There's a Publisher in Your own Backyard
"The free world economics now have a
choice:
Scientific intervention against emperical
floundering,
progress aginst decline.
Inflation and recession, decline and crises
can be reversed from one day to the next."
Dr. A.C. Baggenstoss
Introduction
In 1984 the Bunzlis were occasional customers
of ours. *) He was about 35 years old, very
casually dressed, smoking a cheap cigar,
always chipper. We kind of liked the couple,
even though we were opposite extremes. my
wife and I. We, always hard working, they.....
well... ..I wondered how he made his living.
One day I asked him.
"We don't work" he said, "we
are retired."
"That young, lucky you!"
"We are flower children" he explained,
"we pick up a little welfare change
here and
there, plant our own vegetables. Once in
a while I find an antique car in an old farm
house, send it to Europe where it brings
much more. We get by on very little. Why
don't you join us, stop running after the
buck?"
"Do you realize" I countered "that
if everybody would do as you do, production
would stop, we would all get hungry and cold
and eventually just fade away!"
"Oh no" he protested "we would
not die, most people love to work and they
would
feed, clothe and heat us!"
"If they can still do it" I was
thinking for myself. But in general, Bunzli
was right: most people are happiest if they
can work, produce and over-produce, cherish
their job security, like to accumulate wealth,
then give away and brag about it. My wife
and I are two of those happy producers!
I mention this encounter with the flower
children at the beginning of this book because
the factual predictions of the imminent breakdown
of our economic life are scary. But I do
not want to discourage you to read on. After
the fall, society will stand up again. It
always does. It is not the first time in
history that the whole structure of a system
collapsed. It did recently **) in Russia.
And yet, Russia is still with us. Always
saved by the happy producers. This book is
dedicated to the producers of the world.
*) In 1982 Michelle and Al Baggenstoss planted
a vineyard, built the winery, a "castle",
restaurant and boutique in Watkins Glen,
N.Y . Castel Grisch was operational in 1984.
The name of the flower children is fictional,
the encounter is real.
**) Oct.4, 1993 the last Russian Communists
surrender power to Boris Yeltsin.
.
In 1968 I was in Paris, responsible for 12
American, French, German and Swiss engineers
& technicians when my Company *) was
displaying the latest scientific advances
at a Science Show. Just as the show was to
open, we ran straight into what is now referred
to as the May Revolution of 68. Students
started to demonstrate for an increase of
the worker's wages, the workers of France
declared the general strike and joined the
students in the cities, the then President
of France, Charles deGaulle, helicoptered
out of Paris, his son - a Tank Brigade Commander
- surrounded Paris, police and all law enforcement
disappeared and the mob was master of the
streets. We were trapped in the middle of
an upheaval and the feeling was that of anxiety
and scare.
The events of May 68 in Paris changed my
life. Economics had always interested me
since very young. I had read Karl Marx **),
Adam Smith ***) and Maynard Keynes ****).
And in all the words I read, I had never
found an absolute law, a mathematical relationship
that could move economics into the ranks
of the exact sciences. In Paris I discovered
the first mathematical relationship between
production and the value of money:
NO PRODUCTION : VALUE OF MONEY = ZERO
With all the money in my pocket, some of
it in Dollars, I could not buy gasoline to
get us out of Paris. I could not buy food,
there was none, in the Hotel the beds were
not made, I could not even have paid for
it, the workers had disappeared. For five
days we were like paralyzed while the mob
ruled Paris.
Then deGaulle did his master piece. He offered
an across-the-board 10% salary increase to
the workers. That split the student-worker
alliance, the workers went back to work,
the police broke a few student heads and
the very next day the silent majority of
the working population filled the streets
in pro-Government counter demonstrations
and everything went back to normal within
a very short time. Goods and services were
produced again and arrived, my money had
value again. How much value? 10% less than
the week before!*****)
I could now add the second mathematical relationship
to my slowly developing knowledge of the
economy:
If, in one short step, the Government
increases the producer's salaries by 10%
the Producer Price Index will jump by 10%
over a short time
_______________________________________________________________________
*) Battelle Development Corp. Columbus, Ohio
**) Karl Marx 1818-1883. Manifesto 1848,
"Das Kapital" 1867
***) Adam Smith 1723-1790. 1776 "Wealth
of Nations". Best distribution of wealth
is
Government Non-interference! "Laissez
faire", Let it be!
****) Meynard Keynes 1883-1946. "General
Theory of Employment, Interest & Money"
*****) The statistical proof will be given
later under Leon Blum. The increase of all
Prices across a National Economy takes place
in about 6-12 months after a National salary
increase.
After Paris, my life changed. Economics became
more than just a hobby. I always had to work
harder than my colleagues in R&D (Research
& Development) because I spent most of
my professional free time to research Economics,
proving my laws, calculating and writing.
Yes, I wrote several essays, but no editor
would publish it, nobody read my work. I
called my theory "The General Theory
of Productivity" in opposition to Keyne's
"General Theory of Money" which
has dominated the world economies for three
generations, ever since its introduction
with the "New Deal" in 1932*).
.
The "Theory of Productivity" is
not a new theory. It was the economic practice
of all free enterprise Democracies, the so
called rich countries of the world. It was
the economy of your ancestors in the US,
England, France, Germany, Sweden and my country
of birth, Switzerland. I know it well, this
economy that made our countries rich, long
before WW II and Mr. Keynes. I grew up in
this economy, studied and worked there before
and during the war. There was only one thing
wrong with this completely free economic
system: It did not know how to cope with
the Great Depression that started in 1929.
And this is why the world, the US before
the war, the rest of the world after the
war, was eager to accept and test Keyne's
Money INTERVENTION Theory ("KMIT")
that promised to absorb all unemployed, crank
up production again, avoid a brewing revolution
of the jobless and control the ups and downs
of the economies from there on.
Yes, the world needed an intervention in
1929 during the Depression, it needs it at
all times. But it must be an intervention
theory based on the exact sciences, an intervention
with predictable consequences. My "Theory
of Productivity" is not a new theory,
it is the time tested practice of century
old Democracies with a twist::
it has become an Intervention Theory. It
teaches that one can and must intervene **)
- not with money however - but with controlling
the legal working hours. It proves that monetary
intervention is useless and counter-productive.
I will demonstrate, with statistical proof,
that our money system - as we know it today
- will - without interruption - lower the
Standard of Living of the majority of the
US society and the world until the day of
the total collapse of the system.
