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Consumption Consumer

Consumption as word became popular from Adam Smith’s term consumptibility used in 1763 as a replacement for comestibleness (comeasttibleness) which was coined by Mandeville from comestible or edible based on comedere Latin to eat. Mandeville used the term for the opulence or virtue of prostitutes above honest women offering the conveniences and necessaries of life.

The idea is that anything of value derives its value from those conveniences and comfort it offers. In Mandeville’s view, prostitutes offer the rich a certain comfort; in Adam Smith’s view, treasures offer a value that can eventually be used up. (see Adam Smith’s Economics)

Consumer – one who consumes or uses the product of another.

Utility Preference Curve

Utility refers to the aesthetic pleasure afforded by the convenience of a thing or result. Adam Smith took this pleasure to play an important role in sustaining economic activity and political planning. This abstract term gave rise to the terms utility-curve and utility-preference now used by economists to infer by aggregate the so-called demand curve or function. Utilitarianism is a philosophical notion set out by Jeremy Bentham and John Stuart Mill, based on the usefulness assumed to be in all things exchanged or produced, giving them value accordingly as they contribute to the happiness of the greatest number of people.

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Capitalism origin and impact

Capitalism stems from a range of financial facilities that enable control of economic activities to accumulate in the hands of the elite segment of society. That those who supply labour fall below the suppliers of capital and financial instruments, is the most characteristic feature of capitalism. (see Banking) It has an inherent degree of corruption, at least in terms of ideology and deceptive promotion of idealistic slogans on ideals that in practice are nearly impossible for most people to attain. Hence its periodic outbursts of scandals at the top hierarchies of capitalist society.

The recently exposed fraud to the tune of over €50 billion euros by the Jew, William Maddof, once the most trusted Wall Street boss, plus the Enron scandal, Merril Lynch’s deceptive practices and the German billionaire banker exposed to be fraudulent are clear examples. The era of slavery in European-dominated America started with the capture of a few Indians in battle for the gold mines of Yaracuy, subsequently exploding in scale to the mass shipment of African slaves who were hunted down and sold into unpaid labour from across the ocean. Europeans with their medieval feudal history lapsed into this depth of unethical practice, carrying with them some African leaders by luring these with the promise of nearly worthless objects. The motive was accumulation of wealth from foreign sources without adequate payment – what is mistakenly termed economic profit.

Slavery, serfdom, under-paid wage-labour and profit have always been the other side of the coin regarded as profit. Socialism holds up low prices, denying the explicit declaration of profit as is done by the merchants in the name of capitalism, but just the same denies the lower classes of their true status by pretending that there are no social classes. Capitalist strength derives from a number of instruments such as the bill of exchange and access to credit limited to the established trading sector of society. Increasing gains by the privileged few at the top accumulate only at the cost of underpaying the masses whose labour produced it.

Capitalist society is marked by the social hierarchies it relies upon to survive. Trader’s formed societies, producers formed guilds, merchants associated as ‘Hansa‘, which functioned as chambers of commerce in various far-flung districts where they dominated the flow (exchange and shipment) of valuable goods and money. Capitalist society is also marked by unwieldy long chain of middlemen who acting as ‘go-between’ for a dubious profit, intervene between producers (as brokers, commission agents, entrepreneurs) and ultimate consumers of goods and primary services. The middleman, as sweat-shops show, makes his money off the backs of his under-paid workers as well as his clients. In the past, he typically ran factories for which he subcontracted units of production.
The industrial revolution made capitalism possible and turned career-making into day-labourer, labour-market and unionism. It restructured trade relations and empowered imperialism. Mercantile capitalism gave way to industrial capitalism which gave way to finance capitalism, concentrating wealth into the hands of a few by making multinationals rake up the product of multiple economies. Capitalism is a social order that weighs crushingly on the state order, sucking bounties wherever sums accumulate. The capitalist as a self-made man often becomes that through questionable ethics. (see Banking, Revolution, Hansa, Venice, Florence, Genoa).

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Dollar history

Dollar as currency was made popular by the USA – the American Dollar, but some other countries also have their own dollar valued differently this days. There is the Australian dollar, and the Canadian dollar for example. How did the word dollar originate? The Dutch Estates-General started minting their thaler in 1579, which they called the rijksdaalder in Dutch, but was quickly variously called rigsdaler, rixdollar, riksdaler, rixdale by their trading partners in other countries. Dutch trade in Riga and Narva in the Baltic in the 1650’s involved the payment for Russia’s hemp and grain in ‘riksdalers‘ . From the Turks, horses and oxen were bought for four and two ‘rixdales‘ respectively. The term daalder came from ‘thaler‘ – coins minted from metals won from Bohemian (Czechian) mines in the land of the Slavs. Some trace the word dollar to Joachim-thaler – a Jewish origin.

