Theory of Manufactured Deficits

[William Prest]

In order to manufacture a deficit, everything must become a controlled substance. This fact has emerged as a result of the invention and use of a universal commodity; money that acts as a surrogate for the desired item that can be traded directly. Today, if one does not have this universal commodity, they cannot trade for a real commodity, unless in the rare circumstance, they can arrange a direct barter. Otherwise, they must hunt for “free commodities” in the wild. This fact of a controlled substance emerges most clearly in the control and trading of food commodities. If there is a crisis of overproduction in the creation of surplus value that drives down the profit margin, then the surplus has to be destroyed in order to drive the price back up. There is no consideration about who has and who has not money in this equation. A deficit has to be manufactured to compensate for the overproduction. This concept has emerged to cover every field of commodity production.

At first glance, manufacturing a deficit may sound like a contradiction in terms as most people would be interested in creating a surplus rather than want. But if you consider that a profit can be made by making something scarce, then the concept of a manufactured deficit becomes more plausible. The concept of manufacturing deficits has as it roots the production of surplus value in the way of agricultural goods. Original surpluses in early history allowed for some of the population to leave agricultural pursuits and follow other ways of making a living. This was the foundation of the development of civilization. For the current cycle, this occurred some 6,000 years ago. One can say that the production of surpluses in agriculture liberated some to pursue new ideas that were impossible to implement in times when there was no surplus and when folks had to live hand to mouth in hunting-gathering societies and groups. Once agriculture became established and an abundance of food was a reality in places like Egypt, Bengal, Mesopotamia and Central America, then complex civilizations began to flower. An abundance of food also allowed for population expansion and with that expansion into surrounding territory. This expansion often meant encroaching on the lands of others and as a result, those skilled in combat were needed. As methods of growing food became more efficient, more and more folks found their way into other pursuits to make a livelihood. The transition was not always easy, nor favouring those who formerly made their living farming. This difficult transition is seen today in China were peasant farmers are forced off the land to make way for hydro-electric plants, new cities or heavy industry. As machines of increasing sophistication entered into the production of food, even more people were forced to sell the only thing they had; their labour power and this to those who were already established in non-agricultural pursuits. As the industrial revolution swept the developing bourgeois world into prominence, a new phenomena sprung up; the army of the unemployed. This “army” forced from the land into destitution within the sprawling ghettos and slums of burgeoning bourgeois cities became the seed to drive down the incomes of those who where “lucky” enough to have “gainful” employment. This phenomenon was first identified and described by Karl Marx. It is this phenomenon that set the archetype for different aspects of society, like housing and food availability, which has resulted in artificially manufactured shortages of all types in order to manipulate and profiteer from the masses.

The bourgeoisie were and are, also aware of this. For the early bourgeois elements developed this tactic to increase their profits at the expense of everyone else. Building of profit is crucial for building wealth and for obtaining and securing power. Further, this concept of artificially manufactured surpluses and deficits has been extended to cover every facet of our lives, from food, to water, from economics and education, goods to housing. We live in a world today that is fraught with planned obsolesce, poverty, malnutrition, homelessness, inflation, devaluation and ignorance. How did it get this way? The answer is simple and there is a template that can be applied to any field of enquiry or endeavour as experienced in the contemporary politic.

Recall that the first surplus was agricultural and this liberated many to pursue new developments, careers, ideas and livelihoods. It is agricultural surpluses that developed primarily in fertile regions like ancient Egypt, Bengal, Central America Mesopotamia and other regions that allowed for freedom, the pursuit of other activities and the expansion of population. At first, it was a healthy development, until agricultural specialization, born of competition set in and changed everything. In the earliest days of the industrial revolution, there was competition for growing space for single crops, be it something like sheep, cows, horses or a profitable crop. This has brought us to the current situation of mono-culture agriculture and factory farming specifically designed to be mechanized where only a few hands are needed to run the entire enterprise. In the not too distant past, some 98 percent of the population was engaged in some aspect of agriculture. In the industrial world, that figure is now only 2 percent, which means that the other 98 percent are doing something else. That something else covers the gamut of activity from mining, the military, manufacturing, legal, banking, etc. All of it has depended on another clever invention; the idea of abstracted labour value using money as the medium of trust and exchange.

