GuidoWorld

Capital is defined as wealth in the form of money or other assets available for a particular interest such as starting a company. Another definition of capital is the excess of a company’s (or person’s) assets over their liabilities (or debts).

The entire system of capitalism is based upon an individuals ability to amass capital through asset accumulation, excess profit, investment and savings and then use that capital in business enterprises which will generate additional profit. A profit is generated when the money made from the enterprise exceeds the operating expense of the enterprise plus the original capital needed to begin the enterprise.

The system of capitalism is dependent on capital and a successful capitalistic society would be one in which a growing or at least sizable portion of the populace were able to participate in the system by being successful capitalists. One of the major ways of evaluating the success of capitalism is by seeing how frequent capital is generated by the economy.

Recently I read an article on Counterpunch.com by Bill Quigley which cited some interesting statistics regarding how the US money pie is divided up and the amount of assets (capital) people in the US actually have. Take a moment a digest the following facts.

First, there are 43 million people in the US living under the official poverty line.

The bottom 20 per cent of the US population have negative wealth, they owe more than the value of all their assets.  From 20 to 40th percentile, the next 20 per cent of the population, average about $5,000 in wealth.  The middle 20 per cent, from the 40 to 60th percentile, own $65,000 in assets.  The next highest 20 per cent, the 60 to 80th percentile, are worth about $208,000.  From 80 to 90th, the average wealth is $477,000.  From 90 to 95th, the wealth is $908,000 in assets.  From 95 to 99th is $2,734,000 in wealth assets.  And the top 1 per cent?  $13,977,000 in average wealth.

Okay, let’s reflect on what this means and what it says about US capitalism. First, one out of every 5 people (20%) have more debt than assets, and even if they were to sell everything and completely liquidate they would still be in the hole. So, to start with 20% of the people living in the US have zero capital, even if they were to sell everything they own. It is interesting to note that only 14% or so of people are officially recognized as living below the poverty line, which means at least 6% of people with negative net worth are technically not considered to be impoverished.

Next interesting thing to note is that the next 20% average a little over $5,000 in assets. This again means that those in this bracket would have a little more or a little less than five thousand dollars if they were to sell their, house, car, furniture, clothes, tools, and family keepsakes. What the hell could a person with no food, shelter, clothing, transportation or communication devises due with 5,000 dollars?

In terms of capitalism $5,000 dollars in our current economy is not much different than being penniless. You can’t get a loan with $5,000 in assets and what prospect would you have with no car, house, etc.

So, one can easily say that 40% of US citizens do not have any means of participating in modern capitalism. At best they can aspire to being indentured servants. When you consider how destitute the bottom 40% of the populace is in the US it is amazing that our crime rate is not higher than it is. Even though we have the highest per capita prison rate in the world (a little less than 1/2 of 1%) it is astounding that more of this 40% is not turning to crime. In fact, one could make an argument that crime is more prevalent in the wealthiest 20% than in the bottom 20%.

Another way of looking at these facts is to note that over 120,000,000 million US citizens have little or no assets or capital. Now, how could these people go about amassing capital?

Well, as just noted a couple paragraphs above, these 120 million people would not be able to qualify for any legitimate bank loan. Even though cutting down on expenditures sounds like a good idea there are a couple of problems with this tactic. First, since interest rates are at historic lows your money will not grow and therefore, not even keep up with inflation. Also, the more people cut down on consumption the harder it will be for businesses to survive resulting in more and more job losses. Therefore, the very people most in need of improving their financial situation will be the first let go in the ever rising unemployment environment.

How can one say that capitalism is succeeding when 120,000,000 people are essentially left our of its possibilities? To those who counter that some of these people could become wealthy due to a artistic or athletic talent, or through some other form of creativity or ingenuity I would want to point out that the small amount of people able to benefit from this form of talent lotto will not change the 120,000,000 figure. There are not enough high paying pro sports, music and literary contracts, or creative inventors to put a dent in the 120,000,000 figure. In fact, many potential inventors and creative entrepreneurs are dependent on finding “angel” investors or benefactors in order to raise the necessary capital to begin their venture.

