As Witchdoctor showed in previous part one and part two, the current Capital Formation- accumulation in 21st century has almost nothing to do with the Mainstream and even Karl Marx analysis of how capital is formed. It is resembling nothing concerning the glorious self made man who by luck, cunning plan, diligence , finding an ecosystemic economic niche or innovation builds up through market offer/demand the surplus value extraction.
The current Capital Formation is plainly a story of looting through complicit hijacked State governments and parliaments and code of capital laws made and written by the same looters.
Capital is nowadays given for free or almost. But, it is not given for free to anybody . Only the Big Corporations which already are syphoning – sucking the surplus value of the companies through dividends, financial instruments, eating the big slices of the cake with mega wages , bonuses, stocks, buybacks, etc, etc… For the ruling Oligarchy Corporate Class the most of the surplus value which once used for the capital accumulation is given mostly and only to them and not for capital accumulation and is for free or almost, while the surplus value is siphoned out and eaten elsewhere and not at the place in which it was created..
Capital is not given to:
Small and medium business, self employed and all small and minor actors on the so called “market”. That is why the market is rigged. The small actors are in this way legally and de facto prevented to grow and even outgrow the big players.
Their cost of capital, their capital formation, their price margin on the market is very risky and impossible in this MONOPOLY Capitalism which gives capital for free to the few monopolist players. The tax breaks subsidies and deductions are mostly reserved for the big guys. The small fish are through this mechanism pushed out of the market since the Monopoly Corporation fire power can destroy and destroys the real price finding/discovery of a production, as the looters can cover the market price loss- THE DUMPING PRICE- indefinitely until the competition is thrown out of the market. In the best scenario, the new small competitive company is bought out and so the monopoly is preserved.
This scenario, shall or may lead this story of fake capital in 21st century directly to current so much praised Argentinian president- see the Economist rag publication- Xavier is the, the real NEW MESSIAH with the chainsaw of the current GREAT TA-King. TAKING.
SO, by completely depressing the Argentinian economy and thus maybe achieving a much lesser inflation which is possibly only a short- mid term achievement as the boundary conditions are not solved, the depressing of the Argentinian economy and by this as a parallel its own society immune system, the Chain Saw Messiah is completely depleting any, any any significant local Argentinian capital formation. So even if the economic system apparently by deregulation and lesser inflation gives space to the healthy local capital formation and development of the local Argentinian new companies, this IS NEVER TO HAPPEN.
In the Desert of the chainsaw economics nothing can grow. Nobody locally has even the starter capital to start a real new big company , nor to grow out into a big company, BECAUSE IN THE MEANTIME THE DEPLETED ARGENTINIAN CAPITAL FORMATION is by no tax no tariff limits invaded by freeelooting of the Foreign Multinational companies! They always start to invade new markets with price DUMPING, and so, no chance to compete at the same level..
In fact when the territory slides into this utmost disaster, only the foreign pirates with loads of money from the financial backup given to them for free can buy ANYTHING FOR CHEAP. No way, as Witchdoctor has shown above, the capital formation in the globally open no frontiers chainsaw economics which by the ideological plan HAS depleted the local OVERALL capital accumulation, no way that Argentina can establish a local functional market, society and economy.
The place is FOR SALE to anybody from the US, Europe, to China.
By the way, have you ever made a sort of a business? Well, WD did. Do you think WD will invest all he has in the market where 70% of the people are so poor and can not afford anything apart from basics? OK, you say, make luxury. Invent luxury brand. Ha, have you tried to establish a brand , patent it, pay the lawyers and compete with the french or Italians? OK, you start in a garage, then buy a stand in the market, then ….. you will be Gucci in a few months or what?
In the meantime you are out of the market because your stuff is not made in some sweatshop but hey, lets open a luxury sweatshop in Argentina with your own brand while in meantime the French and Italian have already thrown millions in the same stuff with the backup of the whole global market behind them which you can only dream of on the smartphone screen…. So, at the end you end being a local tailor and that is it.
By the way, the 53% figure of poverty the mainstream sells, is a lie. It is much worse. The parameters for doing business where the 70% of the people- customers- can not afford anything apart from junk food and some cheap liquor is not a market for any serious capital formation/ Investment!
This type of chainsaw economy makes the people there just NAIRU- – a natural Non-Accelerating Inflation Rate of Unemployment (NAIRU) bunch.
!!!!!
OK, have you read here in the Witchdoctors posts and projections that the 70% of NAIRU is the real natural non accelerating rate of unemployment coming to your door soon, YEARS AGO, AND YOU THOUGHT AS WITH ALL STUFF HERE THAT THIS IS A JOKE? In Argentina, in order to push inflation down one needs 70% of the people being unemployed, occasionally employed or poor enough in order not to buy anything and so they buy nothing and so the price rise/inflation is impossible since everybody is broke and can not buy.This is a mainstream demand side economics and not the supply side economics which is the right answer but is impossible in the depleted total lack ofcapital/production situation in which this place is in for a century and the Chainsaw guy Millei is not even thinking in this direction, for obvious reasons of being a slave to foreign Capital..
