Feb 262012
 
 February 26, 2012  Posted by at 11:41 pm Finance
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John Vachon Slop Sink June 1941 Erie County, Pennsylvania. “Each group of ten trailers in the FSA camp at Erie has a trailer service unit, water faucet, slop sink, and garbage pail”

There have been many forms of “debt slavery” throughout history, and almost everyone is chained to the oppressive financial, corporatist system now in one way or another. Although, this fact has not even remotely sunk in for millions of people who, unfortunately, have absolutely no clue how bad it can get. The real issue here, however, is not necessarily what people will have to do to survive the upcoming storms. Rather, it is what they will be forced to do to remain a functioning part of the system under threat of excessive monetary punishment, physical confinement or violence to them and/or those close to them. So, one must be financially/coercively attached to the system to be a “debt slave”.

If you are allowed to voluntarily downsize your living standards and retain some freedom of movement/action, then you are not really a slave. And that’s not meant to demean the existential struggle of the chronically unemployed and/or homeless people living on the streets or in the subway, whose numbers are bound to increase and many of whom will die of sickness, cold and hunger, but it’s hard to say that they are “attached” to our economic system of complicity and coerced participation. The most obvious way this slavish attachment forms is through personal debts/obligations.

That’s why it’s very important to pay off your mortgage(s), car loans, student loans, outstanding balances on past bills, etc., throw away your credit cards and generally avoid taking on debt at all costs. However, that is not a panacea for avoiding debt slavery by any means. One reason is that, as mentioned in Part I, creditors and third party debt collectors may literally conjure up debts for people who never agreed to take on those debts, by failing to account for payments, illegally jacking up interest rates, retro-actively inserting penalty clauses and other similar tactics. Or, they may simply doctor up brand new “contracts” that never existed.

The U.S. financial industry and government “regulators”, at both the federal and state level, have already taken the first steps towards such practices through the illegal transfer of mortgage titles in the MERS system and the “robosigning” of fraudulent loan documents by law firms employed by the major banks, which sought to “prove” ownership of such titles and therefore the right to foreclose. Once these illegal foreclosures came to the mainstream public’s attention, the federal government launched a sham investigation and effectively forced state attorney generals and prosecutors to go along with a tiny and symbolic settlement, which will primarily be funded by taxpayer money.

Jose Suarez explores this issue for the Huffington Post and brings up some key points:

Banks Take It Easy, While Miami Struggles Against Foreclosures

 

However, the settlement will only help a small percentage of the millions of Americans who still are deeply underwater on their mortgages. Victims of fraudulent foreclosure robo-signings look to receive only about $2,000 in compensation.

 

That amount is paltry compared to the amount of pain, desperation, and despair of millions of Americans, and so many Floridians, dangling precariously at the unlikely mercy of banks and their improper, illegal foreclosure processes. $2,000 wouldn’t even come close to covering moving expenses or the “first, last and security deposits” for folks forced to downsize from their own homes to rentals.

 

Another highly troubling aspect of the settlement is the potential spike in new foreclosures predicted by various real estate and financial industry analysts. The banks were delaying foreclosing on great numbers of homes until details of the settlement were finalized. They may not power up the illegal “robo-signing” machines again, but they are now clear to fire out the foreclose notices.

 

This is the buzz I hear from real estate professionals in South Florida these days. While it certainly has a big impact on their day-to-day business, a bigger question is: How will these trends affect the momentum of the overall economy? The tentative recovery has yet to reach a large portion of the individuals hit first and hardest by the recession; these residents, in particular, are still struggling mightily — and yet another downturn could be exponentially catastrophic for many of these families.

 

The settlement frees the banks from any potential civil charges from the 49 states, though individuals can try to sue (in the chance you had the time and resources), and federal and state officials may wish to pursue criminal charges against the banks. But don’t bet on the latter, unless you’re interested in “wrist slaps.” Snug relationships between so many politicians and big businesses, especially the banks, are telling.

This settlement essentially gives the banks free license to go on a rampage of financial harassment and foreclosure without any interference from state governments. That’s why it was noted in Part II that traditional protections found in contract law have been rendered completely worthless for the vast majority of people on this planet, including all but the wealthiest individuals in the West. These protections were rooted in decades of British common law that developed through judicial precedents during the so-called “Enlightenment” era. They offered the average white male citizen a way to protect himself from having to make payments or perform under a contract if it was generally secured in one of the following ways:

1) Duress (economic or physical) – i.e. You are put in a position, physically or monetarily, in which you have no other choice but to agree to the terms of a contract.

 

2) Fraud/misrepresentation – i.e. You agree to the terms of a contract based on a material misrepresentation or omission of facts.

 

3) Unconscionability – i.e. You are a disadvantaged party (very asymmetrical knowledge of the business) to a contract which contains extremely unfair terms on its face.

If a court established one of these situations to exist in any given case, then the complaining party had a right to void the contract. The problem for victimized debtors now is that the legal system only performs this protective function well when the economy is growing and wealthy private interests can claim an increasingly large share of the pie despite these common law hurdles-turned-artifacts. In an era of widespread economic contraction and deleveraging by consumers and businesses, the large private interests will instead seek to extract value through the seizing of assets (“foreclosure” implies a legitimate process) and the subjugation of distressed debtors.