The entrepreneur and profiteer have always aimed to buy cheap and sell dear, in order to advance their own fortune. We have built an entire society based on this formula. What does this mean to the ignorant? It means that they always lose in order for the few to profit and grow rich and by implication, powerful due to the ability to hire and fire by virtue of that desirable wealth. There are many means to achieve this from over-worked under-paid jobs to a multitude of scams to manipulating the value of floating currencies by a multitude of ways. There are several tools to do this being interest charges to short supplying. Manipulating of the money supply has already been examined in “Funny Money and Real Value”. We examine the short supply side of the equation, the first of which was shortness of job opportunities as recognized and defined by Marx when he defined the army of the unemployed being kept in reserve to keep down the wages of those who are employed. The worker has attempted to reverse this by unionizing, striking, boycotting, etc. The unions eventually became corrupt and the workers wound back up in a position like that of the beginning of the struggle even to the point of the destruction of the unions. The so-called gains of unemployment insurance and welfare were even scaled back and eliminated in order to create an imposing, intimidating and impressive body of absolute destitution. This presence has served to drive down wages and increase housing prices. Also, work visa immigrants are smuggled in to work for far cheaper income than is paid to workers native to the region to enhance the effect. It is a double edged economic sword where the top entrepreneur gains both ways, i.e., via decreasing expenses through paying out less and increasing housing costs, usually funded by credit at high interest, creating a gain within a gain. The whole of this has been manufactured carefully in order to cull the maximum value of the masses. Insufficient and inadequate housing is part of the formula to keep prices high. Having a handy supply of homeless people strewn about in plain sight and increasing the demand for housing drives up the prices so much that the ones who can obtain shelter must decide to cut back elsewhere. An influx of cheap workers on work visas by the bosses adds to this situation. The similarity of this formula to the lack of jobs formula is striking. But work and housing shortages are by far, not the only example of such a thing. One can take this formula and apply it thoughtfully to any other endeavour one chooses.

Short supplying food is done for a number of reasons in addition to profiteering. It is done in warfare to harass the enemy or to starve out the enemy. When Europeans took over the new world by storm, one of the tactics employed was to destroy the food base of the people who were living in the areas being pioneered. This was most noticeable with the destruction almost to extinction of the bison upon which the plains nations depended for food. The result was starvation for tens of millions of people. The Europeans introduced their own cattle to replace the bison continent wide. Of course they maintained strict control of the steer and bulls imported to replace the bison. Fortunately for the bison, the 50 or so individuals that escaped the slaughter were rounded up and brought back from the brink of extinction by breeding them in captivity. The herds are now growing, but are exploited for profit. Another instance is the attempt to spread swine flu to Cuba after the revolution there in a bid to starve the people and crush the new regime. That bid proved unsuccessful. There or other examples, such as the food for oil program in Iraq as imposed by the US, where most people don’t even see the food, even though the oil is taken. But this is one aspect only of a complex web of chicanery. Other tactics are cash crops displacing local food crops and the destruction of food surpluses to keep prices artificially high.

Many regions of the world such as Africa and in the Amazon basin, traditional food crops are displaced by cash crops that fetch a greater income from factory farms that are set up in the region. These farms were assembled from peasant holdings or exist superimposed on peasant holdings. Sometimes they are done on land cleared from primeval forest growth such as in the Amazon basin. Often single crops are grown at the expense of food crops that could feed local populations as was done traditionally. Sometimes the crops grown are illegal substances that can fetch a lot of cash due to being controlled substances. Often, the mega farms are built by expelling the peasants from the land to grow cattle for the US, Canadian and European markets. The people have nowhere to go except the slums to eke out a living from mining or in miserable toxic factories if such work is available. Sometimes the peasants are encouraged to grow cash crops for the extra money that they can earn and use. Whatever the case, local food resources shrink and many people are forced to subsist of marginal land by old hunting-gathering methods. This then is a manipulated shortage that drives up prices of local food out of the reach of most locals resulting in malnutrition, disease and opportunist drug sales.

