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Is It All About Surpluses?

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Recently listening to the Iron Heel, by Jack London (1908), I've come to the conclusion that global capitalism and the 20th century is all about surpluses. It explains so many features of 20th century economics, and the push for globalization.

When viewed in this light, it is no wonder that the wealthiest and richest flocked to the US in the late 1800's and that the international (European) bankers followed with their capital in the early 1900's, ultimately coalescing under the umbrella of the Federal Reserve Bank.

These surpluses would have exacerbated a great concentration of capital and capitalists in the US like bees to a honey pot. The favoured position of the US during WW1 and WW2 have increased these surpluses to unprecedented historic levels. However, as these surpluses were reinvested in other countries, the 500 largest US corporations became global, and spread, with capital, elsewhere. They now span the globe and are warring against humanity (Grunch of Giants, RB Fuller, 1983). Excerpt:

"It is essential that anyone reading this book know at the outset that
the author is apolitical. I was convinced in 1927 that humanity's most
fundamental survival problems could never be solved by politics.
Nineteen twenty seven was the year when a human first flew alone across
an ocean in one day.(In 1944, the DC-4 started flying secret war ferryings
across both the Atlantic and Pacific oceans. In 1961, jet
airliners put the ocean passenger ships out of business. In 1981, the
world-around airlines flew over a billion and a half scheduled passenger
miles and carried hundreds of millions of ton-miles of freight.) This
was the obvious beginning of the swift integration of all humanity,
groups of whose members for all their previous millions of years on
planet Earth had been so remotely deployed from one another that they
existed as separate nations with ways of life approximately unknown to
one another. It was obvious that the integration would require enormous
amounts of energy. It was obvious that the fossil fuels were
exhaustible. It was obvious that a minority of selfish humans would
organize themselves to exploit the majority's transitional dilemmas. I
was convinced that within the twentieth century, all of humanity on our
planet would enter a period of total crisis. I could see that there was
an alternative to politics and its ever more wasteful, warring, and
inherently vain attempts to solve one-sidedly all humanity's basic
economic and social problems.
There is no dictionary word for an army of invisible giants, one thousand miles tall, with their arms
interlinked, girding the planet Earth. Since there exists just such an invisible, abstract, legal-contrivance
army of giants, we have invented the word GRUNCH as the group designation--"a grunch of giants."
GR-UN-C-H, which stands for annual GROSS UNIVERSE CASH HEIST, pays annual dividends of
over one trillion U.S. dollars.
GRUNCH is engaged in the only-by-instruments reached-and-operated, entirely invisible chemical,
metallurgical, electronic, and cybernetic realms of reality. GRUNCH's giants average thirty-four years
of age, most having grown out of what Eisenhower called the postWorld War II "military-industrial
complex." They are not the same as the pre-World War II international copper or tin cartels. The grunch
of giants consists of the corporately interlocked owners of a vast invisible empire, which includes
airwaves and satellites; plus a vast visible empire, which includes all the only eighteen-year-old and
younger skyscraper cluster cities around the world, as well as the factories and research laboratories
remotely ringing the old cities and all the Oriental industrial deployment, such as in Taiwan, South
Korea, Malaysia, Hong Kong, and Singapore. It controls the financial credit system of the
non-communist world together with all the financial means of initiating any world-magnitude mass production
and -distribution ventures. By making pre-graduation employment contracts with almost all
promising university science students, it monopolizes all the special theoretical know-how to exploit its
vast inventory of already acquired invisible know-how technology.
Who runs GRUNCH? Nobody knows. It controls all the world's banks. Even the muted Swiss banks. It
does what its lawyers tell it to. It maintains technical legality, and is prepared to prove it. Its law firm is
named Machiavelli, Machiavelli, Atoms & Oil. Some think the second Mach is a cover for Mafia.
GRUNCH didn't invent Universe. It didn't invent anything. It monopolizes know-where and know-how
but is devoid of know-why. It is preoccupied with absolute selfishness and its guaranteed gratifications.
It is as blind as its Swiss banks are mute. Much, much more about GRUNCH later on.
Each of the giants of today's great Grunch is a quadrillionfold more formidable than was Goliath. Each
is entirely invisible, abstract, and completely ruthless—not because those who run the show are
malevolent but because the giant is a non-human corporation, a many-centuriesold, royal-legal-advisor invented
institution. The giant is a so one-sidedly biased abstract legal invention that its exploitation by
the power structures of thirty generations have made the XYZ corporations and companies seemingly
as much a part of nature as the phases of the Moon and clouds of the sky."

From WW2 forward, and particularly from 1970 forward, surpluses have been migrating away from the US. Germany, China, Japan, Korea and other nations such as Brazil have all developed their resources with American capital. This is the nature of the beast.

So the capitalist system has been extended for some time by reversing the surpluses, and creating the great consumption sink that is America today. This has permitted the now world surpluses to be absorbed for some 30 or 40 years more that would have been expected.

But now what of these surpluses? The US simply cannot absorb them any more. It would seem that the 21st century is going to be all about the survival of surpluses, capital and capitalists. It does not bode well for the middle class.

I cannot see any nation emerging to absorb the surpluses generated by China and others. There will be a push for nations to operate balanced economies, and balanced trade. The sovereign debts are just too large. But this is a capitalist nightmare.

What can become of these surpluses? Will war be the contrived solution?

Where does this leave capital, when there is no surplus? And the middle class?

What will be the new political and economic paradigm that will emerge?

Below is the key chapter of the Iron Heel. If you have the time, it is well worth a listen. One can see the striking parallels between 1908 and today. And it makes one fear for the survival of the middle classes (a prophecy now coming true in America), and the new political system that may emerge.


Edited by Toto deVeer
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