Financial Education: How the Sausage Is Made Vol. 2 (transcript) (Patreon)

By Sam

Feral writes; Ok, Sam

So not to restart that whole philosophical conversation, but it feels like in this whole capitalist dichotomy where you have to be an exploiter or exploited, is there even an ethical way to invest? Seems like the options are limited to "have your labor exploited" or "directly invest in pure corporate evil."

I have a guaranteed income for life only because I directly furthered the American imperial project. It's all blood money.

Dear Feral,

Is there an ethical way to invest? No. It's about how unethical you want to be. The same way I am with martial arts, I can't tell you what your scenarios will look like, but what I can tell you is that even most individual investors have a problem giving money to weapons manufacturers.

Another thing that even capitalist theorists to economic libertarians agree on in principle, though may not follow, is that economic rent is bad. So income derived from being a landlord even in capitalism would be considered a market distortion and, in Left moral systems, unethical. So like weapons manufacturing, in principle, even capitalist theory says rent is bad. They also say policing is unproductive labor.

Wars like rent can create money, but not through the market but by circumventing the market. The majority of the capital in capitalism was accumulated outside of the market.

In theory, capitalism should just be the market. In practice, the free market works more as an excuse to defend predetermined outcomes as happening by chance. If it's an accident, it's no one's fault.

Under capitalism, nothing prevents market distortions or bad actions, which is why they exist and proliferate. This is the problem of capitalism. Even if it tries to be moral philosophy, it incentivizes bad actions, which then define capitalism. Capitalism then criticizes socialism for trying to prevent these bad actions because even the prevention of bad actions restricts freedom under the capitalist free market lens.

This is a logic we've all seen for ourselves during the COVID pandemic. Doing the bad thing is freedom. Restricting capitalism becomes restricting freedom. Since socialism restricts capitalism, it is restricting freedom. What capitalism has done is to place itself as the substitute for freedom. If capitalism can't exist, and capitalism is interchangeable with freedom, then freedom can't exist. It's a bait and switch scam: sign up for freedom and end up serving your capitalist masters.

We've seen this from Korea to Africa, to Latin America: install a US-backed dictator that's friends with American capitalism, remove democracy, then claim this is freedom. The US pretends it hates dictators, but in fact, for US capitalist interests, dictators are the easiest to work with because it centralizes who they have to talk to, pay off, and threaten to one person. Imagine if they had to do all their actions in a country by committee and democratic process. It would take too long, be unpredictable, and would put them at a disadvantage.

However, this US-capitalist policy shouldn't be surprising as American businesses and capitalism are also run by dictatorships. The US doesn't want to talk to a co-op. It doesn't want to talk to all the workers. It doesn't want to address a foreign population. They want to speak with one CEO, like Mark Zuckerberg, and get the private information of all their users. They want to control one dictator to own a whole country.

Their anti-dictatorship pretense is an insurance policy against things going sideways. Then the US can blame the dictator and say they were against authoritarians all along. Which has a double effect of creating a demand for the US to further entrench themselves in a country they were already entrenched in, all for the sake of "freedom."

Exploit a country, then create a demand to exploit it further. It's no different from cops exploiting a community, then saying a lack of cops is the problem, getting more cops into an already overpoliced community. What happens domestically also happens internationally. How the US does one thing is how it does all things.

South Korea has a history of US-backed dictators who have suppressed pro-democracy movements with massacres authorized by the US. The two most famous massacres being Gwangju and Jeju Island.

Restricting Koreans from practicing democracy and electing their own leaders while crushing pro-democracy movements all happened in the name of "freedom." Democracy then is the enemy of capitalist freedom. Democracy is actually an inconvenient way for capitalists to define freedom, so they'll define around it and lie.

Nazis and Imperial Japan came for communists and socialists, along with Koreans and Jews, but never the capitalists. Look up the Kanto Massacre.

Nazis were placed in leadership positions in NATO and areas of US interests in Europe, Latin America, and even the US. Japanese collaborators were placed as leaders of South Korea.