Within the mostly mega-farms of N. America and Europe, sometimes a bumper crop occurs that drives down the value of the product. Farmers are then encouraged to either destroy excesses or to not grow at all in the next year, so that prices can be stabilized. The prices are kept artificially high and thus out of reach for many people, resulting in malnourishment and disease even in the developed world. The medical establishment is ever ready with new wonder drugs. Mega and factory farms are organized around machine harvesting and efficiency of operation for the least cost. The ones that grow produce are designed encourage the use of artificial chemical fertilizers to enhance growth, pesticides to control insects and single crops (monoculture) for the ease of machine harvesting. Crops are grown using chemicals of all sorts. No thought is given for nutrition and the needs the animals in factory farms that raise food animals like beef, pork, turkey, ducks, and chicken. Animals are crowded into massive barns and kept in enclosures where movement is kept to a minimum. To prevent disease, they are dosed with anti-biotics. They are given hormones to enhance and speed up growth. No thought is given to the trauma the animals endure in these mass raise to slaughter factories. All of this is translated to the table of most households in the world that buys food from super markets or fast food outlets. People eat, eat, eat, but are still hungry; and they get sick and head to the doctor or hospital if they can afford it or are covered by medical insurance. Others can’t even afford to get these inflated by non-nutritious products and must rely on handouts that are deteriorated a step further or even eat out of the garbage and landfills. A few people try to eat right by buying organic, but this is pricey and the name organic does not mean honest to God organic. It could be merely organic-wash business propaganda just to capture sales at higher prices for the same mass produced factory farmed inflated garbage product. It is becoming known that most businesses (up to 99 percent) use unscrupulous tactics to increase their profits. The problem is so pervasive as to evade effective control by inadequate inspection and policing. The bottom line for the average Joe is to either grow one’s own food or to know what to eat as far as wild food goes. But getting land to grow or the right and ability to hunt and gather is something else. The end result for most people is that they lose, lose, lose even when they supersize that order. They lose their money on questionable produce. They lose their health due to non-nourishing food filled with hormones, chemicals, pesticides and artificial fertilizers. They lose the skills of living naturally, hunting-gathering and growing their own food. They end up paying what is dictated by manipulation of the food market. If there should be a crop failure for various reasons, then the price of questionable quality food exceeds even that of prime organic or food that is the reserve of the wealthy such as caviar. No matter what the outcome, prices are kept high. Some people kept hungry drive the point of desperation home. Coupled with increasing fuel prices for fossil fuels due to carbon taxes, restricted supply, wars, the price goes ever higher, creating more artificial deficits. The whole thing spirals in intensified vigor ending with hyperinflation or stagflation. Yet, all of this was and is unnecessary.

With control of floating currency in the hands of powerful bankers, money can be kept in short supply to encourage people into debt and then slavery to that debt. Debt can come from many ways, from student loans, car loans, home loans and credit cards. The end result is the same. Most people are in debt in the developed nations. In fact the whole of the developed nations are deep in debt and stand at the edge of a major financial catastrophe, but even this can be manipulated by the wealthy and powerful as has happened historically. The financier of 18th and 19th century Britain, Rothschild made a huge fortune when the news of Napoleon’s win at Waterloo collapsed the market. Rothschild promptly bought everything for pennies on the dollar before the real news of Napoleon’s loss reached the ears of the people. By then prices soared and Rothschild became so rich that the family directed the course of the British Empire around the world. A financial catastrophe for everyone turned into a financial boon for the Rothschild family and with that they built the empire at everyone else expense. Today, many people are in deep debt and can lose everything at the drop of a top hat over some manufactured crisis. Something like this happened with the sub-prime loans to home owners in the US. Many people lost their homes and the banks gained all the homes and land. All of this was orchestrated on the artificial deficit of the money supply. There is plenty of money to finance wars and nothing for the poor, who no longer have a social safety net in many regions of the developed world.

