 6 percent unemployment has no empirically rational basis during the 1990s and will again be low following 2005. As a mathematician familiar with unbounded mathematical functions, compound interest for instance, rates of return on investments that exceed the rate of economic growth intuitively are a rational concern. The, “golden rule of accumulation,” which tells us that consumption per head is only maximized in an economy growing at a steady state when the rate of return on capital is equalized with the growth rate, finds respect in my mathematical analysis. Also of concern to me is the sophist reason given to debunk the “the golden rule of accumulation”: sophists argue that economic growth is never growing at a steady state. In statistical mathematics, the Calculus deals with all sorts of cyclical functions. Finding maximum and minimum points is common. So, I expect that “the golden rule of


Population Changes


accumulation” is still valid, while not necessarily the ideal maximum, for all situations of economic growth. I suggest that a “Balanced Budget Amendment” must include the specific requirement for a mandatory rate of interest that corresponds to the rate of economic growth. Under this scenario, the Fed must then find real triggers for dealing with inflation instead of putting the burden onto the components of economy that register as ‘symptoms’ of inflation. If Milton Friedman is correct, the solution will involve monetary restraint of fiat money creation, to conform to targeted economic growth. To ensure that fiat money creations result in consumption of goods and services ‘essential to existence’ (rather than collateral human interest as leveraged corporate buyouts and stock market equities investments), in turn to bolster new wealth creation, I suggest, in a concluding section, that all increases in coining or printing money should be distributed to those of welfare needs (welfare might then be limited to government’s creations of fiat money). This would eliminate political game playing by the Fed. (Cont’d) However, contrarily, The American System of Political Economy authorized public held corporations to distribute ‘new wealth’ to shareholders. While possibly this design is tautologically honorable, political economy did too little if anything to ensure that businesses recycle ‘new wealth’ to production and increased wages. As sustained by theories as laissez faire and determinism, the ‘foxes in charge of the chicken coop,’ so to speak, rationalize tautology to reward the superintendents. Laboring wage-earners are left out. After all, are they not the ‘slaves’ of businesses that, for wages paid, have usurped all ‘slave’ rights? ‘White Rabbit’ businesses that no longer subscribe to Adam Smiths ethics-based tautological economic equation surely believe this is so: still, businesses that are no more than a political economy license puts the



onus onto government. In the Compact view of government, which represents our democracy, businesses, along with all of us, are agents of government. ---As agents of government, do constitutional purposes apply to “for profit” businesses? Should the constitutional charge to, promote the general welfare, apply to them? Business entities do not consume products and services. Instead, political economy allows them to account their purchases as business related costs. They recover these costs at points of sale. The dividend income of shareholders has as its source, income derived from consumption, the income of wage-earners is production related and is a cost of production. Corporations distribute part of the accumulated ‘new wealth’ to shareholders, the accounting of which only affects the capital side of the corporate ledger: where assets and liabilities are accounted. These distributions have no direct link with production costs nor with Smith’s postulation’s for creating wealth. These distributions from net corporate income represent ownership of the corporate ‘new wealth’ but share neither the corporate debt nor tax liabilities. A corporate share is nothing more than a legalized perpetual claim on the net corporate income. The shareholders of a public corporation perpetually own a part of the corporation’s new wealth. 82

Stockholders’ equity reflects the amounts invested by stockholders in the company. They are entitled to the residual remaining after legally fixed obligations are met, and as a consequence they (limited to their investment) bear the residual risk inherent in the operations of the business. One might say that ‘White Rabbits’ have had law made to accommodate the socialization of the new wealth of ‘public’ owned corporate business. In this, did Political Economy license public corporations to violate Smith’s tautological economic equation? : Government’s economic purpose is to sustain the economic


