Principles of Economics

Context

In short, after peripheral beachheads were established along the northeastern coasts of North America and land was secured by white settlers, production of commodities for profit wasjump-started using Africans as the main energy source on land workfarms (plantations). Those plantations were set up in Jamaica, Barbados, Trinidad, and several smaller rum, and sugar producing islands).   Virginia and Maryland, i.e., the Chesapeake Tobacco Coast was established for enslaved Africans to produce tobacco for Europeans. And in the deep south, rice, indigo, and cotton were the primary commodities that European slave masters forced Africans to produce.

Next, distribution of commodities based on exchange of wage-labor and money-capital then grew and developed out of the emergence of trade surpluses. As a direct result, consumption circuits, i.e., markets, developed exclusively in the direct interests of an all-white North American homemarket (with a imported and bred all-white working class as a secondary source of surplus value), and to the indirect benefit of the international European diaspora.

In the process, the immense social superstructure, i.e., constitution; state apparatus; police force, army, institutions of education, science, culture, law, medicine, sport, religion, etc., could then be nurtured, shaped and molded in the image of the white population, class, culture and sex which owned the means of production in each step in the process: essentially, white English, greco-roman/christian slave and capitalist, men.

Specifically regarding commodity money, mass gold reserves would not be discovered in the US until the late 1840s. Lacking precious metal, the European colonist in North America experiment with various commodities as money.

In Virginia, tobacco was made legal tender in the 17th century. Enslaved Africans produced all of the tobacco, hundreds of millions of bails. So as you can see, at every stage in the initial primitive accumulation of capital for transplanted Europeans in North America and around the world, slavery and theft was at the basis of all social production. If we look at the historical and logical flow of development of money forms in North America, we would have to arrive at the conclusion that the enslaved African produced the tobacco, then king cotton, so he and she were basis of money capital in the U.S. Even the Lousiana purchases was financed with gold exchanged for millions of commodities produced by enslaved Africans being worked to death on plantations. These whites owed Africans essentially everything they owned.

In Massachusetts, corn and beaver skins were used in the 17th century as mediums of exchange. In 1637, indigenous Chechimecan currency of beads or wampum was made legal tender in Massachusetts. The indigenous Chechimecan currency of beads was the root of the money system in the North. After counterfeiting made wampum obsolete and the huge volume of tobacco produced by slaves made tobacco useless as a medium of exchange, Massachusetts establishes the first colonial mint and began to print paper money in 1690. England, being a colonial overlord, naturally did not approve of this action. Nevertheless, this action laid the foundation for the development of a standardized money system in the US.

In 1775 and 1781, the basis for a commercial banking system is laid. A monetary system is a standardized means of managing the circulation of money. It includes a system of banks and regulators and also: (1) the commodity which acts as the universal equivalent, (2) a monetary unit, or standard priced, (3) a legalized means of circulation and means of payment, i.e., gold bars, coined money, paper money, banknotes, and credit cards, (4) minimum regulations for gold copper, silver and various small coin alloys, regulations for issuing banknotes and paper money. Alexander Hamilton and James Madison were the chief debtors on the merits of a central bank.

In 1791, a centralized bank, the Bank of the United States, was charted for 20 years with authorized capital of $10 million, of which the federal government would contribute $2 million. Where did the value for this authorized capital come from? Where did US profits come from in this period: slavery---working to death millions of Africans, capturing, kidnapping, breeding, buying and selling Black people---at a profit. Sure the African chiefs who helped to capture these innocent Blacks were as degenerate as they were dumb and backwards. The whites and Arabs could take advantage of them because they were not technologically proficient, their societies were just leaving hunting and gathering, and some were even engaged in enslavement via wars, raids and prisoner bondage. Sure their tribes owe reparations to Black descendants of their enslavement enterprise. Just as the white and the Arabs will have to one day ante up and pay for their crimes against-humanity, so too will Africans tribes/chiefs that participated. Trillions of dollars in land and labor is at stake. The very basis of money in this period was labor, labor digging up gold and silver, labor planting food and fiber, labor draining swamps, labor building roads, labor ploughing fields, labor picking cotton, coffee and tobacco. Essentially, the wealth of white nations is the labor of Black nations on land stolen from red nations. The gold block then the gold coin, then the c-note, then the paper dollar, then the exchange of it for a commodity of value is traced back to the labor value in the commodities produced by Black hands. Study this carefully.

By 1792, the capitalist congress had set up the first minting of coins and placed the US on a bimetallic standard of gold and silver. It was however only until 1830 that coined money was widely circulated. Paper money, notes of transaction would follow. Until the credit card revolution of the 1980's, paper money had been the primary connection to gold, and land wealth.

