The new slave trade; how national economy sucks us dry

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(Cartoon The Moneychanger)

(Cartoon The Moneychanger)

We are all, North and South, engaged in the White Slave Trade, and he who succeeds best is esteemed most respectable. It is far more cruel than the Black Slave Trade, because it exacts more of its slaves, and neither protects nor governs them . . . we will . . . show you that what you have considered and practiced as virtue is little better than moral Cannibalism. But you will find yourself in numerous and respectable company; for all good and respectable people are “Cannibals all” who do not labor, or who are successfully trying to live without labor, on the unrequited labor of other people: — whilst low, bad, and disreputable people are those who labor to support themselves, and to support said respectable people besides. . . .

The common working men … live by labor; for they exchange the results of their own labor for the products of other people’s labor. It is, no doubt, an honest, vulgar way of living, but not at all a respectable way. The respectable way of living is to make other people work for you, and to pay them nothing for so doing – and to have no concern about them after their work is done.

– George Fitzhugh (1806 – 1881), Cannibals All! Or Slaves Without Masters (1857).1

By Franklin Sanders

Everyone knows the bad old days of chattel slavery are gone, but not many grasp that it has been replaced by a subtler slavery. Overt slavery has been replaced by covert slavery that claims and consumes not only the slave’s labor, but everything else he owns. He is “harvested”: slave’s assets are stripped and the masters profit by his failure.

In his preface to Cannibals All! George Fitzhugh wrote, “My chief aim has been to show that Labor makes values, and Wit exploitates and accumulates them, and hence to deduce the conclusion that the unrestricted exploitation of so-called free society is more oppressive to the laborer than domestic slavery.” (Cannibals All!, page 5). According to Fitzhugh, free labor was a more oppressive system than slavery, because “the profits which capital exacts from labor makes free laborers slaves, without the rights, privileges, or advantages of domestic slaves, and capitalists their masters, with all the advantages, and none of the burdens and obligations of the ordinary owners of slaves.” (page 13). (Remember that, legally, chattel slavery did not grant ownership of a person, but of his future labor.)

In other words, freeing slaves or serfs deprives them of their legal right to sustenance from their master in infancy, infirmity, and old age, and turns them loose into a furious fight for employment in which they inevitably bid labor rates down to starvation levels. What’s the net result? The cost of supporting his laborers before they can work (infancy), when they can’t work (infirmity or incapacity), and when they are past work in old age is shifted from the master who benefits from their labor to the laborer himself. Then, “the white slave trade is more exacting and fraudulent . . . than Black Slavery … in leaving the laborer to take care of himself and his family out of the pittance which skill or capital have allowed him to retain. When the day’s labor is ended, he is free, but is overburdened with the cares of family and household, which make his freedom an empty and delusive mockery.” (page 15)

And while modern folk may think this has nothing to do with them because slavery vanished so long ago, Fitzhugh contends, “Society will work out erroneous doctrines to their logical consequences, and detect error only by the experience of mischief.” (page 6). Along with many other Southern thinkers and theologians, Fitzhugh foresaw the collision of the interests of free labor and capital governed only by greed. It goes deeper than “Who will take care of the poor” to “Who will pay for laborers’ support when they can’t work?” Chattel slavery’s abolition does not mean that the problem has disappeared.

Come, let us follow the money.

New Deal cannibals

In the United States this question was partially answered during the fascist Roosevelt era. It is probably most accurate to view the New Deal as one vast rationalization of the failings of industrial capitalism,2 a way to “fix” what wasn’t working, namely, labor.

New Dealers looked at the problems of poverty for those outside working age – children, orphans, widows, the handicapped, and the elderly – and answered by shifting the problem off employers and onto labor and taxpayers. Although the benefit of the working man’s labor flows to the employer (and wages, to be sure, flow back to the worker), the master’s costly drawback in slavery, having to support his labor

Harvesting prisoners

The readiest example is the huge prison population. You might look at these folks, three-fourths of them addicted to drugs or alcohol, as useless eaters and throwaways. Not to our corporate masters, who wring a mighty profit out of them through the “prison industry.”

A 2012 Vera Institute of Justice study found the aggregate cost of prisons in 2010 in the 40 states that participated was $39 billion. That year, 2,266,832 inmates were in federal and state prisons and local jails. A total of 7.3 million, or 1 out of every 31 adults was behind bars or being monitored on probation and parole. Average annual taxpayer cost in those states was $31,286 per inmate. New York state’s cost was about $60,000.3 The US has the world’s largest prison population in the world, and its incarceration rate at 707 per 100,000 ranks #2 in the world, right after the Seychelles with 868. Cuba’s incarceration rate is 510, Russia’s 470, France’s 103, and Germany’s is 78.4

Think of a prison as a large, uncomfortable 24 hour hotel where the guests pay $85.70 a day, and can’t stiff you for a room. Profits are made not only by running “privatized” prisons, but also repeatedly cycling inmates through privatized probation and “rehabilitation,” squeezing the last cent out of them and their families until they are ground to powder.

Do not overlook the court industry that gets them into prison and keeps them there with legal fees, fines, probation, and revocation. (Debtors’ prison is back, too, and not just for deadbeat dads.)