Population Changes


needs of all by sustaining the economic equation of ‘production and consumption.’ The economic system, as authorized and licensed, intends that “new wealth” that derives with consumption is recycled in increased production and wages to create a new cycle of more ‘new wealth.’ By means of political economy, and in instances of paying dividends from “new wealth” accumulations that tautologically were justified for expanding production, political economy has fallaciously ‘affirmed the consequent’ (new wealth) of Smith’s tautology. As examined in other sections, ‘American-System’-political-economy’s metamorphosed socialization underpins our Surreal Economy (stock, bond, commodities and money markets and residuals of these logical fallacies are where Enron’s accounting ended in near complete failure of the seventh largest corporation). Unfortunately for wage-earners, the Surreal Economy exists at ever increasing compromise to the constitutional function (which is a central function of individual sovereignty committment): to promote the general welfare. Political economy, therefore, violates the individual sovereignty of laboring wage-earners that the Constitutional purpose (insurance) intends to protect. About the constitutional function to promote the general welfare, employers provide material-based security to the wageearners of their employ. When our free enterprise system works as Smith intended and employers redeploy the new wealth (that labor creates and is consumed) to provide increased security of wages to labor, then and only then does private business become a surrogate of government in providing this constitutional function. When businesses deploy the ‘new wealth’ to themselves or to shareholders, they abort the constitutional function, as George P. Brockway’s The End of Economic Man asserts. Businesses’ claim on new wealth is no greater than the workers’ claim. By the official political economy allowances of license and their superior sovereign influence, employers, in reality, are either the agents of government or the lords



of government. Each of us should carefully consider this fact. Then by means of suffrage, we should consider whether our political economy should purvey to the private businesses, a contract of central sovereign responsibility instead of a license that enables domination of democratic sovereignty. The attraction of Employer-Paid-Benefits is mostly found in the non taxed values that these Benefits represent. Political economy allows employers systemically to spread the cost of providing this value onto the public that consumes the goods and services of the business. When only a few receive the non taxed value, the financial advantage is greatest. Should it happen that all employers provide all wageearners an equal package of Employer-Paid-Benefits, the advantage evaporates. Employer-Paid-Benefits, therefore, are an abstracted form of sovereignty nullification endemism that mechanistically impresses on consumers. This endemism is a form of political economy paternalism that devastates constitutional purposes. Private enterprise supports either the constitutional function -- to promote the general welfare -- or it compromises this all important function. When some employers give their wage-earners EmployerPaid-Benefits and other employers do not, they give those with benefits a value for which they make others to pay. They nullify the sovereign rights of some to provide value to others and they compromise both ethically and practically the Constitutional Function -- to promote the general welfare. Anyway, because the American System of Political Economy provides paternalism regarding the accounting of costs to businesses (a systemic form of Teflon that shifts these costs onto wage-earning consumers) fully taxed income from wage-earners presently provides the ultimate financial base on which to spread all insurable common aspects of society. The illusions involving all other creative bases are like Teflon: the benefitcost does not wholly attach to them. Critical questions, involving homogenous, dependent,

Endemism and Inflation


collateral insurance interests of society are, therefore: ---What form of insurance will sovereign members of society rationally choose? Or, has political economy endemism made the choice too complicated for wage-earners? ---Will sovereign members allow the surreal affluence (of private business interests) of political economy to overwhelm their sovereign choice? ---Or will sovereign members, as the cogs in mechanisms, defer to the wiles of private “for profit” enterprises’ where the dollar (profits) always determines business-morality, choosing the insurance? ---Will sovereign members of society choose a single-payer system sponsored and controlled by society’s collective sovereignty where the importance of Abraham Lincoln’s “of, for, and by the people” instills probity and honor to govern the not-for-profit insurance affairs? As Adam Smith would ask, please review the contrast and in “moral approbation” choose? (With administering private forms of insurance, consider motives of profit that damage values as probity and honor.) The fiducial essence of any insurance management must adjudge losses for all policyholders (the risk population mass) in matters of fraud and corruption: when it is less expensive (profitable) to stay out of the fray, insurance managers fiducially must curtail ethical concerns. For instance, private insurers will always pay small claims of loss without spending for investigations or litigations. What entails less overall cost is the fiducial course for managing insurance. Endemism and Inflation Still, the combined fraud and corruption endemism hidden from the public’s view is very big "monkey-business." Articles about insurance fraud are seldom, if ever, front page news. Marcia Pledger reported the following article. It appeared on page 13E of the October 27, 1994 Las Vegas Review-Journal.