DEVELOPMENT OF THE U.S. CAPITALIST FORM OF SOCIETY (F-SL-C)
FEUDALISM - 1492

Intense Invasion of Northern Hemisphere by Columbus:

In no time the small scale offshore Sao Tome sugar industry, unequivalnet gold exchange, and the capture and enslavement of Africans were slowly but perceptibly plugged into the proliferating sugar plantations established in the Western Hemisphere by Spanish and Portugues.

The formula then was simple and yet lethal: European technical know-how, intercontinental transportation capabilities, advanced military, guns, germs, steel, religion, money and skills; plus Chechimacan land; plus African enslaved labor organized on agricultural plantations, and in mines producing commodities which the entire white world consumed (relative to their class) in ever growing volumes, yielding relative wealth, prosperity, and advancement for all Europeans.

The European feudalist societies were in crises; had gone throughout the process of birth, growth, development, decline, and were in the -' process of dying and regressing back into the society that produced feudalism and slavery. Slavery was imposed on whites by whites in the form of indentured slavery, then on Africans and non-whites after the period of invasion and conquest. Mass transportation of white conquests from conquistadors searching for gold to seize was expedited. The Arawak Indians welcomed Christopher Columbus while he took them prisoner and attempted to enslave them. A massive process of genocide began with butchery, burning at the stake, looting, rape, and pillage as a primary means of exterminating the people from the land.

This opened the door for Portuguese, French, Dutch, Jewish, Arab, Russian, Prussians, Scottish, Swedish, Danish, and English invasions around the world. Genocide of Indians continued.

English Invasion In Jamestown, Invasion of North America Follows:

1492-1607 - Indentured servants produced labor. Settlers attempted to enslave Indians, but this failed because they died due to exposure to European diseases and inhumane conditions.

SLAVERY: 1619 - 1700

1619 - 1700 - System of Economic development based on African labor and stolen Chechimecan lands brought massive enslavement of Africans to produce goods in the southern economy. The indentured slaves failed because slave labor was more profitable. The servants teamed with landowners to steal land from the Indians. Between 1619 and 1700 the US had two economic system operating on one continental land mass: (slavery) agricultural manual production in the south based on enslaved African labor, and (capitalism) industrial mechanical production in the north based on white wage labor.
SLAVERY/CAPITALISM: 1700-1750

The formation of Transitional Capitalist\Slave Government Structure: The goods were transferred to the northern colonies and then exported to England. Wealth from exports was concentrated in the North. Capitalism developed in the North. The northern economy grew and the southern economy began to shrink without the wealth from the exports. African populations were seized, captured, kidnapped, mass transported, and enslaved for the purpose of being worked to death draining swamps, building bridges and roads, cutting trees and bushes, planting and harvesting food and fiber, clearing debris, building houses, making clothes, cutting weeds, washing, tending cattle, cooking, cleaning, digging, pulling plows, mining mineral resources, sex concubines, shoveling manure, tending to white children, breeding, plowing, etc. All of this was done for the benefit of white society as a whole and white capitalist and slave owners in particular.

CAPITALISM: 1750-1775

Transplanted White British American Colonies Broke From Brittan And The Revolutionary War Was Fought Over Stolen Land, Enslaved Africans, And Representative Government: From 1700 to 1750 there is minimal economic exchange between the system in that more commodities were produced in the south by enslaved African labor and very few refined products were transported back from the north. What was transported went back to the slave master.
However this exchange increased thus forming a strong political bond, after breaking ties with England in 1776.

War was organized. The Declaration of Independence was written. Feudalist England and the King George while millions of Africans and Chechimecans are forced into stav~ry and are being worked to death each day. justice and equality was a smoke screen. Weapons were bought from other white allies. War was organized by capitalist central committee headed by George Washington. Global conditions were good for victory. British American colonies seized the opportunity.
CAPITALISM: 1776 to 1790

U.S. Capitalist Form of Government is Established:
The Constitution was written by capitalist white men who owned slaves. The nation was built on the constitutionally defined inferiority of Africans, Chechimecans, and women. Agreement between the two economies (slavery in the South and capitalism in the North) was established. The Federal Constitutions served as models of state constitutions.

CAPITALISM: 1791-1865

Slave Labor Brings Great Wealth To The Colonies:
1791-1820 The two economies grow wealthy under one agreed upon political structure with African slavery being the primary means for
white economic Wealth, while theft of Indian lands is the basis for everything else. Millions of Africans were worked to death each year pulling plows, digging mines, draining swamps, building bridges, and roads, planting and harvesting, cutting weeds, building homes, cooking, cleaning, tending cattle and other things. Africans literally built the economic infrastructure of the United States in its infancy.

Economic Relations Became Antagonized As The Northern Economy Grew While Southern Economy Shrank: 1820 -1855
The wealth stopped in the North and it became less dependant on the southern economy. Without its own home market the southern economy began to suffer. The industrial revolution began in the North.