Cuba is another example where American businesses and capitalism were rejected. This made them the enemy of America's capitalist freedom, so they were shut out of the US-controlled financial system. It was only after being shut out and branded enemies of freedom that Cuba adopted communism and sought the aid of the Soviet Bloc as a matter of survival.

These examples are numerous because Western European colonial powers were at their weakest following WWII. The colonized world saw this as an opportunity for liberation. In contrast, the United States saw this as an opportunity to expand its empire. Wherever there were liberation attempts in the modern world, the US was there to stop it and make themselves the new beneficiaries. This is, however, consistent with capitalist interests, to place themselves wherever there is money to be made—to maximize profits away from regulations and investigation.

If you bring this up to most Americans, that they believe socialism restricts freedom only because it just doesn't allow capitalism, they'll say "exactly."

It is a mainstream American belief that true freedom didn't exist until capitalism came into existence. Your life can be miserable, and you can die a premature death, but so long as capitalism exists, you are "free." You should already recognize this as the freedom you're living now.

As for Feral's last comment, she's talking about the US military. The US will break its own rules and allow socialism to exist so long as it's socialism by blood. Since capitalism is full of contradictions, it needs to contradict itself to exist. Hence the existence of police and military labor, to protect capitalism. And the "blood" is the blood taken from you and taken by you. All victims of capitalism.

There are two ways to understand economics: microeconomics and macroeconomics. Police protect domestic property while exploiting the domestically marginalized. The US military takes resources and enforces the hegemony of the US dollar while exploiting the globally marginalized. Both are the enforcers of capitalism. All the property protected by them was built off the lives of BIPOC and the poor.

The US dollar is no longer backed by gold. It's not backed by anything economic, and it's the underlying asset to value all other currencies and assets. You can consider every other asset as weight and the US dollar as gravity.

Unlike gold or new emerging assets, it's not a currency that gained value because that's what people had decided. Instead, it has value by proclamation of the US empire, both government and business.

If a country doesn't want to use the US dollar as its measuring stick, it's gravity, this is where the military would come in.

If you domestically said money no longer existed and actually acted upon that by not paying for things or as a worker at a store you stopped charging people, or you stopped paying taxes, then that's where the police would enforce the US dollar.

Money is make-believe, but the reason it still has value isn't that we are all under a collective delusion. It's because we know if we don't use it and accept its value, there's ultimately the threat of violence. Gravity is enforced by reality; the dollar is enforced by violence. Capitalism waves a carrot you can never reach but will use a stick that is very real.

But the threat of that violence is why we can mistake capitalism and the value of money as a feature of reality because it might as well be. It's the difference between recognizing something as reality because it is reality or because someone has a gun to your head. In practice, there is no difference. So whether you say there's no gravity and jump off a building and die, or say money isn't real and stop paying for things and get killed by the police, the results are the same.

And what do we even mean by money? By money, it sounds like anything can be money, but that's not true. Capitalism is denoted in the US dollar. Foreign currencies are valued in US dollars. The only real money is the US dollar because ultimately, the only real military and empire is the US.

This is why claims of any other country overtaking the US as the capitalist superpower are a farce because they can't print US dollars—they can't control gravity—and they don't have military bases all over the world to enforce their currency—their gravity. Those myths only exist to pretend free markets exist. Because in a free market that's fair and competitive, any country could theoretically rise to the top and become the capitalist superpower.

But for a country to be the richest, how would you count their money? In gold? No. The US dollar. No country can have more dollars than the US because the US is the only country that can print dollars into existence. Likewise, a country can have a lot of weight but having a lot of heavy stuff is not the same as controlling gravity. But not only does the US control the money supply, it also has its military everywhere, and also controls most of the world's resources.

The US is a monopoly that has already won the game and only pretends other countries are a threat to give the illusion of fairness and competition. It's a distraction from the obvious truth that the game is rigged. Likewise, an abusive husband will pretend the spouse he abuses is more than his equal. In fact, he will gaslight the narrative and say the abused spouse is the real "slave master." This is America.

In a free market, there's nothing to stop a country from taking over the entire market and preventing any other country from usurping it.