Automobile insurance fraud is big business in Nevada [it is in fact big business everywhere] Automobile insurance fraud costs Nevadans an estimated $50 million each year. Indeed, if insurance fraud and auto theft nationally were a business, it would rank in the top 25 of the fortune 500, according to experts in the field. Often, organized crime rings run by doctors and lawyers are behind the scams . . . Thomas Norton [senior special agent for the Western Region of the National Insurance Crime Bureau] said he is frustrated by the lack of publicity about insurance fraud, especially because 10 to 20 percent of a premium goes to cover the cost of fraudulent claims. Political Economy’s endemism authorized to private insurance businesses includes the 10 to 20 percent of a premium goes to cover the cost of fraudulent claims. Fraud inclusive of endemism, therefore, represents 20 to 40 percent of pure insurance cost. Consumers of insurance, therefore, pay this endemism as a hidden form of taxation. The operations profit of each insurer is additional to the insurance losses and the endemism, including advertizing, lobbying and executive perks. The endemism to insurers is almost as ‘good’ as the political economy’s endemism to mortgage brokers: Listed as items payable in connection with a recent loan are: Loan Origination Fee to (Broker)


Appraisal Review Fee to (Lender) Credit Report to (Broker)

150.00 25.00

Processing Fee to (Broker)


Funding and Review Fee to (lender)


Payment Processing to (Lender)

Endemism and Inflation




200.00 Tax Registration (Lereta Corp) Flood Determination (Lereta)

71.00 13.00

Wire Transfer Fee to (lender)


Yield Spread Prem. To (Broker, pd by Lender)


Settlement or closing fee (to Title Company) Title Insurance

175.00 1029.00

PostClosing Recon Tracking Fee (to Title Co)


Recording fees (to government)


Addditional Charges (to Title Company) 60.00 The loan’s amortization will pay this front end cost of endemism. Political Economy’s front-end endemism causes inflation. George P. Brockway charges the Banker’s COLA as the primary source of inflation. However, bankers’ have also now adopted service fees and charges that are front-end loaded. In my analysis, the front end endemism including brokerage fees of all sorts and the front-end loaded costs of progress, so called, that requires bonding amortized by property taxation, is the primary source of inflation. Front end money that is repaid by debt that is laoded with bankers’ COLA interest upsets Adam Smith’s economic equation: production = consumption. Added to the extreme cost of fraud, which insurance companies pass on to the insurance consuming public, political economy allows insurers to charge 6 percent for their profit. Endemism-profit from the fraud is substantial (If fraud represents a fortune 500 company, as suggested in the above news article, 6% of it represents a very substantial agents’ fee that favors endemism, if not the fraud.). ---more than fifteen hundred separate private insurance companies exist; ---each company can and a few do in fact fail (and this only considers the legitimate companies);

OUR FEDERAL SAVINGS PLAN Political Economy is indiscriminate in matters of ethics and morality. Crooks appear honest but intend to defraud. They can and do organize companies. Government’s political economy paternalism to business discriminates against individuals, the consent of which is the only natural sponsor of government. With ‘American System’ Political Economy’s paternalism, a powerful cabal was created: the official agencies of government are in partnership with private businesses. Intentionally, they collusively defraud the sovereign public. About the only valid advice to consumers, ‘buyers beware,’ is the rule.

Heavily censored energy policy papers released 83 Washington -- The Bush administration on Monday reluctantly released thousands of documents related to its energy task force but left many pages blank, fanning a controversy about the role industry groups and campaign donors played in shaping the president’s energy policy. In putting out 11,000 pages of documents, the Energy Department listed meetings between Secretary Spencer Abraham and 30 energy industry groups. The documents did little to quell the legal and political controversy about the private meetings that administration officials had with outside groups. Critics say the administration’s plan is tilted toward production rather than conservation. . . . ----

Mechanistically, we are required to renew policies (insurance contracts that are deliberately made unique and, therefore, not commonly understood) to perpetuate insurance that more often now is mandatory (enforced by means of Political Economy).

