Power, ethics and economics

New Perspective of Fundamental Economics

Author: He Yufeng ， in Chinese character： 何钰烽

Contents:

Summery 3
Chapter 1: the nature of human 5
Chapter 2: the origin of power 22
Chapter 3: the innate power of common resources 35
Chapter 4: commodity and exchange 44
Chapter 5: money and circulation 53
Chapter 6: market 64
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to copy, distribute, display, and cite the work.

My email: tianjichuiyu@sina.com

Declaration:

This work, I had quoted lots information which form internet and
eBooks, to tradition media and classic works, it is so much that I did
not remember all of the resource in the end of the work, I have to
decide to ignored references in this work. In fact, most information
you could search easily in the internet. But if I believe it is very
important I had mentioned the authors and references inside context. I
just want to figure out what going on in the modern economies and
societies. Thank a lot and pay my respect to authors who did not been
mention in the work. By the way, you would experiment my chinglish. If
your have any puzzle in the work, emailed to me.

Sincerely,
He Yufeng 何钰烽
March 15, 2009, China
Summary

From the coup finished the Culture Revolution, economics have become
one of the most popular subjects in China. At end year of the Culture
Revolution, I was a pupil. When I study in middle school, I was
instructed by Marx’s political economics. Form 1990s till now, the
mainstream economists in china incline to make up themselves as
laissez-fair economists. They also participated themselves to predict
every thing in economy, they predicted Global economic growth, energy
prices, stock prices, real estate prices, as well as interest rate
policies. They like wizards who played on the altar of globalization
economic.

But behind that, it is a question that what is the essential rule of

economics? This works is my attempt to rethink about it. This must be
started from the basic philosophy of economics. It is what is the human
nature be? In the first chapter, the nature of human, I discuss about
it by the combination of nature sciences and social philosophies. The
human nature is shaped by the evolutionary processes, so human nature
is multi-shaped in multi levels. The evolution is work at whole species
of human being, that indicates that the classic or neoclassic economics
hypothesis about “human nature is self-sever” is fragmentary. The human
nature is complicated and multilevel interweaved traits. Above all,
economics is base on the research of behaviors of individual, groups
and whole species.

Brought forward the behaviors analyses, in the second chapter, the

origin of power, I put the power under the background of group animals
behaviors. Power is a special organizing mechanism in group animals.
For human being, power is the basic social traits, and almost all
behaviors focus on it. How the human evolved the nature of demanding
equality, monogamy, families. How the persuades and manipulations to
human mind which changed the histories of societies.

According to the nature of demanding equality, in the third chapter,

the innate power of common resources, I put the basic power of
ownership power about the common resources as the basic ethics of human
societies and economies. How the common resources issues manipulated by
governors, monopolies, tycoons and so on.

After the basic power for ownership of common resources, the exchanges
of commodity are the main factor of economy. In the chapter 4, the
commodity and exchange, I revealed the real nature of commodity, that
commodity is a sort of power. Such definition negate the Marxism’s and
Marginalism’s definitions about the commodity. I also analyzed the
relationship about labor right and the repression inside the trade
networks. And base on my observations, I argue the law of repression
proliferation.

In the chapter 5, the money and circulation, I probe what is going on

for money, and give the definition of money in the perspective of
power. How the monetary supplies influence economies in history? What
caused the inflation and deflation? This chapter is reveal the nature
of money, if people really know it, this financial crisis shouldn’t be
so painful and fall in Dominic disasters. Present monetary system have
remained too much metal monetary traits, that is absolutely
unnecessary.

In the chapter 6, Market, I discuss the ethics about the market and
exchange. How the power manipulate exchanges in the market. What cause
the dilemmas of control and laissez-fair. I also mentioned the
relationship between exchange and persuading in the market.

Overall ， it is the time to rethink the ethics and organizations of

economics and politics, especially to the ruler of monetary allocation
and issues.
Chapter 1 the Nature of Human

All the social sciences should be based on the human nature, at the
beginning of discourse, it is important to analyze and define that how
do the human nature be. All important events of human society rooted in
human nature deeply. For example ， getting food, the distribution of
food, trade, marriage, parenting offspring, battle, war, even the
change of governor and so on, Most of individual and group behavior are
also driven by human nature.

Crossing the modem and ancient time, the philosophers and thinkers
always argue about how the human nature is. The most well-known
controversy in China is: people are good or evil as they born to the
world. It has always been the most controversial issue of Chinese
philosophy.

Mencius (372-289 BC) established the doctrine of people have a natural

of goodness. he once said: Everyone's heart have mercy and sympathy,
for example, one who see a child going to fall into the well, he will
want to help the child or feel sorry about it, but that not because
they are friends of the child’s parent or want be honor in the local
society or not like the voice of the cry.

Tit-to-tat, Xunzi (325-235 BC) believed that all people are born with
natural tendencies toward "waywardness": that is, a taste for profit
and beauty and a susceptibility to jealousy and hate, all of which, if
indulged in, would lead to disorder and criminality. In order to attain
a oneness with the Way, a dedication to morality, Xunzi argued for the
guidance of a proper teacher: only this would allow one to become
morally upright.

Many of the philosophers believe that in most of the time people are
driven by self-serving motives of themselves. LaoZi(circa, lived in
sixth century BC) ， who is foundation of Taoism, he said: “people are
coming for the benefit, Often, people are going to benefit.” In the
Western classical economics people defined as self-serving. 17th
century British thinker Thomas Hobbes established his account of human
nature is that self-interested cooperation was base of human society.
Adam Smith expounds that the free market, while appearing chaotic and
unrestrained, is actually guided to produce the right amount and
variety of goods by a so-called "invisible hand”. Smith believed that
while human motives were often driven by selfishness and greed, the
competition in the free market would tend to benefit society as a whole
by keeping prices low, while still building in an incentive for a wide
variety of goods and services. In The Wealth of Nations, Smith wrote:

"It is not from the benevolence of the butcher, the brewer, or the
baker that we expect our dinner, but from their regard to their own
interest."

Both Hobbes and Adam Smith have a same
interest was the basic human nature.
economic incentives, people will ask for
people work most for economic rewards.
basic assumption of classical economics -
fundamental point, that self-
Smith's doctrine rooted in
the maximum economic benefit,
This point later became the
the economic man.

The term Economic Man is very easy to be felt and understood, but that
is not all. For example, if human nature is self-serving, if really,
why some people had volunteered to fight for his country, faith,
religion? Rate of Return was most be used in economic analysis, but
what self-severing profit can be return of the risk which people fight
for? One man go to the war field may lost his greatest thing, life, but
mostly, he can get little benefits from it. For example, Verdun,
France in 1916 seesaw battle, it is famous “meat grinder” in history.
Both sides which taking part in the World War One put many troops in
the battle, because of the using of machine guns, cause very fatal
casualties. The French army lost more than 543,000 people, the German
loss more than 433,000 people. In contrast, very few bandits had lost
their lives when they first time to rob. Why should we deeply feel
sympathy and sorrow for other people who are suffering distress and
pain? Why do many people will donate their wealth to society? Human
nature can not be explained as simple as self-serving. Today, lots of
experiments create an empirical challenge to what we call the
selfishness axiom—the assumption that individuals seek to maximize
their own material gains in these interactions and expect others to do
the same things.

For example, the Ultimatum Game：

The UG is a simple bargaining game that has been extensively studied by

experimental economists. In this game subjects are paired, and the
first player, often called the “proposer,” is provisionally allotted a
divisible “pie”(usually money). The proposer then offers a portion of
the pie to a second person, often called the “responder.” The
responder, knowing both the offer and the total amount of the pie, then
has the opportunity to either accept or reject the proposer’s offer. If
the responder accepts, he or she receives the amount offered and the
proposer receives the remainder (the pie minus the offer). If the
responder rejects the offer, then neither player receives anything. In
either case, the game end; the two subjects receive their winnings and
depart. Players typically receive payments in cash and remain anonymous
to other players, but not to the experimenters (although experimental
economists have manipulated both of these variables). In the
experiments described here, players were anonymous, and the games
involved substantial sums of the appropriate currency. For this game,
the canonical assumptions (i.e., all participants maximize their income
and this is known by all of them) predict that responders, faced with a
choice between zero and a positive payoff should accept any positive
offer. Knowing this, proposers should offer the smallest non-zero
amount possible. In every experiment yet conducted the vast majority of
subjects have violated this prediction.

Bertrand Russell (1872 – 1970) had also mentioned that in his works:
Power: A New Social Analysis (1938). In the book he said :

The orthodox economists, as well as Marx, who in this respect agreed with them, were
mistaken in supposing that economic self-interest could be taken as the fundamental motive
in the social sciences. The desire for commodities, when separated from power and glory, is
finite, and can be fully satisfied by a moderate competence. The really expensive desires
are not dictated by a love of material comfort.

But in this book, Russell did not make it clear, why people have
desires for power and glory, and why people have such desires. I
believe that it is very important for human nature, to analyze why
people have such desires out of commodities and benefits.

There are for too long time and cross the civilizations, philosophers
all over the world take discussion with God, sanctity, good and evil.
However, God, heaven can not make the full convictions that which
exist. Good and evil, which also ease to fall in the abyss of personal
likes and dislikes? It seems only result is that people have to face
the endless debate.

In other hand, the new development of the natural sciences which give
us new opportunities for using these discoveries to analyze human
nature and behaviors. Modern biology, zoology, psychology, especially
evolutionary psychology, genetics, physiology and other subjects of the
new scientific progress, that give us new opportunity to discuss the
old issues, such as :
How human nature be? How are the relations of human nature and human’s
behavior? How do people’s Weltanschauung or philosophy distort human
nature and affect they to make a decision?

In the beginning of these discovery, is one of the most important

discovery of the 19th century: Darwin’s evolutionary theory. Darwin's
evolutionary theory, discussing about the interaction of biological and
environmental, the biological variation, the role of genetics and
natural selection could lead to biological adaptation to change.
Darwin's theory of evolution gave the West social ethics, with a strong
shock at that time.

When a wife of bishop learned about the evolutionary theory, she talked
to her husband that: “We are the descendants of ape! God, I hope this
is not true. If so, let us pray it will not be known by people for
ever. ”

Obviously, the theory of evolution oppressively impact the religious

believes and theology. The traditional philosophy and theology had been
shocked.
Now that, human just descendants of ape, how human can be holiness?
With abundant fossil evidence, indicates that the earliest stages of
human evolution were begin in Africa. Human history, as something
separate from the history of animals, began there about 7 million years
ago (estimates range from 5 to 9 million years ago).Around that time, a
population of African apes broke up into several populations, of which
one proceeded to evolve into modern gorillas, a second into the two
modern chimps, and the third into humans. More and more scientific
discoveries have proved that the theory of evolution is true, sacred
attributer philosophy of human or holy of God were no more been
accepted by the mainstream academia.

In as much as the “sacred” attributer never had been existed, now,

these viewpoint which claimed any "holy", should withdraw from the
stage of the social sciences. Recalling the history of mankind,
innumerability enslavement and oppression had taken place in "sacred"
name. In history ruling groups usually claim that they were the
executive of the sacred goals of the God and the societies, with this
reason they place the masses under the control. Anthropologists believe
that Kings naturally transformed from the high priest, like Egypt's
pharaohs and kings of the Shang Dynasty (BC 16 century – BC 10 century)
in China.

In ancient China, emperors "Son of Heaven" that had been ruling the
empire in the name of sacred heaven. In Shang dynasty and Zhou dynasty
(BC 10 century –BC 3 century), All important events before taking
actions that should consult by the augury for the God's wills. In
ancient Chinese Zuo Zhuan (translated as the Chronicle of Zuo) said:
the greatest important things for a nation was sacrifice ceremonies and
wars.

Monks and the monarchy have existed for long time, the most primitive society being known
by the anthropologists, of course, at that time are still in their original state. Sometimes,
both functions focused on a same person. These political forms not only existed in
barbarians, but highly civilized countries have. Roma’s Augustus had been priests on a long-
time, in the Province he had been a God. Caliphs is not only heads of state, is also the leader
of Islam.
Bertrand Russell: Power: A New Social analysis, chapter 4: priestly power (translate
from Chinese version)

In medieval, kings and the popes had been struggling for the Europe’s
highest power. Rome Church wants to rule the society by representing
the God, theologies want to stick up for the interests of the church.
Today religions still have been the leading force in lot of regions
over the world, especially in the Islamic Middle East and North Africa
region, some countries still retain a lot of religious domination or
the integration of religion and politics. In the early nineteenth
century German philosopher Hegel (1770-1831)emphasized that the nation
is sacred, nation is higher than the civil society in moral judgment,
the willing and aspirations of the normal people should scarified for
the realization of national goals. Holy God and God's will, be turned
into a man-made ease to be manipulated ideas: the "nation" or "the
people." Hegel put justice and power together as whole one, thus he
mixed the meaning of the two together, that argument had become the
Nazi’s basic philosophy ultimately. On the other hand, it also affected
Marxism, causing they contempt the humanitarian, and it also affected
the cruelly theory of class struggle of Lenin. After the October
Revolution （ 1917 ） Lenin ordered to execute all of the tsar's family
members include youngest child, such brutal action had rarely happened
in modern times over the civilized world. In addition, China, during
the Cultural Revolution (1966-1976), the relatives of the "class
enemies" had been persecuted and discriminated innocently, but in the
views of the theory of class struggle it seems be naturally.

The lessons of history is that sacredness and inviolability ultimately

often become tools of dictatorship, discrimination, oppression,
enslavement, killing, or even a tool of genocide.

These historical experiences showed that demise of the sacredness and

inviolability did not make people feeling hopeless and helpless, it
just gave more freedom of mankind. For the continuity of human society,
the most important character is not sacred, but mutual help,
cooperation and love, people love families, love friends, and even the
love all of humanity, love is the cornerstone of human society. Many
people can face the risk of personal danger, just for their loves,
relatives and groups, nationalities, beliefs. What these great
characters come from? A lot of ancients attributed to mysticism.

Mencius believed that the universe is, in essence, a moral universe.

Moral principles are the principle of the universe; human nature is an
proved example of these principles.

Rousseau believed that the habit of living together, which create the
most gentle emotions: the love for his wife and parents, families
become a better combination of a small community, because of mutual
attachment and free contacts which make small community link together.

Modern scientific discoveries show that the feelings of gentle and love
are not came from certain persons or the saints’ enlightenment, but the
result of evolution of human grouping-like essentiality.

For understanding that how the human nature be built by the evolution,
we must know what like in the beginning of life ,the initial state of
cognitive, the internal structure of human communities, as well as
other customs. Scientists believe that Humanity originated from
biological feedback and corresponding physiological mechanisms and
natural behaviors. Behavior patterns of human being are the
interactions of evolution of nature and the evolution of social
organizations as well as the changes of genetic. Anthropologist Weston
La Barre believe that human beings, as one of creatures, they not only
need to adapt to the objective external environment, but also meet the
needs of his fear, longing and fantasy. His opinions show that psycho
actives are very important aspects of human being evolution. The
evolutionary psychology absorbed Darwin's view, these arguments used to
explain the birds insects and other animal social behaviors.
Evolutionary psychologists argue that much of human behavior is
generated by psychological adaptations that evolved to solve recurrent
problems in human ancestral environments. Evolutionary psychology is a
hybrid discipline that draws insights from modern evolutionary theory,
biology, cognitive psychology, anthropology, economics, computer
science, and archaeology. According to evolutionary psychologist David
Buss, he argued that evolved psychological mechanisms are functionally
specialized to solve adaptive problems that recurred for humans over
deep evolutionary time.

After human beings have the abilities of using languages and tools, and
when human enter the civilized society stage, the culture has become a
more important psychological mechanism. Anthropologist Levi Strauss
described the different attitude of primitive people who face the
death: the first attitude is that dead have no longer entangled alive
people, in exchange, the alive people respect and pay tribute to dead,
dead also bless the alive ones; the second attitude is that dead want
to get comfortableness, but alive people not allowed this, they were
keeping on command those dead, using the victim's fear, alive people
can obtain some kind of prestige. Today, both phenomenon can be regard
as a psychological self balance mechanism, which from the primitive
human societies, as the language to played main role and the fear of
death pervaded in the communities, that mechanism make the spirit of
alive people quiet.

