“Development versus debt peonage”

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By Henry Boyo

The above is the title of a paper presented by Brian Browne, at the celebration of the 90th Birthday anniversary of distinguished Prof. Adetoun Ogunsheye, at the Aboyade Policy Development centre in Ibadan last month.

Browne’s observations on the fundamental causes of mass poverty, which concurrently subsists with stupendous wealth accumulation, by less than 1% of the World’s population, should provoke a deeper reflection on a realistic exit from eternal subjugation by well heeled financial predators.

Brian Browne by the way, is an African American co-author, with Asiwaju Bola Tinubu, of “FINANCIALISM”, an explosive exposé on the inherent danger in embracing the injustice of Mainstream Economics. The following narrative is the first of a 2-part summary of the over 4250 word presentation. Please read on …

“Ten of the world’s richest people hold more wealth than the 3.6 billion people who constitute the poorest half of humanity. Try as they might, African nations cannot break the hold that poverty and rich nations have on them, and invariably do as they are told by economic masters. We are advised to adopt fiscal austerity, tight monetary policy, open markets, unrestrained competition, comparative advantage and free trade, while our Governments are cajoled to reduce social expenditure that will help the poor.

The powerful nations that control prime International Financial organisations, run perennial expended budget deficits. Something is wrong. These unjust things befall us not by accident, but as conscious designs. Only if we change the design of things economic, can we change the wrongs that have relegated so much of humanity to poverty and despair.  How can an Economic system claim to be a purveyor of rational and efficient allocation of resources, when it produces such awful results.

We must understand the difference between social indoctrination and genuine learning. The World’s Economic masters teach us what they need us to know, but to arrive at the truth, you must begin to learn for yourself that which you need to know.

Going forward, I will present an alternative perspective on economics. What I say may hopefully encourage us to scrutinize the assumptions upon which the global economic system is based.

This is economics’ first fiction – that a person, firm or nation makes economic and financial decisions based purely on reason with perfect, complete information at their disposal; we know this as untrue. No one can perfectly forecast the consequences of his economic decisions. Mainstream Economics’ most dangerous lie asserts that it is the most efficient system for allocation of wealth and resources. Any reform, any change to the market, outside the prism of Mainstream Economics will, they insist, produce an inferior outcome.

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This is one of the greatest lies ever; it ranks with the infamous “earth is flat” falsehood which was promoted for centuries by the ruling class, because the truth did not fit their purposes. The history of mankind is the struggle to secure freedom and fair compensation for the labor of the many against the avarice of the few. Historically, slavery was established as an institution that is integral to economic life; this means that with the ownership of one person by another, the very life force of the enslaved is sacrificed to the master’s benefit. The slave is reduced to a tool, an asset, not different from a “chisel or a goat.”

However, slavery was abolished approximately 150 years ago in a manner that allows its evil spirit to live and influence human affairs. The British, for example, compensated slave owners, though they had already profited unfairly from stealing wages that should have gone to the enchained black man.

In Florida were I was raised, a free black man could not leave a job without his employer’s consent. Such approval rarely came. Progress toward fairness, freedom or better equality is always counterattacked by the powerful elite. Mainstream economics is a major barrier against progress. The post world War years and the 1960s proved a double-edged sword, as the American Civil Rights Movement and the national liberation movements in Africa and elsewhere sparked an elite backlash. The non-elite began asking for too many rights too soon.  Something had to be done.

Since 1980 the device of modern-day debt peonage, induced by fear of inflation and recession, has been adopted by the global elite to undermine the common person in order to return to the age-old practice of extracting the utmost profits from the labor of others; this has been achieved through the device of modern-day debt peonage, which the global elite used three pillars to construct.  They first decimated organized labour; wages have stagnated for decades due to labour weakness.

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They also freed banks to charge interest rates that would have been illegal in earlier years. They promoted the growth of the financial sector as the most profitable economic sector. Speculation in real estate and exotic financial instruments is where the financial sector invests the bulk of funds. This is a radical departure from traditional capitalism, where the financial sector focused on investment in physical equipment and inputs needed to manufacture tangible products.

The financial sector is invariably dedicated to nothing but itself and siphons funds from productive industries as it expands. People lose jobs and wages stagnate, so they borrow to maintain their lifestyle. The more they borrow, the less the likelihood of repayment and people have become trapped in a cycle of increasing debt.  This is debt peonage. In Western economies, most working families can’t gather $500 in a hurry.

With too many loans outstanding, People cut costs and purchase less; firms hire less and fire more. Productive economic activity decreases, and everyone suffers except the financial sector, where morality is not a badge of honour. I call this FINANCIALISM, the meaner offspring of capitalism. Evidently increasingly wider inequality plagues most Western nations, so if they so harshly mistreat their own, we should not delude ourselves that they intend better for an Africa they have always despised.

Colonialism was the visitation of economic slavery to Africa and Africa exported raw material to Europe in exchange for manufactured goods. Fifty years later, the trade pattern remains unchanged, except China has entered the joust. They still pay diminishing amounts for your commodities while you pay more for their products; Debt will mount while the IMF comes around periodically to tell you how to behave.  They place conditions on government spending too grievous to bear.  Yet, you still bear them only to find that your condition has worsened despite obedience to these crackpot remedies.

“Unfortunately, the dictates of mainstream economics, will keep us locked in poverty and debt forever.”

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