Endemism and Inflation


Initially, most companies offered five-year and three-year policies. Administrative efficiencies, then justified the reduced premiums. But now, automation has provided new administrative efficiencies: but the cost savings are not now passed on to the consumers of insurance. The multiple year policies that were once the standard option, are now rare, if available. Instead, policies are now offered for shorter terms than one year. By compounding of the endemism, profits are maximized. With this history of increasing premiums and shorter policy terms, private insurance represents a formidable burden of proving its worth (fiducially speaking), particularly about standards of conduct that exudes service related probity and honor. When pure premiums are considered, the cost of overhead, service and profit is often now (even with shorter policy terms) more than the pure premium (the pure cost of insurance). The fact that private insurance is the “only ball game” in town is the only valid argument to justify the grossly negligent service endemism of private “for profit” insurance. However, about the consumption function of economy, one might consider that many people are provided income by way of private insurance. But, so do many people who work as police, postal carriers and other wage-earners of the bureaucratic agencies of government. As we consider ways to curtail costs, as we must, we must consider forcing efficiencies onto all areas of political economy. ----


And, we must curtail the "deep pockets" of private insurance that become legally available for the proliferation of insurance settlements that spawn infinite schemes of fraud and corruption.

Ever increasing liability settlements are very high among the greatest factors underlying the great cost increases in Health Care. Limiting liability is not a solution, however.



Because wage-earner consumers of society must ultimately bear all insurance costs, limiting insurance losses to those which are individual consumer unaffordable will greatly reduce fraud of all sorts (What I am saying here is that a substantial first layer of insurance must always be the individual consumer’s personal responsibility): Each insured individual, by themselves (without the benefit of risk socialization of insurance) must directly pay for loss situations which fit a first layer of responsibility, as rationally defined. When responsibility is theirs alone, individuals are capable and creative: they will always find ways of organizing to eliminate fraud from occurring to affect them (If you say this is a security problem, it is, but you must agree that paternalistic endemism of private insurance gets in the way). The following graphs illustrate the typical distribution of insurance loss events. If the first $5,000 layer of insurance loss occurances, for instance, was the full responsibility of each insured individual the insurance company would then be responsible for only 3 of the the following example’s 1,100 loss events: but they would be losses that are unaffordable. The premium cost would be extremely low; the chance of fraud for which the insured has no control minimal. Insureds might be frightened by the chances of having to pay for many small losses. However, about home insurance, each individual has only about one chance in ten of sustaining a loss of any size in any particular year. By putting the insurance premium savings into a savings account, each insured would end up with enough to buy a larger home, more new cars, or maybe enough to pay the family’s education expenses. ---Will this sort of insurance ever happen on the watch of private insurers whose primary concern is to profit? Not likely! Thoughts of the alternative -- of a bureaucratic administration influenced by the tugs and pulls of politics -- greatly lighten this burden of consideration. Nevertheless, the overwhelming strengths and ultimate sovereignty of a government

Endemism and Inflation




sponsored, single-payer system will act to decrease defiant fraudulent costs. "Deep pockets" of private insurance that are legally made available to provide myriad opportunities for proliferating liability settlements are not nearly so accessable or vulnerable. In single-payer systems, with sufficient independence, coor dina tion and over sight insti lled by a conc er ne d c en t r a l a uth ority that is responsive to the collective sovereignty of individuals will fulfill managerial requirements for probity and honor. Billings for unnecessary procedures could and would become a moral concern that currently is completely without any assigned responsibility in the cabal of political economy fragmented private systems whose business motivation and purpose are to grow and return ever greater profits. TYPICAL FREQUENCY DISTRIBUTION OF 1100 LOSS EVENTS 84

I f impr ove men ts in dedi cation to processes and efficiencies are ever to be achieved, the unbiased, deliberate argument must surely favor single-payer systems: if only to dedicate governance to probity and honor (As we of society decided with regard to Airport Security). Still, the insurable portion of insurance must be scrutinized: subjected to careful deliberate reason: The costs of low end losses, which deliberate reasoning finds ethically unsuited for insurance, should be the responsibility of each individual. Because such costs are affordable directly, collectively, each individual should bear the costs directly. What will get in the way of reason is the endemism of political economy that feeds on inefficiencies.

