Category Archives: Introduction

Castle in the Ukraine. In centuries past, a way of obtaining income was to capture territory, control the land, take a share of what was produced, and defend the territory against others. Credit: Черный Максим

Obtaining income

Basic statement. The principal ways in which income is obtained in a harmful economic system are twofold: 1) obtain it through the government, or 2) use the government to obtain and maintain sources of income that are (apparently) obtained in other ways. These are not substantially different, but may appear so at first.

Obtaining income from the government. There are a wide variety of means in which government officials and others obtain revenue from the government. The first thing to recognize is that people at the top of government, or those who have significant control over the government but who are not government officials—often entrepreneurs or corporations—can and do plunder resources coming into the government. Government revenue is often not devoted to productive services but siphoned off by those in control of the government. Such activity is typically referred to as corruption. A nation expects that its national resources will be used for the benefit of the nation. However, very large amounts of such revenue are often used to enrich those who control or have influence with the government. People at lower levels of government can obtain income too, by not providing services which they are paid to provide, by charging for services which they should provide, or by taking goods, such as medical supplies or automobiles/trucks, which should be used for government service.  Avoidance of government taxes of all sorts is common.

Using the government to obtain resources. Privileged groups can often obtain access to natural resources.  The allocation of natural resources such as oil and land and the income therefrom frequently go to international corporations, allies and supporters of high government officials, and government officials themselves. These structures of domination, control and income distribution have been going on for centuries and have resulted in highly unequal societies.  For example, the Spanish conquest of Latin America resulted in a society where land and other natural resources and larger scale economic opportunities were in the hands of a few.  This unequal distribution of land and income has persisted to this day.

Behavior of the type described here has also been referred to as Kleptocracy (Wikipedia 2013) and Crony capitalism (Wikipedia 2013).

Above Photo caption: Castle in the Ukraine.  In centuries past, a way of obtaining income was to capture territory, control the land,  take a share of what was produced, and defend the territory against others.  Credit: Черный Максим

The great pyramid of Egypt. It is estimated that the pyramid took 10-14 years to build and required an average workforce of 14,500 people and a peak workforce of roughly 40,000.

Introduction to harm

1.  Production vs. harm. The basic idea and activity in productive societies is helping to produce goods—things that are useful to someone—food, light bulbs, cars—and then exchanging the income received for goods that are desirable to you.

The fundamental economic mechanism exists in “harmful” economic societies as well. But these goods (or the resources that produce them) can be reallocated through force, as well as law backed by force. Simply put you can produce goods, or take them away from others, which is why we describe these societies as harmful. The highest stratum—the ruling class—obtains goods through means which may be described as unproductive or extractive.

2. Conquest and conflict historical overview. Armed conflict, the fight by groups for control of the government or territory (frequently  possessing  natural resources), has been throughout history the principal way in which harmful economic societies have been established. Its importance continues today.  The results of conflict have been the domination of the winning side over the losing and the establishment of a pattern of income and resource allocation favoring the winners. Continue reading