In a free market, you are also free to take over the market. This is why the free market is a contradictory idea. This is also why the US definition of libertarianism is a contradiction. A libertarian purist doesn't want all people to be sovereign, just themself. The snake is not saying "don't tread on us," it's saying "don't tread on me" or I'll bite you. It's freedom for the most powerful, where freedom means you get to do whatever you want, and even to whomever you want. It's not their job to restrain themselves. If you want them to stop, that's your problem.

It's an ideology based on self-interest where self-interest is the only good. Caring about others is weakness and irrational. This is why capitalism is also libertarian. However, there is no better way to be self-interested and assert your own personal sovereignty than to become a dictator. Then no one can tell you what to do, and you have the freedom to do what you want to whomever you want, without having anyone restrict you.

Peter Thiel wants freedom of speech for himself but took down Gawker when they said something he didn't like. He cares about his privacy but also owns a surveillance company. This is true for most technocrats. Are they hypocrites? No, because they believe they should have the freedom to do that.

In the film "There Will Be Blood," Daniel Plainview explained how freedom means not only having the freedom to drink his milkshake but also your milkshake. The weak get no more rights than they have the power to enforce. This is why guns are so important in America. In the absence of equality, rights, and a voice, you get unlimited guns. But guns aren't a human right either. Otherwise, the government would issue them to you for free. Instead, you only have the right to buy guns. That means guns, like speech, like any other right, exist only for those who can afford them.

Furthermore, access to guns has not leveled the playing field as advertised. On the contrary, income inequality only gets worse as Americans buy more guns. Making the capitalists richer and the consumers poorer. Giving the illusion of power while the rich extract more power from the people.

Lots of people don't like to share. Guns exacerbate this feeling. Some might believe sharing is a violation of freedom. Then by becoming a dictator, no one can make you share. A dictator is just a successful libertarian. The want to be a capitalist is ultimately the want to become a dictator that's socially acceptable.

What is a dictatorship? A monopoly on power. Libertarians are capitalist purists. Might is right because might gives you freedom. Democracy takes away might and levels the playing field for the weak and is therefore wrong. A democracy strips away the individual liberties of the powerful and gives them back to the people. This is why to the powerful, actual democracies are always tyrannies. But tyrannies for whom? They only speak for themselves because individualists don't care what others think; they only project their concerns onto everyone else.

A free market is not about democracy; it's about power. The goal of capitalism is not a better life nor a better world—it's monopoly.

Imagine what happens then when that monopolistic power cuts off a country from the monetary system? It would destroy them. With the financial system, you don't need direct guns on people to dominate them. You can financially dominate a country. Guns are still needed, but they don't have to be in plain view, which goes back to public perception. You don't need to see the stick to know it's always there. But for the American public, who only sees the results of the domination and not how it happened, they blame the foreign country. They blame the Black community. They blame the child who acts out rather than the abusive community leader who everyone trusts. The US is the abusive community leader who assaults the ones they know no one will care about.

You don't have to shoot everyone in a country to commit genocide; you can do it slowly by cutting them off. This is why in the past, burning all the resources and salting the earth was worse than just killing the people. But this can't be captured in a singular photo nor video. Even an article would take tens of pages to explain. You can, however, take a singular snapshot of foreign people suffering and say this is the fault of their leaders. But ultimately, what country is the leader of the world? What country proudly tells you this in its speeches? What country constantly tells you that its president is the most powerful person in the world? Whenever someone says "ultimately," where does the buck denoted in US dollars ultimately stop?

Yet somehow, dots remain unconnected. It's like looking at a local business without looking at the impact of Amazon.

This is not by accident. This is not because we are stupid. On the contrary, we are trained to live in this contradiction. We are told to reconcile these differences by alternating what we choose to believe based on American Exceptionalism. Change the facts, so America is always right, and its opponents, always wrong.

Similarly, we had a recent mixed martial arts fight with a trans fighter. It was Feral. Her detractors say she sucks and was getting her butt kicked while also saying she had an unfair advantage and was demolishing her opponent. How do they believe two contradictory ideas? Easy. Like the very first person of this series asked, along with numerous others who asked the same question, how do we reconcile a contradiction?