Human labor, after all, is simply a form of energy that can be applied to various inputs and productive processes, including the harvesting of other energy sources and the development of infrastructure necessary for large-scale societies. Most middle to upper-middle class Americans have forgotten all about the labor expended and the lives lost by their not-so-distant ancestors in the course of such work. Yet, they may very well be forced into laying railway tracks and mining coal or constructing/repairing roads, highways, bridges and canals in the near future. College and graduate students steeped in debt who are expecting cushy office jobs that no longer exist will find out they have effectively been sold into slavery by their system of “education”.

At a time when the net energy returns afforded by the extraction of fossil fuels is quickly disappearing, the industrial corporate elites will once again rely on what can only be called “slave labor” to perpetuate a system of large-scale exploitation and wealth extraction. This time these pools of labor will not only be confined to minority groups or third world countries, and we will all find out just how little control we have over our own lives and our own bodies. When faced with the threat of arbitrary imprisonment and/or being stripped of all your earthly possessions, it will be very difficult to resist making a deal of debt servitude with the Devil.

Where can any of these people turn to for relief or protection? Can they seek help from their local police departments or court systems? Traditionally, those have been potential avenues for at least a modicum of justice. Soon, however, even these institutions will be well into the process of being privatized in the name of “fiscal responsibility” and “market efficiency”, which is really code for corporate control over all facets of the modern state. Wealthy corporate conglomerates will not only have seized the “power of the purse”, but also the state’s dispute resolution mechanisms and its monopoly to use coercion and violence in pursuit of vaguely-defined goals.

When a sizeable portion of the police force in any major city is trained, armed and managed by private security firms such as Erik Prince’s Blackwater (now known as… Academi), we may find it rather difficult to defend our homes, assets, friends and families from the wrath of our financial oppressors. They will be our creditors and debt collectors, as well as our judges, juries and executioners. One does not only become a debt slave by being underwater on private debts, though.

As we are clearly seeing in the Eurozone periphery, external public debts that are in the process of being redeemed through austerity and “structural reform” can be a force equally capable of enslavement. If you are any worker, taxpayer and/or retiree living in the shadows of the wealthiest members of society, then you are rapidly losing your freedom as I write these words. Your savings and disposable incomes are being run down to pay the salaries and bonuses of corporate executives and directors, while your democratic elections have taken an indefinite leave of absence and your government will be confronting your resistance with steel cages and the barrel of a gun.

At the same time, the Eurozone crisis perhaps offers us some signs of hope, albeit ones that are few and far between. First and foremost is the fact that the process of systemic credit collapse in our highly inter-connected environment can occur at a pace that is not necessarily capable of being out-paced by those who seek to take full advantage of it, or in ways that are completely unexpected by them. We see this revealed in the repeated inability of the IMF, EU and ECB (and their corporate masters) to come up with policies that will keep Greece in the monetary union and prevent contagion from spreading to other peripheral markets.

It is also true that extensive systems of slavery can only sustain themselves with a certain amount of complicity and passive acceptance within the population. When it is a clear majority of people in a given location, rather than a minority, who are being pushed into slavery, there will most certainly be forceful pockets of resistance and the slave masters will require the slaves’ help to squash these movements. Indeed, that is exactly what we saw in European countries occupied by Nazi Germany, and even then many of the resistance movements made significant headway towards unlocking their peoples’ chains.

The slave masters will especially require the unwavering support of civil servants tasked with carrying out orders of oppression from above. In Greece, we recently witnessed the country’s largest police union issue a statement of its intention to refuse to continue aiding the elites in the enslavement of the Greek people, and even threatened to issue symbolic arrest warrants for Troika officials stationed in the country. It is not hard to imagine similar occurrences in Portugal, Spain, Italy and even Ireland, as their policemen and women are squeezed of pensions and salaries, and forced to face the reality of their role as slaves to the system.

Closer to the “core”, there were also acts of defiance in Brussels, Belgium by firefighters who sprayed foam from their hoses onto central streets and government buildings. In a separate display, these protesting firefighters also hosed down the Prime Minister’s office and the police units protecting it. Perhaps we can expect these pockets of official resistance to grow larger over time and act as a barrier between the corporatist slave masters and the populations they seek to enslave. Which then begs the question – what will the military forces of Westerns countries do? Will they remain a cohesive, unified force that carries out orders as they have been for many years now, or will pockets of resistance materialize within their ranks as well?

It is a mistake to assume that the men and women in the U.S. military, for example, are guaranteed to bring slavery and death to their own people when they are commanded to. As USA Today reported, people who actively work for the military donate more to Ron Paul’s campaign more than any other candidate, and he is certainly not someone known for advocating imperialism and oppressive government authority. That reflects an attitude that is anything but closed-minded and uncritical of current policy trends. So, while the global population’s future of debt slavery is a very real and ongoing threat, there are also reasons to believe it may not sustain itself for very long.

