YES, Even Dead Fish Goes With the Flow

By Mwarang'ethe

In his latest piece, Chris has written this: “how long do you think we will be able to flout our cash around even as our fellow countrymen starve and struggle to survive”? The implied meaning in this statement is that, the yawning gap in wealth between the few rich and majority dirty poor will be reduced or eliminated by the “new constitution.” As we have stated previously, a constitution is an economic document. As such, a constitution drafted without clear understanding of economics, i.e. natural laws of wealth creation and distribution is rubbish. We shall demonstrate with real examples.

Let us first note two crucial, but, little known facts. In the “classical age” politics and economics were studied under the rubric of political economy as the science of wealth. Science in this manner meant the systematical classification and arrangement of the natural laws of social prosperity. However, so as to produce one dimensional idiot who cannot see the whole picture, this subject was divided into political science and economics. The reason given by Neo Classical economists was that, economics had now become a science like physics and astronomy. However, the main aim was to fool mankind for the benefit of few.

About a hundred years ago, a group of socialists established a society called Fabian Society. Taking their name and strategy from Quintus Fabius, the Roman general who advocated a war of attrition against Hannibal of Carthage, they sought to impose socialism on mankind by stealth. To do so, they founded the London School of Economics and Political Science in 1895 (by the way, isn’t Kibaki and many other economists not graduates of this prestigious school?). For those of us who are awake in these dangerous times, we can see their dream of socialism is close to realization all over the world. Yes, we hear the right to food, decent housing and everything else to be provided by the government. The masses completely ignorant of long historical plans are deceived by this monkey language. In this collective ignorance, we hear them say hallelujah. We say woe unto you for we are on the road to serfdom worse than any other in the human history. While at it, remember this. It is socialism for the rich and free markets for the poor. If you doubt the definition of socialism, please tell us what you make of this.

This year Citigroup just announced that its profits for just the first three months of this year totalled an incredible $4.4 billion, Goldman Sachs' haul was $3.5 billion, JPMorgan Chase grabbed $3.3 billion, and Bank of America took $3.2 billion. How did these geniuses make this fortune? It is this. The Fed has deliberately held short-term interest rates to historic lows -- less than one half of a percent. Meanwhile, the Treasury Department is paying almost 4 percent interests on longer-term loans that banks make to the government. This might sound complicated. However, it's really a very simple transfer of public wealth to the giant banks owned by a few thousand people out of 6 billion people. The Fed loans, let's say, a billion dollars (public money) to a bank at a half-percent interest. The bank then turns right around and loans that billion dollars to the Treasury Department, collecting 4 percent interest. In short, the banks take citizen’s money and loan it back to them for a sweet 3.5 percent profit. Apart from loaning the citizens back their own money at interest, they are using the same funds to short including naked short selling shares and government bonds in Greece, Europe and globally. To prevent the collapse of land values, shares and government bonds and currencies (which is a futile exercise where we are now), governments must come up with money bailout (more public debts on the shoulders of the poor) and the game goes on and on. Sheer genius!

Question for YES people
Have we entrenched such a system in your wonderful constitution? And, if yes, can we be educated how such a piratical monetary arrangement will help in bridging the wealth gap you talk about when we know as a matter of fact, that, it is a means of transferring wealth from the poor to the super rich, i.e. the rentier class?
In a recent article on this blog we stated something like this. “The productive activities that can make a nation wealthy must meet two tests. (a) Such activities should lead to production of valuable tangible/intangible stuff. (b) Such activities should be surplus generating economic activities that can be made available for future re- investment. Ignoring the distribution aspect of this surplus for the moment, we can say that, since our economic activities do not meet test (b), in other words, we specialise in unproductive economic activities (special EPZ's and coffee growing - Malthusian activities) we are going NOWHERE. “

We added this. “Furthermore, even if there is some little surplus revenue for re- investment we also have a major problem of its distribution. Under the private land ownership (absolute title to land), land absorbs almost all of the surplus revenue in form of rent. In addition to this, we have piratical monetary system that also extracts a very large portion of the surplus revenue from our economy. This extraction of wealth by the idle class is at the expense of the class that create real wealth. This class is composed of the labour and the real economy/industrial/agriculture economy. Once the industrialist/farmer who creates commodities we need and exchange with each other is starved of revenue for future investments, it follows that, there are no jobs for the labour. And even if there are jobs, so as to meet the unjust demands of land owners and the financial capitalists, the wages must be low as we see in the EPZ’s. Low wages cannot create an environment for industrialists to invest.”