A contradiction can't be reconciled. All you're doing is rationalizing, never thinking about the two ideas simultaneously but alternating between the two based on convenience.

An unfalsifiable belief is when you won't acknowledge something is wrong regardless of the evidence before you. This is the contradiction of capitalism. This is the contradiction of Feral's detractors. Rather than abandoning the obviously false belief, they try to reconcile.

Regardless of the harm, capitalism is always good.

Regardless of the harm, the US is always good.

Regardless of what Feral does, to her detractors, she will always be wrong. Just as to white supremacists, nothing minorities can do can ever be right.

Capitalism asks you to reconcile an exploitative system with your want to be a good person. Reconciling means you only change your thinking rather than your environment. A revolution is when you change the political conditions that create these contradictions. 

Accusing the US of wrongdoing is difficult, just as explaining US propaganda is difficult because it's not as simple as "here are the obvious lies." The US knows to use singular snapshots to back up its lies. Seeing through the lies requires analysis rather than kneejerk reactions. But more than lies, the US omits, and it's hard to prove omissions are malicious. US oppression is crafted by lawyers. It becomes policy, to remain in effect regardless of who is elected or appointed.

This is why even a country with elections can still do the work of a dictator, but only better. A single person can only do so much, whereas a system can be everywhere at once.

Even if the US were to stand trial, who would judge the US for their misdeeds? The US. The US is the defendant, the plaintiff, the jury, the prosecution, the defense, and the judge. Their monopoly is absolute, beyond any monarch in history.

Furthermore, the US legal system looks for guilty individuals. Without a dictator or a single individual to blame, who would you even try? Revolutions judge countries, not courts. And though the US celebrates their revolution against the British, any revolution against the US is terrorism. Unfalsifialbly, the US is always the good guy. The is an absolute, unchangeable US doctrine.

Suppose the US were to say, "Go ahead, try to explain to people that we're the baddies." Where would you even start? It would be difficult to explain even if people were willing to listen. Even as I present this to you now, I don't know how much of this will make sense, regardless of the analogies I use or the plainness of my language. It's not about comprehension; it's about conditioning.

Even some committed socialists can misunderstand and default to nonsequiturs such as "just because a country is against the US doesn't mean they're good." It does not matter if a country is against the US or not. If we are subsumed by capitalism, then figuring out what's absolutely good or ethical is an insuperable task.

From a global perspective, what's useful is to consider hegemony and who has bases and ships everywhere and who has no global military presence. When you don't think about this from the global macro perspective, you think solely on the immediate local problem rather than what will replace it. This is how you get support for regime change wars, how you make a situation even worse, and how the global hegemon supplants a local power. It's cruel optimism that comes from ignorance of monetary finance.

Furthermore, just because a country is against the US does NOT mean they are on equal footing. This is why analyzing other countries from the same lens you use to analyze the hegemon is misleading and intellectually dishonest. No country, not even the countries who oppose the US, can do anything that's not directly influenced by the US. The US is the only country that can ever do things without having to consider any other country. It is the successful libertarian.

Evaluating everything the same as you would for the US is why, as a default, most Americans will blame poor countries for the problems caused by the US. Blaming the exploited for not living up to the CEO.

Let's replace the US with Jeff Bezos and think about this again. "Just because a poor person works for Jeff Bezos does not make them good." No, it doesn't, but in this statement, the difference in power is self-evident. Same as it is for who the real problem is. We can see this because we haven't been indoctrinated in Jeff Bezos exceptionalism as we have been for American Exceptionalism.

If these same people oppose Jeff Bezos, I can say that part is good. But we aren't as protective of Jeff Bezos as we are the American project.

Moreover, if you're already aware of Bezos, why are you putting more scrutiny on the harm caused by the ones he exploits? What is the motivation when Bezos is already in the conversation? Why not trace the roots of the harm rather than stopping at the exploited? Is the belief that once there is leadership, they are no longer being exploited? If I were to be generous, I'd say this is naivete. If I was being realistic, I'd say it's racism.