The Southern Economy Ended When Lincoln Abolished Slavery. As A Political Move To Save The Union: 1860 - 1866
It was during the timeframe 1820-1860 that these two antithetical systems grew, developed, geographically interpenetrated, clashed, tried to compromise their differences, but eventually ended up in Civil War.

By 1866, The North and capitalist form of society defeated the South and the slave form of society.

The modem capitalist system began to emerge based on the industrial revolution. Maturation
of the industrial revolution was concentrated in the North. A crises arose between the northern wage labor and southern enslaved labor economies. The south broke from the union and the Civil War ensued.

CAPITALISM: 1865-1965

Reconstruction Period: 1866 - 1920
The south was reorganized as a Capitalist economy under the industrial lines. Industrialization created a migration from rural areas to urban centers. Overcrowding and unemployment and increase of crime resulted.
Slave Economy Disappeared and The Capitalist Economy Survived WWI and WW2
1920 - 1950

The economy emerged into mechanical industrial production after World War 1 and then to semi-automated production after World War 2. The economic boom after World War 2 created a demand for more labor.
Social Advancement For Minorities and Women As The Economy Continued To Grow
1950 - 1970

From 1866 to 2000 the entire country went through a period of industrialized reconstruction along capitalist lines continentally implementing significant advances in large scale machine production until reaching a period when computers replace humans in the societal production equation.

CAPITALISM: 1966 TO PRESENT

Computer Growth Automated Machine Production Began To Replace Unskilled Labor
1970- Present

Economic growth ceased in the 1980's and constant wages have been stagnant through the 1990's. Computer automated machine production has replaced the demand for human labor. The production process is interrupted before consumption. Credit has become the medium of exchange as job insecurity has increased, so have neo-fascist political movements and hate crimes.

Social Development

The world develops on the basis of objective laws, and this development leads at certain stages to the emergence of life, humankind and forms of societies that adapt to a certain environment, in a given timeframe. Planted in different geophysical conditions and carrying practical production knowledge, skills, and tools with them, historically human populations settled, consolidated, adapted, differentiated and consummated the spiraling labor process which ultimately has led to successive stages of social organization and the resulting diffusion and differentiation of societies. If the technological means are the DNA structures of a particular mode of production, and a mode of production is the genotype of a society, then, what is a society? The social formation is essentially the phenotype of a production mode. It is the external form that a society takes at a certain stage in its socio-historical development based on its mode of production, environmental conditions of existence, and cultural adaptations of the populations that make up the society.

What is the process of socio-historical development? The history of a society as it ages through its own internal life cycle and life span of birth, growth, development, decline, death and replacement by a higher society. What is the internal driving dynamic of this life cycle? The internal basis of metabolism in any society is essentially the fundamental change in the way things are produced by the society. Why do societies go through different phases and stages of development? In the evolution of social production from hominid, to hominid with tool, to hominid in forced manual labor, to hominid with machine, to mechanical labor, to semi-automated mechanical labor, to automated mechanical labor and in present to computer automated machine production when there was a revolution in how humans produced the necessities of life there was also a subsequent revolution in the social relations and the society as a whole that were scaffold around those forces of production. Technologies, instruments of production, tools, and expert skills are constantly revolutionized in the labor process, and thus, transform as they surge forward, the entire network of social relations that manifested as a direct reflection of earlier technological means---in this process the whole society is qualitatively transformed.

The dissolution of the village community, its transition into small towns, and ultimately the evolution of towns into metropolitan cities was the inevitable process of social urban development resulting from developments in production quality and quantity and the resulting evolution of population sizes, division of labor composition and relationships to the means of production. New technological means are thus fitted with new productive relations who mirror the production, distribution, exchange, and consumption process necessary to circulate the social product throughout the population. If allowed to go through all the internal stages social production without external forces accelerating, decelerating or destroying the formation, all societies have an internal mode of development which moves from birth, growth, and ultimately to decline and replacement by a higher mode of production and thus a higher society. In short, one mode of production supersedes another, internally.

But, vulnerable society can be externally penetrated and thus accelerated, decelerated, retarded or liquidated altogether by invading population units which carry the social stamp of another society in embryo. On the whole, nevertheless, no indigenous society has ever advanced into a higher society without first using up all of its productive possibilities, moving into a period of decline, or "white age", fighting for existence, decomposing and finally having its most useful qualities sublated and used by the formation which replaced it. Regarding succession and sublation as a natural process of the new society taking the best qualities of the old before it is replaced. Ka internal sublation compared to elementary external destruction must be made clear.