Both the prison industry and the court industry support untold workers, clerks, bailiffs, lawyers, guards, judges and administrators galore. No single source of revenue that can be squeezed from inmates is overlooked: underclothing, toiletries, snacks, e-cigs, phone calls, nothing is free and to pay inmates must tap into their families. They, too, are harvested. For the corporations who profit, the best part of this business is that the main payer, the government, will never default. It’s all supported by government, and the rest comes by harvesting the inmates and their families.

Harvesting mortgagors

Consider the middle class, fraudulently induced into buying homes by banks, government and their captive media. Don’t forget the government subsidies, “free” money and lower rates from Fannie Mae, Freddie Mac, FHA, without regard to ability to repay. Meanwhile, in the early 2000s real estate prices were already rising parabolically, a sure sign of impending sudden death soon to strike. The borrowers had no prayer of ever paying off their mortgages, which were virtually guaranteed to suck out their last cent in the maelstrom of foreclosure. Those who did not lose their homes will pay on them twenty years or more before prices come back, if they ever do.

The banks, on the other hand, got out in time and handed the liabilities and losses to the government and to the Federal Reserve, thanks to bailouts and QE. Best of all, much of the damage was done to the middle class with their own pension money, controlled by the banks to whom they had entrusted it.

Harvested.

Harvested student borrowers

Now ponder the student class. Student loans have risen from $509.25 billion at the end of First Quarter 2006 to $1.355 trillion at the end of First Quarter 2015, multiplying 2.6 times in 9 years. The majority of these are federal government loans, although there are also state lenders. Before 2010 many lose originated through private lenders with government guarantees, but those guarantees ended in 2010. (It’s obvious but seldom mentioned that student loans themselves generate a vicious cycle of rising tuition costs. The more loans make tuition money artificially available, the more tuition will rise because more money is made available to pay it.) Currently about two-thirds of graduating college students have student loans.

Ask yourself: “What is a student borrower?” A student borrower monetizes and sell his future labor in return for tuition money today. He pledges his future earnings as collateral for the loan. He sells his labor in advance. He binds himself to labor as long as it takes to pay back the loan. Here, in America, students are selling themselves today.

Ask yourself, “What is an indentured servant?” A person who monetizes his future labor by accepting a payment today (as transportation to America) in return for binding himself to labor for seven years. He sells his labor in advance.

Ask yourself, “What is a slave?” A person whose future labor has been monetized by his owner in return for legally guaranteed sustenance (food, shelter, care in infancy, infirmity, and old age) that binds him to labor all his life. His labor is sold is advance.

Whoops. The distinctions become blurred when we ponder that student loans are taken out in the fraudulently induced and quixotic hope that jobs will be available in the future so that the student borrower can earn and pay back the loan. If the job never materializes, the student borrower is nonetheless bound to labor for the lender until both loan and interest (still accruing) are paid off or death do them part. The borrower is “bound for life” because in 2005 the lenders persuaded congress to abolish bankruptcy for student loans.

What’s more, if no job arrives, it becomes possible for the student loan lenders to harvest not only the borrower, but also the borrower’s family, if they choose to bail him out.

Harvested.

Harvesting the elderly

Now consider the elderly, living longer than is economically profitable for the system, but even in their infirmity still able to furnish profits for the mill. Long term care will suck the assets out of most of them before they die. When their assets run out, medicare and Medicaid will pay. There’s that government money again, flowing through those being harvested to the corporations doing the harvesting.

The “fix” for this and other rising healthcare costs (Obamacare) will cost those harvested even more and put more money in the insurance companies’ pockets. Wonderful! The elderly are now worth more to the healthcare industry alive than dead, even after their assets have been extracted.

And soon the system will begin harvesting education, educators, and the educatees using Common Core.

None so hopelessly enslaved

Goethe wrote than “None are more hopelessly enslaved than those who falsely believe they are free.” Very few in America realize that because they are entrapped in a system that is harvesting them, they are not “free” in any meaningful way.

However darkly, antebellum Southern thinkers saw the “erroneous doctrine” that works this mischief, this monstrous system where those who profit are Cannibals All!

Used by permission from February’s editions. Franklin Sanders is publisher of The Moneychanger, a privately circulated monthly newsletter that focus on gold and silver and the application of Christianity to economics, culture and family life. To get it for a year, $22 in constitution-honoring 90 percent silver coin or F$149 in paper money. We subscribe to this newsletter and consider it a must read. Franklin is an active trader in gold and silver (he’ll swap your green Federal Reserve rectangles and give you real money in return). He trades with savers and investors outside Tennessee. Subscribe to his daily price report and market commentary on the website.

1 CANNIBALS ALL! Or Slaves Without Masters by George Fitzhugh. Cambridge, Massachusetts: The Belknap Press of Harvard University Press, (1857) 1960. P. 16 – 17, passim. Following page numbers in the article are from the same edition.

2 I use the term “industrial capitalism” in contradistinction to “capitalism.” Industrial capitalism is characterized by great concentrations of wealth and power protected by government regulation while “capitalism” (better, “free enterprise”) is characterized by truly free markets, freedom of entry into markets, and absence of government regulation. Free enterprise has not been seen in the United States since 1865.

The New Deal also tried to fix “overproduction” and competition with cartelization and government run corporations, copying Mussolini’s fascism.

3 http://www.nytimes.com/2013/08/24/nyregion/citys-annual-cost-per-inmate-is-nearly-168000-study-says.html

4 http://en.wikipedia.org/wiki/List_of_countries_by_incarceration_rate

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