The data regarding relative wealth does not include money owed the government due to the national debt. Much of our national debt is hidden, but even reportable debt comes out to about 25,000 per person. When you factor that in even the asset level of the next 20% become suspect when thinking of it as actual capital.

The reality of the situation is that we are bailing out banks and mega-corporations due to their being “too big” and too important to fail. While it is true that these businesses are struggling the statistics above clearly show that officers and high level employees at these institutions are awash in capital.

While the bottom 40% have only 30 or 40 billion in assets the top 1% have over 42 trillion. Okay, doing the math it means the top 3 million earners, are making some 3400 times the assets (capital) as the bottom 120 million. Many of these so called earners just happen to be so wealthy due to being related to, living with, or being the child of someone with wealth. And even many of the primary earners may not have ever worked a day in any meaningful fashion. The best and the brightest is often a euphemism for the most ruthless and exploitative.

In the early days of capitalism one could acquire assets and capital through luck and adventurism. In the US the moving west and claiming land could result it substantial asset growth through acquiring highly fertile farm land, or great timber, or land sitting atop mineral, oil or any other natural resource able to be adapted to the industrial revolution.

Yet, those days are long gone. Most of what can be owned is now owned. No longer can you strike out into a virgin area and acquire capital, now you need sizable capital to purchase assets. Everything has become a commodity to be owned, every bit of water and air has some kind of claim on it, even concepts are now owned.
More and more capital is filtering down to fewer and fewer people.

The total amount of government and business debt in this country is beyond the conceptual abilities of most people. Yet, this obscene and unimaginable amount of money still understates the problem for it doesn’t include government and business “obligations” such as social security and pension plans.

One has to wonder if you subtracted all personal, governmental and business debt (including obligations) from all the assets of our nation how much capital would actually remain. One has to wonder if its just the bottom 20% of the US that has no capital, or if the entire capitalist system is without capital.

From a purely logical standpoint it would make sense that all assets have a specific value at any given moment. The total amount of capital could be calculated by multiplying all resources and goods by the current price of these resources and goods. In this way the system remains somewhat stable and closed even though it expands and contracts by shifts in volume and price.

Yet, theoretically the system becomes unstable once the concept of debt and interest are introduced. Debt is neither a good nor a resource. While debt through loans may increase capital and economic success in a given project or for a specific person, it detracts from the overall capital in the system. This explains how we can have so many goods and resources yet have actual negative cash flow and capital. From a systemic perspective our wish to bailout out and stimulate the economy through increasing borrowing and the printing of money (both debt activities) will only decrease our overall real and functional capital.

I acknowledge that I may be misrepresenting or overstating some of the economic dynamics between debt and capital but I want to end with a couple of examples which support the practical possibility that debt exceeds capital in our society. First, the number of printed dollars in the US is a micro-fraction of our total debt. Second our yearly GDP which tracts the total amount of money generated by all the economic activity over the entire year is once again dwarfed by our amassed debt.

Another fact difficult to ignore is that each and every day that our debt grows the number of creditors lessens while the numbers of those in debt expands. It is hard for me to imagine that our current policies of debt expansion will in the long run lessen our debt problems or salvage the role of the majority of people as participants in capitalism.

I for one still believe that capitalism has been a beneficiary rather than the cause of the last century of relative wealth. Our mistaking the actual causes of the improvement in standard of living and quality of life experienced by millions of people and falsely equating it with free market capitalism may actually cause a noticeable regression in both quality of life and standard of living for many of those who had benefited from it.

Jim Guido

Over the last year or so many of my posts have focused on my fascination for and appreciation of human experience. I’ve talked of the beauty and rarity of life being conscious of itself and the primal role intimacy plays in the life of every human being.