Question for YES people
So, if this is the condition of our economy and the “new constitution” has not fixed it, how do you meet the economic and social rights as well as devolution demands?
More so, there is something else we seem not to understand. It is the real meaning of “free trade” under which we are operating. This is a simple analysis. The imperial nations export capital to our nations for two reasons. These are the development of low cost sources of food (coffee, tea, fruits) and raw materials required by developed nation’s factories (copper, oil etc). By exporting capital to us, these nations can keep wages for their labour a bit low because basics/food is cheap. This ensures that, their profits for future investments are not squeezed too much. If free trade for the rich is meant to preserve their profits, what do we seek to preserve on our part? We answer debt, poverty and ignorance and conflicts over shrinking cake.

Question for YES people
To what extent does this wonderful constitution come even close to appreciating this reality, and therefore, come up with innovative means of escaping these arrangements? And, since it has not done so, can we be taught how prosperity of the poor will come about when wages must be kept low such that, we lack purchasing power and the profits for future investments?

We seek to write as little as possible, but, we are attempted to say more. In Article 41 (3) of the proposed constitution, we read this: “Every employer has the right – to form and join an employer’s organisation, and to participate in the activities and programmes of an employer organisation.” May God save Kenya. In the USA, we hear that, lobbyists make it impossible to make the necessary reforms. However, here we are, seeking to entrench such rights in our “new constitution.”
Let us see what Adam Smith said about employers and let the reader judge whether the drafters of this document and the Kenyans in general know anything they are talking about. He wrote this:

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices... The interest of dealers ... in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public... The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”

In the end, it seems as if one thinker who also a journalist was right. He argued that, people, including journalists were more interested in believing the pictures in their heads (housing for all, wealth distribution etc) rather than come to judgment by critical thinking. He added that, the function of journalists and news in this sense is only to signalize an even while the function of truth is to bring to light the hidden facts and thereby, set them in relation with each other so as to make a picture of reality upon which men can act. The news is that, we have a new constitution. The truth is that, it is the same old wine in new wine skins. In this case, news and truth are not synonymous. Even worse, he noted that, even if journalists could be effective in educating the public about important issues, the masses are never interested in learning and assimilating the results of accurate investigations. Thus, like a dead fish, they go with the flow.

In conclusion, no, we are not motivated by fear, but, the truth. However, we are aware that, today, there is little regard for the truth, little access to it and even little ability to recognise it. Truth is unwelcome entity. It is very disturbing. Truth is an inconvenience for governments and the interest groups who benefit from so called governments. Even worse, those, whose goal was once discovery of the truth about just wealth creation and just distribution thereof, are now paid very well to hide it. In other words, truth has fallen to the gods of mammon.

Why We Reject the Proposed New Constitution

By Mwarang'ethe

In our considered opinion, what Kenya needs is a document that would establish a Free Enterprise/Market System, which we believe is the Key to Political and Economic Liberty/Prosperity. A Free Market System as we understand it is a governance system tailored to ensure that, those who honestly toil keep the fruits of their toil. The other option is a governance system whereby; we divorce the honest toil from the resultant fruits. This is what we call socialism. Very unfortunate, this draft constitution takes us to socialism route.

A governance system that enshrines the unjust claim of a few on the economic surplus of a nation produced by all through the monopolisation of land is not a Free Market System, but, socialism. A governance system that, legalises a conspiracy between a man decorating himself as a central banker and another calling himself Barclays or Equity to put some ink on a paper and thereby, demand from those who create wealth to part with 15% - 20 % of the wealth they create, in exchange for this useless paper which costs these conspirators cents to produce, is not a Free Markey System, but, socialism. When these two conspirators are not "loaning" Wanjiku their useless paper so as to rob her, the central banker issues another paper he calls a government bond. The conspirator calling himself Equity takes this bond and in return, he gives back the useless paper he originally got from the central banker. In this modern magic, these modern medicine men tell us, the mere mortars, that, this is open market operation. By this abracadabra, they create so called public domestic debt which must be paid with usury. So as to pay back the banker, Wanjiku’s little wealth that was spared by the first ngeta/robbery, must be robbed via taxation. To dare believe that, a document which enshrines such devilish principles of socialism and fascism will emancipate Wanjiku, is the most dangerous delusion we know of.