In fact, it is clear that societies, under certain positive or negative pressure, can move through epochs of accelerated evolution or epochs of accelerated devolution, depending on their internal stage of social production development and the magnitude of the external forces impacting upon them. We can summarize our discussion of the phenotypic quality of the category of society in relations to its mode of production by concluding that in all pervious epochs of European social revolutions, the initial stages is characterized by internal regression, decay and crisis in all primary economic, political and social structures with varying degrees of intensity, unless of course, the change is transplanted from without. This process is driven internally by a revolution in the technological means, the resulting breakdown in production relations, a moribund distribution system, the deflation of exchange mediums, a resulting depression, and the ultimate economic and political polarization between the now moribund classes who hold and the nascent class which seek to take.

In sum, modern society has sprouted from the ruins of feudal, and slave society has not done away with class, race, gender, culture, and generation antagonisms. It has but established new rulers, new conditions of oppression, new forms of struggle in place of the old ones. Our epoch, the epoch of the white, male, capitalist, western, senior global rulers, possesses, however, this distinct feature: it has simplified class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into fundamental global opposites directly facing each other - white-nonwhite, male-female, western-southern, capitalist-maatist, old-new. From the serfs sprang the chartered burghers of the earliest towns, and from these burgesses the first elements of the capitalists emerged. The feudal system of industry, in which industrial production was monopolized by closed guilds, now no longer suffices for the growing wants of new markets. The manufacturing system took its place. The guild-masters were pushed aside by the manufacturing middle class; division of labor between the different corporate guilds vanished in the face of division of labor in each single workshop. Meantime, the markets kept ever growing, the demand ever rising. Even manufacturers no longer sufficed. Thereupon, steam and machinery revolutionized industrial production. The place of manufacture was taken by the giant, mechanical production, then large scale machine production based on fossil fuel, then electricity, then nuclear fission; the place of mechanized manual and machine production gave way to semi-automated machine production, then automated machine production, then presently computer automated machine production.

The modern capitalist, white, western, male, senior global ruling class is therefore itself the product of a long course of development, of a series of revolutions in the modes of production and of exchange of which it inherited and usually seized. Each step in its development was accompanied by a corresponding political advance in that class. The executive offices of the modern global state is but a committee for managing the common affairs of the whole white, capitalist, western, male, senior ruling class. They cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish this epoch from all earlier ones. All fixed, fast frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and humanity is at last compelled to face with sober senses its real condition of life. The need of a constantly expanding market for its products chases them over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.

This is modern globalism whereby through exploitation of the world market, a cosmopolitan character, a white male westernized form has been given to production and consumption in every country. Old-established national industries, some of then ancient, have been destroyed or are daily being destroyed. They are dislodged by new computerized industries, robot, automated sanitized production lines, guided by artificial intelligent wireless communication. Their introduction is a life and death question for socialism and capitalism. Workers are being replaced daily, many retrain for jobs that are being phased out. Raw materials of oil, and precisions metals fuel industries globally, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature. By the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization. The cheap prices of commodities are the heavy artillery with which it forces the barbarians' intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the capitalist mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become white, male, capitalist westerners themselves. In one word, it creates a world after its own image.

Commodities-Money-Circulation

The circulation of commodities is the starting-point of accumulating capital from exchange. What good is paper money without a commodity to back it up? What would one exchange paper for if their were no food, clothing, shelter, etc? The production of commodities with industrial technology, their circulation, and the more developed form of their circulation called commerce form the historical ground-work from which capitalism rises. As capitalism rose from these profane foundations, so it is falling on the basis of its inability to circulate what it produces.

In the United States, and throughout the world, commercial spheres are the place where commodities produced in the productive sphere are sold. The banking industry is the primary link between large-scale capitalist buying and selling. Banks regulate the flow of life sustaining money and capital in a capitalist society. Banks are the heart of the economy. Money is the blood. Money provides a medium of exchange and stores value. Therefore, in the United States, if there is a crisis in the circulation of commodities, this crisis manifests itself in the banking industry.

Financial transactions have become the dominant sector of commodity circulation in the economy. As Computer Automated Machine Production (CAMP) is adapted to banking and insurance, routine, and repetitive technical and clerical jobs are being replaced by advanced expert machine systems. In banking and insurance, the management of accounts by large data processing systems is already virtually universal in all technologically advanced nations around the world, especially in the larger corporations. The purpose of adapting expert systems to the banking process is to replicate human labor tasks in-order to reduce labor cost, and also to standardize motion as to minimize human error. As errors are minimized, efficiency and productivity is increased. Banking service is fast becoming self-service on the basis of laser check-out vending machines, and a network of computer accounting systems. These expert systems replace humans, deeply cut into employment rolls, permanently emanating millions of jobs and thousands of job classifications from the labor process.