In reality, the US is more powerful and does more harm than Bezos, yet we're more protective of the US. Part of American Exceptionalism is the belief that the US is always under threat when it's easier to kill Jeff Bezos than it is the US. But it is that paranoia that makes Americans believe the US is the victim, not the victimizer. That's one hundred times more delusional than believing Jeff Bezos is being bullied. 

Here is the truest statement of all: One day Bezos will die, whereas the US has an indefinite half-life.

However, we also apply this same false comparison to poor people, especially racialized poor people who have been systematically shut out from the financial system, saying their plight and the plight of their children is their fault. It's rich dad, poor dad. Blame the parents for failing at life. Blame the poor country, and look up to rich dad USA. (As a side note, this is also the actual politics of the author of Rich Dad Poor Dad.) Now, with public opinion on your side, it's easier to implement police/military enforced austerity, white supremacy, imperialism, neocolonialism, and neoliberal capitalism.

Unless a country has all the resources it already needs, it's nearly impossible to survive. All you have is labor power. This is why these countries will try to form blocs to share resources (refer to my answer to Evan's question about financial planning for end times). Still, the countries doing this are not resource-rich countries to begin with. 12 countries combined still may not match the resources of the United States, which is why it was important for imperial colonizers to take America from coast to coast.

Yet even with America's resources, it still plunders resources from resource-poor countries. In addition, when countries tried to form blocs or resisted US capitalism, the US went to war with them, literally telling Americans that the self-determination of other nations would cause a domino effect, inspiring other countries to do the same. Therefore, we should intervene and override their will. This made sense to Americans because they believed fighting for capitalism meant fighting for freedom. But oppressors teach their citizens never to ask, who is this freedom for? It's for the expansion of capitalism. "Fighting for our freedom" only makes sense if freedom means capitalism.

I explained how capitalism became interchangeable with freedom, but freedom doesn't necessarily mean democracy or the will of the people. So here's an example of the contradictory meaning of freedom. Most people, including Americans, want healthcare. But here in the US, denying the people's will for healthcare, their democratic want, is freedom, and giving them healthcare is tyranny. Yet, the contradiction of being denied healthcare to even the fascist freedom used by COVID deniers and ultra-right politicians has not sparked a national conversation about what America means by freedom.

How can wanting healthcare or not wanting to die from preventable causes be an opponent to freedom unless freedom means barbarism? Does it not matter what a democracy wants?

To the US, if a democracy opposes capitalism, it is both socialist and tyrannical at the same time. This is why socialism is interchangeable with tyranny because tyranny is not about the absence of democracy but the absence of capitalism. America does not care if socialism happens democratically. This is why in the American narrative of world history, fighting for freedom often means ignoring the will of another country.

As another side note, many cultures define freedom as long life, prosperity, and freedom from premature death. Therefore, rights that increase lifespan are humans rights and civil liberties. Though many Americans might agree with this definition, this is not the American definition of freedom. As I explained, the will of Americans does not always define America.

Amerikkka, with three Ks, defines freedom independently from life and justice. It called itself free when women couldn't vote or own property. When it was killing the indigenous. When it enslaved Africans. During Jim Crow. During Vietnam. When gay marriage was criminalized, to all the injustices of today.

I mentioned reactions to COVID and healthcare. We also saw this previously with seat belts. We see this with the handling of the climate crisis, and we will continue to see it with future disasters. Even if Americans agree with healthcare, masking, and vaccines, it's always framed as a sacrifice. A sacrifice of what? Freedom. Barbarism is still the default.

BIPOC and the poor die disproportionately from COVID, climate crisis, and environmental contamination. This injustice is American freedom. How can freedom be at odds with justice? What is freedom without justice? Barbarism.

For a colonized country, what other choice does it have than to resist the system that tries to exploit it? Join the system? Well, if you've fought for your liberation, you can only join the system by paying back your colonizers.