“The non-accelerating inflation rate of unemployment (NAIRU) is the specific level of unemployment that is evident in an economy that does not cause inflation to increase. “- from Investopedia
Now, this is the real Nairu that Argentina can have in order to have no inflation!
They do nothing there to make the economy circle and produce, as WD has written here time ago.
And, unbelievable but true, Xavier Milleiouo has a majority support by the local gauchos while he chainsaws all and will sell Argentina for cheap while the 70% are poor and mostly the ARGENTINIAN MEN, MACHIOS GAUCHOS around 35 years old are raving mad how good this is and they lick the arse of their messiah in order to? Be even more NAIRU trash, junk to be disposed off as the human shit.!
. But the NAIRU IS a neoliberal parameter of almost no real significance, except in this case of driving a country in poverty and never counting the MMT predicament of a job guarantee the State is capable in one or another way to promote.
But that is the fascist agenda of the Corporate one world and this parameters are theirs.
To better understand the boundary conditions of the looters of the Great Taking, Witchdoctor will ad to the Nairu another parameter: S-DUE- STEADY DYNAMIC UNDERPAID EXPLOITATION. Together with NAIRU the S-DUE, or shit due, is the rate the capitalism uses to extract the surpluss value from underpaying the workforce-to pay less than is necessary or less than the value of something. The rate is difficult to calculate as the Matrioska house of cards of the way how is accounted the surplus value through a value chain of extraction and exploitation of value, both animal (people) and mineral ( stuff) is a complicated code of Capital laws and regulations mumbo jumbo in order to cover the tracks of the magnitude of the exploitation.
But as the ultimate boundary conditions for this ratio we can apply the Global ratio of all the financial instruments- derivatives of any type , against the Global wages amount.
Bank for International Settlements
https://www.bis.org › otc_hy2311
· Prevedi to stran
16. nov. 2023 — The notional value of outstanding OTC derivatives reached $715 trillion at end-June 2023, up 16% (or $97 trillion) since end-December 20
The Global income- wages are a tricky count. From 70% in Switzerland to 15% in Tajikistan. So, the gdp to wages ratio is a tricky count. But lets assume that globally the wages are optimistically around 30 % of global GDP which is around 100 trillion which means that essentiallay the derivatives vs wages is something roughly around 1:25 globally. That is one way to count the S-DUE. It means that each one Euro earned makes 25 euros for the surpluss value. One may say that this is not true since 800 trillions are money making money, but this is not true since this house of cards is propped by the collateral, which in this case are wages and broadly taking into account also the people private assets for the Great Taking Plan law code it makes the gross colateral for this casino surplus value formation, which is definitely called exploitation.
OK lets make a simpler example. One kilo of Oranges. Normally the kilo of oranges is paid to the farmer around 15 cents, which includes, unbelievable but true, all his costs of production plus his surpluss value which includes also his wage!!!!!
This kilo of oranges is travelling the “value chain” and when it reaches the customer on the shelf is around 2 Euros!!!
We are in the ratio around 16 times, so the 1:25 is not so bad approximation as the ratio. Witchdoctor excluded in this ratio the Private banks money creation- lending out of thin air- out of nothing which is always the GDP plus COMPOUND interest plus a ratio of accumulated debt which excludes the State debt as the bonds sale is a different pair of gloves. But a big part of this can be added to the S-DUE ratio.
Never forget that this extraction of surpluss value happens each and every year, for decades!
SO, one euro of wage equals 25 euros of exploitation.
Not to mention the rare earth and other minerals where the exploitation is better than sellling Captagon or Cocaine- 1: 1000 or even much more. So Argentina is selling stuff on the level of Cocaine drug dealers which are his buyers.
In this S- DUE the famous law is: HIGH TECH- LOW LIFE.
The only current stop of how low can the pay – wage- be is the point that someboody has to sell stuff- sort of goods, to this people. But this minimum ratio of demand is the one which in the whole value chain of wages DETERMINES also the higher wages. – the ones paid to the higher echelons of the middle class and the whole bunch of lackeys working for the “Soft Power” daily proppaganda of this Looting Great Taking. Surplus value accumulation.
So, getting back on the track of the Great Taking, the capital formation with this new economy which, after Thatcher, Pinochet and company of Miltons Friedmans Clowns is being promoted a little far away- Argentina- as a new Guinea Pig Experiment (remember Greece and the European Austerity Plan- yes the start is always like that) to be GLOBALIZED SOON.
So at the end what is that Argentina gives for free* definitely is not a buyers/ customers market. The purchase power is irrelevant there for any even foreign company apart from all sorts of cheap shit selling.
Argentina is selling its only assets which are not its people since they are useless.