In the past managers coordinated communication within the organizational chain of command. Now, with the introduction of advanced computer technologies that perform coordination of functions previously practiced by middle managers located within separate departments, these middle management jobs have become obsolete. More, and more capitalist enterprises are eliminating entire middle management levels from the corporate organizational hierarchies by compressing several jobs into single processes. In all service industries computer technology is being used to compress time, eliminate middle management levels, and therefore reduce labor costs. At every rung, computer automated technology is being used to eliminate jobs in clerical and transportation handling such as secretaries, salespersons, clerks, account executives, billing managers, shippers, warehouse workers, and truck drivers. Information isolated by scanners at the point of sale and transmitted by electronic data interchange directly eliminates warehouses purchase orders, bills of lading, large inventories, warehouse workers, and secretaries.

Although at an embryonic stage of diffusion, expert systems of computer automated machines are directly linking banking system with retailer accounts and customers around the world. Charges are, therefore, being deducted from the accounts of customers instantly. This is an evolving technological tendency which will result in "electronic bank-in-the-wallet" cards in the hands of consumers who still have a means of income. Bills for light, water, gas, food, entertainment, child-care, car-note, mortgage, charge accounts, hospital, taxes, education, and other regular expenses are, today, being linked into centralized banks with computerized recording and accounting systems. As this process matures in the 2007+, paper money in all of its forms will become obsolete.^{^[1]}

Historically, banks have been the centers of capitalist credit. In short, a bank is merely a store for money, similar in form to any grocery store. They are in the business of buying and selling money at a profit. In the context of the US capitalist economic system, they have the special function of acting as conductors and intermediaries in credit and payments. Next, they convert into capital the money incomes and savings of the population. And finally, they create the credit instruments necessary for commodity circulation in a specific region of the country, state, city, town or rural area.

Conditions of Commercial and Specialized Banks

First, commercial banks hold over two-thirds of the nation's money deposits. They are by far the largest financial institutions in the US and are, therefore, the primary vehicles for exchanging money.

Commercial banks provide credits for industrial, commercial and other industries mainly from the money capitals obtained by them in the form of deposits, and also engage in stock exchange, commission and foreign exchange operations. They specialize in serving businesses, making most of their money by giving businesses short-term loans. Commercial credit is credit extended by capitalist to each other in the form of commodity capital. In such cases, commodities are sold on credit with payment for its value effected at some time in the future.

What is the condition of these banks? Facing collapse. Supply exceeds demand in almost every industry, one solution is to make commodities more available to potential buyers. Since the early 2000's, shopping malls, retail outlets, and fast-purchase stores have sprang up everywhere. Shopping malls, no matter how beautiful and convenient, however, cannot sell commodities to workers who have no money, or a means of credit. Shopping malls that cannot sell their retail commodities also cannot repay investment banks. As a result, increasingly banks fail from "good" loans that become "bad" loans. This downsizing will continue as a law of economics under capitalism in and age of Computer Automated Machine Production. Capitalists who own the computers, robots, laser sensors, factories, mines, and offices cannot pay a worker to do something that can be done more efficiently, faster, and cheaper by a computer automated machine.

As a result, specialized banks have been created to care for the needs of definite types of credit operations. Thus, mortgages banks make available loans secured by real estate (land, buildings) while export and import banks specialize in foreign trade credits. In sum, debt spending is evident in all six major sectors of money circulation in the society's spheres of exchange. International, federal, state, municipal, consumer, and corporate debt are the final means of circulating CAMP manufactured commodities and services in capitalist and socialist societies. In the US this problem is extremely acute. Bankruptcies are at an all time high, even eclipsing the rate and number during the Great Depression. The savings rate is also is at an all time low. Banks, insurance companies, brokerage firms, savings and loans, and investment firms head the list of failing financial institutions which are a direct result of the inability of the businesses that they have loan money to repay long-term loans because they themselves cannot sell what they produce.

^{^[1]}Joseph Wright, U.S. Plans Wide Use of Credit Cards, New York Times, March 1, 1989; and Smart Cards: Pocket Power, Newsweek, July 31, 1989.

Central Bank/Federal Reserve

In 2007, the United States' Federal Reserve Bank had approximately $32 billion in earnings assets (profits), which is less than one single corporation like Exxon. This governmental agency is central to preserving the health of capitalist financial institutions.

Federal Reserve

The Fed conducts the nation's monetary policy, supervises and regulates banks, and provides financial services and liquidity (ready cash) to depository institutions and the federal government. It is a lender of last resort and boosts the economy, while preserving the value of the currency. The Fed is required to maintain long-run growth while minimizing inflation and pursuing price stability.
The Fed has greater independence than other governmental agencies, as well as its own source of funding. It is not governed by Congressional monetary policy.