Since the ancient times, almost all of the rulers in the world claimed
that they are the manifestation of “goodness”, on the contrary, defined
their enemies the manifestation of “evil”. After this is the endless
debate until to eliminate opposite body, innumerable killings be taken
by the name of goodness and sacredness.

However, even in the more than 2000 years ago, the ancients became
aware that there were no relationship between morality and Heaven.
Laozi had said that: “heaven was not care about any creature and saint
care nothing about the normal people.” Modern evolutionism affirmed
that, modern human beings have evolved as a whole. Ancient Greek
philosopher Aristotle said that “one who not belonging to a group is,
ether a animal or a spirit.” Evolutionary psychology argued that one
always cared about to keep consistent with the groups he belonging,
that for their concerns about survival and reproduction. At the same
time, being a member of a group usually concerned about they position
in a group, if one was exiled be the group, he had little opportunity
to survive. human being as a species are born in the organization of
society.

The concepts of the “goodness and evil” were based on the behavior
preferences of grouping animals. For instance, in a group of lions,
female lions hunted for the foods most of time, but the prey was been
distribute by the physical power, male lion usually take the flesh
first, female lions and cubs had to waiting until the strong male lion
end it’s dinner. The male lion that newly get mating opportunities will
kill the cub the former male lion left behind. It is nature of lions
group, of cause, it is so cruel for human societies, but it is the
nature rule of lions. Collectively hunting wolves group, all the
individual of the group can eat the flesh they left the exception of
excessive hunger, except the excessive hunger.

The chimpanzee is required to review each other to food, when

chimpanzee mother in the group died, their minor children will be
bring-up by the other female chimpanzee, at most time is the sisters of
the dead. It has been is very close to human beings customs. Species
behaviors are based on preferences; these are results of evolution in
the nature and corresponded reproductive competition. By the same token,
the behaviors of human preferences are also shaped in the millions of
years of evolution. in the evolving process, human beings stepped down
from the tree branches, till 400 million years ago; till 2.50 million
years ago, the primitive human brain capacity increased; till 1.7
million years ago ， Primitive people have close to the body size of
modern people, but the brain capacity is only half than modem people;
Until the half million years ago, Homo sapiens replace the late Homo
erectus, till 50000 years ago, it took place a great leap in the
history of human evolutionary process. Although we have gone through a
long process of evolution, the human preferences still remain a lot of
traces or characters which from stone age, that means that “Modern
skulls house a stone age mind”. For example, modem people when they get
in a dark environment will feel fear, even the environment was familiar
at the lighting time. For evolution adaptive reasons, predator avoiding
is a very important problem, so the danger experiment like darkness and
so on will be transformed to offspring finally became a psychology
mechanism; but when modem people live in a safe environment the
psychology still remained to scare us.

In nature, the basis of animal behaviors is neural activity, neural

activity from very low-level animal there already exists. For example,
nematode is a subtle tiny microbe, its nervous system is very simple,
using a newly invented equipment, researchers could found specific
nerve cells of acting and feeling. Modern biological psychologists
argue that behavior is made by the nervous system for internal and
external factors. The basic function of nerve is responding to changes
in the environment through the bioelectrical signals. The human
experience feelings of joy and sadness, depends on the central nervous
system, and the neurons of it can be classified as exciting cents and
inhibiting cents. Scientists have found that certain chemical stuffs
determined the nervous activity. In other words, every action of
peripheral nervous is driven by chemicals stuff. Such as, when thirsty
want to drink, hungry want to eat, it mean that action and behaviors
will soon get chemical feedback from the body. Scientists found a
chemical called dopamine, which is a neurotransmitter occurring in a
wide variety of animals, including both vertebrates and invertebrates.
it transmit bioelectrical pulse between cells Dopamine has many
functions in the brain, including important roles in behavior and
cognition, motor activity, motivation and reward, sleep, mood,
attention, and learning. The lust of the brain, and happy feeling,
transformation of exciting and happy also have certain related function
to it. Opioid and cannabinoid transmission instead of dopamine may
modulate consummatory pleasure, Libido can be increased by drugs that
affect dopamine。
The latest scientific discovers indicate that evolution is not only
involved by genes ， genetically, also include enzyme, hormone , food,
light, population density. The basic model is: gene in cells, cells in
the body, the body in the environment。 The model should be nested type.
The evolutionary psychology tells us that, human evolution is not only
the body and intelligence, emotion and psychological desires are also
build by the evolutions.

Now, the scientific discoveries have proved that Human behaviors has
been driven and responded by the chemicals feedback from the body. Fear,
hatred, love, jealousy, all of these activities are driven by internal
biological electrical current. These activities are shaped by the
evolution. the essence of creatures is survival and reproduction, that
is, the populations for genetic continuity. The driving force of
biological evolution, survival and reproduction is the interaction with
the environment and competition between species and individuals. This
is the fundamental of the philosophy of creature. Chinese classify
ancient book: book of changers, said that:

Changes must be taken, when one face circumstances that no way out, if he take changes
successful he will win great through.

Whenever creatures encountered the difficulties in nature, including

the plight of species, such as over reproductions or low reproduction
or the environment take acute changes, for surviving in a difficult
situation, it must do best and changed any thing it can. It makes some
kind of biological changes, and these changes through breeding has been
expanded and improved, finally change genes. Nature is not a blind
watchmaker like Richard Dawkins described, nature just be the basic
rules. Recently, magazine modern biology published that: a group of
biologist from New York University, they researched different sample of
roundworms, finally they discovered that evolution is not random liking
a lot of people think, but rather identify and orderly.

European scientists analyze epigenetic changes in twins' genomes. The

group was led by Manel Esteller, a researcher with the Spanish National
Cancer Center in Madrid. The researchers studied 40 pairs of twins
recruited in Spain, Denmark and the United Kingdom; 25 of the pairs
were female. The youngest set of twins was 3, and the oldest pair was
74. All of the participants were asked to complete questionnaires about
their health, eating habits, physical activity, history of prescription
medication use and tobacco, alcohol and drug consumption.

The researchers also drew blood samples from each participant in order
to analyze and compare similarities and differences in the epigenome.
Results from the blood tests and from the questionnaires showed that
the youngest set of twins had the most identical genomes. But that
wasn't true for the oldest pairs of twins. Genetically speaking, these
twins were the least alike. The process that alters gene expression
and behavior without changing a gene's DNA sequence is called
methylation. Nearly every tumor, every human malignancy shows changes
in DNA methylation that mess up gene expression. This research show
that environment also can change genes expression.

To explain altruism, in 1960s William Hamilton sought the most evident

example that he could find: bees. These animals exist in a stringent
social hierarchy. The workers are sterile, serving only to protect and
fulfill the needs of their queen, rather than reproduce themselves.
Superficially, this seems in direct opposition to Darwinian evolution,
in that the individual is unable to contribute to the gene pool to
augment his or her fitness.

This was the focus of Hamilton’s theories of kin selection and

inclusive fitness. Hymenopteran insects, such as bees, wasps, and ants,
possess a unique reproductive strategy known as haplodiploidy (a sex-
determination system). In this system, the insects have more genes in
common with their sister, the queen, than with their own offspring (had
they any).

This is a socio-biological thinking, wherein genetic gain determines

the action and response of the individual. Thus, the sterility and
self-sacrifice of Hamilton’s bees are simplistically explained. The
underpinnings of kin selection, inclusive fitness and the coefficient
of relationship are clearly influencing these creatures to promote
their genes via acts that benefit the queen.

Group selection was also used as a popular explanation for adaptations,

which advanced by Wynne-Edwards. Many behaviors are adaptations of the
group, rather than adaptations of the individual, and that populations
have adaptive self regulatory mechanisms. Selective factors can create
situations in which groups are selected because they display group
properties which are selected-for.

As a non-mathematical introduction called the Haystack Model argued by

Maynard Smith, imagine a group of animals which spend most of their
time living and breeding in haystacks but which occasionally all come
out of their haystacks simultaneously, mix together and then separate
into equal groups which once again go off to inhabit separate
haystacks. We can then imagine a trait which benefits each haystack
group, perhaps leading to behaviorally altruistic acts which cost an
individual some fitness but enhance the fitness of its group even more,
and a selfish trait which, for the purposes of this discussion, we can
just call the absence of the altruistic trait. Each of these two traits
works on a different level of selection. Within the individual
haystacks the selfish organisms benefit in terms of evolutionary
fitness.

The basic theory of biological evolution is: the evolution was occurred
in whole species, stock is the basic unit of species evolution. For
example again, the bees sting acts against predators of honey a very
effective means. However, the one which have stung invader, at same
time have been drawn some entrails out by barbed sting, and
inevitably, it die soon. It is clear that the altruistic acts of bees
have benefit whole species, instead of the group which belonging. This
is the species level altruism. A other hand, bees compete for the
opportunity of reproduction. The queen which had been the first hatched
will kill their sisters, that is a selfish trait level mechanism.

A group of wolves have complex behaviors, their community organized

with hierarchy, that because wolves need a teamwork in order to capture
enough prey at the same time to ensure their baby safety, the females
would help her sister to breed their offspring. The chimpanzee
community base on the unit of family which mainly be supported by
females, members of the small group collaborate each other and mutually
assist often happens.

Bernd Heinrich theorizes about the ''left-wing behavior'' of ravens.

His observation show that Ravens at the bait were very noisy,
suggesting that this was a signal to other ravens to come and get it.
Professor Heinrich finds that young ravens leave home to wander. They
are gregarious, joining other juveniles to roost and feast with,
enabling them to choose an attractive mate. An unmated raven finding
food invites eligible singles to join him (or her) at the feast. He had
seized a few of crows which too tired to escape, tagged and analyzed
their DNA, which proves that they are not related.

The Portuguese Man O' War, also known as the blue bubble, is commonly
but erroneously thought of as a jellyfish. In fact, it is not a single
animal, but rather a siphonophore – a colony of four kinds of minute,
highly modified individuals, which are specialized polyps and
medusoids. Each such zooid in these pelagic colonial hydroids or
hydrozoans has a high degree of specialization and, although
structurally similar to other solitary animals, are all attached to
each other and physiologically integrated rather than living
independently. Such zooids are specialized to such an extent that they
lack the structures associated with other functions and are therefore
dependent for survival on the others to do what the particular zooid
cannot do. That is the beginning form of mutual mechanism. The group
surviving mechanism is the root of altruism trait.

The blue bubble also prove that the rules of nature is: in the
evolutionary process the basic rule of keeping the species survival,
which shaped behavior mechanism, colony or group animals must have the
mechanism for the colonial or mutually living. Simply said : group
animal must have the grouping mechanism. As a senior mammal, human being
is obviously should have some king of mutual and altruism and
competition mechanisms for successful surviving.

In 2007, the scientists of the Max Planck Institute for Evolutionary

Anthropology had published new discoveries about the altruism. Studies
investigating such behaviors in nonhuman primates, especially our close
relative the chimpanzee, form an important contribution to this debate.
Here we present experimental evidence that chimpanzees act
altruistically toward genetically unrelated conspecifics. In addition,
in two comparative experiments, they found that both chimpanzees and
human infants helped altruistically, regardless of any expectation of
reward, even when some effort was required, and even when the recipient
was an unfamiliar individual—all features previously thought to be
unique to humans. The evolutionary roots of human altruism may thus go
deeper than previously thought, reaching as far back as the last common
ancestor of humans and chimpanzees.

As Mencius said, human's favorite of infant or children is born. Today

magazines cover often put innocent children pictures on, advertisers
also promote the image of the child this way, love children is human’s
nature.

Treat with the reverence due to age the elders in your own family, so that the elders in the
families of others shall be similarly treated; treat with the kindness due to the young in
your own family, so that the young in the families of others shall be similarly treated - do
this, and the kingdom may be ruled to go round in your palm.

—— Mencius / chapter Liang Hui Wang I:

Altruism is not formed by the postnatal education, it is the innate

mechanism of human being. Therefore, the mutual mechanism of human is a
necessary requirement for species or stocks, without mutual mechanism
human could not survive in stone age time when competition of nature
and society was drastic. Inevitable, selfish tribe went toward
extinction finally. In human society, even in the thief and bandit
groups, will be gradually formed their own mutual trait and moral, so-
called "bandit moral”. Chinese philosophy Zhuangzi (370-331 BC)had told
a story of the robber.
The followers of the robber Zhi had asked him: “do robbers also have any method or
principle (in his proceedings)?' He replied, 'no profession is there which has not its own
principles? That the robber in his ability comes to the conclusion that there are valuable
deposits in an apartment that shows his sageness; that he is the first one to enter danger
place that shows his bravery; that he is the last to quit it shows his righteousness; that he
knows whether (the robbery) may be attempted or not shows his wisdom; and that he makes
an equal division of the plunder shows his benevolence. Without all these five qualities one
has never become a great robber leader.”

Zhuangzi / chapter Cutting open Satchels

This tale show that it is impossible to become a major great gang,

without some kind of ethics and mutual assistance are impossible to.
The well-known mafia movie "The Godfather" gave us a perfect
interpretation, which about why mafias become the largest criminal
groups in the west, for that, they have a long history and tradition
and internal ethics.

In Ming dynasty of china (1368-1644), philosophy Wang Yangming (1472-

1529) he developed the idea of innate knowing. He argued that every
person innately knows how does good and evil be? to Know this is the
our nature, he call this is ”conscience”. people need to do all are
that following their consciences instruction and moving forward without
hesitating.

Wang Yangming had told a story in his book, that: one day, a thief had
been arrested by a student of Wang, because Wang was local chief
office, he decide to interrogate the thief. Wang told a lot of
principle of conscience, but the thief laugh him, and asked him that:
“please tell me, where my conscience have been?” Wang not answer the
question immediately. For in the summer, it is so hot, Wang let the
thief take his cloth off, the thief take some off. Wang said: “it still
hot， you can be naked”. The thief hesitated and said “it may not
good” 。Wang suddenly told the thief loudly, “your conscience is her”.

The story tell us that everyone has his conscience, human being are
innately hat to do something ugly like killing people, cheating mate
and so on. but lot of times people’s nature just were twisted by the
other fact of human nature: self-serve.

Philosopher Kant interpreted mutual aid action as selfish motivation.

He believed that if one felt sorry for other’s pain that is sympathy,
one help unfortunates just because one not want to feel sorry for it.
In fact, it also shows that one did the right thing which may
benefiting species will be the inherent emotional reward. It is
evolution mechanism. Today, I think that sympathy and emotions are the
evolution mechanism which keeping human being as a group species. The
emotion of rewards and punish are motivation of the species, genes,
culture and so on. In the highest level analyze human nature, it is
that all of they are driven by evolution mechanisms and evolution
selections.

Psychologists describe these mechanisms of driving human’s behaviors as

spiritual motivation theory. Sigmund Freud (1856-1939) argued the
theory first. Freud proposed that the psyche could be divided into three
parts: ego, super-ego, and id. The super-ego is the moral component of
the psyche, which takes into account no special circumstances in which
the morally right thing may not be right for a given situation. When
one’s behaviors are against these moral component, one will feel guilty
and punish. Now, physiology proved that some parts of human brain closely
related to emotions and memory.

In 1994，Antonio Damasio publish his work: Descartes Error, in the book

he provided additional examples that emotion and rationality could be
damaged by focal brain injuries. He then reviews the neuron-anatomy and
neurochemistry of the pre-fontal and limbic regions that are known to
be critical for reason and emotion. he synthesizes his speculations
about how human reasoning works and how this working came to be. In the
book, he gives experimental evidence supporting his speculations, and
he explores the philosophical and moral implications raised by them.
The people whose focal brain had been injured, their feeling and
intellectuality are absolutely normal. but they unable to do any
reaction about others emotion, they haven’t excitement, anguish,
frustration, many of them can not fish their jobs had used to do well.
Damasio is clear about why Reason depends upon Emotion. It flows
directly from evolution's first commandment (Survive!), and from the
fact that "evolution is thrifty and tinkering." Nature, Damasio says,
"has built the apparatus of rationality not just on top of the
apparatus of biological regulation, but also from it and with it."