Then again, the number of slaves is growing by the day and the time may come when many of us are forced to either fight for our freedom or learn to live with our chains. These are obviously very serious issues and very serious possibilities. It is no longer acceptable for anyone to pretend that the concept of systemic slavery in the developed, “civilized” world has been relegated to the history books. It took the upheaval of the Great Depression and the Second World War to truly rid the U.S. of its enslavement of African Americans only 60-70 years ago. What will it take for the indebted masses now? And is anyone really willing to find out?

Home Forums Our Depraved Future of Debt Slavery (Part III)

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February 26, 2012 at 11:41 pm #8612

ashvin

John Vachon Slop Sink June 1941 Erie County, Pennsylvania. “Each group of ten trailers in the FSA camp at Erie has a trailer service unit, water fauce
[See the full post at: Our Depraved Future of Debt Slavery (Part III)]

February 27, 2012 at 12:10 am #1017

jal

They are knocking down “tent cities”

Imagine the loops and hoops that a municipality have already set up to prevent the set up a system as shown in the caption picture.

You would need to be a millionaire … so if you are … why would you go to the trouble to help the destitute and the needy

John Vachon Slop Sink June 1941 Erie County, Pennsylvania. “Each group of ten trailers in the FSA camp at Erie has a trailer service unit, water faucet, slop sink, and garbage pail”

February 27, 2012 at 1:12 am #1023

scandia

Ash, I wonder if you are losing sleep thinking about slavery. A dark consideration.
I hope other blogs pick up your 3 part series. Nothing like this, to my knowledge, is being written anywhere.
Thank you for your work here.

February 27, 2012 at 1:27 am #1024

SecularAnimist

In other words, capital is about to get rough. Systemic preservation is going to get ugly.

Ash, another great piece.

February 27, 2012 at 1:49 am #1025

SecularAnimist

They are knocking down “tent cities”

The are police constantly breaking up encampments here in San Diego. Which is a popular homeless destination. I’m not quite sure what the benefit to society is to make these people’s life harder than it already is. Living for free will not be tolerated!

February 27, 2012 at 2:11 am #1027

murdamcloud

As I was reading this piece I began to think about India…or Indonesia and realised that the dark picture that Ashvin is outlining is already true for the vast majority of people on the planet. It could be argued that it always was. My grandfather was a landowner in Bangladesh…by all accounts a ruthless man. He started with nothing and bribed/cajoled/strong-armed his way to being the biggest landlord in the village/district. Big enough that I have met people in Australia who knew the man and had respect (read as fear/envy/hatred/awe) for him. I can only imagine what kind of duress any of his tenants would have been under when making agreements with him. He influenced all the people with access to the traditional levers of power; from political to judicial to ‘law’ enforcement.
When he died, someone replaced him. The world is changed by unreasonable men, as ever.
What I’m taking from Ashvin’s piece is that the western world is about to learn what it’s like to live under duress on a grand scale. Something that many have forgotten about for forty or fifty years. Rich and powerful people (on the whole) make the laws and everyone else is forced to follow them; especially when ‘everyone else’ does not realise how strong they really are. Seems we didn’t make poverty history…the wealthy and powerful may be determined to make poor people history instead.

February 27, 2012 at 3:15 pm #1038

Franny

I would appreciate a citation to some authority for the notion that economic duress has ever been recognized as a defense to contract obligations. That is not what I was taught in law school.

February 27, 2012 at 3:48 pm #1039

ashvin

Franny,

From Wikipedia:

Economic duress

A contract is voidable if the innocent party can prove that it had no other practical choice (as opposed to legal choice) but to agree to the contract.

The elements of economic duress

1. Wrongful or improper threat: No precise definition of what is wrongful or improper. Examples include: morally wrong, criminal, or tortuous conduct; one that is a threat to breach a contract “in bad faith” or threaten to withhold an admitted debt “in bad faith”.

2. Lack of reasonable alternative (but to accept the other party’s terms). If there is an available legal remedy, an available market substitute (in the form of funds, goods, or services), or any other sources of funds this element is not met.

3. The threat actually induces the making of the contract. This is a subjective standard, and takes into account the victim’s age, their background (especially their education), relationship of the parties, and the ability to receive advice.

4. The other party caused the financial distress. The majority opinion is that the other party must have caused the distress, while the minority opinion allows them to merely take advantage of the distress.

A very relevant case to our discussion at hand that I remember going over was Batsakis v. Demotsis. Here are the facts:

In 1942, during the German occupation of Greece in World War II, Demotsis was in severe financial straits. This period in Greek history was marked by extensive starvation and malnutrition. Hundreds of thousands of Greeks died as a result of wartime living conditions. [1] According to scholars, the apparent contract made between the two parties would most likely have resulted in punishment or even death at the hands of the Germans.[2]

Demotsis asked Batsakis for money, which she needed to buy food for her family. In exchange, Demotsis promised in writing (in the form of a letter) to give Batsakis $2,000 dollars, plus 8% annual interest, after the war, or sooner, if she was able to regain access to her assets in the United States (Demotsis held property and funds in Texas but had no direct access to them as a result of the war). In the putative letter from Demotsis to Batsakis, written in the Greek language, Demotsis stated that she had received $2,000 from Batsakis.