Governance

The Federal Reserve has three components: (1) A Washington-based Board of Governors, (2) 12 regional Federal Reserve Banks, led by a bank president, and (3) the Federal Open Market Committee (FOMC). The FOMC has 12 independent members, each with one vote, and let by a chairman. Each reserve bank is owned by the private commercial banks in its district, has its own board of governors and issues stock to commercial banks. Technically the Federal Reserve is owned by private capitalist banks, governed by a board of capitalist class representatives, and regulated by Washington's Board of Governors. Bank presidents are appointed by the board of directors of the bank, with the approval of the Board of Governors of the Federal Reserve system, for a term of 5 years. The Board of Governors consists of 7 capitalists, each appointed by the President and confirmed by the Senate. Members of the Board of Governors are appointed to 14-year terms (an appointment only second in length to the lifetime appointments of federal judges). The President appoints each member of the Board, who is then confirmed by the Senate
The Federal Reserve of New York holds a unique role. In addition to regular duties of the Reserve bank, it conducts open-market operations, intervenes in the foreign exchange markets, and stores monetary gold. The presidents of the other 11 banks rotate on and off the FOMC, the president of the New York Fed is a permanent voting member and serves as its vice chairman.

Monetary Policy

Monetary policy is set according to what the Board of Governors considers healthy for the economy. The Fed sets a target rate, but the rate varies according to the ideology of the group that has been selected to run it. For example, when Alan Greenspan chaired the Federal Reserve, the Board of Governors appeared to target a 2.9% inflation rate for the overall Consumer Price Index. If people began to get nervous about inflation, the Fed would normally increase the federal funds rate to slow economic activity; if inflation was moving below 2.9%, the Federal Reserve would lower interest rates to increase economic activity.

Source of Revenue

The main source of revenue for the Federal Reserve is seigniorage revenue. Seigniorage is the difference between the value of a currency and the cost of its production, distribution, and retirement from circulation. This money comes from issuing currency. If the seigniorage is positive, profit is made; if it is negative, there is economic loss.
The Fed can increase the amount of money in circulation by purchasing new currency from the U.S. Treasury for only a few on the dollar. Although currency is cheap to produce, the social costs are substantial. The rate of money creation is correlated with inflation. Fast money creation costs society by eroding the purchasing power of money already in circulation. The Federal Reserve must balance the benefits of low production costs with the social costs when deciding how much to rely on seigniorage.

Role in the Economy

U.S. banks are required by law to keep a certain amount of money with the Fed (called reserves). It is usually around 10% of the banks demand accounts (checking, savings, etc.); in other words, demand accounts are those held by people who put their money in banks. A bank that is short on reserves may borrow money from other member banks at the federal funds rate.
The Federal Funds rate is the interest rate banks pay when they borrow money from other banks. They borrow money when their reserves go below the amount required by the Federal Reserve. The reserves decrease when the bank gives loans to people. Banks either borrow from one another and pay the federal funds rate or borrow from the Federal Reserve directly and pay the discount rate. The Fed controls the discount rate.
When there is fear of inflation, the Fed increases the fed funds rate to slow activity in sectors of the economy that are particularly sensitive to interest rates (in other words, it raises interest rates to slow purchases and lending). When the economy slows, the Fed reduces the fed funds rate to stimulate activity (encourage spending and borrowing).
The normal rate is a target set by the Federal Reserve governors; these are the interest rates often referred to by the media. It is not an exact rate, which the market determines.

Setting Rates

The Fed adds to or subtracts money from the economy to hit its target rate. If it wants to raise rates: (1) the Fed sells bonds (treasury securities) to banks in its system; (2) to pay, the banks send money from their reserve; (3) banks replenish their reserves from borrowing from other banks (that have reserve balances); (4) this drives up interest rates (the increased demand for loans increases the interest on them)
If the Fed wants to lower rates: (1) the Fed buys securities from banks; (2) this money thereby increases the banks' reserves; (3) banks have more money (beyond the required reserve amount) to lend to other banks; (4) this reduces the interest rates (because the demand for loans decreases, thereby decreasing the interest paid on them)

Short-term and Long-term interest rates

The Federal Reserve directly affects short-term rates by raising or lowering the federal funds rate, which in turn influences the market for shorter term securities. Long term interest rates (10 to 30 years) tend to move in anticipation of changes in the economy and inflation. Both long and short term interest rtes are affected by economic factors such as inflation, the strength of the U.S. dollar and the pace of economic growth.
The Fed indirectly affects long-term rates through short term ones. Long-term rates are set by the bond market and depend on buyers' and sellers' expectations of long-term growth. [The bond market is a financial market where participants buy and sell debt securities usually in the form of bonds-corporate, government/agency, mortgage backed (asset backed, collateralized debt obligation), and funding. The majority of bonds are held by institutions like pension funds, banks and mutual funds. Ten percent of the U.S. bond market is held by private individuals.]
Generally, long term interest rates increase as monetary policymakers raise short term interest rates.
If interest rates increase, investment decreases due to the higher interest in borrowing.
If short-term rates are expected to increase, long-term rates will generally be higher and will rise roughly in tandem, since investors usually demand more interest when they put their money to work for a longer time. Sometimes, however, this is not the case. Some investors will react to rising short-term rates by lowering long-term rates to balance future economic growth. Under such a scenario, rates farther out will level off or fall because the Fed will be forced to reduce the fed funds rate in the future.