Super-ego is the species of human mechanism. Individuals are always

concerning for their position in the community. The recognition from
the society is very important for individuals. In the extremely
circumstances of social recognition like excluded by the communities,
one will take terrific action such as self-destruction, suicide,
attacking and so on.

The moral of human is not effected by the saints, it is parts of human

nature which from evolution mechanism, it is instinct of human.
May 12, 2008, it is the unforgettable days for the all Chinese people,
the 8 magnitude earthquake caused more than 80,000 people killed and
hundreds of thousands of people seriously injured. But, Chinese people
had been shocked by the terrific disaster, they do great action against
the misfortunes, they donate money, blood, beggars even donated their
savings. What make the nation that was regarded as a little selfish and
indifference changed so much? It is the power of human nature which had
been twisted by the ugly governors. (In the history of china governors
forbad people to care the affairs which no relate to themselves. For
example, in Qing dynasty people gathered without permission would be
severely punished even be executed.) What power made the Chinese people
became so selfless and brave? It is power of human nature. The
suffering and death of fellowman make Chinese feel great lost of their
genes, Chinese were touched by the internal super-ego mechanism. In
China's history, it is just this mechanism made volunteers and soldiers
to battle against the tyranny and invasion one by one . However, such
feelings exist more long time than human’s history, because it is the
natural of grouping animals.

But the super-ego was not always benefit to the societies, it also do
harm to nations. It was often utilized by the politicians, who make
enmity and tyranny. Fascism and ultra-nationalism are also utilized it
for enmities.

On the other hand of the evolution, competitions between the

individuals of the communities. Every one want to get the opportunities
to reproduce offspring. Second; every one want to survive. Sexual
reproduction is the means by which genes are propagated into future
generations, sexual selection plays a large role in the direction of
human evolution. More excellent and stronger individuals are bound to
acquire additional resources, so species select individuals by the sex
competitions. So species get more health and diversification though sex
selection mechanism. The sex-selection mechanism is basic force of
self-server trait. Many archaeologists believed that in Neolithic age
fights and battles between the tribe caused by the contests for
females.

Zoologists Watson who was studying the red grouse (lagopus scoticus), he
found that male ones which had been injected testosterone, their
territory became bigger twice times and they could attract more female
red grouses. at same time, they became more aggressive. The observe
proved that testosterone is related to aggression and sex selection
effect the behaviors mechanism. Red deer usually mate in the autumn,
the most strong male one get the most females and most opportunities of
mating and reproductions. But that not harmless, lot of males had been
flesh wound by the fighting toward females, 20%-30% had been some kind
of disabled finally.

In baboon society, the younger males usually form a small alliance to

compete with elder male for the mating opportunities. The elder and
stronger male baboon control females in the groups. By the advantage of
quantities younger males will drive out elder male. But the question
is: after that, in the winners, which one could mate with the females,
who became the lucky one? Who get the most females? Whatever there
must have one or two will have chance to mating and reproduction. This
mating contest is a mechanism which made genes of the species
diversification. In the contest, mutual benefit trait is a critical
step. It make the competition more complex, and also show the mutual
and self-serve trait interact at different levels.

Human being society have been form by the deferent mechanism, altruism
,mutual benefit, self-serve. Altruism versus selfishness, they not the
two face of a coin, they are mixed at a complex mode which driven by
the force of evolution. By now we can not give a simple answer for how
human nature be. The physiological researches show that human’s brains
work at different mode and different level, it have been formed to
modularity. There are not a CPU in the brains. The altruism and self-
sever modules may not being the same level or same hierarchy, it still
need to time to work out. Evolutionary psychologist argued that there
are hundreds or even thousands of these special-propose modules in the
human mind. If these traits are belong to deferent level and modules,
there are can not be calculated which trait was more important and
effective for the human’s behaviors. It means different modules exist
and work at same time, as a result it is in dilemmas and indecisions.

Complex life had been simplified as a foolish game, that is the reason of the economist so
notorious.

Matt Ridley: the Origins of Virtue

The recently genetics research argued that genetics are complex process
and multifaceted, studies have shown that genetics have been changed by
the environmental impact, changes in cells, organizational changes and
changes in the environment. There not exist such pre-dominated genetic
changes in the evolution. Sometimes environment play a key function in
the genetic changes, for example, when crocodilian’s eggs are hatching,
the environment temperature will decide the sex of the child, at some
range the eggs will all be males, an other range will all be females.
There has a sort of coral fishes, usually in their group have few male
fishes, sometimes, when male coral fishes leave the group, some of the
females in the group will became males.
In the human societies environment are more important than animals,
culture are also one of the key environment for human being. And
culture not only shaped our psychologies and also shaped our bodies,
just like we saw in some barbaric tribes.

Human natures was complex multiple interactive trait. Since that, the
“rational expectation hypothesis” which argued by neoclassic
economists, was in questions. The neoclassic economists always said
“rational one will do the right choose.” The question is what is
ration? British philosopher David Hume (1711-1776)argued that, the
ration is just the slave of the passion, unless served for the passion,
ration hasn’t other utilities. That mean that ration is driven by the
obsession. But today’s scientific discoveries have shown that passion
is more complex. But in fact, decisions are made in highly complex
situations that preclude reliance on fixed rules and compel the one who
made decisions to rely on intuition. Intuitions play a more important
role in lots of decisions.

“To be, or not to be that is the question.” Just like Shakespeare

( Hamlet 3/1)said, making choices always bother people. Maximize
interest is impossible at some times, because the physical needs and
psychological needs and social needs and so on, are totally at
different levels or different module of people’s mind. For example, one
should take a wonderful dinner or save the money for the next trip or
have a good night in the club or so on? Life fill about the hard
choices, or life is the hard choice. The neoclassic economics usually
overlook one of the important fact is that purchasing behaviors is
people buy something at some times just by the intuitional impulse.
Just for that, the sale promotion and advertisement is so critical for
the sellers.

In other hand, there are some interactions of people’s Weltanschauung

and behaviors; the evident fact is cultures also affected people’s
choices. For instance, religious are one of the great influence for
people’s behaviors among those culture, that because, religious are
usually have compound views of the world. Culture is a group mechanism
which had been evolved to deal the problems in their circumstances at
the beginning of civilizations. So cultures did also be one of the
critical trait which shaped the human natures, and it will be more and
more important for human nature definitely, but fundamentally they are
result of human society’s evolution.

In the end of the chapter, let’s take a concise review of human nature.
The human nature is the result of evolutions, it is the mechanism of
species which interact with the circumstances for millions years.
Altruism, mutual benefit, egoism, are the main traits of human
motivations, because human nature is complex, so the “economic man”
hypothesis had broken its base. That why so many economists and
sociologists criticize the economic man concept that it is not a result
of empirical scientific inquiry but rather part of the ideology of
liberal capitalism. The moral mechanism should be the adaptation of
collective life, they have formed in millions years of responding to
the circumstances. The altruistic traits and mutual benefit traits have
formed by the connections of genes which connections exist at different
levels like offspring, kin, groups, whole species. The self-sever
mechanism is the competitions of mating and reproductions and living
opportunities, which competitions also exist at different levels like
brotherhood, families, tribes, cultures, and so on. In other hand, the
human nature was not like rational expectation, human’s brains formed
at modularity which like a Swiss-knife, and most times one can not get
enough information for his decisions. so the paradoxes are bother
peoples mind in lots of time. Every trait have its own utilities for
the human being. The important question is how to keep the traits under
the social systems and make these balance, for that people have
invented ethics, customs, laws, cultures, and so on.

The false assumption always made terrible disasters in the history of

human societies. For example, in 1958, china, Mao’s Great Leap Forward
movement, which based on the altruistic assumption is that every people
will work hard for the country or collectivity, care about the public
wealth, and do his best for the collectivity. But the consequence of
the movement is nearly thirty million of people died of the starvations
which lasted for there years. Self-interest abuse caused the blooding
pristine capitalism and environment disasters. Self-interest caused
disaster could be seen everywhere, pollution, deception, killing,
looting, war, human being had pushed by the greed and selfishness to
the brink of self-destruction. It also caused the monetary tyrannies.
In china today it is making the society collapse. In 1998, PB Watts,
the executive of Shell USA, admitted that they provided guns and
logistics support, as well as soldiers pay benefits to the government
forces in Nigeria. The most of ethics, all over the world, always had
been design to prevent the harmful selfish behaviors, and there are
lots of tribes disappeared in the terrible circumstances, just because
they could not get enough mutual trait in their societies.

Chinese philosopher Wang Yangming (1472-1529) had said that: there

should be no exception, that social philosophy is belong the human’s
mind. It isn’t exist any true social philosophy which could beyond
human mind.

Just for that, today, when we discuss any social questions, there is a
critical principle should be remember that any rules mast not be
designed against fundamental human natures.
Chapter 2: the Origin of Power

What is the definition of power? In West, the word power etymologically

deriver from two Latin words, one is Potere which means capability, the
English word power derived from it, an other was Autorias which mean
edict and rule, the English word authority derived from it. In China
power etymological deriver from word “quan” that earliest mean a kind
of wood, which maybe be used to make measures, gradually it indicated a
kind of measure for weight which made by that kind of wood, next it
gradually indicated the rein of a machine, finally in Chinese quan
indicate capability to control something form vehicles to military
forces. Power is the fundamental concept in social sciences all over
the world. In west, Max Weber was defined power as that: power is the
capability which one or several individuals achieve their wills in
whose communities even they were facing other people’s resistance. In
other hand, there has a concept “right”, which derived from Old English
riht, rihtan, rihte, of Germanic origin; related to Latin rectus
'ruled'. Now, right is mean, a moral or legal entitlement to have or
obtain something or to act in a certain way, in other word is a
capability which from a moral or legal entitlement to have or obtain
something or to act in a certain way. Right is a kind of power which
authorized by the ethics and lows, so I put the concept ”right” as a
subclass of power here, other words concept power is include right,
e.g. property right is the capability, or the power, to deal with the
property, The capability or power is authorized by governors or ethics.
In this book I regard “right” as subclass of “power”, and in most times
I will use “power” to refer “right”, it makes easy to analyze the
social questions.

The early sociology, which regarded power as an oppressive and

compelling concept, it can not describe the true mechanism of power
correctly and completely. I argued that power is neutral traits in the
societies, in spite of power which made innumerable oppressions,
enslavements, and disasters. For example, couples have some power to
each other equally, which is the main organization of modern human
societies.

Here I give my own definition of power: Power is action with limited

range, which is authorized or accepted by the communities or
circumstances.

In many cases, power is the consequence of capabilities, for example,

some regimes are the result of force capabilities. At the same time,
the range of the actions should be dynamic, so power is also dynamic
trait. Just like Russell had the metaphor, sociological concept power
equate physical concept energy.

In the course of this book I shall be concerned to prove that the fundamental concept in
social science is Power, in the same sense in which Energy is the fundamental concept in
physics. Like energy, power has many forms, such as wealth, armaments, civil authority,
influence on opinion. No one of these can be regarded as subordinate to any other, and
there is no one form from which the others are derivative. The attempt to treat one form
of power, say wealth, in isolation, can only be partially successful, just as the study of one
form of energy will be defective at certain points, unless other forms are taken into
account. Wealth may result from military power or from influence over opinion, just as
either of these may result from wealth.
Bertrand Russell: Power: A New Social analysis , chapter 1

Power is concept about quantity, it like the energy to be and exist

for different forms. Power essentially is a kind of social dynamic
range, it also mean the capability to action. A president is entitle to
reject a bill unless it was passed by two-third, in this case, the
range of his power has been defined clearly, but lots times president
will not reject to sign bills, what ever president to do in this case
he has the power of rejection. Power traits have formed by the
competitions for surviving and reproduction, and it is driven by the
human natures. So power is also exist in some grouping animals. the
power of a king depended on relations of different groups, classes,
families, bureaucrats, military forces. Even in same dynasty of china,
power of empires had been so different that someone were political
strongman, other were the puppet of political oligarchs. In most
circumstances, individuals have the power to manage themselves bodies,
that is one of the most fundamental power of human.

Most of former philosophers argued that only human have the power trait
in their society, but in the animal society there are also widely exist
some kind of power. The most well know powers are leadership power and
mating power, in many cases these two powers combined. In a group of
lions, a lion could mate with any lionesses in the group, only when it
get the leadership power of the group.

One of the greatest threats for chimpanzee group is that older male
kill newborn cubs. Sometime cubs also are killed by female one, if
females one need food or they believe the cubs will become rivals of
mate in a predictable future.

Zoologists found that when a female chimpanzee mated with the highest
male chimpanzee in the group, she would shout as loud as her can. Those
females want proven their fecundity by bark.

Zoologist Hall and De Vore discovered that: when female baboons was in
beginning of their estrus, the male in the group did not compete for
females, but when females in their oestrus, the males star to compete
for females, and usually there are only one male can get the
opportunities to mate and go with the female. The male one would drive
any one which want to access the female until the estrus past. This
show that the power of mating exist in the wild primates.

Frans de Waal, a primatologist who focuses on the social structure and

psychology of apes, in his recent work: our inner ape, he figured out
some relations between human and two of our closest animal relatives
chimpanzee and pygmy chimpanzee (bonobo). The chimpanzee has a
reputation as murderous and power-hungry, whereas the bonobo, seems to
prefer to "make love - not war." He present a more complete picture of
human nature and human ancestry, one that tries to accommodate both the
chimpanzee and the bonobo within us. Sex is closely related to power
relations amongst apes, although what role it plays depends on the
social structure of the ape species in question.

Bonobos show us the conditions under which peaceful relations between groups may evolve.
Similar conditions apply to us. All human societies know intermarriage, hence gene flow
between groups, which makes deadly aggression counterproductive. Even though one may
gain by defeating another group over territory, there are drawbacks, such as lives lost on
your own side, kin killed on the other side, and reduced trading opportunities. The latter
may not apply to apes, but it is a significant factor in the human case.

Frans de Waal: Our Inner Ape

Social animals form hierarchies based on access to sex and resources

such as food, territory or safe places. Human nature is still preserved
something ape-like traits, the power mechanisms are also derivation
from the ancient animal-like circumstance. Human children took years to
acquire the information and the practice needed to survive in hard
environments, just as they still take years to learn how to be a farmer
or computer programmer today. During those many years after weaning,
our children are still too dumb and helpless to acquire their own food;
they depend entirely on their parents to bring food to them. These
habits are so natural to us that we forget that baby apes gather food
as soon as they are weaned. The result is parental burden makes care by
the father as well as the mother important for a child's survival. That
why human societies devote to monogamy, and that is also the derivation
of families, at meantime, a woman remains sexually attractive and
receptive so that she can satisfy a man sexually all the time, bind him
to her, and reward him for his help in rearing her baby. Sexual
relationship formed one of most important power in human societies.

Sociologist Westermarck (1891) believe that even if in the barbarism

age of human being, one man living together with one or more women was
habit of their societies. They copulated and took the children caring
burden together, man was protector and supporter of the family. In
2003, an American anthropologist Owen augured that, the different was
little between man and women in the primitive age, which proved human
societies had been monogamy dominated in the beginning.
By contemporary evolutionary theories the great difference between the
male and female body size, which indicate males competed with others
mainly by the strength and body size, in contrast, the body size little
difference indicated there were less fight for the female than those
great different species. It also shows some relations about spending
more time on caring spouses and children.

The attraction system directs an individual’s attention toward specific mates, makes him or her
crave emotional union with this person, and is associated with high levels of dopamine and
norepinephrine and low levels of serotonin in the brain. The attachment system is distinguished
by the maintenance of close proximity, feelings of comfort and security, and feelings of
emotional dependency and is associated with oxytocin (for women) and vasopressin (for men;
Carter, 1998; Insel, Winslow, Wang, & Young, 1998). Additionally, when both men and women who
are deeply in love are asked to think of their partners while their brain is being scanned, regions
of the brain that are associated with reward become activated (the same regions activated by
cocaine).
Buss: handbook of evolutionary psychology

In the Indonesia's Kalimantan Island, zoologist observed a chimpanzee

family which form by a pair of adult chimpanzees and two children, two
children age gap show that the family had existed at lest for two
rutting seasons. male chimpanzee gently constructed lair for the
female and children upon a tree, itself sleep in a branch under the
lair.