What she actually received however was 500,000 Greek drachmae which had a market exchange value of approximately $25 at the time of the execution of the contract. After Demotsis refused to repay the loan once the war was over, Batsakis sued and Demotsis asserted as her defense that the contract was unenforceable due to a lack of consideration (the element of exchange generally necessary to make a contract valid in common law systems) and that Batsakis’s delivery of 500,000 drachmae, with a putative value of $25, could not be adequate consideration for her promise of $2,000, making the contract unenforceable.

Although the only issue looked at the Courts in this case was the adequacy of the consideration paid by Batsakis ($25 for $2000 + 8% interest, which they found was adequate), it is generally accepted that Demotsis could have presented a strong defense of economic duress to void the contract.

February 27, 2012 at 9:09 pm #1049

pipefit

I’m not sure if Batsakis v. Demotsis is a great fit here. Basically, the debtor in that case agreed to absurd terms, out of desperation. In present day USA, it appears that a hyperinflationary wave is about to hit our shores, rendering the creditors as the ones who will be seeking some sort of relief.

Unfortunately, legal precedent is not on the their side. Say for example, someone owes $18,000, which about 10 ounces of gold. They could liquidate their gold holding and pay the debt, but instead just pay the interest payments. Even if the interest rate is 20%, or even higher, if they can just figure out how to hold onto those gold ounces a couple of years, they will be home free.

Gold will soon be $3600/ounce, a double, and then $7200/ounce, another double. And of course silver will go up even faster. Have you spotted the problem? Most Americans don’t have much gold and silver. So both debtors and creditors will lose!!! Only holders of solid assets will gain.

February 27, 2012 at 11:10 pm #1056

ashvin

pipefit,

I’m assuming you haven’t been reading TAE for very long. Which is just fine, but you will find the assumption that we are headed directly for dollar HI and that gold will skyrocket in purchasing power any day now is frowned upon here, to say the least. It is much more likely that, by the time HI comes around, the corporate/financial elites will have dumped paper assets onto taxpayers and accumulated productive assets (including cheap human labor) to a much greater extent than they have now.

One thing is for sure – the fact that you, as a mere individual in the 99%, “own” gold or silver after the combined upheaval of debt deflation and HI will not necessarily insulate you from most of the risks that remain to you and those close to you, including that of enslavement. Major creditors and other corporate elites do not have to worry about legal precedent when they can exert significant control over all branches of the state, which, it just so happens, they already do.

February 27, 2012 at 11:45 pm #1057

Reverse Engineer

Ash, I still find it hard to figure out how you can have debt enslavement without a functioning monetary system. Debt denominated in what? Euros? Dollars? It’s all Toilet Paper.

RE

http://www.doomsteaddiner.com

February 28, 2012 at 12:10 am #1059

ashvin

Reverse Engineer post=655 wrote: Ash, I still find it hard to figure out how you can have debt enslavement without a functioning monetary system. Debt denominated in what? Euros? Dollars? It’s all Toilet Paper.

RE

http://www.doomsteaddiner.com

What do you mean by a “functioning” monetary system? I think ben’s reply from the other thread was accurate. Even during/after a process of HI, there will certainly be attempts to establish or re-establish currencies and carry over debts. Many people will still be forced into various forms of labor for basic necessities, provisioned by the full-fledged corpotocracy, and pay their share of taxes (tribute). As I made clear in the articles, though, none of this is guaranteed to be sustained for very long, and it is very likely that there will exist cities/communities that function with “black market” economies and also pockets of forceful resistance.

February 28, 2012 at 2:41 am #1061

pipefit

Ash-Been reading TAE for about a year. Sooner or later Foss and the other deflationists will throw in the towel. Or end up like Pretcher and become irrelevant. It appears it won’t be at $4/gal gasoline. Will $6/gal gas do the job? That will be in July, 2012.

We’re five years into the greatest credit bust of all time and consumer prices are still rising, and now even accelerating.

A lot of the ‘money’ that is in danger of getting destroyed isn’t really money. Yes, banks owe each other a thousand trillion in OTC derivatives. But that was never going to be used to buy stuff. It is just for trading within the financial system.

However, if you buy the argument that the world’s central banks will never allow the banking system to fold, then the quadrillion in OTC derivatives means it will take even more QE-X than we ever would have dreamed a few years ago to get the bailout done.

February 28, 2012 at 3:00 am #1062

Greenpa

Happy days are here again.

http://www.nytimes.com/2012/02/28/nyregion/to-pay-new-york-pension-fund-cities-borrow-from-it-first.html

But, do keep in mind, it’s astonishing how long people will insist that the Emperor’s new clothes are really gorgeous.

February 28, 2012 at 3:44 am #1063

g-minor

Ash,

Your series on slavery is great work. At the risk of sounding like (or being) a pedant, I’ll point out that, in your third paragraph from the end, the facts don’t “beg” the question but “raise” the question. See http://begthequestion.info/ I realize that this complaint is trivial compared to the serious issues you are raising, but it’s a usage that always bothers me.

