How the Political Class Robs Us?

The German sociologist Franz Oppenheimer in his discussion of the political institution of the State divided the society in two classes. In his own words, 

There are two fundamentally opposed means whereby man, requiring sustenance, is impelled to obtain the necessary means for satisfying his desires. These are work and robbery, one’s own labor and the forcible appropriation of the labor of others. Robbery! Forcible appropriation! These words convey to us ideas of crime and the penitentiary, since we are the contemporaries of a developed civilization, [25]specifically based on the inviolability of property. And this tang is not lost when we are convinced that land and sea robbery is the primitive relation of life, just as the warriors’ trade—which also for a long time is only organized mass robbery—constitutes the most respected of occupations. Both because of this, and also on account of the need of having, in the further development of this study, terse, clear, sharply opposing terms for these very important contrasts, I propose in the following discussion to call one’s own labor and the equivalent exchange of one’s own labor for the labor of others, the “economic means” for the satisfaction of needs, while the unrequited appropriation of the labor of others will be called the “political means.” (The State)

This is the true class analysis for any society as compared to the false one by Marx where he showed an antagonism between the workers vs. capitalist class. There is no antagonism between workers and capitalists. In fact, they both are in harmonious need. The one cannot survive without the other. 

Now, in this short essay I want to discuss the major ways through which the State and its parasitic political class steal, loot and murder the rest of us who are living lives using economic means. 

The state has three major ways of obtaining its loot from us. 

1. Taxation
2. Market borrowing; and 
3. Inflation  

Taxation and market borrowings are not very much known amongst the public, but inflation is even more clandestine technique of the state of very cleverly emptying our pockets. Taxation and market borrowings are easy to understand but not inflation. We all know that whatever we are earning as a citizen of a given nationstate, some part of our earning we will have to compulsorily give to our political masters sitting in New Delhi. This we are told we are doing to help the state carry out its duty of welfare. But the reality is quite very different from what is being told to us. As Franz Opennheimer said above, via taxation the parasitic political class forcefully takes away a part of our income for their own sustenance.  Welfare of poor people is just a ruse, an excuse to hide their parasitic living. Over the period of time the intellectual bodyguards of the state have devised all these excuses of welfare state to disguise the looting of state officials. This intellectual bodyguard of the state is also getting their fair share of loot from this very same loot of tax payers. 

Market borrowing is when people lend their money deliberately to the state because they know that they will continue to get the interest payment because the government will rob the tax payers to pay them back. This is the reason why government bonds are considered as secure form of investment. It is secure not because of the credibility or productivity of the state but simply because the creditors know that the government can forcefully take away taxpayers money to pay them back. So government borrowing is again backed by forceful robbing of the taxpayers i.e., the productive class of the society. And so just like taxation, market borrowing (sic) is also immoral. 

Now as I said above, inflation  is a clandestine method via which the state officials empty our pockets. So how do they empty our pockets using inflationary policy? Let us see. To elaborate my point I am going to use the example of Indian central bank Reserve bank of India which is in charge of creating inflation on behalf of its master government in India. 

Before We understand how the RBI robs our money, we have to understand very briefly how money works in the modern economy. Money is a common medium of exchange that we all used to trade with each other. That means in every transaction on one side there is money. As opposed to common mainstream view that money is a neutral tool, money is not neutral. In fact it is the primary vehicle through which the parasitic state transfers the available scarce wealth to itself.  Now let us try to understand how this process works. 

I will use the example of Robinson Crusoe economy. Let us say on an island there are three people living comprising Robinson, Friday and Peter. Before the Reserve Bank of India arrives on the scene, Robinson, Friday and Peter are using the economic means of working hard to produce something in which they specialise in surplus and then trading that surplus with others to obtain the goods that others have produced.  Let us assume that this simple primitive direct barter economy slowly evolves into the modern economy of indirect exchange using money. So Robinson, Friday and Peter all three are now using money to make the trade. Let us say Robinson has produced 10 fishes while Friday has produced 10 coconuts and Peter has produced 10 potatoes. Thanks to their previous trading with each other they have earned an income of hundred rupees so far. Robinson is using hundred rupees to buy five potatoes from Peter and Friday is using hundred rupees to buy five potatoes from Peter similarly. 

Now let us bring in the reserve bank of India into this economy. There now establishes the central bank known as the Reserve Bank of India and the governor of reserve bank of India is a good friend of Mr Friday. This bank has the sole authority of printing money out of thin air, that means RBI can just bring money into existence without any prior production of goods or service like how we all have to do. RBI now prints Rs.500 and gives it to its friend Mr Friday. This means the income of Mr Friday has now gone up to Rs.600 from the original Rs.100. As Friday’s income has gone up he can buy all 10 potatoes of Peter because he can outbid Robinson now in the bargaining process. And by doing that he will basically deprive Robinson of his five potatoes. In a way, with the help of RBI Friday has robbed Robinson. He can corner all the scarce goods in the economy for himself. And this is the exact process that we see happening in every society of the world including India. This is how via inflation, creating new money out of thin air is inflation, the government and its officials rob all of us of our hard earned income. To buy the products that we need we have to work very hard and produce something first whereas state officials do not have to do anything because they can just print money by using their central bank RBI. And because this process is indirect and hidden so most of us do not realise how we all are getting poorer day by day and the state officials and their cronies are getting richer. This is the primary way in which the central bank and its master government creates huge inequality into the society.

These are all the major ways in which the state robs us, and in the end when it will be necessary for them to do so they will sacrifice all of us in the name of public welfare or wars. We are their cash cow and we are their beef cow.  As long as we will not realise this real nature of the state, it will be very difficult for all of us to make our lives better. Scores of people will be continued to sacrificed on the altar of power.