In the chimpanzee communities, there are less fight than baboon and
monkey. A lead of chimpanzee group, frequently did not be the strongest
one, but be the one of wisdom who can coordinate and organize groups.

Human society had form family system in the primitive age, it also the
result of evolution. Weaned human infants cannot support themselves
because they lack these mechanical and mental skills. They need adults
to teach them, and they also need adults to feed them for the decade or
two that they are being taught. That caused human family last for more
time in order to feed their infants. In order to consolidate the
relation of spouses, the strong feelings, love, had been evolved. Such
feeling linked spouse tightly, and exclude third one to involve their
mating game. the feeling of love is a mechanism of brain, which caused
by Neurochemical system, and located in some brain regions rich in
dopamine. Family had been formed by the mating competition and infants
rearing. Families have been a fundamental cell of the human societies.
These formed basic powers which concerning on families.

When people get the abilities of using tools and making tools, that a
great leap for human being. When first people learned to thrown stones
at a beast, human began to be invincibility, human began to conquer the
world. Invention of the weapons that make more equal for human
societies, Axes, spears, bows and arrows these let fighting more
dangers than ever, gradually people quit internal fighting as the
mainly male courtship pattern inside their groups. In south Africa,
when autochthons disputed for something, they often said that, we don’t
quarrel who is bigger, who is smaller, let’s pick up, the bow and
arrows, let’s the weapon prove it. Since the fatal weapon had been
invented, human societies became more equal than they previous had
been. At least, in most time of primitive age, weapon let adult male in
the tribe equal.
Inner equality of tribes make the monogamy solidified became mainly
pairing habit ， despite there existed little polygynous. Although the
civilized world had portrayed primitive peoples as promiscuity
barbarians for long time, but contemporary serious field research had
increasingly tend to confirm that whatever how primitive are those
tribes, their family habit were dominantly are monogamy. Claude Lévi-
Strauss had described that in Brazil autochthonic tribes, married
couples and unmarried young were living in separated areas, when
European colonists found the Hawaiian Islands, the island indigenous
communities were still living in the Neolithic Age, but their families
system were also mainly monogamy, little polygynous.

In the end of nineteen century, anthropologists narrated those

primitive societies of Semang, local primitive tribes were still
dominated by monogamy. The phenomena of polygamy only existed at the
frontier with the Malaysian tribes. In the pure nation tribes,
debauchery and adultery were serious crimes, some one even had been
executed for that, and couples were rarely divorced.

All above show that human abilities trend to equal in the evolution
processes, which formed power of mating contributing equally in the
societies. Natural powers finally became social powers in the
communities. So the equality and justice were basic needs for everyone
in psychology, and put the seeds of resisting injustice in everyone’s
mind.

An other important power is the power of leadership, as a group animal,

they need cooperate for hunting or avoiding predators, so the leader of
group should be critical for the group’s survival. The leadership
powers are about the abilities to make decisions and manage the groups
and so on. As rewards the leader of the group will get some kind of
priorities both in physical or social aspects. At same time, the
leadership power also involved great risk for individuals, circles and
classes who competed for that. The competitions for leadership are the
main thread of the civilization history. The desires for leadership
power were impelled by the physical instinct and superego. In most of
the primitive tribes the competitions for leadership were not by the
physical strength, chieftains usually were experienced and wise
seniors. Small tribes form by 20-50 peoples, they were equal generally,
there were no hierarchy in their communities. Men must marry with
adjacent tribal girls, and vice versa. Such marriages relations with
external tribes gradually linked into a larger tribal coalition, which
is the prototype of nation. When those tribes need to make decisions,
they would collectively discuss and make a unanimous decision, if the
individual did not agree this, he could go to other tribes. In
Primitive stage of human communities, capacities of adult individuals
are average and equal, in addition, these relations are solidified by
blood ties, which created democratic decision-making mechanism in their
communities. Of cause, the leadership powers were produced by
democratic manner. The average and equal relations guaranteed the
democratic power structures in primitive societies, The power of
leaders mostly concerned collective affairs, in the primitive age, the
distribution of the quarries mainly decided by the ethics of local
communities, the leader of the tribe most time couldn’t exclusive
possess quarries. But there were something changed, the power of
leadership became more and more formidable and exclusive by the time in
lot of places. What make these happened?

The answer is wizardries or so called shamans, which is a range of

primitive beliefs and practices concerned with communication with the
spirit world, wizardries made the wizards had the abilities to control
other one’s actions and choices, the leadership power of a tribe
gradually transformed from chieftains to the wizards, and maybe lots of
they originally to be same one. Finally these wizards became kings of
nation. Nations essentially derived peoples who have common ideology.
Human began to embrace shamans at least in the Neolithic age.

What did the wizardries derived from? I believed that is the mental
mechanism for human to respond natural and social circumstances, it is
the byproducts of evolution. Superstition, mostly brought from the
cognitive bias, in certain stage human need relate or explained element
their facing in circumstances, finally gave their own answers, those
were a great leap in evolution of human cognition, for example, among
those cognitions people knew the relations between the seed and fruits,
then people explored which plant could be domesticable, that cause
invention of agricultures. But some times the cognitions is wrong, like
ancient people regard there were causalities between the elements and
ghosts. That caused primitive shaman.

In the nature, animals also have cognitions of causalities in some

degrees, animal even have their superstitions. The basic model of
cognition is:

circumstance ┄ behavior ┄ consequence ┄ learn (realize the relations

between elements )

1948 psychologist Skinner took a famous experiment proved that animals also have
cognitive abilities and superstitions. Skinner placed a series of hungry
pigeons in a cage attached to an automatic mechanism that delivered
food to the pigeon "at regular intervals with no reference whatsoever
to the bird's behavior." He discovered that the pigeons associated the
delivery of the food with whatever chance actions they had been
performing as it was delivered, and that they subsequently continued to
perform these same actions.

One bird was conditioned to turn counter-clockwise about the cage,

making two or three turns between reinforcements. Another repeatedly
thrust its head into one of the upper corners of the cage. A third
developed a 'tossing' response, as if placing its head beneath an
invisible bar and lifting it repeatedly. Two birds developed a
pendulum motion of the head and body, in which the head was extended
forward and swung from right to left with a sharp movement followed
by a somewhat slower return.
Skinner, B.F.: Superstition in the Pigeon

Skinner suggested that the pigeons behaved as if they were influencing

the automatic mechanism with their "rituals" and that this experiment
shed light on human behavior. A few accidental connections between a
ritual and favorable consequences suffice to set up and maintain the
behavior in spite of many unreinforced instances. The pigeon’s
superstitions distinguished after thousands times invalidations, which
took more time than established. That explained why the wizardry set up
so widely in human societies. Ancient china it were usual to perform
wizard ceremonies for ask rain for drought, and most of people believe
it. When the drought last for long time, the possibilities of rain
would become greater, so there must have accidental connection to be
set up and be reinforced.

This phenomenon has also been replicated among high-school students

(Bruner & Revuski, 1961) ， in the experiment students had been demanded
to four buttons which numbered 1,2,3,4. if one touch the right button
it will get the right , one would get a coin, but the reward must be
last at least 10 seconds, the right key is 3, of cause, the students
didn’t know that. The experiment result were, students explored
different combination, because they believed that only their own
combination could get the rewards.

As primitive superstitious acts influenced the communities more and

more great, there were greater interests for shamans, they
significantly improved their skills. they had invented a lot of trick
to consolidate the credibility of their witchcraft and their prestige.
Levi Strauss recorded that Brazil indigenous shaman had verify their
wizard craft by tricks. Shamans left a piece of blooded floss in their
mouth, that were used to proved their shaman craft. The power of shaman
were formidable in the tribes, lots of recorders proved that shaman
could decide whether a member should be executed by claiming who was
the devil or did be controlled by the devils.

In ancient Egypt, the pharaohs were mixture of god and human, pharaohs
were defined as the son of sun god, lots of his ministers also be
monks, meanwhile, pharaoh is the leader of the monks. In China, Shang
dynasty (circa 1760-1050 BC), the kings also identified himself as son
of heaven. the position of great priest was just below the king,
according to history book Shang Shu, the customs of Shang were very
superstitious, when the king Wu Ding wanted to nominate a low class
man as his prime minister, he secretly let painter to paint this one’s
portrait first, than he told to his ministers he had dreamed a oracle
which show him that there were a low class man who would help king to
make kingdom prosperity, after that he let offices to find the one by
the portrait. Despite, the kingdom was dominated under very serious
hierarchies, but no noble dared to opposite this nomination, because of
the superstition. till this stage, in human societies, leadership
powers had been competed by the controlling crowd’s minds.

Dennis H. Wrong in his book power, 1988, had defined manipulations and
persuasion as two kind of power. So the ideology always be the
fundamental form of communities. India historic Ashoka (273 BC-232
BC),as he end years of conquest war, had said that the real conquest is
the conquest of minds. 1989, when the Soviet Union military force who
had been ordered to suppress the multitude in the streets, the soldiers
whether mutinied or denied to shooting, that because the ideology of
Soviet Union had collapsed. Fascism and communism had the common ground
is ideological manipulations, flags, sport games, square multitude
movements and so on. Warsaw Treaty Organization had collapsed almost in
one night, when the China Tiananmen massacre prove that it had been so
called “communism ideality” just a cheat of oppression, it essentially
were military based bureaucracies. It also proved that the most
powerful weapon is human thinking, whatever it is right or wrong.

Abraham Lincoln once told to a general that: someone had told me you
were interesting to become a dictator, the route to the dictatorship is
win the war, I want you win the war, for that I had been ready to take
the risks of dictatorship. That was right for Lincoln, because there
were nearly no soldier willing to fight for dictatorship in 1860s
America. In contrast, two hundred years ago, in British, Cromwell’s
soldiers were willing to dissolve the parliament by his order.

The leadership are not always benefiting individuals, it also

accompanied great risk sometimes in the nature. In the competitions for
the leadership, lots of individuals who involved had been seriously
injured or killed. The involved one whose odds of death, were times of
normal one’s. In the nature, a leader of a group beast usually is more
danger than his numbers. A leader of a group hyena had been killed
first by a group of lions, a leader of a group monkey usually had been
the first quarry. That because, that leaders usually are distinct and
easy to focus on, that also is easy to be caught by predators. Because
of war and competitions for leadership, in ancient time, a ruler of
community usually more danger than other numbers. Despite this, the
leadership power lies in appreciating ones relation to survival and
reproductive success both during our evolutionary past and in our
present lives. For individual, leadership is the most interest for
one’s reproduction, so it is also important for genes.

Leadership mechanism is critical for a groups existing, whatever in the

nature or in the human society. The critical decision is one of most
important key for group’s survival, meanwhile, the leadership also need
following mechanism which let the number follow the leader. The leader
of a group of gooses, decide where to fly in their migrate, if it wrong
the group rarely survive, and of a individual not follow the leader
goose or lose group , it also do. The follow mechanisms sometime are
rational, sometime are irrational. The follow mechanism are formed to
adapt the surviving competitions, for example, when a predator near a
group of deer, if the leader run other will follow it as soon as
possible. But the irrational follow mechanism make the leadership power
more formidable in communities. At other aspect, the follow strategy
are the mutual benefit mechanism, the follow one also can get benefit
of their doing. Those benefits could be priorities for food or mating,
it also solidified the follow one’s leadership power to junior numbers.
That formed hierarchy and hierarchy ethics like Confucian ethic formed
in the ancient china. In Melanesia aborigines societies, the big man’s
political sphere divided itself into a small internal sector which
composed of his personal satellites, it rarely over 8 person and a
much larger external sector, the tribe galaxy consisting of many
similar constellations.(M.D. Sahlins)

The intimate relationship between social status and neuroendocrine

responses is plainly evident in modern humans. You may believe you
don’t think much about status, but your endocrine system shows
otherwise. Changes in status produce large changes in hormone levels.
For example, following competitive games, male winners typically show
elevated testosterone levels relative to losers (Booth, Shelly, Mazur,
Tharp, & Kittok, 1989; Elias, 1981). Life at the bottom of the
hierarchy can be pretty grim emotionally, and, as this section shows,
the constant emotional turmoil that those at the bottom suffer put them
at high risk for illness, depression, or violence.

The leadership, persuasion, manipulation, following, hierarchy, formed

the basic culture in the ancient human societies. In the human
cultures, the some of them have developed strictly hierarchical ethics,
like in ancient Eastern Asia, China, Japan, Korea, and Vietnam, as well
as in the Middle Eastern. In Japan, it was specially strictly, in
there, junior number must obey the senior’s directions, the extreme
sample is the Bushido, which was famous as the action of Kamikaze
attacks. Psychologist suggested that people usually easy to follow like
a sheep, specially for younglings. In history, Red guards,
Schutzstaffels, mainstays of them were younglings.

The rulers also invented the system to manipulate individuals follow

their directions or orders. The militaries, prisons, propagandas,
ideologies, and so on, these were invented to manipulate people to obey
their dominations. People were used to live under managements, so they
would follow the directions without hesitancy.
The power of distribution, were also a fundamental power for
communities, lots time, this power is included in the leadership power,
but some time, it is decide by the local ethics. In fact ethics about
distributions were the foundation of a society. The robbers were have
their own ethics about the distributions of loot, if anyone violated
that he would be very dangers. The origin of distributions mainly
derived form the distributing quarries.

When human used weapons for hunting, the cooperation had been
solidified in the communities. So the subsequent question is that how
to distributing the quarries. But in other hand, the statistic from
anthropologists had revealed that the main food resources for primitive
human societies relied on females gathering foods very much, or at
least, it was no less than males hunting quarries. Those make the
distribution ethics more complicated. For hunting primitive tribes,
they defined quarries belonging to common wealth. That is a mutual
trait system, because the big quarry could not be stored for long time
in ancient, if one who hunted the quarry shared the quarry to others,
and he could share a quarry who hunted by others next time, meanwhile,
the sharing behaviors also help the one avoid hunger when he hunted
nothing. Quarry distribution was very important for human communities,
for that today, feast and dinners is a very usual method to communicate
each other, sharing food behaviors widely existed in human communities
form beggars to presidents, from strangers to lovers. These common
habit are based on the human’s social natures which formed by the long
time collective life and evolutionary psychos. At meanwhile people had
been inclined to keep the gathered vegetal food or small quarries for
themselves. In Venezuela, aborigine Yanamamo live inside the forest,
they collectively hunting big quarries, but individuals can keep small
quarries and bananas for himself, because those food can get by
individuals himself or herself. How do the primitive communities
distribute food were formed by the local circumstances and the
abilities which primitive tribes owned.

In the Tanzania, there live the Hadza, they are still out of the stage
of agriculture society, women gather vegetal foods and honeys, men hunt
individually or in pairs for big quarries, some times are antelopes,
some times are big quarries such like giraffes. Big quarry could not be
reserved in hot climate of local, so distributing quarries to tribe is
a reasonable choice, any stingy behaviors will be disdain by the
communities. But both men and women could keep small quarries for
themselves or their families in their habit.

In the early stage of human civilizations, the distributing property is

one of basic power, which derived from the ethics which had been form
by the agreements of members of communities. The collective or private
properties have been carefully distinguished by the local ethic for the
primitive age.

Moors who live in the north England have kept their traditions of using
common properties, these traditions limited the quantities of livestock
for every families, their sheep could browse on anywhere in their
common field, but families could not increase the quantities of sheep.
This keep the common field not to be destroyed by the overgrazing, it
also kept the common resource to be used fairly.

