Zbigniew Piekarski discusses the abusive power of the "feel good" factor

"The Depression acted as an efficiency expert, increasing output per man hour by 20% from 1929 to 1932."

- Joseph Schumpeter in Business Cycles (1932).

It would appear that the Religious Rally has come to an end. The donations of those who followed the advice of the new priests of finance - in the hope of a miracle - will, once again, support the continuation of financial institutions and redistribute wealth from the many to the few.

When the social mood is optimistic and the economy is booming, the politicians take the plaudits. When the social mood turns pessimistic and the economy falters, dishonest, avaricious, grasping, greedy businessmen are to blame. These are always the same businessmen who were lauded and applauded as the markets climbed and this process is repeated at the same stage in every major business cycle.

The main difference now is that we live in an age where principles of any kind are widely regarded with contempt, and governments are free to do almost anything that they like in the economic realm. They no longer respect property rights, nor the freedom of contract. The result has been that they have gained almost total power both to break - and to make - businessmen.

Businessmen are forced to pay regular extortion money to politicians and government officials. They have to pay bribes in the form of "campaign contributions" and "donations" to various pressure groups in order not to be harmed or destroyed. This fact applies to all of the "capitalist" economies, particularly the USA.

As governments try and increase their control, they create more and more "regulatory" and "supervisory" bodies based on arbitrary rules. This creates a breeding ground of corruption and immorality, for these bodies must justify their existence by finding "criminals", but are then unaccountable for their mistakes.

Politicians are fully aware that the prospects for their continued abuse of power are directly related to the prevailing "feel good factor", which is dependent upon the illusion of prosperity of the unthinking herd.

One guaranteed way of providing this illusion is to make credit easy to obtain. Easy credit creates an environment in which every business venture is given the appearance of prosperity, and every individual is given the opportunity for instant gratification of their desires. Unfortunately, the underlying reality is one of massive diversion of capital into bad investments. The hope is that, given time, the apparent prosperity will make those efforts good and conceal their fraudulent nature.

Yet, even in this environment, a vital distinction remains between the business community on the one side and politicians and government officials on the other. Businesses still produce goods and services for sale in the market and make a positive contribution. They create wealth, which sustains and promotes human well being. It is the business sector that is responsible for technological advances and their implementation throughout history - not governments.

Acts of dishonesty and fraud by individual businessmen cannot be used to condemn all business activity, just as the existence of dishonest and incompetent physicians cannot be used to condemn the practice of medicine.

The activity of politicians and government officials is always inherently negative as it is either destructive, or threatens destruction. The simple reason for this is that the foundation of all law and government activity is physical force, or the threat of physical force. If it were not, then it would be unable to compel obedience.

The only legitimate use of this power is to prohibit and punish negative acts, perpetrated by individuals on other individuals, such as: murder; assault; rape; kidnapping; theft; and fraud ( in keeping with the six commandments ruling social interaction that God gave to Moses). It is only to that limited extent, the banning of physical force from human relationships, that the government can make it possible for the positive activity of market forces to proceed unhindered and achieve positive effects.

When any government steps beyond this strictly delimited domain of legitimate activity, then it acts as a destroyer. Far more often than businessmen commit fraud, government and politicians commit, or are accessories to, the commission of such criminal acts as: extortion; theft; and unjust imprisonment. This last occurs, not only when people are prosecuted for crimes they did not commit, but when they are punished for acts they did perform, but which are not genuine crimes, such as the commission of so-called victimless crimes and "economic crimes."

Yet the misdeeds of businessmen will be featured more and more as this bear market bites, while the far greater and more fundamental misdeeds of politicians and government officials will, for the most part, be ignored. This is the result of the anticapitalistic political philosophy that is indoctrinated in each succeeding generation by the servants of the state. It is then supported by all those whose very survival depends on money stolen from the business community and laundered through the state apparatus.

In time, a new generation will see the folly of Stateism - but that is after the ravages of deflation have done their work.

On the WSE: A little re-bound is in order, before the attempt to fill the gaps on the downside resumes. The speed of the decline will depend on whether an effective solution to the problem of the miners can be implemented.

The core skills of the miners can be harnessed in a productive way, to provide a source of renewable energy whilst, at the same time, leaving their social and political associations undisturbed.

The answer: bicycle farms. Bicycles can be harnessed to power generators and the miners paid for pedaling.

Huge warehouses can be constructed protecting them from the weather and on several floors so that they can still use lifts. The dangers of working underground would be eliminated and their health would improve. Naturally their pay would have to decline, for this work would be much safer, but they would still be "in gainful employment" and Poland would infuriate the French by regularly winning the Tour de France.