Building a Political Economy that Serves People First

An exercise

One of the aims of the Geopolitical Gymnasium is to educate readers about the different political-economic systems to show that there is an alternative to the Western Neoliberal system that’s kept the Global majority from attaining basic development goals. That aim is interspersed with reports on geopolitical events and information to help readers gain a different understanding of Russia, China, and BRICS from how they’re described by Western Media. I’ve made no secret that I’m a student and associate of Dr. Michael Hudson and promote his writings and internet discussions because they help explain the POV that’s expressed here. His main critique of the attempt to create a new international political economic system not controlled by the Outlaw US Empire and its vassals is that there’s no unified development theory that aspiring nations can adopt as they escape from Neoliberal oppression, which often employs Neocolonialism as its main tool. Such a theory is present within Hudson’s entire body of work over his career, but it doesn’t exist in one place. However, over the last year in his weekly discussions with Dr. Richard Wolff on Nima’s Dialog Works program various components of such a theory were presented. Last week, the discussion was geared to talk about that and what BRICS could/should do. Here’s what’s considered fundamental from last week’s discussion:

Well, the key move that China has made and that the BRICS countries need to emulate is keeping banking as a public monopoly, a public creation of money and credit so that it will be used to finance actual industrial and agricultural and government infrastructure investment, not predatory behavior of the banks of Europe. [My Emphasis]

For that to happen within any nation, the banking system must be lawfully made into a public utility via the national constitution. And as I’ve suggested before, that’s not the only thing that needs to be lawfully mandated. Essentially all services that support modern human existence that can be considered natural monopolies must also be lawfully made public utilities. Much of this structure can be easily adopted by the many rather young nations that emerged from Colonialism since all too many were advised and adopted Western Neoliberal constructs because many of their leaders were educated in Western institutions. Again, the governing philosophy is to serve people first via people centered development. Like it or not, a nation’s people are its primary form and source of Capital—Human Capital—because they are the ones who get things done—produce products and services, construct infrastructure and maintain equipment, provide healthcare and education, as well as govern.

No nation on the planet is starting from a zero point—something already exists politically and economically. The main determining factor is who is served by what already exists—is it all the people or just one or several classes? In other words, how equitable is the nation? Here another goal needs to be introduced and acknowledged: For a nation to prosper to the best of its ability, it must be in harmony with itself and its overall environment—ecosystem and international relations. The only way to get the best performance from a nation’s human capital is for as many as possible to have an opportunity to perform to the best of their ability—neglecting as few as possible, meaning only those with the most debilitating life conditions, which in reality ought to be a very small number. Education for all is the pathway to generating that best performance. Building an outstanding educational system is easy in theory but difficult in practice as reality has proven. Why? Because other national attributes were made more important, the military in all too many cases. But also because the money to create such a system wasn’t under public control. And here’s where we see the need for a strong government to ensure sovereignty and enforcement of the national constitution.

What provides for the strength of any government? The support of its citizenry. What ought to provide for the basis of that support? A constitution that serves the needs of the citizenry. Thus, the key is having a proper constitution—not something vague that empowers one class like the US Constitution and established an oligarchy despite the rationale present in its preamble. A constitution that’s specific yet terse in outlining the functions of government and the place of public utilities within the government would be basic. Based on historical experiences, some form of meritocratic qualifications that must be possessed by those seeking public approval to govern must be provided as a way to expose the corruptible and keep them out of governance. Also based on historical experience, a parliamentary form of government capable of attracting many political factions thus giving citizens the widest possible choices appears to be best that also combines an elected president where the division of duties would see the Prime Minister running the legislative and some ministerial portions of the government while the President would conduct planning and overall management of the military and monetary portions of government—the idea is for attaining/keeping Harmony as the government’s goal domestically and with its international relations. My aim here is not to write a constitution but to provide basic guidelines for each nation’s public to discuss and design their own. That way the nation’s people have ownership of their destiny. How hard should it be to amend a constitution and should ratified treaties automatically become part of the constitution are two very good questions. Another relates to the incorporation of international law if ratified treaties don’t become part of the constitution; for example, the UN Charter and Universal Declaration of Human Rights.