In the south Africa Kalahari desert, local aborigines have composite

ethics for distribution of foods. For example, they hunted by poisoned
arrows, one who killed the quarry can drink the blood at first time,
but only the owner of poisoned arrow which killed the quarry have the
power to distributing the meat. When they hunted collectively, the meat
also belonged to the tribe, one who participated only get opportunities
to eat quarry’s innards. The poisoned owner distribution is the
capitalism, the collective hunting distribution is socialism, and
evolution and circumstance keep both regimes in a single community
without confliction.

The attitudes about distribution of food not changed by civilization

progress absolutely, there away have some exceptions. For example, in
the world war Ⅱ, British government have to apply rationing policies,
but, as we know, the British government incline to free market policies
at most time. Form the historic perspective, systems of distribution
relied or limited by the quantities of resources which communities
could get or produce. That is basic issue of distribution.

An other power which is very usual in nature, is the power of

territory, this power is the range which animal lived. The term
territory refers to any area that an animal or an animal group of a
particular species consistently defends against conspecifics, some
times could be other species. Territorial animals defend areas that
contain a nest, den or mating site and sufficient food resources for
themselves and their young. Lions emit urine to signal the range of
their territories, any male one which invaded the territories would
face a fatal confliction. Territorial boundary patrols are a
distinctive and unique aspect of wild chimpanzee, and lethal inter-
group aggression occurs in chimpanzees societies, and so patrols are
likely to be dangerous and costly. Human societies also have the habit
of territorial defending, for thousands years, clans, tribes, states,
fighting each other for their territorial. the territory definitions of
human societies are very complicated and interweaved. From the states
to provinces, counties, block, farms, villages, families, and so on,
social definitions of territories are the basic rules of the civilized
world.

In the common owned land of primitive tribes, the territorial issues

also were a main factor to evoke battles, the fossils evidences showed
that in the Paleolithic age people had been killed each other by
weapons. Inside the aboriginal tribes, there are several areas be plot
out for different flocks, people defined their own areas for families,
some tribes married and unmarried individuals were lived in different
areas.

The collective territories concept were derived from nature habit of

human, in the contrary, the private possessions concept were gradually
formed by the primitive agricultures. When one or one family could
handle the food supply by himself, they inclined to keep grain for
themselves naturally. In the middle age, however, lots of nomadic
tribes had regarded land as collective possessions. Even in the farming
civilizations possessions had been defined belonging to deferent master
at deferent level. The king had all territory of the kingdom, and a
king distributed his territory to the seigneurs who related to the
king, at same time seigneurs would contribute some thing to their king
or do something for him, and the seigneurs distributed their
territories to related nobles, nobles also do some thing to the
seigneurs, the basic cell of these hierarchies was farmer and farmer’s
families, they did all of the work to supply their societies, they had
little power to choice their job. The ways which lands had been divided
in ancient time like companies to transform contracts to subcontractors
now. in these cases，Kings had the power of Eminent domain, the nobles
had the power of ownership, the farmers had the power of using the
field.

The phenomena of power universally exist in nature, in the long time

evolution, human societies formed complicated and interweaved power
structures that became the bases of human societies. Power had been
divided carefully in these structures, that temporarily balanced the
relationship between individual and collective, senior and juniors,
until the new power systems build up. In some aboriginal tribes women
gathered vegetable foods men hunting for quarries, everyone work hard,
but every one also could have a meal freely. Levi Strauss in his work，
the Lectures of Anthropology, Naked men had motion that:

In North America, Indian myths explained how the kindling been gotten from. In those
myths put kindling under the circumstances of properties, which arranged carefully like
which one could be exchanged, which one should be share with other individuals, which one
should be kept for oneself, and so on. These myth seemed be ridiculous and vulgar at the
first blush, but when you analyzed them seriously, you can find the complicated and fully
economical philosophy of their societies.

In the nature circumstances, every one, at lest, has the power to

manage his body that is the entitled by the nature, but it also rely to
abilities one owned sometimes, for example, choosing sexual mate, it is
fundamental power of bodies. The power structures had been solidified
and modified by the communities and lives, it became basic ethics
finally. Ethic have successfully reduced lots of unnecessary conflict
in human societies, it is kind of grouping mechanism. Some powers are
related to collective decisions, like where did tribe migrate to,
whether tribe should exchange goods to an other tribe, the choice of
these are disunited at most time, so tribe should elect a wise one to
make the decisions， it colleted individual powers to one or a small
group, that is beginning of executive mechanism. In aboriginal tribes,
it usually is a wise senior one more than a strongest one. The election
process formed primitive democracies. The societies are more civilized,
its power structures are more sophisticated.

Economics also have missions to research the relations of powers which

are the fundaments of economy systems. Until now, the concepts and
relationships of individual power (right), capital power, property
power, have been illegible and misunderstood. For contemporary world,
it is one of the most important questions that capital powers have
abused everywhere, and it has been aggravated by the globalization, it
also make capital power take precedence over human power.

Brazilian government had been puzzled by the AIDS epidemic infestation

in 1990s, at that time, the most of patients who infested the HIV in
brazil could not offered the expansive medical cost. In 1997, Brazilian
government declared that domestic medical firms could legally imitate
medicines which invented by the developed countries. That means that
Brazilian government temporarily abolished patents for HIV medicines
which owned by the medical corporations. As results of this measure, in
Brazil domestic market, HIV caring medicines have a steep down in
prices, the price of these medicines only were quarter of similar
products which manufactured in USA, some of them even be one sixteenth
of similar one. Government bought some of imitating products to
distribute for poor HIV patients, that caused a obvious decreased in
the mortality rate of HIV patients.

There are in the dilemma for the U.S. government, protecting

intellectual property right or protecting the basic human right they
have to make choice. Us government which had been turn of the screw of
patent holders, they threatened to apply trade sanctions to the
countries which have violated patents of American firms, at same time,
they accused these countries for violating intellectual trade rules in
the WTO (world trade organization). But, that evoked public opinions
over the world against U.S. government and medical firms. facing the
huge public pressures, U.S. government have to change their attitude
and strategies, terminated the trade sanctions against those countries
which violated medical patents about HIV. Several international
organizations and Unite State, Brazil, and other developing countries
had negotiated about these questions, several private funds had joined
the negotiation late. As result, May 2000, relevant medical firms
announced that they were willing to negotiated with developing
countries, 2001, medical firms had agreed that they would sell the
medicines about HIV in their cost prices, which usually were one tenth
of the prices in West.
This case showed that societies should do some thing against laissez-
faire capital powers, and the dialogues and negotiations between
relevant parties could get acceptable results. Now it is the time to
re-focus the question about the capital power and relevant powers. The
balance of power is the key issue of human societies. Democratic and
open accessed politics would give societies abilities to reform
themselves peacefully and perpetually.
Chapter 3: the innate power of common resources

The first man who, having enclosed a piece of ground, bethought himself of saying This is
mine, and found people simple enough to believe him, was the real founder of civil society.
From how many crimes, wars and murders, from how many horrors and misfortunes might
not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying
to his fellows, "Beware of listening to this impostor; you are undone if you once forget that
the fruits of the earth belong to us all, and the earth itself to nobody."
1755 Jacques Rousseau: A Dissertation On the Origin and Foundation of the
Inequality of Mankind

Rousseau had motion the question that how ground belong to? For more
than 250 years last, now the question still puzzle public still. Ground
as a kind of private properties, were rooted form primitive
agricultures, at that time, people had the abilities to earn live of
themselves and their families by the cultivating only, but at the
beginning of farming societies, they still owned ground collectively,
as we talked before, the distribution relied on the productive
abilities, private ground regime also relied on the maturation of
agriculture and political powers, till modern time, lots of aboriginal
tribes leaved their ground as common-property. Ancient Inca Empire had
already been a centralized agricultural stat, but it remained the
ground as common-property.

As traditions of Native American Indians, ground had been regarded as

common property till 19th centuries. Most environmental educators will
be familiar with what has become known as ‘Chief Seattle’s speech’.
Many people consider it to be one of the finest statements ever made on
behalf of nature, and it is regularly reprinted in text-books and
curriculum materials around the world. But, in fact, The most important
fact to note is that there is no verbatim transcript in existence. All
known texts are second-hand.

How can you buy or sell the sky, the warmth of the land? The idea is strange to us. If we do
not own the freshness of the air and sparkle of the water, how can you buy them?

The air is precious to the red man, for all things share the same breath--the beast, the
tree, the man, they all share the same breath. The white man does not seem to notice the
air he breathes. Like a man dying for many days, he is numb to the stench.
Chief Seattle’s speech, the version of Ted Perry

In this speech chief Seattle revealed the critical problem that if the
land could be owned privately how would the air be? Let’s suppose that
if one will declare in the future time that the air belong to him, what
should we do? Both air and land are nature resources why the land
should be private property? For this, the only reasonable answer is
land is common property innately.

As the air, land, wild animals, forest, and other natural resources
were not the result of human’s lab, for the nature of human is that
everyone demand equality between individuals, all nature resources
should be common owned by all numbers of human societies, at least,
people should common owned all nature resource belonging to whose
countries. The basic human right should be that everyone has the
ability to get essential resources which one need for subsistence. As
the 17th century British philosopher John Locke believed that: for the
naturally rational of us, human has the right of exist himself, so
people could subsistence themselves on meat and drink, and other
natural resources they needed.

All resources of nature should be common owned without doubt. On the

assumption that, a group of people immigrated to a remote and
unfrequented valley for avoiding war, they plot out each family’s
dwelling places and land which suit to be cultured in the valley. But
when the scheme was accepted by every one, a new question followed in,
in the valley only one family’s land could dig out water, and this is
the only wellhead in the valley. For a rational economic choice, the
family who owned the well should sell the water, but in fact, for our
experiences, few one would do it, unless they want to be driven out of
the group. This case proved that the power about the nature resources
fundamentally is a politic issue rather than economic a issue.

Reviewing history, the private powers of nature resources were outcome

of violent scrambles. Land issue became one of the main threads of
Eurasia’s history. Bertrand Russell had mentioned this question in his
work Power, A New Social Analysis, he pointed out that the British oil
companies exploited oil in Iran in 1930s, because of British government
had the priorities in there, American oil companies had the power to
exploited oil in America land, that because of they own the land where
they exploited, the former owner of these land, native Indians, had
lost it by lost they wars against colonist Europeans. Lorraine iron ore
belonging to French or German, that depended on the result of the war
between the two countries in 1870.

Despite some of private ownerships of lands were outcome of military

conquest, but the peaceful social changes also was a main factor to
privatize common lands. In the beginning of farming civilizations, kin
owned territories collectively, kin allied as a tribe, tribes allied as
a nation, those alliances were pressed by the endless wars. The
governors manipulated the power of distributing land in the final.

In the time of the Western Zhou dynasty (11th century BC to 771 BC)
China, king had the power to distribute land to seigneurs, and
seigneurs assigned their land to nobles, nobles supervised farmers to
work on the grounds. In the old poem book the Book Of Songs, Binfeng,
July, poem recorded the work situation in that time, The poem describes
the nobles and supervisions urged farmers to work hard throughout a
year for their seigneurs in the name of commune, farming, hunting,
repairing palace, chiseling ice, females doing sericulture, weaving
textiles, making clothes, and so on. Seigneur would offer food, cloth
and firewood to the farmers and their families, the rest belonged to
commune which controlled by the seigneurs, farmers could keep the small
quarries for themselves. These social situations remained some aspects
of primitive hunting-gathering tribes. The distribution in the Western
Zhou dynasty was so similar to some aboriginal tribes who lived in
modern age. Analyzing this old poem, we could find that seigneurs were
not so much owning grounds as controlling distributions, it means that
the grounds were common property in ethics.

Before 1775, the British Land system was the Common Field System or
Open Field System, most of land belonged to nobles, but farmers also
could use the common field for herding their livestock. John Locke had
defended for private field system in his work Two Treatises of
Government.

God and his reason commanded him to subdue the earth, i.e. improve it for the benefit of
life, and therein lay out something upon it that was his own, his labour. He that in obedience
to this command of God, subdued, tilled and sowed any part of it, thereby annexed to it
something that was his property, which another had no title to, nor could without injury
take from him.

Locke’s view of private field is not reasonable, obviously, the labour

could not change the ownership directly, otherwise, gardeners could own
your yard for his work. In my opinions ， one who had tilled and sowed a
piece of land that of cause should be rewarded, so he could own the
field for a long time. But it is not mean that they could own the field
permanently even bequeathed it to his offspring. Lands are common owned
innately, so any permanent ownership is unfair. Human societies are
mutual related communities, so every resource is staked to the interest
of the communities. As some collective and exigent actions, every
resource of individuals could be requisitioned by the administrators.
In history, metals like iron, copper, lead had been requisitioned by
governments for exigent war situations.

The concept of “property right” had assisted people to handle the

complicated relationship of common resources. A property right is the
exclusive authority to determine how a resource is used, whether that
resource is owned by government or by individuals. Society approves the
uses selected by the holder of the property right with governmental
administered force and with social ostracism. Ronald Caose had
discussed this issue in his book the Problem of Social Cost :

In a world in which there are costs of rearranging the rights established by the legal
system, the courts, in cases relating to nuisance, are, in effect, making a decision on the
economic problem and determining how resources are to be employed. It was argued that
the courts are conscious of this and that they often make, although not always in a very
explicit fashion, a comparison between what would be gained and what lost by preventing
actions which have harmful effects.

Property right is a legal system which arranging powers for different

peoples. Back to the land’s issue, there are lots of national owned
land all over the world. The statistic had show that in recent years,
Russia stat-owned land is 92% of whole territory, Singapore 83%,
Netherlands 80%, Sweden started their state-owned policy from 1904,
till 1964, capital Stockholm had 64% state-owned land. In the Chinese
mainland, Chinese authority’s the laws of land administration, it
declared that all lands of china are social common owned, it is means
land owned by whole people and collective working masses. In fact, it
is called no much suitable for state-ownership land system as governor-
ownership land system.

A widespread prejudice is that collective ownership or common ownership

will spoil nature resources. In comprehensive perspectives, it is not
true, of cause, there were some case of ruined land or overstocking,
that not caused by collective ownership rather than frustrated
administration. In lots of case common property had been maintained
carefully. British common field had been managed strictly from the
Middle Age, every power of common field had been processed by
individuals, like cutting woods, herding stocks, how to distribute
those common properties that was determined by the local ethics and
legal systems. There are still leave papers of baron court which
recorded about common field’s different ownership. For more than a
thousand years, land owners had leased their land to farmers to
cultivate, little land had been spoiled by farmers, rarely ruined by
the cultivating, and that depended on the supervising of land owners.
So why land owners could manage their land well, but governments could
not? In contemporary, governments and law makers strictly limit usages
of lands. For example, in 1981, the United States congress enacted the
law of the Farmland Protection Policy Act (FPPA) as a subtitle of the
1981 Farm Bill. The purpose of the law is to “...minimize the extent to
which Federal programs contribute to the unnecessary conversion of
farmland to nonagricultural uses...” This legislation revealed that
government had the power to bind the usage of the land, whatever, the
government’s ideology is socialism or capitalism.

In east-Africa Kenya, on shores of the Turkana Lake and Turkwell River,

there left lots of pods of Robinia, it is wonderful foods of sheep. In
the local traditions before, sheepherder who would like to herd in the
shore should get the permissions of local chiefs, which actions equaled
to pay ground rent in disguise. Subsequently, local government had
token over the power of administrating the shore, as new ruler, every
one could herd in the there, there were spoiled by the overgrazing and
local vegetations were ruined. Some economist proved state-owned system
being a failed system by this case. However, the fundamental question
of this case is how to manage this land, but not which ownership is
batter. For the owner of the land, local government could do well for
it, why they did not distribute the permission of herding by public
sale, and income of it could fund local people equally. Meanwhile
government should enact rational rules of herding in the shores. Local
chief had managed well for long time, local government could do it well
also if they took a right fashions. Place and Hazell (1993) conducted
surveys in Ghana, Kenya, and Rwanda to ascertain if indigenous land-
right systems were a constraint on agricultural productivity. They
found that having the rights of a proprietor as contrasted to an owner
in these settings did not affect investment decisions and productivity.