Firmly believing that the state should and must not be a dispenser of privileges, we propose that, the proposed constitution ought to have been guided by some key principles:

Natural Rights of Man

A Free Market System can only be based on acceptance and adherence to the principles of Natural Law and Natural Rights of mankind. In this way, the drafters of this constitution ought to have known and acknowledged that, the preservation of economic and political freedoms can only be founded on the firm belief in God and therefore, the existence of moral law. As Hamilton taught us, "Good and wise men, in all ages, have ... have supposed, that the deity, from the relations, we stand in, to himself and to each other, has constituted an eternal and immutable law, which is, indispensably, obligatory upon all mankind, prior to any human institution whatever."

It is for this reason on the vital land question, we beseeched the drafters of the proposed constitution to expressly state that, land is a God given birthright to all Kenyans. Thus, whenever this sacred right of man is violated, as this document does, we violate Divine and Natural Laws. We blatantly violate this sacred right of mankind because in our arrogance of little education we believe that, the basic principles that governed natural resources/land before the formation of the Kenyan state are dead. This can only be so, if one believes that, the sole objective of the formation of the Kenyan state was to take away this sacred right. On the contrary, the sole purpose of formation of Kenyan state should be the preservation of this sacred right. For those who may dispute this, all we shall ask is the location of the Creator’s land office which has issued right to land to some while denying others. Yes, we may say the colonial state which was formed by evil men, had this single objective in mind. But, was it not the objective of our independence to deny and reject this inequity? If not so, it shall be an admission that, we shed blood not to remove oppression, but, merely to install black oppressors. In simple words, the equal right to land for all that existed before the formation of the Kenyan state, is the appropriate standard to measure the proposed land tenure. On this score, we miserably fail.

We firmly hold the view that, a stable, just; equitable and peaceful nation cannot arise from foundations that negate the Natural Law and Natural Rights of mankind. In this sense, we find ourselves in agreement with Calvin Coolidge who said that, "Men do not make laws. They do but discover them. Laws must be justified by something more than the will of the majority. They must rest on the eternal foundation of righteousness. That state is most fortunate in its form of government which has the aptest instruments for the discovery of law."

Rule of Law

Throughout mankind’s history, with a few exceptions, man has been ruled by the whims of few powerful evil men rather than by the law. Having a written constitution is no guarantee or a sufficient condition to the establishment the rule of law. We argue this because, the validity of our laws cannot merely rest on what law makers decide or the majority may decide is law. The validity of laws must be based or judged on their compatibility with common sense and their ability to safeguard the public interest. The proposed constitution does not meet these two requirements. As such, it cannot be the basis for the rule of law in Kenya required for establishment of Free Enterprise System.

Morality and Ethics

A Free Market System requires virtue, honour, truthfulness, fairness, honesty and self reliance. As we find in the Bible, a false balance is an abomination to the Lord. But a JUST WEIGHT is His delight. You need not believe in the Bible to accept such teachings. Now, in a modern economy, money is the blood of the economy. This being the case, it is not an exaggeration to state that, the most important fundamental law in any nation is that which institutes money; for money governs the distribution of property, and thus affects in a thousand ways the relations of man to man. If wrongly instituted, it cannot be rightly governed by any subsequent laws; and the wrong distribution of property consequent upon it must corrupt society in all its branches.

If this is the case, what do we find in the proposed constitution? In s. 231, we find this: "The [CBK] shall not be under the direction or control of any person or authority in the exercise of its powers or in the performance of its functions." Translated, this means that, the CBK shall not be answerable to the Kenyan people. Therefore, we have surrendered the greatest power, i.e. MONEY as Esau surrendered his birthright. So, who shall it be answerable to then? A brief look at history will tell us.

