The Ati-thesis , Marxism

"By that definition, a state capitalist country is one where the government controls the economy and essentially acts like a single huge corporation, extracting the surplus value from the workforce in order to invest it in further production.[3] Friedrich Engels, in Socialism: Utopian and Scientific, argues that state capitalism would be the final stage of capitalism consisting of ownership and management of large-scale production and communication by the bourgeois state.[4]"

Quoted from Wikepedia

Saturday, September 21, 2013

State Capitalism VS Crowd Funding

I am not a professional journalist or researcher. I work independently as an avocation rather than a vocation in part because I feel that allows me to retain my freedom in expressing what I have to say. For instance "incentives" and "bribes" mean the same thing in the way that they are being implemented by the state but If I were employed by another organization I might be encouraged to use the word "incentive" instead of "bribe", but to my point of view "bribe" is closer to the truth than "incentive" which rings as though there were a fair exchange involved. In the case of usage by Maine State Inc- there is no fair exchange involved. The only thing the taxpayers are getting in exchange for the transference of their hard earned dollars is rhetoric about job creation but if the article in Bangor Daily News by the Center for Public Interest Reporting points out anything, it points out that there is no evidence that jobs are being created by the Pine Tree Zone redistribution of public money to private corporations. One has to wonder if, when Mr Levesque, head tzar at the MRRA, promises more "state backed loans" to Tempus Jets, it doesn't mean that the process begins with promise from both MTI, which will match an investment amount as a charitable donation granted to private capitalists, and the Seed Capital Tax Credit Program, which will sign the tax payers up to cover the private capitalists investment to the tune of up to 60%.  Speculatively speaking, the business so provided with such state backed promises, can use such promises to procure the loan that sets the whole process in motion. Now that the Seed Capital Tax Credit program has been "improved" by removing the requirement that the entrepreneur bring capital into the state, the lending institution, can be a Maine based institution in which other Maine borrowers who are not so showered with gifts of taxpayer money have to compete for loans against the favored ones of Maine State Inc. This is all pure speculation, but in a game in which those from whom wealth is being extracted are not allowed to know how their wealth is being used, thanks to tax privacy laws shielding the recipients, speculation is not only fair but one of a few sparse tools that we the people actually have on our side. As an independent I can grant myself permission to speculate based on what we can know.

Tzar "The term is derived from the Latin word Caesar, which was intended to mean "Emperor" in the European medieval sense of the term - a ruler with the same rank as a Roman emperor, holding it by the approval of another emperor or a supreme ecclesiastical official (the Pope or the Ecumenical Patriarch) - but was usually considered by western Europeans to be equivalent to king, or to be somewhat in between a royal and imperial rank." - Wikipedia

The MRRA is a municipal corporation chartered by the Maine State Legislature. The governing authority of the MRRA is not elected by the inhabitants of the municipality but is appointed by the state. Mr Levesque is given the title by the state of "Director of the "Authority" but his position at the city state of the MRRA also meets the definition of a tzar. Mr Levesgue rules by appointment over a municipality- not by the will of the inhabitants of the municipality.

When my father started our business back in the 1950's a government backed loan meant that Dad got a loan from a bank and the government co-signed it. There was never a use of public money since the loan was borrowed from and paid back to the bank. Public money only came into the picture if the loan defaulted and that would be easy to track and to know when the ratio between loans paid according to terms and defaulted loans reached an unacceptable limit for the use of public money.

From that point forward my parents capitalized the growth of our business with self generated capital- or as they say, sweat capital. It was a long and difficult process that required exceptional perseverance. When the business became successful, Dad complained that he still could not get a loan from a bank and speculated that it was because he was not asking for enough money, that he would have more success if he were trying to borrow ten times as much. Today, after years of researching the economic policies in place in the state, policies generated by our government that have a far reaching affect on all aspects of our economy, I believe that Dad was right in his speculations.

Fortunately the economy remains much larger than Maine State Inc. There still exists a private economy with new venues emerging via the internet- one of the most prominent being crowd funding. Crowd  funding capitalization impacts the economy in a completely different manner than the redistribution of wealth as practiced by Maine State Inc and their ilk. Maine State Inc  chases freshly printed federal money, which has nothing to back it up - not gold and not productivity. There are those that pursue whatever kind of project as is currently being financed by the federal government and in so doing they become "instrumentalities of the federal government" which is currently on an unsustainable course according to the CBO, and many others.