Milan also minted silver coins called thalers (Maria-Theresa thalers) which merchants in Marseilles used to pay for imports from the Levant. Russian trade was state controlled and focused mostly eastwards towards Turkey, Bukhara and lands to the south of the Black Sea and the Caspian Sea. The Tsar’s men (merchants chosen by him for their loyalty) firmly took charge of the monopoly in spirits, tobacco, coffee, potassium, beer, furs and other essential commodities. Alcohol drinks were sold only in ‘kobaks‘ or taverns opened by the state. Soldiers, navy men and state workers were paid partly in cash and partly in rations of bread or flour and hemp. Along with the geographical spread of these soldiers and merchants, went the spread of the terms they used for money – thaler, daalder and florin (from Florence). In particular, Dutch domination of trade in the 17th century brought much focus to the rijkdsdaalder and the Dutch florin. As is widely known, the Dutch established what later became New York, and they built the wall that gave Wall Street its name. The Dutch also pioneered the financial exchange which became Wall Street. It is therefore not surprising that the Dutch coin the daalder became the word dollar when the USA was formed.

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Pound Sterling Silver

Since Roman times, the word pound has normally referred to a unit of weight. The currency unit Pound Sterling was stabilised by queen Elizabeth I in 1560 by fixing its value at the equivalent of four ounces of sterling silver. By maintaining this intrinsic value at its face value as a money of account until 1931, while other currencies varied by direct state manipulation or due to market forces, the pound gained reputation as a point of reference in exchanges. Isaac Newton as Master of the Mint reduced the guinea (gold currency) to 21 shillings in 1717 which in 1816 officially became the gold standard as a gold coin of 7.988 grams and eleven-twelveth fine metal. By that time Britain was no longer melting silver coins for re-minting. Rather, she was exporting silver to India, Holland, China, Russia and Europe and importing gold from Brazil and elsewhere. By 1774, British money in circulation consisted of notes issued by the Bank of England.

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Banking accounting banknotes

Banking including the use of cheques was already in practice among the Persians in the time of king Darius I (521-486 BC). Modern Banking started in Italy with bookkeeping called scritta by which merchants settled transactions by booking the one against the other without cash transfers. Credit notes* called cedole and records noted in ‘banchi di scritta‘ further allowed eligible clients to do transactions covered by  overdrafts. The origin of most capitalist or modern banking and financial instruments are traceable to Italian city states – Venice, Genoa, Florence and Milan, where financial instruments evolved including forward selling, bills of exchange, public finance, double-entry accounting, debit-credit balance-sheet and discounting rates.

By forming consortia, Jewish moneylenders to small borrowers qualified for acceptance to Venetian merchant facilities. Partnerships with terms specified in contracts called colleganza enabled a provider of cash or capital to deposit cash for another who actually laboured to travel and carry out the specified transactions of trade as if a project with records kept. Upon settlement of the transactions, they both shared the profit according to an agreed ratio, usually three to one in favour of the provider of capital. This was the origin of the terms capitalist and capitalism. Eventually companies or compagnia emerged as permanent forms of partnership, allowing the capital to be re-used continuously (Turn-over*). The Bank of England was created in 1694 as a private merchant body to provide credit for the state.

As a vehicle of trade, the Bill of Exchange evolved as a written declaration signed and underwritten by the issuer (acceptor because he accepts) to make himself debtor in the amount therein stated, until a specified date as deadline. The bill itself could be transferred, deposited and traded as if money cash; hence the term Acceptance trading. Acceptances were traded with discounts/interest reflecting the expected decrease in value of money, and the credit-worthiness of the underwriter. Providing credit like this afforded some people – called rentiers -the privilege of living off the interest charged; a practice called rentierdom. Depending on the specific nature of the transactions, lenders were called merchant bankers or negotiating bankers, stock brokers or fund brokers, and their agents facing the private investors were called entrepreneurs or jobbers, since they came in between private investor and the lenders . On the principle of bills of exchange, the French government issued bank notes in 1701, payable at the Lyon Fairs. Their Royal Bank was established by law in 1716, flopped at first, but the Bourse thereafter established in Paris in 1724 thrived. (see Commission*, Exchange Boards, Capitalism)

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