Endemism and Inflation




as uninformed and against free enterprise. This political influence succeeded ultimately to force him from office. This is only one of many such examples. Still, the question remains: ---What alternative to the private systems of insurance (influenced by dollar morality) can find a political sponsorship that will subdue the powerful Insurance Lobby? This remains as the greatest question to be answered and the greatest test of our Sovereign Will. The essential question for our Sovereign Will to answer is, again:


More important, when consumption is captivated, free enterprise no longer exists. When a private insurer dominates a market, they will attempt to also captivate consumption: Auto insurers surely attempt to captivate the consumption function with auto repair as also health insurers do with health care (The synergy management that is now rampant in mergers of huge public corporations is primarily about captivating markets). About orthodoxy, private systems of insurance inculcated dogma of unreasonable expectations regarding the low end, directly affordable losses. For profits they would achieve, they sold to the public the illusion that lower end losses are insurable. For example, in the early '70s, insurers ran out of office the Insurance Commissioner of Pennsylvania. He proposed to mandate higher deductibles for Home Insurance. The highly educated Commissioner, with PhD degree, argued very clearly and properly for increasing the deductible and saving consumers 10 percent and more of their insurance cost. He found, however, that support from the insurance business community did not exist. The Insurance lobby painted him

Which administrative form and system of insurance will provide the most efficient security and ethical support to returning lifestyles in what our nation’s ancestors called probity and honor?

The answer ultimately lies in considerations of the benefits to society provided by wage-earners, labor, on the one side, capital on the other and our Constitutional right to security in the middle. The answers are in the quintessence of duality involving our politics and sovereignty. In this, We, the people must learn what our unique sovereignty is about and how to preserve then effectively exercise it. In the demographic sense, at least, Thomas Jefferson stood with a losing cause and philosophy: on the side of the security of a harsh but a nostalgic agrarian lifestyle. Security in this lifestyle was founded in Dr. Francois Quesnay's postulation of what we might call the natural accretion from the land in results of husbandry. Adam Smith was familiar with Quesnay’s observation of natural accretion enhanced by labor and it influenced greatly his postulations involving labor. Smith did not discredit Quesnay. However, he criticized applications of wealth creation to husbandry instead of labor. Great poetry sprang from the nostalgia. ----

In contrast, what poetry does the lifestyles sponsored by American Political Economy inspire?

Endemism and Inflation


Alfred Lord Tennyson may have written the agrarian lifestyle’s epitaph in the following verse:

Tears, idle tears, I know not what they mean, -- tears from the depth of some divine despair rise in the heart and gather in the eyes, in looking on the happy autumn fields, and thinking of days that are no more. Social Security functions with faith and dependence on demography but it also depends upon favorable economics and politics for its well-being. Created in the reality of economic depression when paychecks were too few to go around, the foundation of Social Security was and is still extremely solid. For aged workers and dependents of workers who are the beneficiaries, Social Security gives practical assurances to meanings of life, liberty, and happiness: the values that society claimed as inalienable rights as our nation was born. They framed these values in our Constitution: more particularly in the Bill of Rights. Whether Social Security remains depend largely upon transferring to new generations, the essential, unalienable values and customs, upon which the Bill of Rights is based. Concerns with erosions of society's values imply that diminished human rights and values are also important considerations to the perpetuation of Social Security: But maybe more importantly (as some historians are warning us), such erosion could presage our decline as a nation and this surely would affect Social Security. Therefore, education is an unalienable essential for ensuring sovereignty that insures Social Security. The Constitution May Be Our Most Popular Export is the caption of Jack Anderson's syndicated column. Anderson wrote:85

Sometimes it seems our own citizenry would even like to throw it out and start fresh. Indeed, there have been a number of



experiments where Americans have been read the Bill of Rights without knowing what it was; a few said it sounded dangerously communistic to them. But if Americans take the Constitution for granted, it is surprisingly alive in the hearts of those who live without it, as the Commission on the Bicentennial of the Constitution is finding out. Anderson's column shared many touching letters requesting to receive a copy of the U.S. Constitution. Then, add to Jack Anderson's message the editorial Western Culture Must Go by Bernard Lewis. Lewis is/was Dodge Professor emeritus of Near Eastern studies at Princeton (and with the terrorism of 9/11/’01, it has greater significance). Lewis wrote:86

This demand has been made of late by significant groups of students at Stanford and elsewhere, with increasing support from professors, politicians and others. If Western culture does indeed go, a number of things would go with it and others would come in its place. One consequence would be the restoration of slavery. . . . existed in virtually all the societies known to human history. (This) would also facilitate the introduction of another almost universal non-western institution: the harem. . . . could include child marriage and the burning of widows. Opposition . . . could easily be overcome by the removal of another of the peculiar and distinctive features of Western culture, namely political freedom. The idea that ordinary people have the right to share in the formation and conduct of government, and to criticize and seek to change the policies of those in power, is again peculiar to the western culture tradition and has its roots going back to