What Will Happen Next

The construction of modern factories, big or small, from the very beginning exclude human workers from production. Robots are replicating all adaptable human activities. The contemporary technological process demands absolute clearness of the working place-even the presence of human beings is considered a polluted environment in the production of microprocessors, for example. The development of science and implementation of its discoveries into production leads to reduction of labor consumption in the process of production. Modern achievements in genetics allow people to grow vegetables, fruits, domestic animals in artificial conditions much faster and in greater quantities with much less human labor expenditure. The original size of these products can be considerably increased. Robots, automation, drill computerization is practically eliminating human labor in excavating raw material for fuel like oil, gas, and coal. Capitalist production has begun the absolute elimination of workers out of the sphere of production. When a capitalist economy emerges from a crisis and production begins to work under normal economic conditions, factories hire fewer people than before the depression.

The situation is this: on one side,an army of unemployed is growing every year without any hope of finding jobs to secure the average standard of living, and on the other side, the quantity, of produced commodities for mass consumption increases geometrically due to the high productivity of robotized factories, computer automated machine production, and microelectronics. These two process are intertwined but in antagonistic contradiction. Companies would produce goods for mass consumption on an increasing scale and at the same time eliminate the consumer market as they lay off workers. No homemarket, no domestic economy, no domestic economy no tax base for government and social services. For this reason the companies can't realize their profits, for the sake of which they robotized their production and reduced manpower---so they must sell abroad where China has positioned itself with nearly 2 billion people to take advantage of capitalism's profit motive.

The result: an economic crisis that cannot be solved with the Federal Reserve Bank, lowering interest rates, and dragging out academic appologist whom they have earlier handed nobel prizes to. The old economic policy, the essence of which is to stimulate the private sector by reducing taxes on capital, by reducing the interest on money borrowed from the Federal Reserve, in short, by creating favorable economic conditions for capital to function will not work this time. Capitalists will only seek loans to invest in robots or move to Asia where socialism temporarily allows them a dirt cheap nonwhite labor force to exploit/cheat.

This economic policy will fail, because the main reason for the crisis is absence of a solvent market in the face of high unemployment, consisting of workers who never will be engaged in production, and never will restore the market for goods of mass consumption. The old means of treating an economic crisis by stimulation of business, which in turn enhances market solvency by attracting more and more unemployed people into production, will no longer relieve crises. CAMP/robotics will forever eliminate workers from production, especially most unskilled and semi-skilled Black people who were straped to the most antiquated technology in the first place.

Globalism is not the answer---only a stop gap measure reflective of capital's need for cheap human labor/surplus value. The existence of the global market only postpones the economic crisis in a given country, because capital increases export of its goods abroad for realization of profits when the solvency of the domestic market diminishes. This process will proceed until the robotization of production in underdeveloped countries, especially Africa, South America, and South east Asia reaches the same level as it has in developed capitalist countries. International competition will force them sooner or than later to implement robotization. Of course after they have worked to death millions who were not organized enough to fight back.

Today, cheap labor (in Mexico, the Caribbean, and the Arab world) can no longer compete with unmanned factories producing the same product, so underdeveloped countries are now compelled to implement robotized production, and are now feeling worst consequences than developed countries experience. Under these conditions the global market will exhaust itself as the valve that eliminated economic pressure on the domestic market. In its social aspect, unemployment resulting from the robotization of production means a violation of the balance between the interests of rich and poor, the preservation of which is the major function of any class-based state. Under these conditions it is most likely that the patience of working people left without work will be exhausted and they will begin to demand jobs, food, clothing, health care, education, transportation and fair distribution of wealth. The robots can do this for them effortlessly. But the capitalists want/need profits. They could care less who they take advantage of to get those profits. Unemployment forces governments to become fascist dictatorships ---which is open season on Black skin; Workers merely want jobs, equal food, clothing, shelter, education, health care, transoportation, recreation, and even to hold families together. Lose a job permanently in a capitalist society you lose your ability to live life. This situation never has existed in a capitalistic society for the mass of white people.