February 28, 2012 at 5:20 am #1067

Reverse Engineer

ashvin post=657 wrote: [quote=Reverse Engineer post=655]Ash, I still find it hard to figure out how you can have debt enslavement without a functioning monetary system. Debt denominated in what? Euros? Dollars? It’s all Toilet Paper.

RE

http://www.doomsteaddiner.com

What do you mean by a “functioning” monetary system? I think ben’s reply from the other thread was accurate. Even during/after a process of HI, there will certainly be attempts to establish or re-establish currencies and carry over debts. Many people will still be forced into various forms of labor for basic necessities, provisioned by the full-fledged corpotocracy, and pay their share of taxes (tribute). As I made clear in the articles, though, none of this is guaranteed to be sustained for very long, and it is very likely that there will exist cities/communities that function with “black market” economies and also pockets of forceful resistance.

The operative word in that paragraph being “attempt”. The Money Masters of the Universe may attempt to supstitute currencies; they are however highly unlikely to succeed.

Debt is a means of managing surplus, not scarcity. It has been used, as you indicate in your post through history as a means for one class to maintain control over that surplus and extract profit from it. The vast expansion of Debt possible since the Age of Oil began was only possible because of the concomittant availability of vast amounts of thermodynamic energy.

There is an Energy-Money Equilibria that is being disturbed by both Energy depletion and Overshoot problems. In this situation, you’ll get a vast credit contraction for the simple reason nobody is really a good credit risk and no bizness venture is profitable. You folks at TAE have covered this end of the problem on many occassions yourselves.

The bottom line here is it is about impossible to make Debt Slaves of people if you don’t issue credit, and there is no reason to issue credit, it cannnot return on investment.

Credit creation is in a catastrophic Cascade Failure mode now, resultant from depletion and overshoot. It cannot be reestablished until a new equilibria level is reached, and that can only be reached with a massive power down and a population contraction of indeterminate but probably quite significant levels. We’ll see a progressive failure of Fiat currencies across the board, likely ending last with the Dollar due to its status as proxy for Oil and the funding mechanism for the Big Ass Military. Dissapointingly for Gold Bugs, Gold is not a solution to this problem because in fact PM based monetary systems are also highly debt dependent.

I wrote a series of more detailed examinations of the Energy-Money Equilibria problem a while back which I’ll try to get up on DD in the next couple of days. Like you folks, we just moved to our new website and I have a backlog of numerous articles to transfer and catalogue. I’ll provide a direct link once I get that stuff up.

RE

http://doomsteaddiner.org

February 28, 2012 at 2:16 pm #1069

pipefit

ash-One other observation, or perhaps question, I have for you. As you mentioned in a post above, the law of land is pretty much irrelevant, and will become more so soon. So why do they need ‘debt’ as the mechanism for enslaving people? Why not just declare martial law and install a totalitarian state? They aren’t very far from that right now.

One must really squint very hard to see even a smidgeon of logic in the ‘deflation’ argument. Using GAAP accounting, the federal govt. (USA) is running a deficit of about $6 trillion/year. That’s 40% of GDP. With any significant economic weakness, it will exceed 50% of GDP easily. But you really expect those ‘out of thin air’ dollars (the portion not from tax revenue) to buy ever larger quantities of goods and services? Is it not apparent that they will never cut spending?

February 28, 2012 at 3:02 pm #1070

Golden Oxen

Thanks Ash, This series was quite a revelation to me.

February 28, 2012 at 3:21 pm #1072

ashvin

pipefit post=667 wrote: So why do they need ‘debt’ as the mechanism for enslaving people? Why not just declare martial law and install a totalitarian state? They aren’t very far from that right now.

It doesn’t have to be one or the other, and it makes the most sense for them to use already established and newly created debts (mostly public, as you mention below) for as long as possible and as a means of transition towards anything more totalitarian. The conditions are certainly there for both to be used in combination.

One must really squint very hard to see even a smidgeon of logic in the ‘deflation’ argument. Using GAAP accounting, the federal govt. (USA) is running a deficit of about $6 trillion/year. That’s 40% of GDP. With any significant economic weakness, it will exceed 50% of GDP easily. But you really expect those ‘out of thin air’ dollars (the portion not from tax revenue) to buy ever larger quantities of goods and services? Is it not apparent that they will never cut spending?

The US public deficit will continue to remain elevated and eventually grow as the economy contracts, but the question is when will the bond markets and our trade creditors say “enough is enough”. They are not using your simple accounting methods (however accurate they may be), because other economic, political and geopolitical influences factor in as well. There are a lot at risks involved for everyone, including the largest players (or slave masters, if you will), if the $IMFS collapses anytime soon.

The only way that’s not true is if “they” already have some kind of new global currency mechanism in place to be deployed, which is very doubtful for me (I don’t necessarily view them as such a coordinated and unified group), but possible.

February 28, 2012 at 4:10 pm #1073

steve from virginia

http://www.tomdispatch.com/post/175509/tomgram%3A_engelhardt_and_turse%2C_the_end_in_afghanistan/#more

Somebody/some thing is going to enslave what, again? You’ve got to be kidding me.

