Financial repression is the technique where government extracts wealth from the private sector and siphon it to themselves.
To the unsophisticated it is invisible.
Crudely, a state makes it impossible to get a fair return for private sector capital and by doing so channels resources to itself on the cheap.
A financially repressive state will have an inflation rate higher than the interest rate paid for savings. This shrinks the value of its debts and lowers the value of private sector savings. As if by magic wealth is sucked from the private sector into the state sector.
Without touching anyone’s money, the financially repressive state transfers resources from the people to itself.
It is a painless confiscation.
The US and Europe is bowed under the yoke of government debt and financial repression.
Mulling on this I realised something I’d missed, the repression word.
There is religious repression, which is a lack of religious freedom. This is bad.
There is the repression of “human rights” which is a lack of human freedom. This is bad.
There is economic and financial repression, which is a lack of economic and financial freedom. This is not discussed.
Economic and financial repression is at every turn in the US and Europe.
It applies directly to us as individuals. It is praised, just like religious repression and political repression was and still is in many places, to the skies.
Yet how is this repression less bad than the repression of our other general human needs.
(Of course Karl Marx and his friends will fill you in on while its absolutely critical if you’d like to disagree.)
My feeling is repressive regimes repress. Repressive regimes are bad. Isn’t it that simple?
The moment before I started thinking these thoughts I was sat in a castle’s grounds looking over medieval fields, thinking what a tough break the medieval peasants got.
They had religious repression. If they didn’t sign up for their local religion they would be thrown in jail or worse.
They also had what in modern thinking would be considered repression of their human rights. If they said what they thought, or tried talk back or even leave, they would be thrown into to jail or worse.
They were also economically repressed. If they didn’t hand over all their surplus crops to their state, they again would be thrown into jail or worse. Like a homeless person paying sales tax, if they were starving they still had to pay their cut to the bosses or bad things happened.
Now I’d like to think of myself as a knight on a white horse, or a lord or a prince, but sadly if I do not work a full day, I starve. That makes me a peasant; I’m just like the folks in their tights and funny hats 700 years ago, tilling their fields. I must work therefore I am a worker. All this “middle class” nonsense is just “divide and rule.”
If you want to delinate where you sit in the picture just follow the money flow.
Money doesn’t rain down on me from the state, I rain money on it. The crop in my field goes to the King.
There are no fat gold plated pensions from the state for me, no stipends or lands will be granted. If you are yoked by the state to work until you drop, what does that make you?
So looking over the fields I can see my religious life is now free. I can go Buddhist and not end up on a pile of burning branches. That’s an improvement.
I have my human rights, which is a nice bag of modern goodies. Within bounds I can up and go from my tiny hovel and grinding life of servitude and take my labour with me. Within bounds I can write rude letters to and about the state and no find my head on a pole. That’s an improvement.
..but after all this time I still do not have my economic freedom which of course is my financial freedom. At the end of the day I have nothing left to keep from my efforts. After I feed and cloth my family on our hovel I have nothing left over. I might just be that much more indebted to the man then when I started.
If I counted it up I would see that the state took from me directly or indirectly more than I earned. If I counted I would see that the sum total of the surplus created by serfs like me was taken by the state, spent and then a chunk more was borrowed and spent too.
This is why serfs revolted occasionally, who could blame them and a cursory glance at the record shows that that doesn’t end well for them either.
That’s what repression is about, after all, a transfer of resources from the repressed to the repressing.
In the past, there were all kinds of complicated and broadly accepted reasons why it was just simply horrendous not to be repressed. It was understood to be different and for example be Catholic, or Protestant, Muslim, Jew or whatever, in the wrong place was absolutely a clear cut reason to take your stuff and or end your live. Even today the world is not free of this.
Repression is always backed up by strident and copious “reasoning.” There is never a shortage of justification for taking your freedom.
You don’t have to dig too deep in the archives to find volumes on why you should be horribly put to death if you don’t believe in monarchy. You will quickly find the counter argument carrying the same punishments for disagreement. That is why the advent of modern human rights is so important.
The establishment of human rights is meant to shield average folk from all this repression and threatened violence and protect us from a huge range of overt and covert repressions.
But where does economic and financial repression fit in to our human rights?
The economic and financial slavery we are increasingly suffering is real.
Economic and financial repression is also, as bowing to the King once was, or attending religious observances at the correct time can still be, accepted to be the way things must be.
If you try and escape financial repression, for example, bad things will happen, while many people, particularly the un-repressed, will agree that is how it should be.
Repression works for a lot of people, but it does not make it either right or good for the society that exerts it.
Freedom is good right? Repression is bad isn’t it? Maybe that’s wrong?
However the structure of European feudal and post feudal life, were the systems that generations of people fled to America to escape. They prospered because they escaped repression. One of those repressions that drove this exodus was to escape from economic and by extension financial repression. It is still the case today.
When someone comes to America to make money, the most likely reason is to escape the economic and financial repression of their motherland.
Economic and financial repression is very real, very powerful and is a growing bane in the developed world. It makes an economy poorer, it impoverishes. That’s why it is a bad thing.
Economic and financial repression is why it has become almost impossible for a working person to retain any of the fruits of their labour. Or put another way, it means working people cannot save and those that have saved see their savings transferred by erosion.
Until people realise there can be no real freedom until they have economic freedom, financial and economic repression will continue to develop chaining them to the wheel as tightly as any iron fetter.
How can religious freedom, political freedom be good but economic and financial freedom be bad?
Until working people can generate a surplus again, the freedom we are all so proud of is illusory. Until the rulers of our states grant these freedom back we will be in thrall to them.
Sadly, like kings and priests of old, that probably the way they’d prefer it to stay.