to turn another corner.
Key economic practices
We can choose to advocate a society like the Wild West frontier or the Scottish Border Reivers’ territory, when what you have and can keep, normally by force, allows you to be “king of the castle,” creating your own wealth to provide literally everything you and your dependents need.
The world is not like that. In various configurations we live in society with each other, with varying levels of interdependence. In that mutual reliance, there have to be some rules (e.g., looting or taking by force is wrong), and once we step beyond subsistence agrarian societies, something will become currency, be it furs, slaves, food, salt, or gold. Economic principles and practices develop.
Until recent decades, the Westernized nations of North America, the UK, and Eurozone as well as Australasia have effectively acted together as a control and a brake on the global economy. They have had the ability to control both the growth of nations such as Japan, and also the restrictions upon the prices of products from the developing nations, such as those from Southeast Asia or Africa. They have done this by extending their own principles of taxation, by commodifying almost everything, yet inadvertently creating an uncontrollable global monetary system and not truly recognizing the power of “the new kids on the block.”
Taxation
Was it not Benjamin Franklin who said, “In this world nothing can be said to be certain, except death and taxes”? The previous part of this chapter affirms how taxation is a necessary part of society. If we want roads (and road repairers), education for our children or a judicial system, these have to be paid for and some system of federal or city taxation is required to do so. The key principle is how such taxation should be applied: should it be progressively applied to income or to the amount of one’s possessions? Should we have a “purchase tax” upon some (or all?) goods and services? All civilizations have had taxation of some sort. Remember, even Jesus had to ask his followers for a coin, bearing the mark of their Galilean oppressors, and tell them to pay their due taxes with “render to Caesar . . .” (Mark 12:17). We return to the question of “just taxation” in chapter 2.
“Commodification”
In his life-enhancing novel The Alchemist Paulo Coelho said, “Everything in life has its price,” which is daily misquoted by nearly everyone. In today’s labor markets, there is a salary to catch every worker whereas people-traffickers know that even their sisters and brothers have a market value! Whether it’s a new fridge or the latest SUV, we understand that everything even natural resources have their ultimate price—whatever their scarcity. This is the frightening contemporary construct/practice which is known as “commodification.” Part of Marx’s helpful analysis was to remind us that society becomes a danger to itself when it commodifies labor, people or those goods which traditionally did (and even should) not have a price put upon them.
The “global monetocracy”
The mind-blowing 2003 book Gaian Democracies first coined and thus popularized the phrase “the global monetocracy,” which has easily slipped into mass-media usage. The “global monetocracy” concept is the worldwide phenomenon that now money talked and commercially was acting transnationally. Just like General Motors, Coca-Cola, and—how many more would you like to name?
Later we shall return to why this book proved helpful in “redefining globalization and people power.”18 As the noughties evolved, so did the role of transnational companies. For many years, we had watched as the über-rich moved to tax havens, such as Monaco, Panama, or the Cayman Islands. Now companies began emulating individuals, moving their taxable bases to the jurisdiction where they could pay least tax. Nowhere was this more apparent to Europeans than with the global internet-based companies such as Amazon or Google, or those representing the city lifestyle, such as Starbucks or the international banks. Individuals and consumer groups increasingly questioned the injustice that such companies with huge incomes paid little or no tax in the territories generating that wealth.
In January 2016, the UK’s former right-wing Chancellor of the Exchequer19 advocated, in a much-publicized interview, that old-style / “Galbraithian” graduated “corporation tax” (levied on profits) should be scrapped in favour of taxation upon sales in the country concerned. “It is also grossly unfair on smaller businesses, who are unable to shift profits between tax jurisdictions and have to pay the full amount due under UK law . . . . While multinationals can artificially shift profits to whatever tax jurisdictions they choose, sales are where they are, and can’t be shifted . . . the UK should take the lead in implementing this much-needed reform.”20 No wonder his comments were globally reported across those nations where the US$, £-sterling or euros are traded. Time for change.
Recognizing the new players
UK economics professor Jim O’Neill began inventing acronyms for the recently developing circles of countries as serious economic players. His first was BRIC, referring to Brazil, Russia, India, and China. Consider all the media furor about social and economic conditions surrounding the high spending for the 2016 Rio Olympics or the challenges created by Russia’s GazProm in the Arctic (1) or the increasing economic influence of the world’s one billion-plus nations of India and China. O’Neill’s second acronymic circle, MINT, meaning Mexico, Indonesia, Nigeria, and Turkey, are just entering the global stage. O’Neill’s circles of shared economic development are now challenging the supremacy of former key players, such as the USA or Germany, in determining global economic policy.
The bottom line
Capitalist China’s 2015/16 unilateral devaluation of its own currency, the yuan, was the clarion declaring a new global economic order. No longer did a major economy need to heed the USA and indeed it could significantly wound the dollar system. The old days of Venetian ducats, the gold standard, Bretton Woods, or the IMF having any real semblance of control of world economics is probably dying. “China’s reforms are re-shaping the global economy and global politics. Soviet reforms beginning in the 1980s and changes in India in the early 1990s were no doubt inspired in part by China’s successes.”21 No longer will the US dollar be able to ride over the world’s hill, like the US Cavalry, to sort out the mess, as successively Keynes, Galbraith, Friedman, and Greenspan once believed. “In future years, the rising power of China and India could further wound US pride and self-confidence, and further ratchet-up global tensions.”22
It is the transnational corporations and the mega-sized (both in population size and financial clout or growth) nations who now “rule the roost.” As Keith Hebden, the director of the UK’s Urban Theology Unit has prophetically written:
So we reward genetically-modifying, patent-hungry monsters like Monsanto [a food production transnational], even though they create starvation, slavery and environmental disaster, because they dazzle us with the promise of technological and economic salvation. We shop till we drop because Marks and Spencer tell us that there is a lifestyle attached to the sweater we buy. We sacrifice the lives of our military because the oil- and gas-guzzling monsters—which isn’t only the oil industry but all systems dependent upon fossil fuels—demand that we feed them ever more of the earth’s natural resources. We are told that they live to serve us but deep down we all know that we live to serve them. The monsters are our masters.23
In terms of the global oikos, the USA, UK, Eurozone, and Australasia no longer “call the shots.” Many of the new players do not believe as we Westerners believe,