Paper tiger, paper authority, what the Viets called ‘pitiful helpless giant’.

The West is already enslaved to its machines, what is underway is the liberation from machines whether we like it or not.

February 28, 2012 at 4:51 pm #1074

ashvin

RE,

As you know, both the concepts of debt and slavery predate that of money. Granted, that was at much smaller scales of society than we have today, so a functioning monetary system is certainly something our modern slave masters would not like to go without right now. However, to say that debt slavery is not possible in an era of credit contraction is very misguided, IMO.

In fact, it is the ability to create net credit at an accelerating pace which has allowed many people to remain “free” consumers in the developed world, to the extent they had a choice of what work they would perform, for what compensation, for which employer, etc. That situation completely reverses as debt deflates and people/businesses are forced underwater on their liabilities. The status quo elites are also using sovereign debt mechanisms to mitigate the pace of private credit contraction. Even a tiny, deeply underwater country such as Greece has managed to remain a functioning part of the international bondage system for several years running.

As you point out, though, eventually the private and public debts will contract to the point where they no longer offer enough leverage of the elites’ power/control within the logic of this system, most likely marked by the period when the dollar hyperinflates after several other major currencies. The questions that are raised then are how long before that time arrives, and what mechanisms of slavery will be in place by then. In a world that is facing widespread energy/resource shortages, slavery could become the primary means of maintaining large-scale societies.

You could still call it “debt slavery”, because debts do not have to be “voluntary” contracts in monetary terms. One could be in perpetual debt to the corporatist sovereign by simple decree, or the very fact of one’s existence (born into debt). These are the people who will be kept alive in chains rather than allowed to die free. That is a very difficult thing to imagine/understand, yet a very real threat. That’s really why I ended the series with a question – because no matter how much I intellectually understand the argument, it remains perplexing to me.

How will I react if I am personally threatened with enslavement to an emerging system, not very different from those of recent history throughout the world and even in the U.S., far beyond any recognizable levels of forced attachment than we have right now? I don’t know.

February 28, 2012 at 5:19 pm #1075

g-minor

Everyone who thinks they own a house––even clear of all mortgage debt––is perpetually in debt to the town, county, or municipality that collects taxes for schools, roads, water, trash collection, etc. Even if you are way off the grid and don’t make use of any of those services, try not paying your taxes for a few years and you’ll discover that you didn’t own your house and land after all. You were just renting it from the man.

g

February 28, 2012 at 6:02 pm #1076

el gallinazo

SA wrote:

“I’m not quite sure what the benefit to society is to make these people’s life harder than it already is. Living for free will not be tolerated!”

Well, it will make the position of being a WalMart greeter feel like a great privilege. Good for ovine endorphin levels.

Reverse Engineer

I found your comments about debt and surplus interesting. However, never underestimate the ability of the deranged and ruthless to squeeze blood from a stone. I lived on the Island of St. John in the Caribbean for 13 years. It was the site of the first Caribbean slave rebellion of 1733, the island being a possession of Denmark and a sugar and rum producer, a hugely profitable industry at the time. At the time of the revolt, the average lifespan of a Danish, white indentured servant was six years and an African born slave, 8 years. There is a wonderful book about the revolt written by a guy named Anderson called “The Night of the Silent Drums,” a local classic. It lies somewhere between historical fiction and history. By the time I read it, I was very familiar with the tiny island’s geography, and I followed the events with my National Park Topo map. But the point I am making is that you can always extract a surplus from slaves if you work them to death.

pipefit – you a fellow plumber or a gigolo?

I don’t think these huge deficits that the US government is running will continue much longer. IMO, they were necessary to try to counter the deflationary collapse while the bankers fine tuned their Stasi state. Obviously, it was also necessary in order to clean out the remaining wealth of the middle class which was primarily transferred to the 0.001%. The greatest worry of the NWO is successful rebellion from the remaining middle class, the military, and the para-military. They don’t want a total austerity hammer to drop until they have their ducks in a row and have gotten the sheep acclimatized to having the genitals of their children groped by thugs. When the hammer comes down, the deficits will become much less, the new budget being mainly foreign wars and Battlefield USA war.

February 28, 2012 at 6:10 pm #1077

jal

This thread has opened up a discussion that goes right to the heart of our social economic structures.

PERCEPTION OF

slavery

debt

freedom

free will

I’m sure that most of you are aware that the best way to rule is to have the subjects unaware that they are being ruled.

I have freedom.

My surplus cash flow, (that which is available over and above the necessities of life), permits me chose to use my time, energy to acquire the tools to spend time discussing these matters with you.

Its too bad that those that are already enslaved will never become aware of their condition because they have not known any other condition to compare.

On second thought …

I’m also a slave.
We are all slaves.

There are forces, ( which I had not considered), that are limiting my freedom and enslaving me.

Hey! supergravity help me out!

Take my hand, lets fly to the moon.