Conversely crowd funding capitalization is based on the ability to produce .Crowd funding transforms consumerism into entrepreneurial-ism, a form of "conscious capitalism" that might instead be called "conscious consumerism" It's an interesting dynamic compared to what is going on in China with the government relocating rural populations, bribing them with free apartments and money in a goal to turn them into a home grown consumers market. Instead crowd funding turns consumers into a new breed of private capitalists, a breed that is not motivated by profit, at least not in the case of crowd funding that is not an investment. ( I understand there are new forms emerging that are for investors). If Americans are known for their generosity, always the first to come to the aid of those struck by natural disasters and other causes, then crowd funding is quintessentially American. It is based in the spirit of helping others to succeed.If the thought can be kept in the public's mind that genuine economic revival has to emerge from all sectors of the economy, not just one subset determined by the "authority" of the state,  then crowd funding becomes American disaster relief for America's own economy.

Because crowd funding is often capitalization which is not profit motivated, it has never been more true that when Maine State Inc and their ilk transfer wealth from general taxpayers to "targeted sector" private capitalists, it drains the capitalization from the rest of the economy into the pockets of government selected privately owned businesses and private capitalists. The private capitalists  that make up the other 90% of the Small Enterprise Growth Fund have long been called "high growth capitalists", which in practice means capitalists seeking to make high profits in a short amount of time, generally expecting an "exit strategy" - code for selling the business - within seven years. It used to be that the high growth capitalist also took a high risk but Maine State Inc has transferred much if not all of that risk to the general taxpayer who sees no share of the profits, being that the general taxpayer is an involuntary investor in the SEGF, accounting for 10% of SEGF's investment with terms of agreement arranged by the state legislature, providing that the taxpayer's investment will always "roll over" in the manner of an investment in a non-profit organization.

So crowd funding capitalization comes from disposable income in the pockets of the people. It does not qualify as a business expense, is not a deductible. As Maine State Inc chases after the worthless paper money printed by the federal government and gives that money to it's "targeted sector", the amount of disposable purchasing power in the pockets of the populous shrinks down another notch with every dollar that Maine State Inc takes from the fed.

The taxpayers are non-profit capitalists when public money is used to "invest" in Maine's Small Enterprise Growth Fund. In the case of the SEGF , the taxpayers have no choice. Conversely, when the public functions as non-profit capitalists through crowd funding, they do so of their own choice investing (spending) in the projects of their choosing.

While Maine State Inc has a very narrow range of businesses that are the beneficiaries of the redistribution of wealth as managed by the state, crowd funding benefits the full range of business activity, as there are many different venues of crowd funding, each with its own "targeted sector".

Crowd Funding and venues like Etsy promote a hands-on business owner involvement, while the new "improvements" recently added to Maine's Seed Capital Tax Credit, take the capitalist a few steps further away from a hands-on business involvement: The "Extended and Improved Seed Capital Tax Credit",  changes the requirement that the operation of the business must be the full-time activity of the owner  to  "a substantial professional activity of at least one of the principal owners, as determined by the authority". Another "improvement", we are told is that the new Seed Capital Tax Credit changes the requirement that the operation of the business must be the full-time activity  of the principal owner to a "substantial professional activity of one or more individuals who are not managers of the private venture capital fund, as determined by the authority". In other words the Seed Capital Tax Credit is being "improved", we are told, by moving toward mutual investment groups, which means that the profit motive becomes the priority value over all other values encapsulated by the term "conscious capitalism", as that is how motivations trend when the owners of businesses become divorced from the operation of businesses and this is the direction in which the "authority" is taking Maine- all for "the public benefit" of course !

In exchange for a perpetual transference of the public money into the bank accounts of private corporations and capitalists , the legislature gives the people absolutely nothing- unless one counts the debunked "creating jobs" explanation. A successful crowd funding project usually creates jobs as well and the person making the donation receives a reward. Why does the Maine state legislature give the people nothing in exchange for extracting their wealth and depositing it into the banks accounts of the legislature's "targeted sector"? Because it can ! Not constitutionally -but the Maine State legislature is no longer governed by the Maine state constitution.

Taking out the supply of federal funny money that Maine State Inc actively pursues, Maine State Inc and Crowd Funding are competing for the same capital resources, one through the method of government mandates and state controlled means of production,  and the other through free will. The state will win in the end unless the people do something to stop the drain of the people's wealth by a government that is continually grabbing more than its "fair share" of the ownership and control of the means of production and fundamentally transforming a free enterprise culture into something all together different.

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