In most of these discussions I’ve focused on the essential role of the body in human experience and the tendency in modern society to diminish and deny its importance. In fact, in many ways the very goal of much of modern spiritualism and science is to deny our body and try to overcome our humanity.

The body to most is a burden and a distraction, and human perception and one’s sense of self is an illusion at best and a vain deceiver at worst. The goal of humanity is to attain objective knowledge, get in contact with the unconscious, or transcend oneself and unite with pure spirit (one’s true essence).

Modern man’s war on the body is not just mental and philosophical but functional and pragmatic. What started out as a desire to have good hygiene and not offend others with offensive emanations has morphed into a need to cover up any hint of one’s corporeal reality. Between make-up, antiperspirants, depilatories, mouth wash, teeth whiteners, hair dyes, perfumes, colognes, and every form of scented “body care” product lining more shelf space than human beings we are all expected to cover up and hide our natural physical humanity.

Now I know a lot of you are thinking that much of this is just good capitalism and isn’t indicative of a grand conspiracy against the human body. Yet, one could make just as many products which accent the human body rather than try to mimic the beauty of flowers, trees, meteorological phenomena such as spring rain, or the smell of stags in heat (musk).

Our lack of appreciation of the crucial role our body plays in the quality of human experience is also demonstrated by our willingness to remove the majority of its sensing hairs, pierce many of our most important sensorial zones and treat our bodies as artistic billboards with a slew of tattoos. Not to say that such practices are evil, but coupled with so many other factors it is hard to deny our lack of respect and appreciation for our bodies.

Western science’s obsession with obtaining “objectivity” is fond of demonstrating how natural human perception is erroneous and unreliable. The truth of the matter is that human perception is an ongoing process in which further clarity and diversity is achieved the longer we live.

For those obsessed with absolute and eternal truths, our imperfect and ever evolving lived reality of personal and social growth and development is unacceptable. Due to this denial and desire to make the finite absolute and infinite, scientists fail to recognize that a perceptual illusion or error is only demonstrated through an experiment which involves the production of a refined or alternate perception. In essence science is just an extension of human perception which is progressive and self-correcting in nature. The main difference is in the way variables are isolated and a more accurate truth are produced and hypothesized.

Instead of presenting itself as a very useful tool in assisting the growth of human perception on both a personal and social level, science often poses itself as being beyond human perception. Rather than being a human process steeped in perception and lived reality science often portrays itself as a bodiless objective spirit a language of investigation and Truth freed from the biases and prejudices of a consciousness that interacts with the world through a body.

While science often aspires to be a bodiless “body” of knowledge, psychology blends this free floating truth with a sense of consciousness, spirit, mind and the like. While science is pure knowledge of the laws of the universe, psychology is pure knowledge of consciousness, spirit, ego and mind.

Just as science denigrates human perception while denying that it is perceiving (percepting) at each and every moment of its research, psychology routinely denies that its knowledge of human consciousness is intimately tethered to and based on human sensorial perception and the body.

It is interesting to note that the beginning of psychology fully realized the importance of the body and the primal role perception played in human experience and one’s sense of self. Freud’s emphasis of all human drives including the sex drive keep the importance of the human body in a primal position. Likewise, Freud’s early emphasis on how interconnected the body and mind were in terms of maintaining a homeostatic state (energy economy)made the human body indispensable for knowledge of the mind, consciousness and ego.

One of the basic premises of psychology was that a healthy individual gravitated towards experiences of physical, emotional and mental pleasure while trying to avoid experiences of physical, emotional and mental pain and anguish. Repression and other defense mechanisms were the ego’s way of trying to protect the body/mind from experiencing pain and anguish beyond acceptable levels.

Yet, in Freud and other psychologists explanations of the etiology of pathology and mental illness the role of the ego, mind and unconscious predominated while the body just became the slave and storehouse for the mind’s decisions and patterns. The positive role of the mind’s repressing traumatic memories and its efforts to avoid future painful experiences, became secondary to the ill effects suffered by those whose “unconscious” hadn’t succeeded in maintaining a person’s sense of health and well being. The unconscious soon became associated with the very pathology that it was supposedly designed to avoid.