February 28, 2012 at 6:47 pm #1078

Reverse Engineer

ashvin post=672 wrote: You could still call it “debt slavery”, because debts do not have to be “voluntary” contracts in monetary terms. One could be in perpetual debt to the corporatist sovereign by simple decree, or the very fact of one’s existence (born into debt). These are the people who will be kept alive in chains rather than allowed to die free. That is a very difficult thing to imagine/understand, yet a very real threat. That’s really why I ended the series with a question – because no matter how much I intellectually understand the argument, it remains perplexing to me.

How will I react if I am personally threatened with enslavement to an emerging system, not very different from those of recent history throughout the world and even in the U.S., far beyond any recognizable levels of forced attachment than we have right now? I don’t know.

You’re morphing the question out of “debt slavery” and into a more explicit form of hereditary slavery, blurring the arguments. I did not say slavery was unlikely, just that in the absence of a functional monetary system, debt slavery is unlikely. Debt as a concept transcends money, but in its numerical sense as we use the term it needs a monetary system to have numerical meaning.

Anyhow, the collapsing monetary system is only one of a number of conduits the Elite depend on to maintain the kind of global control they have now, and none are destined to remain functional in a low energy world. What seems more likely here is gradually collapsing large scale systems of debt, replaced by smaller systems which could reflect many different forms of social organization, including collectivism and hereditary slavery as part of the system.

In any event, I spent some time looking at the economics of slavery, and its not viable either in a contraction environment. In the end, it was probably the real reason Pharaoh acquiesced to Moses’ request to “Let My People Go”. In the contractionary environment the Pharoah was in, he simply could not afford to keep slaves.

More later. Gotta work now.

RE

http://www.doomsteaddiner.com

February 28, 2012 at 7:24 pm #1080

jal

I feel like a total failure.

Someone that I love has just spent $40,000 for a van that he did not need but wanted to have. He has gone into debt for another 6 years. He has reduced his free cash flow and reduced his freedom.

Wisdom is a worthless commodity if it is not accepted for its value.

MSM has won.

“There is no wolf coming. That’s a sheep that you see coming.”

February 28, 2012 at 7:38 pm #1082

ashvin

ReverseEngineer wrote: You’re morphing the question out of “debt slavery” and into a more explicit form of hereditary slavery, blurring the arguments.

In any event, I spent some time looking at the economics of slavery, and its not viable either in a contraction environment.

Yes I am, and that’s the whole point. Debt in some form has existed in societies for a long, long time, and it’s ability to create conditions of slavery are no less effective than any other form (that’s the primary reason slavery for African Americans could continue after the Civil War, EP and 13th amendment). You say it’s not viable in a contraction environment, and all I can say is tell that to the African Americans (and others) who lived through the Great Depression, or factory workers in the East right now, or the Greek people, or even the increasing number of U.S. prisoners who are said to “owe a debt to society”. The reality is that “debt slavery” is just as pliable as the concept of debt itself, and that’s why I blur the line. Although it has mostly been defined in monetary terms throughout the world in recent decades, there is no rule that says it must always be that way (although I suspect debt slavery will be viable even in monetary terms within certain populations for quite some time, especially in the West).

February 28, 2012 at 7:54 pm #1083

Reverse Engineer

The monetary system did not collapse during the Great Depression on a Global level, nor has it collapsed yet for Eastern Europe. The system still functions to maintain the system of debt slavery quite well now as it did back in the Great Depression. I am talking about what comes AFTER this.

RE

February 28, 2012 at 8:17 pm #1084

el gallinazo

Jal,

i would be very careful not to take on other people’s failures as your own. We all have our cup full of our own individual shortcomings to have the luxury to take on others. Wisdom in all its forms, if one should be so fortunate to possess a farthing of it, is a non-fungible commodity.

February 28, 2012 at 9:21 pm #1088

Franny

Ash, a Wiki article with no references is not exactly authoritative in a court of law. My point is, the defense of economic duress is often discussed but almost never sustained in any court. It is a layperson’s myth, not a real legal defense.

February 28, 2012 at 10:45 pm #1090

scandia

Often one hears the phrase ” work it off “. In other words labour pays off a monetary loan.
This aft I was listening to a CBC program on migrant farm workers who have been travelling north to harvest our food for generations. I was wondering if and when Cdns will want that work? To date EI entitles one to payments while searching for work in one’s field. No fields for me masta:)

February 28, 2012 at 11:26 pm #1094

ashvin

Franny,

Are you saying the defense of economic duress has never been used successfully in Western courts? Perhaps you are correct, but I find that unlikely, and I know that we spent time discussing it in law school. It is a legitimate defense that can be raised. But I obviously agree that it is useless now for most people just like other protective aspects of contract law, and other fields of law in general, including Constitutional law.

February 28, 2012 at 11:53 pm #1095

Reverse Engineer

I got Part 1 of Energy-Money Equilibria up on DD to go over the problem in some more detail.

http://www.doomsteaddiner.org/blog/2012/02/28/energy-money-equilibrium-the-value-of-money-in-the-age-of-oil/

RE

February 29, 2012 at 5:06 am #1107

Glennda

When anyone who flees the city goes to a doomstead to survive by “helping out”, they have become debt slaves. The Company store is the tried and true way to keep a serf enslaved.