With diseases of malnutrition and those caused by anti-biotic resistant super-bugs prevalent, medical science as we know it comes to the rescue; or does it. It was the wonder of miracle drugs and techniques that brought us ultimately to where we stand today, back to the conditions of the 19th century where there were no known cures for diseases like tuberculosis. Some people suggest that some diseases such as we have today like AIDS are a product of military experimentation for the purposes of war and population control. The claim is not unfounded considering that diseases like tuberculosis and smallpox were deliberately spread to the peoples of the first nations by the conquering Europeans. This was germ warfare on a mass scale and helped to clear the land for the settlers. AIDS spreading in Africa is decimating the population so severely that some countries have already collapsed due to loss of the productive population. Is there a parallel? Some would say that there is and certainly the fact that capital needs expansion space and raw resources available only in Africa would fill the conditions. The one problem with biological warfare is that to effectively perpetrate it, you must have protection for yourself by enhanced immunity or a cure. There is no known cure for AIDS, but there are expensive treatments. If you want to live, you’re going to have to pay dearly, even if the end result is a life of virtual hell. There are, of course many other disease for which doctors and the drugging medical profession can placate with their nasty nostrums if the price is right. There is MRSI, born out of the overuse of anti-biotics in the hospital and factory farms. All the old standards are back with a vengeance too like the flu, cholera, TB and some new ones too like Marbourg, E-Bola and West Nile virus. We are perched on the edge of another precipice for which most of us will pay one way or another. Good health will come only with extreme care, pure pluck of luck or position of wealth and power. Most of humanity is already sentenced to death.

We have long had the technology to run industry and vehicles by means other than fossil fuel. Why is this not being done? The reason stretches back to the roots of the industrial revolution when steam was generated by using coal or wood and later oil. Prior to that, power came from water or muscle power of people or draft animals. At that time there was no thought for pollution or global warming due to greenhouse gasses. Even though there were killer fogs of smog in London during the 19th century due to the use of low grade coal, its use was continued. There was little thought for wind, solar or geothermal power sources. Across the English Channel, the Dutch were using wind to draw water from the land in order to have below sea level farm land behind dikes. The Dutch never used steam power to pump away water in the early days; it was all done by wind power. The use of fossil fuels continued into the 20th century because by then it was well established and a profitable industry had been already set up and underway for a century. Once established, it was difficult to compete, even for new industries with new ways of doing the same jobs. People on the bottom, forced off the land for various reasons found themselves in collieries mining coal or some other desperate under paying and dangerous work. Coal and oil became highly profitable. When new ways were found to do the same jobs, the establishment didn’t want to lose their source of income, so by means of politics, legal pressure or outright manipulation, these wealthy owners made sure things stayed the way they are. That continued from then to now and despite increasing awareness of what fossil fuels are doing, the use of them continues in an ever escalating pace. As demand goes up and supply shrinks, the prices go up and this impacts everything shipped by ship, plane, train or truck. Carbon taxes only exacerbate the problem to the poor. Instead of encouraging alternative ways of doing the same work, we get carbon taxes that further enrich the powerful. As a matter of fact, despite all the green propaganda by the state, huge pipelines exist and new ones are being built to extract oil and gas from Canada (Alberta and BC) in increasing quantity all the way to Texas for refining.