Common owned land system also can run effectively by arranging the
power of ownership rationally, for that, it is critical that property
right should be defined clearly in a period, and property right is
power system and political system essentially, it is a political issue
in fact. John locke argued that：If anyone who wand to use common
property as private usage, he must get allowed of common permission.

In the contemporary communities, public sale system of state-owned land

is a familiar mechanism for managing the common property. Hongkong is a
typical free market economic system. By the opium war (Anglo-china war)
of 1839-1842, British colonist had occupied Hongkong island as a
colonial harbor for trading with china, subsequently, British
government leased Kowloon peninsula and New Territories by compelling
Chinese government. In 1903, Hong Kong-British authority had completed
measures of Hongkong lands, they announced that all the land’s ultimate
ownership of Hongkong belonged to British Queen, except some of farm
land in New Territories, authority had the power of administrating
Hongkong land on behalf of British Queen. That mean most of land in
Hongkong became the properties of authority. As soon as British
colonist occupied Hongkong Island, they lead the land to businessmen
but authority did not limit the use time of lands. In 1844, authority
confirmed that the leases of state-owned lands were 75 years, and the
leases could not be extend after 75 years. In 1898, authority re-
confirmed that 75 years lease period should be the stand period of
lease.

Near the time of handover of Hk, most of leases would be run out. In
1984, the Sino-British joint statement had dictated that HK-British
period leases would be continued, but it could not extended no more
than 2047. Now, HK SAR government still adopt the HK-British
authority’s land management systems. The government has got land sales
and land premiums for their revenues still.

After the Handover, according to the legislative spirit of the Hong

Kong Basic Law that dictated HK under the administrations of HK people,
it means that all the revenues from the public sales and leases should
belong to all HK citizens. For property of currency，those revenues
should be divided equally and paying every HK citizen, it is the most
just and equal method for distribution such common resources. But the
land revenues had been used as general government expenditure by the
Beijing or London dictated government and legislative council. During
the period from 1947-48 to 1984-85 the sum of recurrent and capital
revenue from land and buildings usually accounted for more than 20 per
cent of the total government revenue. In the 1980s property boom the
proportion was over 30 per cent, with a peak of 44.8% recorded for
1980-81 financial year (C.L.WU University of HK). 1981-1982 it was 37%.

Land revenue pay for public finance, it seemed be acceptable. However,

it is pay for the rich in disguise. According to the core concept of
taxing, how much individual should be taxed depend on how much he could
earned. Land revenue distorted the concept quietly. Here I would like
to make a sample hypothesis model for analyzing it easily.

Assumption, HK government budget is 10000$, there are only 100

taxpayer, as the proportions of HK land revenue vs. total government
revenue, the land revenue should be 37%, it is 3700$, Under Hong Kong's
wealth gap conservative set that 5% rich men own 60% properties of HK
society, supposing rich men income are equal, the calculated outcome is
that rich man’s property is 28.5 times than per capita normal taxpayer.
It is not exaggerated, because by the data of 2002, from local Census
and Statistics Department, HK’s Gini Coefficient is 0.525, and it means
that there is great wealth gap between different classes.

Assumption, it is tax by individual incomes, and land revenue is

distributed to every citizen equally, normal taxpayer income are equal，
who should be taxed α；rich man income also equal，who should be taxed
β. These people should be taxed as follow:

1) 95×α+5×β=10000
2) β=28.5×α
Result:
α=42.1$ ；β=28.5×α=1199.85$
the land revenues is distributed to every one, 3700/100=37$
the normal taxpayer actual pays:
42.1-37=5.1$
The rich man actual pays:
1199.85-37=1162.85$

Actual burden in this case is normal taxpayer 5.1$ and rich man is
1162.85$.

If the land revenues directly pay government expenditures, the

actual tax burden is:
1000-3700=6700$
1) 95×α1+5×β1=6700
2) β1=28.5×α
Result:
α1=28.2$; β1=804$

let’s compared two case of using land revenue, we can discover that
manipulating the usage and distribution of common property, HK
government could deprive mass’s welfare in disguise, and benefit rich
class and firm production costs. By the HKSAR government
administration, the Gini coefficient of HK had been raised to 0.56 in
2006. HK had taxed inheritance from 1915, but benefiting from land
revenues, HKSAR which is representing interest of rich and business
class, had abolished inheritance tax in 2005. In contrast, citizens of
HK have the lowest welfare in the developed economic regions.

It is more ironical that for recent years Chinese government followed

the example of land system which adopted by colonist HK-British
authority. In Chinese constitution dictated that all land of cities in
china belong to Chinese people common. In reality, all commercial usage
land had to pay a huge number of funds for a several decades of leads,
for regulations of Chinese mainland authority there are diverse types
of land lead from governments, it usually are70 years, 50 years, and 40
years. In 2005, Chinese government total financial income is more than
3000 billions RMB in that fiscal year. Among those more than 550
billions RNB, that one sixth of whole income. That as a common owned
property should be distributed for every Chinese citizen. It means that
every citizen should get 423 RMB in 2006, a small families with 3
members could get 1269 RMB. According to official statistics, every
labor who defined as a farmer by Chinese government had been the
average income of 2829 RMB in 2006. But in fact citizens in china get
nothing from authorities.

Governments owned nature resources as common properties instead of

public owned common properties, all over the world. That is because of
contemporary administration system and political ethic remained lots of
influences of autocratic oppressive regimes. It is long way for
contemporary societies to carefully get rid of unfair regulations in
political architectures.

Thus, resources that had been under a de facto common property regime enforced by local
users were converted to a de jure government-property regime, but reverted to a de facto
open-access regime.
Elinor Ostrom: Private and Common Property Rights 2000

As common owned resources, all land revenues most of them could be

converted to monetary benefits, so it should be easy to distributing
revenues to every citizen in a state equally. Meanwhile, monetary
welfares of common resources are most efficient market mechanism, that
markets decide distribution currency. A rational political ethic should
be that, legal governments have the power (right) of tax, but they have
not the power to use common land revenues. Common resources should
include lakes, rivers, irrigation systems, groundwater basins, forests,
fishery stocks and grazing areas. Common resources may also be
facilities that are constructed for joint use, such as mainframe
computers and the Internet. Common revenue should be stipulated
distributing on every citizen, it should be a separated system of
incomes of taxes and incomes common resources.

In reality, question about common resources are much more complicated

that ideal politic ethics. And such like, which qualification bidders
should be, land revenues of a city should be distributed to the citizen
of the city or the citizens of the state. I believe that all these
questions should be solved by democratic votes, dialogues, and coming
to terms.
Chapter 4 commodity and exchange

Adam Smith believed that every animal must rely on efforts by itself to
survive, and it need to know how to protect itself, he also believed
that only human could exchange something each other. Nevertheless,
modern ecologists proved that animals also have abilities to exchange
something. In America, where lives a kind of blood sucking bats
(vampire bat), they food on sucking other animal’s blood. If a bat has
not sucked blood more than 60 hours, it would die. So some mutual
mechanism exist in the communities of these blood sucking bats. If a
bat sucked a large meal of blood, it would spit out some blood to
feeding its hungry mates, despite of they are no relations at all.
Nevertheless, ecologists found that there were following strict rules
in the game, bats would not feed members who just did free ride but did
not reward at all. Obviously, it is a mutual mechanism in nature. the
magazine primate, 2005, it had recorded a exchange action in a
community of chimpanzees. An other well known exchange action in
chimpanzees is that males use foods changing mating opportunities with
females.

Anthropologists and archaeologists argued that human had begun to

exchange something with each other from the Stone Age, and primitives
had exchange they stone tools at long-distance. In Lauriston Sharp’s
article Steel Axes for Stone–Age Australians, he narrated exchanges in
primitive society. When colonists had arrived Australia first time,
aborigines called Yir Yoront had been the Stone Age still, they
subsisted by hunting, fishing, and gathering. Stone axe was the most
important tool in their community, and it also played important roles
in local social relations ， it also was highly valued property. Women
used it for firewood harvesting, felling of trees and collect wild
fruit, men used it for hunting and fishing, some times used it for
Split wild honeycomb which was inside tree. Stone axes belonged to men,
but men could lend it to women, it was the unique power of men. Yir
Yoront lived in a broad alluvial plain near north coast of Australia,
but the raw stone which used to make stone axe is more than 400 miles
away. If Yir Yoront people wanted to make stone axes by themselves, it
was a hard work. Fortunately, they needn’t do it, they could get stone
axes by exchanging with other tribes. Spears made from stingray spines
were the major export, while stone from tribes to the south for stone
axe heads was the major import. The tribes which lived nearby Yir
Yoront also did not make stone axes by themselves they just middleman
of the trade circulations. However, when Western missionaries brought
steel axes to the aborigines in Australia, local societies were greatly
impacted by these steel axes. Steel axe performed great advantage than
stone axe which aborigine used before, but steel axe were very
expansive, Yir Yoront men bothered day after day. If any one who could
give a steel axe to Yir Yoront man, the man would rather let his wife
to make love to the one.

What is the definition of commodity? In Karl Marx’s capital (Das

Kapital) he mentioned that: “A commodity is, in the first place, an
object outside us, a thing that by its properties satisfies human wants
of some sort or another”. As neo-classic economics definition,
commodity is anything which could be exchanged for satisfying human
wants. Karl Marx argued that the essential attribute of commodity is
labor. However in realities, lot of commodities are not the exchange
about labor-productions, for example, a businessman want to bribe a
officer for some commercial interest, this exchange at least not
concern any labor factors for the officer who involved in. behaviors of
exchange are so complicated and diversified. In the Chinese classic
ZhuangZi has an allegory about exchanging which showed the huge
diversities between exchanges.

Once upon time, there were a family living in Song state(a seigneur existed in 11 centuries
BC – 286 BC), the family had subsisted their lives for generations by dying and tanning, they
made a sort of medicine which preventing crack of skin. A merchant had known that, he bid
five hundred golden coins for the formula of preventing crack. Senior of the family
gathered all members to discuss that, they argued that: we worked for generations just for
several golden coins, now, one could offer five hundred for the formula in one day, that is
several times than we have gotten before. Finally, they decided to sell it to the merchant.
Subsequently, the merchant devoted the formula to the king of Wu (a seigneur existed in 11
centuries BC – 473 BC). At that time, in winters, Wu state was warring against Yue state. By
the advance of the formula, soldiers could prevent crack in the float battles, and they won
the war. The king of Wu constituted the merchant as a feudal lord of a land. Both the
family and merchant had the ability of prevent crack of skin, family just protected their
hand, and the merchant could became a lord of a land.
ZhuangZi the Free Roam

In this allegory, the family got currency in the exchange,

corresponded, the merchant got powers of lording a land. In the
circulation of exchanges, the power of the patent became the power of
lord a land.

Back to the Yir Yoront case, the man of Yir Yoront who wanted get a
steel axe, was willing to letting his wife making lover with a
stranger. The man temporarily alienated his exclusive power of mating
with his wife. The exclusive power of mating exchanged the (power of)
ownership of commodity in this case. Karl Marx argued that: As values,
all commodities are only definite masses of congealed labour-time. This
viewpoint had been challenged by many economists. David Ricardo had
mentioned that, he could not resolved such difficulty, why wine which
had been stored in cellars for couples of years cost equally to 100
pounds oak.

Marginalism argued that the value of a commodity is relied on the

subjective evaluation of consumers. If a commodity embodying lot of
labors not be sold in market, it has not any value. But the marginal
utilities for individuals were so different that marginalism value
theory lost its basic function of scales. Like I mentioned in chapter
1, human brains do not work centrally, he or she works modularly and
parallel. Such architectures of human mind also limit rational of
human behaviors.

Yir Yoront man exchanged steel axe with the exclusive power of mating
with his wife. There are not labour in Yir Yoront side at all. The
value of steel axe constituted of the power of mine exploitation,
labour, the cost of long distance transportations, tax, and so on, but
the cost of Yir Yoront was almost none. And the desire of merchant who
wanted to mating with the man’s wife probably was involved by the Yir
Yoront man self. What is the essential fact of the commodity exchange?
It is power. All exchanges in human societies are Human power in the
abstract. In the steel axe case, the power of making love with Yir
Yoront man’s wife is equal to the sum of: the power of mine
exploitation, labour, the cost of long distance transportations, tax,
and so on.

Harlotries exist for long time and all over the world, such unmoral
exchanges base on the power of one’s body. To some extent, the harlotry
is similar to the behavior of male chimpanzee which induce female by
foods, that is nature. In normal circumstance, comparing saleslady who
looks mediocre with beautiful model, there are a gap in wage in same
time. That is because of beautiful girl is less abundant than
saleslady. Less abundant or scarcity is nature of the world, but how to
handle it is a sort of power mechanism. It also is one of the most
critical facts in nature evolutionary competitions. When robbers
hijacked a passerby, they could ask any thing they could find at that
time. That is for robbers controlled the most important power for
passerby, the power of live, so they can ask any thing. In contemporary
societies commodity exchanges are multifarious. In 2007, Guangzhou,
china, a special number of License plate of car, had been sold for
747,000 RMB in public sales. That is exchange between the power of
money and power of scarcity.

Marxian scale of value, labor, do not work for analyzing the history of
land leases and exchanges. In history lands always were expensive
commodities, but who was the first owner of the lands? It is obvious
that the first owner is the conqueror. For lands exchange in ancient
time, the essential thing people exchanged is power, most exchange is
between political ownership power and money. Power of labor is a sort
of power which mean workers had the power to get reward for his work.

British philosopher Jeremy Bentham had said that, there had not existed
any fortune, until laws came to being. If laws had been abolished, any
fortune would not exist. That happened in the beginning of the
communist china, PRC. It is usually happened in the alternations of
dynasties all over the world.

In a country too, where, though the rich or the owners of large capitals enjoy a good deal of
security, the poor or the owners of small capitals enjoy scarce any, but are liable, under the
pretence of justice, to be pillaged and plundered at any time by the inferior mandarins, the
quantity of stock employed in all the different branches of business transacted within it
can never be equal to what the nature and extent of that business might admit. In every
different branch, the oppression of the poor must establish the monopoly of the rich, who,
by engrossing the whole trade to themselves, will be able to make very large profits. Twelve
per cent accordingly is said to be the common interest of money in China, and the ordinary
profits of stock must be sufficient to afford this large interest.
1776, Adam Smith: the Wealth of Nations

Adam Smith was right, he evaluated the corrupt society of Qing dynasty
(1644-1911). The rich and powerful man had pillaged the poor and small
capitals in that time. Unfortunately, today in china, it have been
happened still, more unfortunately, it happened in myself. In 2008, I
found that state owned Shanghai Media Group, SMG, had broadcasted my
documents film the Wars of Qing Dynasty all over the china, but as a
result they did pay any for that criminal behaviors. Government,
police, and bureaucracies refused to do any thing for that. There are
also existing exchanges that state owned TV could broadcast illegal
programs without caring about any punishments, as rewards TV will do
some propaganda which proved the legalization of the rule of communist
party. Of cause, it also happened on Hollywood and HK film producers.
Other wards, state run TV stations in china are authorized to pillage
film producers all over the world in disguise.

Back to the property of commodity, the essential exchange is based on

the powers. Now, I could give the conclusion: the commodity essentially is

the power which could be exchanged. The exchange of commodity is the

exchange of power. The familiar Marxian theory of labor value is the

exchange of the same power of labor in fact. If one charge his lens for
a second hands video camera to an other, in this exchange they
exchanged the commodities’ ownership of each other. If a beekeeper
charge a jar of honey for barber to cut his hair, in this case, the
beekeeper alienate the ownership of honey, that exchange the server of
barber that is a sort of power of labor.

If the barber works in the open air, this exchange also could be
analyzed by the theory of labor value. But if the barber works indoor,
the exchange become complicated immediately. The rent and such like
electricity fee and water fee become main costs of the barber.

Beekeeper’s ownership of his work + scarcity of honey in local + other cost of

tools = barber’s ownership of his work + landlord of barber’s ownership of the

land and house + the ownership of power firms + monopoly power of electricity

+ other cost of tools

This equation shows that exchange is complicated by various forms of

powers, but not the power of labor only.