Just ask the girls that work for Foxcomm, and get to live in barracks and work for 14 hour days 6 or 7 days a week. But they get fed and are even able to send a penny back home. I suppose that’s why 18 young women attemped suicide and only 14 managed. I guess the other 4 will be in permanent servatude.

If the govt. gives hand outs of food etc, they will expect a return. Or is debtors prison just the company farm? Comng to your city soon.

Lol, no wonder my daughter doesn’t want to listen to me. However she has started to do urban chicken farming a bit. Soon I’ll have a flock.

February 29, 2012 at 7:00 am #1112

Reverse Engineer

el gallinazo post=674 wrote: But the point I am making is that you can always extract a surplus from slaves if you work them to death.

No, actually you cannot, its a question of EROEI, just as it is with Oil. When the Cost of maintaining the Slaves is greater than the excess wealth they can sieve from extraction of resources available there is no profit in Slavery, even if you work them to death. Basically, in an extreme situation of contraction and resource depletion, its counterproductive to maintain slaves, they are more costly to maintain then what they can produce.

If there is a plan in this regard, it would be not to enslave people, but to abandon as many as possible and “Free” them as Pharoah did with Moses and his People, alowing them to walk into the Desert, under the assumption they would Die there.

The key here for Slaves is to be able to SURVIVE in the Desert. It can be done. The Bushmen of the Kalahari have done it for a long time. If you want to maintain your FREEDOM, you must be willing and able to walk into the most extreme environments where few are able to survive, and make it out there. That is the only place there is ever true Freedom, and this has been the case already for a very long time.

Ideally also for small groups of people to maintain their Freedom, they must depend on features of Geography that make it very difficult for Mechanized Armies or even Horse Drawn Chariots to maneuver about. Why do you think the Swiss were able to maintain neutrality and independence through all the Wars in Europe? Why do you think the Pashtuns never lost Afghanistan even to Alexander? Mountains. Really BIG Mountains. The Great Wall that GOD built to protect the independent souls of the world.

RE

http://doomsteaddiner.org

February 29, 2012 at 1:59 pm #1125

ashvin

RE,

Nice looking blog you have there, and your latest piece was a very good overview of how societies have evolved more complexity from surplus energy and derived money systems (although anthropological research has shown that many ancient surplus societies have maintained without internal money systems for quite some time).

When it’s all said and done, you are correct that the EROEI from human labor will not support a complex global society such as ours or perhaps even national scales of society. However, you are really talking about a time frame that is well beyond the scope of most of our lifetimes. Human labor will provide plenty of EROEI as long as some level of fossil fuels or alternative energy production remains, as well as modern technological processes. That is especially true if the humans are used as throw-away labor dolls who are only maintained at basic sustenance levels over the course of several years, like many were in the convict leasing systems. If you have over-population and excess labor force, then it really makes no sense to not use them as slaves and work them to death during a prolonged period of contraction.

February 29, 2012 at 2:54 pm #1127

ashvin

Apparently, the VA legislature has voted to “nullify” provisions in the NDAA which allow American citizens to be indefinitely detained without due process. From Washington’s Blog:

Virginia declares “emperor has no clothes”: NDAA nullified

Unfortunately, a state legislature has never been able to nullify federal law under the logic of the supremacy clause. It is still perhaps a promising gesture of defiance.

February 29, 2012 at 3:20 pm #1129

Franny

I never say never, Ash.

February 29, 2012 at 4:22 pm #1132

jal

@ Reverse Engineer

You have a nice site.
Keep up the work. Don’t get disappointed by the number of hits or the few comments.
The knowledge and point of view are important to have on the web.

jal

February 29, 2012 at 6:07 pm #1135

Reverse Engineer

jal post=730 wrote: @ Reverse Engineer

You have a nice site.
Keep up the work. Don’t get disappointed by the number of hits or the few comments.
The knowledge and point of view are important to have on the web.

jal

The site is the work of Computer Wizard and Hydroponics Guru Peter. If you wanna know everything there is to know about Hydroponics and how to grow all your own food inside your own HOUSE, you’ll visit DD regularly. Eventually I suspect people will become less shy about posting.

As for me, if I cared about site hits I wouldn’t be writing. I’ve been writing inside my members only Yahoo Group for years. I just got sufficiently pissed off at a Yahoo Bot censoring some of my prose a couple of weeks back Peter suggested it was time to Host elsewhere, so we are collaborating on the Doomstead Diner.

I started writing on the Peak Oil message board in 2007, right after a lightbulb went off in my head with the failure of Bear Stearns. Besides that I have done some stints writing on OPB (Other People’s Blogs). On OPBs, you face Censorship and Banning if you have a spin the Admin or Moderators do not like. I have been banned from Peak Oil, Market Ticker, TBP, and Raging Debate. Only reason I never got banned from TAE is that on their old Blogspot location I never was able to post here. LOL.

Anyhow, I have a backlog of hundreds of articles I can post up without ever writing anything new, and I write every day. If you ever want to discuss them, drop on in the Diner and order up your favorite dish :-)

RE

http://www.doomsteaddiner.org

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