Argentina is selling its last resource: Land. And minerals. The whole surplus value which should form the capital accumulation there, is leaving the country. Currently the farming Oligarchy is still of a sort of Argentinian origin but soon with the ongoing depletion it will be bought by the foreign Oligarchy and monopolies.. The minerals will be sold to foreign looters for their free capital formation.
The Current Mercosur agreement with the European Union is selling also the European farmers in exchange for the heavily pesticized genetically modified, synthetic hormones full Mercosur food against the German Cars as a free trade, plus some Mercosur Lithium ( 30% of Lithium is in Argentina ) for the new electric cars which no Argentinians will ever buy in relevant numbers and buy buy German car making because the NAIRU- S-DUE there is 70%! The only bet taken here is; when the German Nairu and in the the EU will start reaching this numbers, or, when the robotization and the AI will do this shift in the EU?
With this new Great Taking in action, this scenario is not far since, the Mercosur agreement has its long lasting Nairu S-DUE costs coming to the EU.
Slovenia which will ratify the agreement for sure and be quiet about it, is already by signing selling its farming sector, especially this will bankrupt the only relevant Slo production of meat, which is fine by Witchdoctor but not for the meat eaters in Slovenia or maybe not, they will love this Mercosur hormonized stuff and applaud to the more chopping of the Amazon and other forests for even more Mercosure cheaper meat, while the Slovenian farmers will sell their land for cheap and go find new opportunities, but where,except for the Slovenian ever growing public sector?
Welll , here we have not to mention ITALY. The biggest fan of the Chainsaw Xavier is President Meloni. Visiting often and even getting Italian citizenship for free. How this goes with the Mercosur agenda which means a deep blow to the so called “made in Italy “ agribusiness? The “ made in Italy” which is the soft power propaganda of Italian way , style, and sold all over the world. OK, as by the EU regulations the “ made in…” means nothing at all. It is like the Sugarcane Sugar Witchdoctor is buying for making his marmalade from his produce. On the package is written; sugarcane sugar- made in Germany! Well well well, sugarcane is finally growing in Germany!!! There is still a bright future for Germans to work in the sugarcane plantations!! So who gives a shit from where the ingredients come, they will be all “made in Italy”!
The Italian farmers fought against the green agenda which contained inherent planned demise/debacle due to inner contradictions and the real issues of financing the green transition were never addressed by the EU Tech Oligarchy,the stuff Witchdoctor excellently analyzed a while ago. Now, all of them farmer and workers fans of Meelone, they will close and default, bankrupt and sell their land and slowly other personal assets in the name of the Big oil, big pesticides, big hormones and big shit cereals, wheat and meat and etc agenda they were all for it and which is coming from the Mercosur. Fuck Greta Thunberg they were shouting. HEIL XAVIER, they will shout?! HAHAHA.
IF Italy is the new Trojan Horse of the complete BIG Sale- A GARAGE SALE of Italy existing assets, from companies which are big and still State controlled to all his Disneyland medieval cities- all Italian assets as the new entry in the new forming right wing slavery agenda of the Great Take Over- the road is paved for the Great Taking of the whole Europe as the polls show.
Idiots are digging their own graves . Soo they will have nothing. In the name of? Efficiency? Freedom? No taxes and no services, no health insurance and no pensions= ! 1Euro per hour wages? Yes Italy has a problem in the current debt driven economy: the huge debt. It is the door for the Trojans. As the current Euro architecture prevents the common treasury and bonds and investing, the door is ajar. It was always ajar, but the pace of change from the current Austerity agenda of fiscal bollocks is speeding into – ARGENTINA here we come!!
We are all on the down spiraling road of cheaper and nastier scenarios of the dynamically smaller common denominator (the race to the bottom) S-DUE which leads to the 70% NAIRU S-DUE outcome in this free capital accumulation by a limited number of Global Monopolies which are deeply into the Great taking of the people property and constant fall of living standards. The lesser purchase power is balanced by crapification- crap food, clothing and overall living standards and this scenario is nearer for the 70% than you think. It is about about Food, Energy, Water and the complete concentration of Capital in a few hands . The Great Taking, until the Planet lasts and bears it.
And this is not a natural accumulation process of forming of the monopoly capital on some sort of a free market by simple exploitation and extraction. There is no Natural, no Free and no Accumulation going on as they teach in schools and talk in the media or people believe in. It is not Natural. It is given for free. To Them. By your choice.
Once upon the time, in the west, the ripoff, the looting was not so direct. The piece of cake given to the populace was bigger and better. But the debt driven economy greed with interest, supported by the voters, changed the cards on the table and in desperation the overall mindset of the serfs- the middle class of nothing , in order to keep the losing standards, fell into the neoliberal narrative trap and decided that to prevent impoverishing it is better to give them all for free and so maybe get something in return. De La Boetie and the slave syndrome.
But as we all know the latest results in the Europe and better not mention the US and others show that almost half of the population is functionally illiterate and this essay here is too complicated for the 80%. This unfortunately is not a joke.
So, New Year coming and Witchdoctor decided to write more complicated stuff, as was at the beginning of this blog.