Endemism and Inflation


the American and French revolutions. The replacement of this outworn tradition by the natural and almost universal combination of authority and submission would greatly ease the transition to a less parochially western way of life. Could Social Security be symbolic of a bellwether, to suggest the direction of our society's choice or abandonment of basic social values (Roger Williams’ “social usage,” for instance)? If society's choice is abandonment, then those in our birth-wave and now assuming the sway of sovereignty could produce the political "Killer Wave" to submerge the Social Security Insurance System! Social Security is a foundation or building block that is far more important today than it was in 1935. Should Western Philosophy and Truth prevail and if we can master our economy (this indeed is the greater political challenge) and define our Civitas (pronounced se.wi.ta which interpreted means the virtues of a public spirit), the important elements of Social Security should eventually fit a mosaic of society's economic connectors to assure basic financial security to all Americans without frustrating incentives with productivity and business investment. Nevertheless, all of this will require a concerted exercise of sovereignty that trumps Political Economy. Our world is changing and aspects of society's security are changing with it! Ultimately, Social Security will depend on advances in applied technologies. Society must eventually evaluate these new technologies while society must reconcile the chaos of the old. This also depends on our exercise of Sovereignty. The responsibility of sovereignty is left to each of us to exercise. Should we fail to protect wage-earned consumption, an economic evolution with focusses on unearned wealth portends to destroy the American Constitution. About reducing taxes, in probity first we must focus



individual sovereignty onto redressing the Social Security contribution taxes of 1984 (which according to the Court’s view is a form of general taxation). If we do not, we will allow the nomos of determinism to nullify the sovereignty of all wage-earners. And, I hope I have made clear, the purpose of this nomos is not the constitutional purpose specified for America. About private insurance, I proposed: I intend to confirm the direct relationship of political economy with sovereignty. I believe this was accomplished here. This section concludes a reminder: Consider the definition of sovereign as a unit of money. Then consider the Supreme Court ruling about money’s relationship with free speech. Finally, consider how PoliticalEconomy-paternalism commissions corporate business to siphon the cost of their operations, including advertizing and lobbying, from wage-earner-consumers. When we allow justice to rationalize legality to directly relate wealth to natural unalienable sovereign entitlement to free speech, we can comprehend the means of political economy that effects systemic taxation involving not only the accounting of money but also the usurpation of sovereignty. Only by understanding this contrived metamorphosing of sovereignty, can we undo the metamorphosing and thereby preserve the unalienable rights of nature endowed sovereignty to individuals and them only. Dogmatized deterministic materialism is the means of the metamorphosing. The veracity test of tautology shows it as fallacy. And this logical fallacy is the main source of our political quandary.

103-104 ENDNOTES



103-104 ENDNOTES

17. Parrington, Vol. I, 69 18. Edited by R. J. Barry Jones, Perspectives on Political Economy (St. Martins Press, 1983) 4-5

19. Barry Jones, endnote 4, p.13 1. World Book Encyclopedia Dictionary (1965) 655

20. Jn. 8:58

2. V.L. Parrington, Main Currents in American Thought, Vol. III (Harcourt

21. H. Rosin, Kansas Targets Darwin’s theories, The Washington Post, (in

Brace, 1930) 20 - 23

Las Vegas Review Journal August 9, 1999)

3. Dogmatic doctrine advocating territorial expansion of North America:

22. I. Kant, The Critique, Great Books of the Western World (Encyclopedia

First argued in the 1840s, revived during and after the Spanish-American War. Political flux of ‘Dollar Diplomacy,’ U.S. Corporations used this doctrine to exploit beyond the nation’s borders, driving expansion of U.S. Foreign Policy and stretching U.S. Security provisions.