An example in the history of alternative power being circumvented by established companies stands out in the early 20th century. Nikola Tesla developed a method for the wireless transmission of electrical power. Before you think impossible, consider the remote control and the cell phone, both inspired from Tesla’s concepts. Tesla managed to construct a tower, funded by J.P. Morgan, a wealthy electric power tycoon. When J. P. Morgan figured out what the tower could do and realized that it threatened his income from selling electrical power, he fired Tesla and had the tower demolished. This stands as a clear historical example of manipulating resources and manufacturing a deficit in order to profit thereby. As a result, we are a wired society, dependant on the whims of electrical power magnates who can turn on and off our power at their whim and jack up prices due to increased fossil fuel and nuclear energy costs. All this time we could have been using Tesla’s concepts linked to geo-thermal, wind or solar generation and wirelessly sent at low cost; but for the intervention of greed and wealthy interests manipulating us for their own profit through manufactured deficit.

Approximately three quarters of the planet is covered with water and yet we have a water shortage due to mismanagement and misuse. Fresh water is in acute shortage in many areas of the world and this is being exacerbated by climactic change and a mushrooming population. Other regions like Canada have a super abundance of fresh water. Plans are being considered and pursued to pipeline fresh water out of Canada to the US. This disparity between regions is what fuels wars as surely as oil resources does in other regions. Although the US and Canada are not at war, Israel and other Middle East nations are on the brink of war over water resources. With climate change, some areas drying up and others are being inundated. It’s either too little or too much. All this creates desperation for water, whether for growing food, drinking or other uses, such as we have in the developed world for washing clothes, cars, streets, watering lawns, mega farms in deserts or for sewage management. The developed nations consume much more water per person than do the developing nations per capita. There is no equitable balance and seeming little desire or progress in this area. When fresh water is in short supply, we ship in bottled water, gobbling up fossil fuel in the process, exacerbating the climate crisis with more greenhouse gasses. Huge systems are built to transport fresh water, mainly from Canada into the US. These systems need to be built and maintained with current technology using fossil fuels. With global climate changes, water distribution by nature is shifting, primarily with more rain on the coasts and less in the interiors of continents. All of this is opportune for manufacturing profitable opportunity due to local deficits. Bottled or shipped water will increase in price due to rising costs of fossil fuels and carbon taxes.

Disaster profiteering is something of a new kid in get wealthy schemes, but it relies at its base, the same formula of manipulated or manufactured deficits. In fact a new term has been coined for it; disaster capitalism. Huge numbers of people suffer in disasters, whether man made or natural. In a world of shrinking and filled markets, something must intervene to create new markets or to allow that necessary expansion space for capital to grow into greater profit. Wars and natural disasters come to the rescue of capitalism when markets have no more growing space. If you have no new market, find or create new ones opportunistically as the theory of profit dictates. War destroys old markets and creates an opening for a new market via redevelopment. A natural catastrophe has the same effect as a war, i.e., destroying that what exists which then must be redeveloped at the expense of the region affected. Two notable examples stand out, the catastrophe of the Malaysian tsunami and the results of hurricane Katrina on New Orleans. The destruction created by these natural events created open markets for capitalist industrial expansion via redeveloping the devastated areas allowing CEOs to renew profits. This was profiteering based upon exploiting the misery of the inhabitants of these disaster zones. Even with that, the poor of both disasters are still waiting for help, but aren’t getting any because of their poverty.