Just as science ignores the fact that corrections in illusion and misperception are rectified by additional perceptions, modern psychology often ignores the fact that “unconscious” memories or “content” are restored through an act of consciousness. First of all, all consciousness is a process and not a thing or a place. Therefore, something does not exist in the unconscious, for unconsciousness is by definition a process of repression and not a thing or a place. Making the unconscious, conscious, is just the removal of an inhibition, not an action of some actual thing called the unconscious as opposed to another thing called consciousness.

The blatant disregard for the body is further demonstrated with modern psychology’s portrayal of the ego (sense of self). In most forms of psychoanalysis and talk therapy cure comes from an understanding of the psychological conflict or problem. One’s understanding of the dynamics of the problem which unveil the origins of the mystery (make conscious the unconscious) allow a person the opportunity to make new choices freeing them from the trauma which was at the root of their pathology.

Yet, it should be extremely obvious that understanding a problem does not cure a problem. For some people it makes cure possible, but understanding without concrete change does not solve anything. In the end it is practical change in one’s actions, experiences and emotional reactions to those experiences which verify and make positive change real. Mental health is not a concept, but an experience where pleasure, anticipation, joy, challenge, growth, love and self-satisfaction return to acceptable levels.

At this point I want to return to the title of this blog to help everyone better understand the reason I’m writing this post and the point I’m trying to make. In English speaking cultures it is common to respond to a person’s thought, idea or theory in a positive manner by saying “that makes sense”. When a person responds in such a manner they are saying that the idea expressed was logical, seems right, and that they are comfortable with its validity.

What has been lost is the original feeling of something being sensed or making sense in its being sensual. Something made sense because it could be felt, tasted, seen and experienced. Similarly, someone agreed with you when they said “I see what you are saying”. Nothing made sense that wasn’t sensual, that wasn’t grounded in one’s experience which wasn’t available to one’s eyes, ears, tongue or body. The fact that we used tools or inventions such as the telescope and microscope didn’t change the fact that we experienced and had a sensorial experience of our lived reality.

Yet, today something is often only deemed true or makes sense which defies or is divorced from the body. In the religious and spiritual realms often the only reality or truth is in that which cannot be experienced or sensed. In the realms of hard sciences, social sciences, spiritualism and religion the only things that are true or make sense are the senseless.

Spiritualist’s often talk of being connected to the universe. Stating how, after death, their essence (spirit, consciousness) lives on, returns back to the universe, will be reincarnated, or blends back into the Spirit now that their illusionistic sense of individuality is dropped with the body.

The concern I have with such spiritualistic beliefs is that they intentionally or unintentionally denigrate the body and our lived experience. In a view which looks at the body as being inessential at best and as a prison at worst, it is easy to tolerate or ignore many of the inhumane practices which currently dominate our planet.

People who acknowledge that all experience is dependent on both a mind and a body existing in a world are people capable of respecting the feelings of all life and the health of the environment in which life and experience happen. People who cherish the fragility and preciousness of sensorial life do not easily engage in war, torture, or righteously defend policies which deny others food, shelter and medical care.

If all our experiences depend on our bodies and our senses then what happens now is of utmost importance rather than some future event or some reality produced in one’s head divorced from their bodies. When love is an action and pleasure is a sensorial experience than thoughts and ideologies become secondary.

Each day I revel in the opportunity and privilege of making sense. I want to feel pleasure and I want to please others. I enjoy the process of learning about myself and the world through thoughts based on my sensorial experiences and perceptions, and I enjoy hearing other people relate to me their accomplishments, challenges, joys and pleasures.

I hope this is all making sense, and that you see and feel what I’m trying to say.

United in Compassion

Jim Guido