In 1929, Montagu Norman, then the world’s most influential central banker as the governor of the Bank of England, precipitated the Wall Street stock market crush when he asked the governor of the New York FED, George Harrison to raise U.S. interest rate levels. Since Harrison complied, we witnessed one of the most dramatic financial and economic collapses in the U.S. history in the following months. In 1931, the New York FED governor demanded the German central bank, i.e. Reichsbank headed by Hans Luther to impose rigorous CREDIT AUSTERITY and tightening of the German capital markets so as to "stop foreign capital flight." What ensured was the collapse of the German banking and industry in the winter of 1931-32 in what was said to be the hardest winter in one hundred years. When the German government (any person or authority) headed by Bruning requested the Reichsbank to seek emergency stabilization credit from other central banks to contain the national banking crisis, it refused. Having destroyed German economic and social structure through the control of its central bank, the same forces turned around and supported Hitler.

When one appreciates the world history since 1971 when Nixon destroyed the Bretton Woods system, one cannot but fail to see the obvious. Since 1971, it has been the policy of the Anglo - American banking/financial elite (who are monopolists) to impose Versailles treaty like conditions on humanity. Let us recall that, the Versailles treaty reparation against Germany was meant to loot Germany and thereby, destroy its industrial and military power that comes with ability to manufacture. Therefore, we seek to warn Kenyans that, by making the central bank unanswerable to the Kenyan people, we have permanently and effectively ceded our monetary sovereignty to IMF, WB and other hostile nations. Having done this, we can forget ever modernising our nation for money creation shall be in the hands of private interests. As such, whenever money is created not in the broad public interest, but, to secure private interests, we have an unjust measure and a Free Market System cannot be run under such arrangements for there is no equal opportunity to all.

If you doubt what we are saying, sample this.

(a) For the Americans who control WB/IMF, so as to arrest current economic mess and help “stabilize” the broader financial system, the Fed had to invoke a seldom-used emergency lending authority under Section 13 (3) of the 1932 Federal Reserve Act (as amended by the Banking Act of 1935 and the FDIC Improvement Act of 1991), not used since the Great Depression, to provide short-term backup funding to select non-depository institutions through a number of temporary facilities.

(b) On our part, under the "guidance" of the WB/IMF, we inserted s.49 of the CBK Act inserted in 1996 which outlaws the ability of the CBK to extend credit to any public entity. In other words, if we want to build a latrine in Garissa, we must beg for money, but, when these people we beg from want to build theirs, they just print their papers which we call reserves and in return, we surrender Wanjiku’s coffee to them. What a nice f$$%% arrangements for people who call themselves educated to accept?

More so, as we noted sometimes back, under the monetary system proposed in this document, we will have established a monopolistic structure which allows a few connected thugs to corner all the money from the source (remember YK 1992?). Once they corner this money, they do not invest this money in the productive sectors of the economy. No, they buy governments debts, speculate in land and stocks. Since such money creation does not meet real value creation, it creates inflation. This inflation affects those on fixed wages and the poor most. Having messed their ability to earn for themselves, we turn around and create a welfare state to take care of these people. What a deception!

Limited Government

A limited government is only possible where the governance structure is framed in accordance with Natural Law and Natural Rights of man. A government framed with these laws and rights in mind, does not need to be a welfare state. This means that, only those with serious mental and physical disabilities ought and must be cared by the whole community. However, since the proposed constitution trashes Natural Law and Natural Rights of man, we shall be forced to create a welfare state to take care of those whose natural rights shall be violated. A welfare state is an unlimited government.

An unlimited government is a call for arbitrary government via taxation. Arbitrary taxation is not conducive to protection of our property because, such a government has arbitrary powers to decide how much of our property it will confiscate via taxation so as to provide the so called welfare. Since such a government must resort to borrowing, it ceases to be a government in the service of the citizens, but, a vessel or an agency for collecting debts via taxation from the struggling masses to pay the monopolists who have cornered money from the source and as well as land.

As such, by failing to secure absolutely the security of our property we shall have forfeited our economic liberty. Once you forfeit your economic liberty, you have also effectively forfeited your political liberty. Thus, all that shall remain is useless motions of voting every five years. Even worse, all welfare states will sooner than later end up as socialistic/communistic states. If you doubt, check what % the USA or the UK GDP is now in the hands of the government. Humanity is on the tarmacked road to serfdom.