The treatment of private financial operations, if they’re allowed, also comes into question. Should they be allowed to charge interest, and if so, should the amount be capped? Capital control laws and a Tobin Tax assessed on currency trading along with strict regulation of capital markets is also a must. In most nations, such laws aren’t incorporated into constitutions mainly because the constitution pre-dates their need; however, we’ve seen how easy it is for a faction to gain control and alter legislation in its favor. Private munitions companies are also a threat to any nation’s harmony and thus need to be public utilities. And there’re a host of others: All public transportation and roads, perhaps including taxis; water, sewer, communications, energy delivery; education; healthcare; fundamental insurance including welfare and retirement pensions. The idea is to eliminate all possible points where rent can be collected privately instead of regulated and collected by government. And that brings us to housing. If subsoil rights belong to all the people, then shouldn’t all land be deemed public and leased by government for a fee? If housing is essential for modern human existence, then who/what is to finance and construct it? It’s claimed that people who own things take better care of them. Many nations have built high density housing and then allocated it to its citizens freely or for a nominal fee or monthly rent. The public via the government thus is responsible for the property’s upkeep. IMO, this is another question nations must decide for themselves. Personally, I’d prefer a hybrid system where young people are allocated high density housing when they finish their schooling and enter the workforce thus making it easy to afford to start a family. They can then generate savings with which to eventually purchase a home, whose price will be low because the land is publicly owned.

The ultimate aim of all the above is to keep the cost-of-living as low as possible so the nation’s economy will be competitive as wages don’t neet to be exorbitant thanks to an excessive cost-of-living. Thus, the economy can be low-cost, high-skilled and continue in that mode as it modernizes via development. The most important and basic part of any nation’s economic development must be its ability to feed itself—nutritional sovereignty. Basic industry that stems from agriculture and providing for public needs can thus grow and generate the products for commerce. It’s entirely possible to have a prosperous, harmonious nation with a basic economy because all its needs are in its own hands. Its government provides the investment credit for development and is repaid in the long term as the nation prospers. No IMF or World Bank loans are needed because dollars aren’t needed. The types of development exchanges provided by China and Russia aim at avoiding indebtedness, and I expect other middle income BRICS nations to do similar things as they all help the rest of humanity to develop.

People Centered Development is a communitarian, mutually beneficial arrangement that could be described as social-capitalism since Capital is still a requirement in the development process but doesn’t imply that the system then becomes Capitalist and dominated by a small class marked by extreme wealth. The idea is to keep the wealth generated by the economy within the society as the investment capital for further development. Some initial production facilities might be state-owned-enterprises (SOE) and remain that way or perhaps spin-off “private” enterprises owned by their workers. One very important lesson is clear from Russian and Chinese development—Labor, Government, and Management/Business/Entrepreneurs must all work together for the goal of attaining and maintaining national harmony. Government includes the entire educational system and state-run research institutes where labor and the productive sectors merge together to execute the current plans and importantly plan for the future. This structure demands expertise and thus people proven meritocratically. Most BRICS nations and aspirants are far smaller, but the initial structure and philosophy of developing nation enterprises must be properly established for the system to prosper and that depends on education. As noted, all nations are already operating, none are a taula rasa. How to convince the leadership of developing nations that such a system is in their interests and is possible to implement? In many cases, it’s assumed the answer is: We can’t develop because of the Debt Issue. So, after having written all the above, it appears it needs to begin with some ideas of how to defeat the debt boot so a fresh start can begin monetarily and fiscally. I’ve commented on the debt issue before and termed it odious for almost all developing nations, but what do they do once it’s declared odious? Doing an entire reboot that includes writing a new constitution seems to be the place to start.

This was a good exercise. Having done it has convinced me that the issue needs to begin with how to clear the slate so something new can be written, and that means freeing nations from the odious debt that keeps them down politically and economically since they have no agency against the Neocolonial power of the Outlaw US Empire and its vassals unless all such nations band together and declare their independence together. I know those with a more powerful voice than I have aired their advice, but how many of those nations were listening? Well, it won’t hurt if I chime in. Perhaps I’ll be motivated to rewrite this and send it to some of the developing nations embassies here within the Empire. We’ll see.

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