The colonizers won't let you enter their system from zero, let alone with reparations. Instead, YOU have to pay them back for what they believe they have lost. Then you aren't actually free, you're still being exploited, but now they don't need to be as physically present to do it. Maybe a few bases and some companies to extract resources, replacing classical colonialism with neocolonialism.

However, even without oppressors with guns everywhere, if a loan shark says you owe them money, whether it's true or not, you pay them back. If the suffering you face is their good side, their bad side is annihilation.

They don't necessarily even have to use boots on the ground. They can just say your money is worthless and poof. Your currency turns to vapor, and your ability to buy food, water, or anything to stay alive vanishes. They are gravity, after all.

To be honest, the main reason this series has taken months to complete is from having to take breaks because it's depressing as fuck. Explaining how capitalism works is explaining how the sausage is made. You are the sausage.

But as I said, I won't give prescriptions, nor do I have any. I'm just describing what is in a way that hopefully makes sense, without judgment, victim-blaming, nor cruel optimism. Cruel optimism born out of ignorance, unrecognized American Exceptionalism, xenophobia, and stubbornness.

Ayanthi writes; Dear Sam

What are the most predatory financial products that advisors try to sell?

Dear Ayanthi,

Probably the most predatory financial products are loans and insurance products. It's extra dangerous because insurance products and loans are sometimes necessary. But if there are only a handful of necessary uses but hundreds of different products, now we have a problem. 

There are also multi-level marketing schemes, formerly known as pyramid schemes. Since pyramid schemes are illegal, rather than changing the practice, they've rebranded.

There's so much fraud you can do legally because here is the most dangerous financial product: the idea that you are NOT a product of your circumstances. This is the American Dream, and there has never been a more successful dangling carrot than the American Dream. And since the American Dream says anyone can be lifted out of poverty, corrupt financial products that promise to lift poor people out of poverty are legal. Otherwise, the American Dream would be illegal.

The American Dream is literally a dream, an illusion. The racist, punitive American superstructure is the reality.

Even when a financial company does something illegal, it's seen as an isolated incident rather than a feature of the whole industry. It's the liberal idea of bad eggs rather than bad systems. As if rotten systems don't bear rotten fruit. This isn't a blind spot; you don't need to be particularly educated to know A can lead to B. Liberals elites, like conservative elites, will lie because they benefit from capitalism.

A "capitalist democracy" allows predatory finance to exist because otherwise, capitalism has no way to promise a way out of poverty other than to abolish itself. Since it won't commit suicide, it will sell you a cure for the problems it has caused. It needs a carrot to dangle.

Except you can't cure capitalism with capitalism, which is why things that promise to get you out of poverty are predatory. The times they help are more exceptions to sell you on the cure.

But why would capitalism not want exploitation? It never promised equal distribution. Equal distribution is the mortal enemy of capitalism. The people who project socialist ideals onto capitalism are an expected contradiction because they're trying to reconcile their morals with their beliefs. But their argument is: if capitalism already has socialistic tendencies built-in, why change anything? Capitalism will have you arguing against your own liberation.

Predatory finance exists because it gives people hope even though it hurts them. Yet when these products fail, capitalism will persist because society will blame the individual rather than the system, just as they've been taught to do by this very system. We will flog each other and ourselves with the stick for not catching the carrot because the God of capitalism is always watching.

Jelani writes; Dear Sam

What is money, and why is money?

Dear Jelani,

Money is the US dollar. What is the US dollar? The matter that makes up the fabric of modern capitalism. Why does money exist? Because if money is matter itself, then nothing can live without it. The dollar's power becomes absolute. The US becomes God. The dollar becomes a manufactured conduit to harness the world. The US is God because it will always have the most US dollars.

How can you win at the world when the world isn't something you can win? By remaking the world into a game you can win. God remade the world in its own image.

This is why I find it unhelpful to analyze the world using the authoritarianism framework. It's much more practical and honest to look at global matters from the analysis of hegemony. Otherwise, you will rank a minor authoritarian threat as being more dangerous than a hegemon who already oppresses the planet, including that minor authoritarian, just because the hegemon has a system of checks and balances.