Britannica, 1991) Vol. 39, 10-12

4. Parrington, Vol. II, 310-311 5. Parrington, Vol. II, 152-160 6. R. L. Heilbroner, The Worldly Philosophers, (Simon & Schuster, 1986) 27

7. Parrington,, Vol. II, viii 8. Parrington, Vol. II, p 298 9. World Book Dictionary (1965) 84 10.

Bellah, Madsen, Sullivan, Swidler, Tipton, The Good Society, The Rise and Fall of the American Century (Vintage, 1991) p 67

11. Parrington, , Vol. I, 8-15 12. E. K. Hunt, Property and Prophets (Harper and Row, 1990) 65 13. Parrington’s note: See “The Babylonian Captivity,” in Works, Vol. II,

23. Barry Jones, p 5 24.

A. Gamble, Critical Political Economy, PERSPECTIVES ON POLITICAL ECONOMY, edited by R. J. Barry Jones, St. Martins press, 1983, 66

25. Roger Sherman’s ‘Caveat for Injustice’ is an indictment of legal metamorphosing of the Constitutional provision of his authorship [Section 8 (5) assigning responsibility to Congress to coin and regulate money and fix the standard of weights and measures].

26. Parrington, Vol. I, 299 27. A Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Great Books of the Western World (Encyclopedia Britannica, Inc., 1991) Vol. 36, p 485

28. An excerpt from An Additional View to the Report of the President's Commission for a National Agenda for the Eighties. (The Report ordered by Carter was ignored if not excoriated by President Reagan)

29. Heilbroner, p 72

p. 233 (Philadelphia, 1915).

30. Parrington, Vol. I, 170-73

14. Parrington, Vol. II, 298

31. Barry Jones, 66

15. Parrington, Vol. I, 8-15

32. Barry Jones, 66

16. Hunt, 40

33. G. Brockway, The End of Economic Man (Harper Colins, 1991) 29

103-104 ENDNOTES



103-104 ENDNOTES

34. B. Russell, An Inquiry Into Meaning And Truth, (Unwin Hyman Ltd.

53. As noted by Vernon Louis Parrington, Main Currents in American


Thought, Vol. 3, p. 84: Leaves, Song of the Broad Axe, p. 160, II. 7, 14-20, 21-22; p. 161, II. 1-2, 6-7, 10

35. D. Greenwald, Encyclopedia of Economics (McGraw Hill, 1982) 14142

54. Adam Smith, The World Book Encyclopedia, 1965, Vol. 17, 425

36. Greenwald, 141-42

55. Heilbroner, 49

37. Barry Jones, 170

56. Heilbroner, 196-197

38. Greenwald, 142

57. Parrington, Vol., II, 152-160

39. Parrington, Vol. III, p 45

58. World Book Encyclopedia Dictionary (1965) 655

40. Hunt, 12

59. Pound Sterling, World Book Encyclopedia, 1965, Vol.15, p 650

41. Hunt, 157-158

60. Sovereign, World Book Encyclopedia Dictionary, 1965, p 1862

42. Barry Jones, 170

61. There to Here, Craig Thomas, Harper Perennial, 1991, p 160

43. Parrington, 8-15

62. Declaration . . ., World Book Encyclopedia, 1965, Vol. 5, p 66

44. W. Greider, Secrets of the Temple (Touchstone 1987) 48-49

63. Wolld Book Encyclopedia, vol. 12 p 369

45. Barry Jones, 46

64. C. Thomas, There to Here (Harper Perennial, 1991) 82-85

46. W. Greider, Who will tell the People, (Simon and Schuster, 1992) 14-

65. W. Greider, Who will tell the People (Simon and Schuster, 1992) 14-15


47. Greider, 11 48. Heilbroner, 34-35

66. Greider, 11 67. Parrington, Vol. I, 177 68. Parrington’s note: Works of Thomas Paine, edited by M. D. Conway,

49. J. Anderson, FIASCO (Times Books, 1983) 37

Vol. IV, p 465.

