BACKBENCHER
Rod Kapunan
9/10-11/2011
When the finance managers of the world conceived the idea of trading money for money, the first rule they did was reduce it to a commodity, and not as a medium of exchange. In that, this new generation of merchants called “money traders” was able to trade currencies with other currencies of whatever denomination at any given moment where they would command higher value. Maybe it was an unconscious effort to resonate the concept of money as a commodity to supersede the burdensome practice of barter, but nevertheless its consequence was far-reaching to man, to his society, and to the world.
The official conversion of money to commodity began when the international finance syndicates through their tightly-noosed World Bank and International Monetary Fund enunciated the policy of defying the biblical prohibition of usury. The abrogation of laws prohibiting usury and punishing those engaged in it resulted in the removal of the last safety valve of compassion for the less fortunate. The two finance institutions pushed whatever progress that was achieved by man back to the Dark Age.
The legalization of usury effectively deregulated the interest rates, and money supply generated through interest earnings tremendously ballooned without or with a negligible increase in production. Money then was automatically detached from production or what conservative economists would traditionally view as the primordial creator of wealth, viz, of mankind’s building block to progress and prosperity.
Like that of globalization or the universalization of free trade, the financial oligarchy of the world deemed it necessary to globalize the practice. To make it work, often by economic pressures and blackmail, countries, through their central banks, were prohibited from fixing the value of their currency.
As a result, less developed countries were pushed deeper into poverty. The World Bank and the IMF pretended to be generous by imposing lower rates of interest compared to other private commercial banks, but seldom did people know of the harsh conditionality of them having to devalue their currency.
For that, people, mostly from the Third World, suffered untold sufferings and hardships because the sudden and increased dependence by the financial oligarchy on that novel business resulted in the erosion in the value of real wages. Production and the trading of manufactured goods became less and less attractive as they generated less profit compared to the wizard-like wealth created by money trading.
The mad rush to save cost by legitimate manufacturers and traders invariably gave birth to a much harsher form of exploitation that contributed further to reduce the cost of wage. Most painfully, the advent of labor-only contracting or contractualization cut short their security of tenure, a milestone in the workers’ movement won through decades by their blood and tears. Concepts as labor-flexibility, outsourcing, and even making a mockery of organizing their already slave-like condition into some kind of labor cooperatives became fashionable. As usual, those quisling labor leaders were the ones that made money out of their deplorable condition.
The workers had no choice because everything was reduced to a struggle for survival. The workers’ international solidarity was lost with the demise of the Soviet Union and the subsequent metamorphosing of the economies of the former socialist states led by Russia and China to free enterprise economies.
The profit generated by money trading emboldened the financial oligarchy to do away with production and manufacturing. Effectively, the workers already receiving a much reduced income ended up in a much worse situation than the slaves US President Lincoln emancipated.
Should the workers starve and die, their capitalist employers would have no reason to be sorry. After all, wages for whatever is its value under the new era of monetary trading was the cash equivalent for their “freedom.” Like an unsold commodity in the market, the slave-like conditions of the contracted-out workers was effectively treated as outside of their employer’s moral responsibility.
The devaluation of the currency resulted in the gradual but continued depreciation in the value of exports that by the same axiomatic principle would cost them more to purchase equipment badly needed to serve as their lynchpin to achieve self-sufficiency through industrialization. Domestically, the practice became more vicious as local banks exacted higher interest rates that made them no different from the international financial vultures.
Of course, the abrogation of usury or the removal of the ceiling on interest rates necessarily would require the abolition of all price regulations, including rental. Everything has to be deregulated if only to allow production cost to cope with the business of usury.
It was an excruciating dilemma lackey states like the Philippines had to take. Should they refuse, instantly all businesses in the country would close, and instead all would just resort to the most convenient business of usury. Besides, there is risk in hiring workers who, at any time might demand a wage increase that if not granted, would resort to strike or engaging in manufacturing that would require them to pour in huge capital investment to build plants. Worse, everything could even end up in waste due to the possible flooding of cheap goods coming from other countries because of free trade.
Through this principle, the world saw the rapid rise of a new breed of financial oligarchy. One could not be wrong in judging that the rise of the local financial oligarchy was made possible because of their collaboration with their international counterpart; that as quislings they in fact acted as the local enforcers of the abominable practice that would routinely exact a pound of flesh from their countrymen.
Indeed, the saying that “money begets money” came to full realization. From the elementary practice of lending it soon evolved into a revolutionary concept of trading money for money. Invariably, the value of money became volatile like the price of commodities affected by the indubitable economic law of supply and demand. As that cycle of currency trading went on, the value of the local currency continues to depreciate much faster, making it more difficult for governments to meet their basic obligations to the people.
(rodkap@yahoo.com.ph)