Exchange of commodity is often involved by productivity, scarcity,

production relation, ethics of distribution, trading circumstance, and
so on. The common property of these elements about exchange is that
they are power.

In a interesting Hollywood movie, The Shawshank Redemption, it has a

remarkable story inside the movie. The head of the Shawshank State
Prison, he exploited the prisoner’s free labor for his own profit.
He undertook building jobs by low cost of labor, that caused lot of
building contractor lost their jobs, for keeping their jobs, they
had to bribe the head of prison for his retreating in some biddings.
Why the free labor in this case harmed the society instead of
benefit it?

In reality, it is usual that same production with deferent price in

the market. In lot of case, the deference of the price not from the
deference of power which owned by the workers. For example,
assumption that there are two firms A & B, which manufacturing same
product, the workers of two firms had same wages of week. Workers in
firm A works 10 hours a day, and 6 days a week. Worker of firm B
works 8 hours a day, and 5 days a week. Both firm have same
productivity. As a result the firm A product’s price should be at
least 30% off than firm B, firm B would retreat from the market by
the competition. In such case, free market competition eliminated
the health, and transformed the competition of managing to the
oppression of workers. Such phenomenon should be formed by the

oppression of power. I should argue that it is the Law of Oppression

Proliferating . It means that in the free trade network , by the exchange of

commodity, oppression would proliferate all over the network . And if there

are no any political intervention , the oppressive relation of labor should be

the main relation of labor.

According to this law, in the film of The Shawshank Redemption, the

prisoner who worked as free labor made the normal work lost their
job or working opportunities. Most of workers can not work at
totally free, so the only way building contractor nearby could exist
is bribing the head of prison, letting him retreating form the
market. But the cost of bribing finally would shift burden on
workers.

The most oppressive relation of labor is slavery. Slavery in ancient

cultures was known to occur in civilizations as old as Sumer, and it
was found in every civilization. Classic economists had an observation,
it is that slavery becomes more desirable for land owners when land is
abundant but labor is not, so paid workers can demand high wages. If
labor is abundant but land is scarce, then it becomes more costly for
the land owners to have guards for the slaves than to employ paid
workers who can only demand low wages due to the competition. But in
the history, abolishing of slavery had not been caused by the economic
transformation, in fact, it had been caused by the political movements
and wars.

One of the most famous war of abolishing slavery is the American civil
war (1861-1865). As the traditional historians and economists believed
that American south slave agriculture was inefficient and unprofitable
compared with the free agriculture in north, and slavery had already
been a moribund institution before the Civil War. The profit of slave
mainly came form the rearing and trading of slave. However, more and
more economic historians proved that it is wrong.

In 1974, Robert Fogel and Stanly Engerman had co-written a famous work
the Cross Time, in the book, they argued that on purely economic
grounds, slavery was not unprofitable or inefficient or a moribund
institution. They argued that slavery economy is an efficient and
profitable system at that time. By analyzing history evidences, they
revealed that slave owners were not becoming pessimistic about the
future of their system during the decade that preceded the Civil War.
The rise of the secessionist movement coincided with a wave of
optimism. In fact, on the eve of the Civil War, slaveholders
anticipated an era of unprecedented prosperity.

In fact, the South slaver economy was not an irrational system, the
price of slave also exposed the profitability of slave. Far from
stagnating, the economy of the antebellum South grew quite rapidly.
Between 1840 and 1860, per capita income increased more rapidly in the
south than in the rest of the nation. (Ironically, such situation is so
familiar to china and America today.) By the source of census of the
United States from 1790-1860, the slaves population in south increased
from 648,640 to 3,951,798 (The figures for 1850 and before are from DeBow,
Statistical View of the United States, p. 85. For 1860, Population of
the United States in1860. The Eighth Census, Washington, 1864), that is
six times of increase. It also proved that the demands of slave had been brisk.
Fogel and Engerman report the results of an extensive method to compare
the efficiencies of free-labor farms, north and south, with slave-labor
plantations in the Old South and the New South. According to their
conclusions, Slave-labor farms were 28 percent more productive than
southern free-labor farms and 40 percent more productive than northern
free-labor farms. The slave-based agriculture of the New South was 29
percent more productive for equal inputs than slave-based agriculture
in the Old South. The free-labor farms of the Old South equaled the
productivity of the free-labor farms of the North. The slave-based
agriculture of the Old South were 19 percent more productive than the
free-labor farms of the North and the slave-based agriculture of the
New South were 53 percent more productive than northern free-labor
agriculture.

In a domestic market network, in antebellum South, the efficiency of

slaver owned plantation had the absolutely advantage comparing to North
free labor plantation. If a firm’s efficiency is 30 percent more than
its competitions, most of competitions would be wash out in the market.
In domestic agriculture market, same weight farm products also sold
with same or similar price, with the 53 percent advantage, South slave
owned plantations also pressed north farmers and landlords to an
extremely difficulty plight. This situation similar to the story of the
movie The Shawshank Redemption. Assuming that North and South planted
a same kind of farm product, North farm workers have to decline
their salaries to just offer their lives, if slaves worked 7 days a
week the farm workers have to follow it, and most of north
plantation would be close down. That is why some case showed that
south slaves lived better even than north free labor workers. In
reality, with the increase of slave population, south slave owned
economy impacted north free labor economy greatly, and caused north
agriculture progressively difficulty. Therefore, as time went on, at
a tuning point of time in North, the voice of abolishing slavery
exceeded the moral confines, at that time, abolishment is the
combination of moral and interest, so it became necessity. As we
know, the American Civil War, beginning in 1861, led to the end of
chattel slavery in the United States.

Comparing the slave labor in south and free labor in north, it revealed
that the oppression of slaves in the south had transformed to the free
laborers in north by the free market network. It is a perfect instance
that proved the Law of Oppression Proliferating which I mentioned
above.

September 17th, 2004, Elche is the capital of Spain's footwear industry

and has been hard hit by Chinese competition. Some protesters held
banners reading "Chinese out" - others smashed windows. Before that,
the protest took a more menacing turn when two Chinese-owned warehouses
and a lorry belonging to a Chinese entrepreneur were set on fire. And
several had been arrested. Many Spanish manufacturers blame their
current crisis on cheap Asian imports.

In Elche local shoes industry once had been 600 manufacturers. When
Spain had begun to import Chinese footwear in 1998, till 2003, they had
imported 61.9 million pairs of shoes for that year. As the Spanish
population is 39 million, in average per capita had bought 1.58 pairs
of shoe which made in china. In local market Chinese shoes had been
sold at the average prices of 5€, and it also profitable, but shoes
which in local manufactured cost 8€ in average. In the retail market,
shoes which made in Spain cost 3-8 times than shoes which made in
china. It is obvious that most of local footwear manufacturers could
not compete with Chinese footwear manufacturers. At that time, lots of
footwear factories had been closed down, at least 30 percent workers in
this business lost their jobs. By the much higher efficient of per
capital Chinese footwear industry evicted many Spanish competitors out
of the market. From 1998 till 2003, just for five years, Chinese
footwear manufacturers had occupied a great share of local footwear
market. Facing the extreme upheaval in the footwear market, local
footwear manufacturers had been at a loss for any valid replies. In
that unfortunate violent incident, Spanish footwear workers had
mistaken the critical issues and attacking at a wrong target. That
action liked the free-labor to attack sad slavers in the American 140
years ago. In fact, in this case not Chinese footwear workers deprived
Spanish footwear workers’ jobs, but the unfair globe trade orders. That
also is the results of the Law of Oppression Proliferating.

Comparing the oppression which Chinese footwear workers suffered, it is

easy to figure out what caused the unemployed in Spanish workers. As we
know, Chinese footwear workers have to be working at least 10 hours a
day and 6 days a week, they usually have not any insurances and
welfares, they could be fired at any time without any compensations.
Even more they worked in the poisonous and fatal environments without
any protections, footwear workers are being exposed to high levels of
benzene, toluene, and other toxic solvents contained in the adhesives
used in the shoe-making process. Their fates filled with blood ad
tears. They have not the right to organize their own union. Despite
there are little improvement in some globe footwear firms, such like
Nike, Adidas, Puma, but most of footwear laborers are working at sad
situation. In fact, modern legal definitions of freedom of association,
the right to collective bargaining and the right to strike do not
appear in Spanish legislation until the Constitution of 1978. Recent
years, employment in Spain is highly regulated, with the main purpose
to protect an employee's rights. The regulations are complex: jobs are
grouped into categories, and each category has a different set of
regulations. It’s important both as an employer or employee to be aware
of the different types of work contracts, holiday entitlement and
social security requirements when considering the options of working in
Spain.

When china and Spain have begun to trade each other freely, the Low of
Oppression Proliferating has worked at same time. Spanish footwear
workers lost their job, it also a king of oppression. China became a
“workshop of the world”, it has not any accident, because china had the
one of the lowest labor protection environment in the world and
greatest labor supply in the world. If Chinese footwear workers could
have the same right which Spanish footwear workers own, shoes which
made in china would be more cost, therefore, the impact of the Chinese
shoes would be much more mild, and the taxes of importing could control
it.

The World Trade Organization, WTO, it play the most important role in
the present world. But in the organization’s treaties have not
contained any important protector labor rules in its framework
agreements up to present. Once time in November 1999, Seattle, U.S.
President Clinton and others developed countries chiefs suggested that
the WTO include core labor rights and sanctions and so forth if these
were violated. many developing countries (such like china)saw this as a
protectionism vehicles and that it would be too costly for the poorer
nations to be able to afford such dramatic changes given the poverty
and dependency they are in. at same time, labor right is also an issue
of human right, labor right include the right to collective bargaining
and the right to strike, this related to domestic polities closely,
especially those rights have been deemed to challenge the power of
governments in some totalitarian regimes. More powerful opponents are
the capital forces in developed countries, they also describe labor
rights treaties as a protectionism vehicles.

Moreover, precisely because third world workers are terribly exploited, their employers will
pass on much of the cost of improvements in labor standards achieved through international
trade treaties to their employees in the form of lower wages.
Robin Hahnel

After 1999 Seattle ministerial meeting, subsequent G. W. Bush

administration had not insisted to adding labor rights demands in WTO
treaties. Some NGOs have played more and more important role in the
labor right protections. SAI, Social Accountability International, is
an international non-profit human rights organization dedicated to the
ethical treatment of workers around the world. SAI’s social standard,
called SA8000, functions as a highly effective and expedient system for
delivering improved social performance to businesses and their supply
chain facilities.

It is pity that labor right standard could not became a part of world
trade treaties. SA8000 standard adopted by some companies, but because
of it had not supported by governments, its effects have been limited
seriously. SA8000 could not instead the constitution of labor right
which will be legislated by United Nations. It is one of the most
important missions for the world trade order and for the every laborer
all around the world. I would like to forecast that the Labor right
constitution of United Nation will reshape the world trade order far-
reaching.

In a free trade network, people want to avoid their power (right) being
oppressed and exploited, they must concern every trade partners in the
network. As I mentioned above, exchange of commodity is the exchange of
power, so other’s power are highly related to everyone in the network.
Inequality of power inevitably cause Inequality of commodity exchange.
Others like monopolization and protectionism are also a king of
inequality.
Chapter 5: money and circulation

In modern societies money is the medium of exchange all around the

world, it is also a kind of power. Economists argued for the definition
of money. One of them, Frederic Mishkin, he defined it like this:
“Money is anything that is generally accepted as payment for goods and
services and repayment of debts.” In Milton Friedman’s work, Money
Mischief, he had narrated a story about money.

One century ago, American anthropologist William Henry Furness

occasionally had been the Caroline Islands, he impressed deeply by the
money system in the island Yap where had more than five thousand
population. There is no metal in the island, they took stone wheel as
their money ， and called it “fei”. The stone which was used for money
was form an other island where is more than four hundred miles away.
When those fei had been moved to Yap, people used those fei, but
without moving it any more, they even rarely made any signal to prove
the ownership. Once a family had attempted move a huge and outstanding
stone wheel, fei, from that island to Yap. When their ship near the
shore, unfortunately, the ship sank with the huge stone wheel. However,
local community regarded that the family had owned this huge fei, and
the family became the richest family in the island.

This report revealed a essential character of money that: money is the

medium of exchange which is generally accepted by communities. In other
words, the foundation of money is the societies’ affirming to
ownership. This case also upset traditional concept that money must
circulate in the community. So called fei, in fact, just is a affirming
of the power of ownership. Especially, when the huge fei had sunk into
the sea, local resident had accepted the power of ownership to the

family. So money is a sort of power. Here, I give my own definition which is in

the view of power: money is a sort of warrant which prove and measure the

power of ownership, money, as a warrant, this warrant is generally accepted by

community numbers spontaneously or it is generally accepted by the legislative

mandating. It measures the power of ownership as accurate as possible.

Most important functions of money are as medium of exchange and

measuring the power of ownership. In contemporary time, money is in the
form of electricity data which exist in virtual. Money is a
substitution of commodity. Money’s fundamental social function is to
keep exchanges in regularity. Assuming that, in barter time, two sheep
could exchange for a pig, it could be much difference in this barter. A
sheep has lots of properties such as weight, breed, gender, and so on.
It made the equal exchange difficult, always have such one who want to
make the exchange with two thin sheep for a pig or vice versa.
According to the Gresham Law, in the market, the sheep for exchange
will be thinner and thinner. Money gave the perfect resolution for such
exchanges, for money could scale value exactly, if a pig cost 100 units
and a sheep cost 50 units, a thin sheep maybe cost 40 units, so money
made such exchange equal.

In the rude ages of society, cattle are said to have been the common instrument of
commerce; and, though they must have been a most inconvenient one, yet in old times we
find things were frequently valued according to the number of cattle which had been given
in exchange for them. The armour of Diomede, says Homer, cost only nine oxen; but that of
Glaucus cost an hundred oxen. Salt is said to be the common instrument of commerce and
exchanges in Abyssinia; a species of shells in some parts of the coast of India; dried cod at
Newfoundland; tobacco in Virginia; sugar in some of our West India colonies; hides or
dressed leather in some other countries; and there is at this day a village in Scotland where
it is not uncommon, I am told, for a workman to carry nails instead of money to the baker's
shop or the alehouse.
Adam Smith: the Wealth of nation

In order to learn more about the formation of money, we should trace to

the beginning of it. The use of barter like methods may date back to at
least 100,000 years ago. Trading in red ochre is attested in Swaziland,
shell jewellery in the form of strung beads also dates back to this
period, and had the basic attributes needed of commodity money. To
organize production and to distribute goods and services among their
populations, before market economies existed, people relied on
tradition, top-down command, or community cooperation. Adam Smith
argued that, when the division of labor has been once thoroughly
established, it is necessary for defining certain commodity as the
medium of exchange. But, we can find that using a high utility
commodity as the medium, it a great waste for the societies, so the
less utility commodity become the main medium of money gradually.
Finally, metal became the mainly employed monetarily material in
Eurasia. An exception is copper coin, copper had great utility in
common life, people had melt copper coins for living objects in ancient
time, and so authorities had always bothered by the private melting in
Chinese history.

An other being widely employed material is shell in ancient time, one

sold his sheep for several shells. Such exchange is similar to today,
one sold his sheep for a certain amount of electronic data of money.
But money for a warrant of power, it limited by the environment which
it want to use. So, as we know, shells did not able to use in today’s
market.

The invention of money is a great leap in the social evolution of human

societies. It made the large-scale multi-levels exchanges more
convenient, and ensured of the social division of labor more effective.
Money made the societies getting more systematized and organized,
different flocks and tribes united. Money functioning in social lives
like blood functioning in the human body ， it relate productions with
demands, producers get money form the exchange, it mean the ability to
demand, consumers spend money on their demand, that like blood red cell
function in body, bringing oxygen (production) and removing carbon
dioxide (consumption). Because of the storage characteristics, money
also greatly stimulated the desire of producers to offer more products
and severs. The currencies also reflect demands and surpluses of
societies.