One of the greatest tragedies is manufactured ignorance. This may seem like a contradictory statement as we live in an age of increasing knowledge. But who does this knowledge serve and who is allowed real knowledge without interference and censorship? Who are given pseudo knowledge in the place of the real thing? Knowledge is an evolving thing and our remote ancestors had intimate knowledge of nature including the sky, the seasons, the land, animals and plants. They were one with nature and an integral; part thereof. Early religion was all nature based. They needed that in order to survive. However, with the advent of agriculture, there was a surplus and the development of non-agricultural pursuits and specialization. Purity of knowledge remained as long as the first generation persisted. Those born after this time into paths other than those directly tied to the land forgot the old ways. As civilization developed and intensified with ever increasing specialization, forgetfulness of the old ways increased just behind new developments. This reached a point where those who specialized in military pursuits produced individuals of such power, they did nothing but luxuriate in indolence. These folks grew in no way but wealth, power and contempt for those still tied to the land. Politics grew out of this and with it manufacturing of mass ignorance through censorship. Today in the most developed regions, the people are the most ignorant; as capable as a new born baby of surviving in the wilds should civilization collapse. Nor are the people of the most developed, civilized regions given knowledge that is based on truth, high science and rooted in nature. They are given the type of knowledge that will make them obedient and good consumers of capitalist products. They are given fantasy, games, sports and sham religion. There is a constant high profile verbal and image war between opposite camps of every discipline that serves to confuse. This is all a form of control.

This phenomenon happens quickly, sometimes in the span of a single generation. That which one generation knows like the back of their hand is unknown to the next one. This fact was proven when natives were forced from their parents and culture into the schools of the conquerors to receive religious oriented training in parochial schools. They quickly lost all contact with the ways of their parents and the old ways died out swiftly. They could no longer function within the context of nature as their parents and grandparents had done before them. They were now dependant upon their new proxy parents, the priests and settlers in the form of the European church and state, both of whom proved to be unwilling to support them in basic fundamental issues. The end of this is that the later generations were forced into reserves to live in squalor and misery with little opportunity to live the new life imposed forcibly upon them. Specialized knowledge is not something like an instinct that is inborn. It is something acquired in youth and is not directly transmissible except by properly educating in the early years of life. This fact can be demonstrated with animals raised in captivity and then are released into the wild. The released animal does not survive because it has not learned the skills to fend for itself, having been fed in captivity by humans, an alien species to their natural way of life. Extend this idea into the human sphere. If no training occurs, then the newly born remain virtually as babies, unable to fend for themselves even unto old age. Capitalism constantly changes the way things are done in order to keep the profits flowing. The result is that millions end up on the street to be absorbed by crime or to resort to begging because they know no other way. In the third world or developing nations, this problem is more extreme, which means many people are too poor to survive no matter how they struggle to survive. All the prior knowledge has been removed and lost in the cruelest form of censorship. We live in an era where children are intimately familiar with computers, while their grandparents are stone ignorant. Meanwhile, grandparents are familiar with things of which their grandchildren are stone ignorant. Neither displays much interest in the others world of experience and learning except on rare occasion. Knowledge today is another consumer product that will cost heavily if you wish to advance in the bourgeois system. Knowledge that is given out today is what is permitted by the rulers and often subject to censorship. The ruling class does not care as long as they keep their wealth and power. In fact, all types of knowledge, true or phony, is used as a control on the rest of the population.

People forced into cities and mines are educated to best perform the tasks allotted them and little else. They are brought up to believe in sham religions, devoid of real spirituality. The basic things the rulers take as granted as their right to enjoy, are described as sinful for anyone else and subject to punishment from terror gods and enforced by police state tactics whether from theocracies or secular governments. Yet the people pursue these same activities provided for them by profiteers and gangsters. Within this context there is a lot of confusion and illusion. Without guidance, they continue as confused unless someone shows them the deficiency of their ways. If nature were to do it through a catastrophe, where suddenly they had to rely on themselves, most would fail utterly, because they lack the proper knowledge. The poor are left to suffer and die and those who can pay up will receive help. This fact too is exploited through disaster capitalism.

All of this is unnecessary, so why is it happening? It is happening because it is profitable. Money can be made from shortages, actual or manufactured. With shortages come opportunities for profitable wars. With wealth comes power to direct the courses of everyone’s life on the planet. What then is the solution? The solution is to socialize everything so that it is equally available to everyone who needs it. This requires an international socialist governance by the toilers. As the power that is in place will not willingly relinquish its claim to power and source of wealth, the toilers who actually produce all the use values and commodities must make an international socialist revolution.