June 20, 2013

The Sterile Class

Throughout the ages, there have been references to the group of people who produce nothing, but take much. Today it is clear that we have this class of people – they make nothing at all, and indeed do it on borrowed money, or worse, non-existent money such as debt. They have huge salaries and even bigger bonuses. They are not penalised when they gamble billions away, and they do not go to jail when they defraud the public. In short, they are the bankers.

The Sterile Class was a term used by a group known as that Physiocrats in the letter part of the 18th Century, and never before has it resounded so clearly. We have a whole class of people who work in institutions deemed too big to fail and too wealthy to jail. They do nothing useful for society. They are sterile. They are a Sterile Class.

The old economic systems of China put merchants at the bottom of the class hierarchy, because they did not produce but only distributed goods made by others.
In the late Roman Republic, the dominant senatorial class was not allowed to engage in banking or commerce but relied on their large plantations for income.

The French school of Physiocracy has particular relevance today, because they saw quite clearly that all life remains dependent on the productivity of the raw soil and the ability of the natural environment to renew itself. They first used the term ‘the Sterile Class’ to illustrate the difference between the productive class – those who made or grew something useful – and those who did not.

In the past, banking did have a useful function: to lend money for increased production for example, but banking always had its unproductive side. Financing wars to prop up the egos of monarchy was very popular. It still is.

Islam forbids lending with interest even today, and the Torah states that all debts should be erased every 7 years and every 50 years (in the Jubilee year, as described in the Book of Leviticus). The majority of Muslims and Jews alike do not attend to this teaching.

There is a wonderful phrase in international legal thought– Odious Debt. Odious Debt is debt that is incurred by a regime for purposes that do not serve the interest of the state. Interestingly, these debts are considered to be personal debts of the regime that incurred them and not debts of the state. 

Compared to the size of our economy, Britain is now one of the most heavily indebted countries in the Western world. The real national debt is close to £4.8 trillion and rising. That is approximately £78,000 for every person in the UK, and more than 103.5% of GDP (Centre for Policy Studies).  We are servicing debts we will probably never pay back – well, not without raiding the savings of ordinary people.

Today, in the rise and completely predictable fall of banking we can see clearly that these institutions are less about useful productivity (they never were interested in funding for the greater good, even if profitable) and more about the creation of debt for debt’s sake. Debt has become the new money, it is unearned; it is sterile. Debt today, though accountable as wealth, is not wealth. Wealth, in real terms is the productivity of land and people.

We have a useless and toxic Sterile Class, and it is time to see them as such. They have gained far too much for doing far too little, they should take responsibility and start paying the bills.

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