50. As noted by Vernon Louis Parrington, Main Currents in American

69. Parrington’s note: In “Queries and Remarks . . .,” in Works Vol. V, p

Thought, Vol. 3, p. 84: Leaves, Song of the Broad Axe, p. 160, II. 7, 14-20, 21-22; p. 161, II. 1-2, 6-7, 10


51. Edwin Lawrence Godkin's idealism, Parrington, Vol. I, 167 52. As noted by Vernon Louis Parrington, Main Currents in American Thought, Vol. 3, p. 84: Leaves, Song of the Broad Axe, p. 160, II. 7, 14-20, 21-22; p. 161, II. 1-2, 6-7, 10

70. Parrington, Vol. I, 299 71. Matt. 4: 4 72. D. Greenwald, Encyclopedia of Economics (McGraw Hill, 1982) 647 73. Thomas, 82-85 74. Thomas, 89, 91

103-104 ENDNOTES


75. Greenwald, 141-42 76. Thomas, 89, 13 77. Greenwald, 110-11 78. W. O. Menge & Carl H. Fischer, The Mathematics of Life Insurance (Ulrich Books 1965) 7


79. The Statistical Abstract of the United States, U.S. Department of Commerce, 1978, p 8

80. The World Almanac 1996, Newspaper Enterprises Assn., Inc., p 258 81. 1996 Information Please Almanac, Otto Johnson, Editor, Houghton Mifflin, 1996, P 840

82. Greenwald, 405 83. J. D. Salant (AP), Las Vegas Review Journal, March 26, 2002 84. J.J. Launie, J. Finley Lee, N. A. Baglini, Principles of Property and Liability Underwriting (Insurance Institute of America, 1976) 244

85. The Daily Spectrum; St. George, Utah, March 12, 1988 86. Western Culture Must Go, Wall Street Journal, May 2, 1988


RESEARCH SECTIONS CONTENTS of OUR FEDERAL SAVINGS PLAN and ETHEREAL-GOLD (the shaded titles) FOREWORD Quintessential Foundations (An Introduction) 101 Security: our Heritage 102 Insurance: our Heritage 103 Political Economy: the foundation of our Heritage (introduces 205) 104 Exercising Sovereignty: a responsibility of Heritage (introduces 208) 109 Truth’s Fiducial Gauges (introduces 209) Substantial Quintessence (Virtuous Knowledge) 201 Life’s enigma and the essential need for philosophy 202 Perceptions of reality and illusions 203 The requirements of self in finding truth 204 Politics for what it is 205 Political Economy 205 Appendix, Petitioning ‘Civitas’ 206 Liberal and Conservative 207 Our "Captains of Industry" 208 Sovereignty 209.1 Truth: The predicate value divisions of 209.2 Truth: The Fiducial Gauges of 210 Truth: Postscript about Organizations 211 Truth: Postscript about Emotion 212 Truth: Postscript about Faith 220 Truth: Postscript about Paradoxs 230 Truth: Postscript about Paradox and Mechanism 240 Truth: Postscript about Deontology without Teleology 250 Virtues of Social Security and Vices of organization

In 2000, wage-earners have a $2 trillion (+) stake in the Economy. Teleologically, this $2 trillion stake (with interest) must be repaid before the top 20 percent of income earners (who did not contribute to SS) are given a revenue tax refund (top income earners got tax refunds, common wage-earners did not). ABOUT ETHEREAL-GOLD

“It is the uniqueness of individuals, as they are encouraged to develop responsibly, into which the beauties of nations bloom. The American heritage is ETHEREAL-GOLD. The unalienable qualities of individuals are not compatible with anything that we produce, particularly on production lines.” From Petitioning‘Civitas,’ the Appendix to 205 The American System of Political Economy is a mechanism that opposes teleology: It divides the economy and upsets the ethical flux in culture. Our Political Economy locks Americans of the REAL ECONOMY between Americans of the SURREAL ECONOMY and Americans of the NON ECONOMY. Tyrannous Determinism results to compromise the human rights bequeathed by the Constitution. --Are we losing our unique AMERICAN HERITAGE? ---

Do we allow Mechanism to gamble with Teleology?

Increased in 1967 to provide for Medicare, Congress increased Social Security contribution-taxes again in 1984 to fund OUR FEDERAL SAVINGS PLAN for SS (Then spent the money) and (as reported in NEWSWEEK, May 13, 1991, p. 35) "the centrists [in Congress] say the deficit-ridden government needs the money." All attempts to cut SS taxes have failed. Political Economy, however, now calls for general tax reductions. The Administration of 2001 anointed this political objective.

Political Economy  

"With the dogmatic "old" ways of "divine right" monarchies holding fast, seekers of better ways ensured the uniqueness of American governmen...

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