Property Rights

A Free Market System can only work where property rights are protected. However, a clear definition of private property must be adhered to. Private property from the Natural Law perspective is that which man has produced with his sweat for it is written that, man shall eat bread from his sweat of his brow. It is when seen from this perspective, we agree with John Adams that, "The moment the idea is admitted into society that property is not as sacred as the laws of God . . . anarchy and tyranny commence. Property must be secure or liberty cannot exist.” As we have noted above, under the proposed taxation system, our property is not secure. To this extent, we shall not constitute a just government which shall impartially secure the right to every person’s property. This is an invitation to tyranny.

Voluntary Exchange of Goods & Services

Free Market System requires a system of voluntary exchange of goods and services. Freedom is one of the God's greatest gifts to mankind and in the economic arena it should allow any person to make choices out of own self - interest. It allows voluntary setting of price. As Jefferson asked on his inaugural address, what is "necessary to make us a happy and prosperous people? Still one thing more, fellow-citizens—a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.... "

We also read Adam Smith saying that, To prohibit a great people . . . from making all that they can of every part of their own produce, or from employing their [capital] and industry in the way that they judge most advantageous to themselves, is a manifest violation of the most sacred rights of mankind."

As we have noted previously, terrible mistakes were made on land issue after independence. The best way to rectify this mistake is to equalize the right to land and not through equalization of fortune as we find in Article 68 (1). The best way forward would have been the Singaporean model whereby, people compete to use public places. In such a system, the winner decides what price he is willing to pay for the privilege of using public space. Similarly, instead of arbitrarily limiting land sizes which has never worked and will never work, (what if the next parliament sets 5000 hectares as the limit or even refuses to set the limits?) we would have allowed those who hold land to voluntarily decide the price/rent they are willing to pay to keep them. If they are unwilling to pay open market price, through an auction, others willing to pay the price would acquire them while compensating the previous owners any improvements done on these lands.

Profit Motive

Profit is the individual reward for honest work. It is this honest reward which enables individuals to risk their time, capital and other resources to create business so as to provide services to others. When you provide good and services to others, apart from paying you back the cost of production, they say thank you (profit). From many thank you, you create great wealth. In other words, and this is the CRUCIAL POINT, business is nothing but, a public service. Once you accumulate wealth through such honest toil, you are in a position to create more opportunities. More opportunities do further create greater levels of wealth and prosperity. The best way to ensure this profit motive is thriving is to protect honest toil from private taxation via monopolies/cartels and the unnecessary taxation which comes along with unnecessary welfare state.

More so, by refusing to reform land and money systems, we encourage speculation so as to capture unearned incomes. These unearned income/profits which come from speculation erode work ethics while corrupting the ethical foundations of the nation. In other words, we have put rent seeking instead of profit motive. The difference between these two is this. To capture rents, you need not do anything. However, to earn profits, you are forced to be use or service to fellow mankind. And, as Jesus said, he who must be the greatest must be a servant. It was for a reason, He never said the greatest shall be the rent seeker such as the money changers He chased from the Temple.

Competition

Another principle/spirit that ought to be enshrined in the proposed constitution is competition. Competition helps to bring about quality products and services for buyers to choose. This competition ensures that business people are forced to devise better ways of serving the public. However, when we create monopolies and cartels as we have done, the buyers/public are the losers because they have to pay a higher price or go without the product or service. Thus, we should have promoted competition by restructuring natural monopolies like land, money, telecommunications etc. Instead of doing this, we have entrenched the monopolies which is nothing but private taxation. More so, since this private taxation is affordable to large corporations, it is only a burden to the small business and thereby, put them out of business. And, when small businesses are crushed, the whole economy is crushed.

Stiff-necked fools, you think you are cool
To deny me for simplicity.
Yes, you have gone for so long
With your love for vanity now.
Yes, you have got the wrong interpretation
Mixed up with vain imagination.

The lips of the righteous teach many,
But fools die for want of wisdom.

The rich man's wealth is in his city;
The righteous' wealth is in his Holy Place.
Destruction of the poor is in their poverty

But I don't wanna rule ya!
I don't wanna fool ya!
I don't wanna school ya:
Things you - you might never know about!

By the late Bob N. Marley.