What this Means For Black Populations

Unlike the machines characterizing early industrial production, whereby human labor was supplemented by technology, currently, human beings merely supplement whatever human capabilities the machine lacks. Whereas humans once took machine in hand, today, machines now take humans in hand. Humans in the last half of the 20th century have been inserted into gaps where electromechanical devices were underdeveloped or remain too costly to implement. Though electromechanical maturation of the advanced technological components of machine systems had an extended early incubation period lasting roughly from 1890 to 1970.[1]Today, such technological development and their social coordination within some degree of a CIM system have accelerated in an unprecedented manner.

Since the early 1980s a revolutionization of science and technology has been occurring. Though elements emerged in a scattered manner prior, it was in this earlier period that the incremental developments emerged in an embryonic form. Advances in microelectronics, principally in microchip technology, superconductivity, and parallel processing made possible operations previously impossible. The diffusion of these advanced microchips into microprocessors, variant computers, machine systems, robots, and other electromechanical devices accelerated the diffusion of computer-programmed machines into large-scale automated production factory facilities. The union of these automated technologies with sixth, seventh and eighth generation computers to possessing greater information processing capabilities and their application to manufacturing enabled production to be more systematically organized via Flexible Manufacturing Systems (FMS), Computer Integrated Manufacturing[2](CIM), Group Technology (GT), and Just-in-Time (JIT) production. More sophisticated methods of transferring information, communicating, and transporting goods and services on a global sale rapidly led to the emergence of production centers, production regions, and an international production complex with the ability to communicate via space satellite, Internet, and integrated systems communication between linked machine systems.

With each innovation in microchip technology, and its resulting application to the programmable control[3]of automated machine systems, the less the value of skilled mental human labor is necessary in the production equation. Indeed, the significance of Computer Integrated Manufacturing (CIM) is that it establishes programmable control, by degrees, throughout the manufacturing process and, therefore, coordinates direct networks between various machine organs of production and a central processing and control center. Similarly, we spoke of central nervous system in the latter phase of computer automated machine production. Although analogies are limiting in technical elasticity, the use of the term is extremely relevant to this discussion. Because all that is missing technologically in the total negation of humans from the industrial production process, aside from standard incremental refinements, is the brain being replicated in electromechanical form.

The technological processes described above are heavily located in manufacturing industries, which have historically employed a relatively small, but significant, percent of black women. Given black women's historical positioning in production, their susceptibility to technological displacement, their vulnerability to fluctuations in the economy, and the increased financial responsibilities for their children (and other family members), such a reversal in the relationship between technology and human labor possesss enormous implications.

Advances in service production technologies are significant for this population, because they are largely concentrated in service producing industries.

By the late-1980s employers began to recognize that blacks were no longer a source of docile and cheap labor. This shift in the character of the black labor supply should be understood primarily in terms of the heightened consciousness of blacks developed by the civil rights movement...employers began actively to recruit and to switch to new labor supplies, mainly Latinos already in the United States and new immigrants from Latin America, the Caribbean, Asia, the Pacific Islands and elsewhere. In less than 15 years over 20,000,000 new undocumented/illegal alien hispanics emerged in the United States, while at the same time Black populations who were undocumented were barred, kept out, caught, imprisoned, deported. These groups became a major source of new labor supplies for the private sector. While millions go unemployed. The capitalist state had established a system of allowing cheap labor into the United States to boost their profits. Hispanic populations are now larger than Black populations. Employers succeeded in reestablishing low-wage employment, which grew rapidly, but a remarkably small percentage of these jobs were filled by blacks.

As the applications of these new scientific technologies to the workplace expanded a new economic category, the structurally unemployed, was created. This was the industrial reserve to be thrown into production---as the need arose. The widespread elimination of the black people in the industrial work force was inevitable since they were last to be allowed in the least developed industrial positions. The least developed industrial technologies are the first to be replaced. Such a place in production lead inevitably to the replacement of the technology and the worker from the production equation. This is a systematic process whereby black people are last to be hired and first always to be fired.

[1]The temporal parameters roughly mark the points of the revolutionization of computational and computer technology. The early date, 1890, was roughly when advances in computer technology emerged. Fulfilling a need to speed up the tallying of the U.S. Census, the U.S. Bureau of Census used a counting machine invented by Herman Hollerith (Billings 1995). "The machines were able to complete the Census in two years, which was an amazing feat for its day. Hollerith's company eventually came to be known as International Business Machines (IBM).

[2]Computer Integrated Manufacturing is the name given to manufacturing that uses a complete control system which incorporates a product design and analysis, quality control, inventory control, cost accounting, purchasing, and order entry. CIM is used to integrate the various components of the manufacturing process, as well as enhance the productivity of the entire manufacturing enterprise.

[3] The more the mental work is automated, particularly in terms of designing, writing, testing, and implementing, the less valuable on the market workers are in knowledge and information intensive industries