Let’s back to the history of money. In the ancient China, some people
found the less utility properties of money. The Chinese philosopher,
and economist Huang Zongxi (1610- 1695) in his work, Waiting for the
Dawn (Mingyi dafanglu) had narrated a story about choosing material of
money:

In the East Jin dynasty, the governor who had real power once had
attempted to abolish copper coin as money and instead of foodstuff and
silk (it was probably that the endless warfare in that time need more
metal for making weapons). An officer Kong Linzhi had persuaded the
governor to give up such attempt. He said, in ancient time those Great
Kings had choose the useless material for the circulation of useful
products, that why the beginning of money materials were shell or shell
of tortoise. Now if you using the foodstuff or silk as money, these
stuffs would be lost and wear out in the circulation’s reduction of
carrying and dividing. People would be absent for those fundamental
stuffs.

This story also proved that labor time not the essential property of
money. Shells were employed for money just for its scarcity, so it is
easy to be manage and controlled for proving the ownership. Karl Marx
argued that:
Because all commodities, as values, are objectified human labour, and therefore in
themselves commensurable, their values can be communally measured in one and the same
specific commodity, and this commodity can be converted into the common measure of their
values, that is into money. Money as a measure of value is the necessary form of appearance
of the measure of value which is immanent in commodities, namely labour-time.
(Marx 1867: 188; emphasis added)

Obviously, today, labor-time could not be the measure of value,

comparing same labor-time in China with America, every body knows that
is not equal in value at all(according to that mentioned above, the
difference is formed by the gap of power -labor right).

Huang Zongxi in this book, also mentioned the monetary history in

Southern and Northern Dynasty of china (420-580). He said (according to
history recorder) copper coins had been employed as money only in a
party of kingdom, some areas employ iron coin and tin coin as money,
some areas employed gold and silver and mixed with silk, salt, and
foodstuff. This recorder revealed that there were several sort of
material employ by the market. Causing this situation was mainly
because of the endless warfare, which limited the exchange and
production of metal, so local people had to choose other substitutions.

Silver not became the main money material until the late of Tang
Dynasty (618-907). It is one of the greatest invention in the monetary
history, that happened in Song Dynasty (960-1279), it is the use of
paper money as a circulating medium is intimately related to shortages
of metal for coins. In that time coins were circular with a rectangular
hole in the middle. Several coins could be strung together on a rope.
Merchants in China, if they became rich enough, found that their
strings of coins were too heavy to carry around easily. To solve this
problem, coins were often left with a trustworthy person, and the
merchant was given a slip of paper recording how much money he had with
that person. If he showed the paper to that person he could regain his
money. Eventually from this paper money "jiaozi" originated. A banknote
is a promise to redeem later for some other object of value, usually
metal or coins.

Here, paper money innately has the property of warranting the power of
ownership. At meanwhile, paper money get the lowest utility of monetary
material, it released lot of metal to the production and living. It
also innately with the property of credit, the ability of to be trust.

The successive Yuan Dynasty was the first dynasty in China to use paper
currency as the predominant circulating medium. The original notes
during the Yuan Dynasty were restricted in area and duration as in the
Song Dynasty, but in the later course of the dynasty, facing massive
shortages of specie to fund their ruling in China, began printing paper
money without restrictions on duration. That caused hyperinflation and
upheaval, and Yuan Dynasty destructed.

The next Ming Dynasty (1368-1644) once to issue paper money, but by the
terrible experiments of paper money in the Yuan Dynasty, and authority
issued paper money form defective inhibition, these caused that people
denied to use paper money. From 1430s, Silver became the main monetary
metal, and government legislated that tax should be turned over by
silver, that caused painful long tern deflation over 200 years.

Huang Zongxi had said in Waiting for the Dawn that: it is over 200
years, silver all around country flowed into the capital, Beijing, into
the pockets of senior officers and rich merchants, the scarcity of
silver in the market became less and less. For example, comparing the
land price in Ming Dynasty, because of the lack of silver, at the late
of Ming (middle of seventeenth century )silver price for land is
equivalent to one-tenth of the price in early Ming Dynasty (beginning
of fifteenth century). In fact, taking into account the long period of
peace time in the Ming Dynasty , a large population growth is evitable,
that also caused land scarcity. This means that in reality deflation is
less than true one-tenth.

In other hand, the deflation of Ming not only caused by the scarcity of
silver, it also caused by the distorted distribution of fortune, that
made the centralization of silver. Silver as a storage metal, if lot of
silver was stored in richer and quit the circulation, remaining could
not supply the huge demand of the Chinese economic which was the
biggest economy in the would for centuries. In the late of sixteenth
century, Sino-Japanese war arrested the importing of silver of Japan.
Deflation became worse. In most time, the distribution of money is more
important than monetary aggregates.

In china such deflation had not finished until huge quantities of

American silver imported in eighteenth century. As the analyzing of
Gunder Frank, china in eighteen century had been huge quantities of
silver trade surplus for long time. It mainly relied on exporting high
quality porcelains and silk.

The import of silver flourished the market, in eighteenth century china

economy became more prosperous. The enough monetary supply make the
economy exchange flourishing, that like the enough blood made the
organism filling health and vitality. Appropriate amount of currency is
a good lubricant for economies.
How the monetary mechanism works, here I would like to describe it use
a simple model. Supposing that, there is an isolated island; residents
divide to three vocations, farmers, masons and merchants. The merchants
are specified by the senior chiefs, and they worked totally free, they
live by their families. Farmers carry foodstuffs to merchants,
merchants give corresponding amount pieces of wood which print
merchants fingerprint on. Masons also carry their product stone axes to
merchants and exchange their product for corresponding wood. Merchants
give every product a fixed price. That is convenient for local
residents, farmer could save the wood tile their need buy new stone
axes, and masons could buy foodstuff any time they want. In this case,
the piece of wood is the money in the island, the monetary aggregate is
the total product’s value in local if those wood not be used
repeatedly. In such circumstance, farmers and masons will do their best
to make more products, because all produce could exchange for money.
Money in there is without any value of labor time, just the warrant of
power, which proved ownership of holder. Merchants in provide money
more or less not related to inflation or deflation, because merchants
give a fixed price for products. Merchants in the island is the
precursor of central bank.

From the perspective of whole society, the distributions of the money

reflect that how the society works. Money as a form of power, they rely
on the ability of the one who issued it. At the beginning of banknote
in china, paper money was issued by private institutions, it means that
any one had enough trust he could issue the money. And in reality,
powers are not steady for permanently, so the values of moneys are
waved corresponding to the ability and reliability of power.

After the first World War ， a terrible hyperinflation was triggered by

the losing of the war and huge war indemnity in German. At that time in
German, workers had to demand their boss to pay their salary of half
day’s labor in the noon, and as soon as they get the money they would
immediately to buy something back in their lunch break. It is because
of the price of commodities changing by hours. That revealed the
relations between value of money and ability and reliability of the one
who issued it. Such hyperinflation also happened in china, in 1947-
1949, that also triggered out by the administration’s failures in the
battle field between the communist party’s forces.

There is no subtler, no surer means of overturning the existing basis of society than to
debauch the currency. The process engages all the hidden forces of economic law on
the side of destruction, and does it in a manner which not one man in a million is able to
diagnose.
— John Maynard Keynes
To cope with the hyperinflation in some countries, free capitalism
economists invented so called “shock therapy”. In my opinion such
policy almost like taking a war against a nation, because the
rebuilding of the monetary credit is not caused the stagnancy of
production and demand inevitable. Such “shock therapy” caused stagnancy
is unnecessary and painful. Money is just a kind of medium, people even
could barter in their community without money in history. Financial
crisis just lost medium, the basic productive ability still exist like
before, so the key just for back to a new order, does we need reduce
products and servers? So all solutions before just is to put the cart
before the horse.

For about 60 years, the Russian economy and that of the rest of the
Soviet Union operated on the basis of a centrally planned economy, viz.
state control over virtually all means of production and over
investment, production, and consumption decisions throughout the
economy. Since the collapse of the Soviet Union in 1991, Russia has
tried to develop a market economy and achieve consistent economic
growth. In October 1991, president Yeltsin announced that Russia would
proceed with radical, market-oriented reform along the lines of "shock
therapy". However, this policy resulted in economic collapse, with
millions being plunged into poverty and corruption and crime spreading
rapidly. In fact, Russia had good basic manufacture ability at 1992, if
they imitated the gradually release policy Chinese government used in
1980s, the subsequent economic disaster should be avoided. It’s a
comparison, that a man who almost is frozen to dead, people could not
put him into the hot water to save his life. The shock therapy just
like that. I would like to call such policy as “suicide therapy”, and
it worked exactly like that in Russia.

To cope with the financial crisis, it is evitable to using some kind of

socialism like policies. For that, a wisdom, effective, and clear
administrator is the first important thing.

Reviewing the history of gold silver stander monetary system, that

caused lots of deflation and financial crisis, such as economy crisis
in china for 17-18 century. And it also caused the collapse of the
Bretton Woods system. In 1971, U.S. president Nixon unilaterally
imposed 90-day wage and price controls, a 10% import surcharge, and
most importantly "closed the gold window", making the dollar
inconvertible to gold directly, except on the open market. That ended
the gold standard system for U.S. dollar. It did not cause
hyperinflation subsequently, for contrast, according the data of U.S.
department of commerce, 1972-1974, American economy did not decline but
flourished for years.
As we know, it is time of overcapacity from the 1980s to this day, in
fact, I believe that the old gold standard based like monetary systems
have blocked the globe economy to form a health and sustainable new
system. It likes that we are living in an electronic time but having to
deliver goods by cart. Although most countries have not employed the
gold standard or silver stander monetary system, but thinking modes of
that have remained in today’s economists and politicians’ mind. How to
rebuild the money circulation ethics in the overcapacity time is the
urgent issue.

To coping with financial crisis, J. M. Keynes argued that investment

demand could simulate economies greatly. It performs like that:
newly investment for a sector not only increase their own incomes,
but also increased other sector’s income by division mechanisms,
finally, total investments would be several times than the original
investment.

But the questions are which investment would be more effective? Who
invest on which project? Above all what is the money from?

Where is the money from? If the money in the golden stander age, it
is a hard work. However if you give up the golden stander like
ideologies, you would get a free but dangers world. If we cope with
the question of issue money carefully and smartly, we will success.
Let’s pay attention that the money just a sort of power, a warrant
of ownership power.

For traditional methods, governments would be the main role of

investments, the infrastructures are the first choose of governments
usually. However, it is not an effective method and not an equal
method. When government invest in infrastructures, that would
inevitably benefit builder who related to officers. Building
industry is a capital-intensive sector, that could not allot money
to the most need sectors, and most critical question is what need to
build is a time-consuming political question. They need time. As
results, those infrastructures in history either had to be delayed
for long time or were building without careful planning. So to cope
with the nosedive crisis, we need new solution which do not based on
the gold standard monetary ideology.

How to evaluate the monetary aggregate? I don’t believe that there

are exist some simple formulas could exactly evaluate it, that like
a man to eat a piece of bread, can you evaluate how much saliva you
need by a simple formula? In modern capitalism societies, the
monetary supply was functioned by commercial banks and central
banks. In the United States and many other countries, monetary policy
is delegated to a partially independent institution called the central
bank. The central bank of the United States is the Federal Reserve.
Commercial Banks have two fundamental functions, one is collecting
money form the market, one is giving money to individuals or firms who
get the confidences of bank. But it also takes place risks of moral and
credits. Most banks lend out money which not belong to their in facts.
At same time, bank had made the monetary circulations more fast and
effective. In reality, banks also lend out money as several times as
their owned, in modern banks, that decided by the rate of reserve
against deposit. But, by inventing of bank in the gold or silver
stander era, it had alleviated the illiquidity of current circulation.
Bank is a monetary allocate mechanism in the evolutionary process of
the economy.

Ration systems are a special monetary distribution ruler. When I was

a child in china, I remember that the rationed food coupons should
be used with money together, and that in a very low price. coupons
are the certifications of power of basic life, it adopted in both
capitalism societies and social societies. coupons are also buy
something directly in the black markets, I remembered that people
could exchange ocoupons to eggs, edible oil, and so on. In the
period of warfare, capitalism society used ration system too. Ration
system is a sort of system designing, it ensured the priority of
individuals right of existing and freedom of hunger.

Overall, the monetary supply of public especial the bottom of public

is the most serious plight. To cope with it, there are must have
some welfare mechanisms to reallocate money. These revenues should
be come from tax, common owned properties, such like public selling
of land, or profit of the state owned enterprises, public selling of
franchises, and so on. Those welfares are not alms but the
compensations of losing opportunities of monopoly and franchises.

Capitalism competitions are the games of “race to bottom”, so it is

impossible to balance the distribution by the enterprises
themselves. so the balance of power should be interfered by the
governments, unions and communities. So welfare policies would
reallocate money and demand rationally and effectively. Public get
money and insurance, they would consuming it, manufacturers would
employ more labor, merchant could sell out more commodities, bank
would lend out more loans, public should earn more money. This is a
perfect circulation if we ignored the environment issues. I believe
environment issues should mainly rely on the techniques and
legislations not market itself.

But in reality, the monetary circulations are not current in

domestic, but a part of the globe circulation. So one country’s
policies related to other countries which trade with it. For
instance, in February, 2008, U.S. council had acted a 168-billion-
dollar package to simulate domestic economy, including tax rebates.
But last 10 months, till the end of Bush administration, American
economy had been no significant improvements. Why this package have
not played the role of simulation? It is because that manufacturers
who provide commodities to America locate in china India and other
developing counties. The retailers have got lot profits. At
meanwhile, unemployed have still puzzled American society. The
circulation of U.S. broke, so a big part of the package was finally
into the pocket of rich merchants all over the world. More important
is there are not effectively stimulate the employment situations. In
such globe circulating economic environment, providing more jobs are

the critical solution for this crisis. Because the money is a sort of

power, so the financial crisis essentially is a crisis of power distributing .

Money as a sort of power, money also changed by circumstances. These

changes caused inflation and deflation. What caused the inflation
and deflation? By analyzing the history cases, it is clear that
demand and supply, monopoly, venture games, warfare, are main factor
which caused the fluctuation of money in history. Warfare drive lot
of males to battlefields, so there must be lack of labor, losing the
stable circumstance to manufacture, the supplies in most
circumstance were declined. Weapon industry have to use lot of
laborers in the state, there were no enough farmer and worker. These
must cause purchasing power declining. During a long time siege of a
city, inside, gold have not more value than same weight of crude
foods.

Commodity also is a sort of power, it also infect the inflations,

especially such nature or social resource commodities, such as land,
house, mines and energy. That also one of the most important factor
of the 2008 world financial crisis. I made a simple model to reveal

the process of the crisis. Supposing that, A material had the

equilibrium of demand and supply, it had the 10 billion tons ability

of supply, and it also has the ability of expand the output of 10%
in one year. Its price is 100 $ pre ton. At some time, the market
demand had add 5%, but, of cause the demand could not be satisfied
immediately, so the price had rise to 110% than before till 110 $
per ton. That is a remarkable margin for merchants. So lots of
merchant start to store A material for the rise anticipation, such

behaviors caused 40 billion tons material occupied in stores,

harbors, markets. The total demand steeply rise to 150%, the price
of it maybe rise to 200%. After a period, such high price certainly
made the demand shrunk to 80% as original. But at this point the
ability of supply had rise to 110% than original, so there are 30%

of surplus, the price of A steep fall to 50% as original. Market had

suffered a painful fluctuation, and for long period it is

equilibrium of demand and supply in 105% point. In such exchanges,
most manufacturers, merchants, speculator, consumers are losers.
Free market mechanism, in this model, harmed the rational allocation
of resources. In such speculating exchanges, huge quantities of
money had disappeared without any rewards.

That model is also suit to describe the 2008 world financial crisis.
2004-2006, the globe economy had expanded, the speculators in future
markets had blow up the demands and prices of materials, that made
more and more speculators into the market, lots of material had been
doubled or trebled, at one point, the market could not endure such
cost pressure, demands shrunk steeply. In 2008, for example, lot of
people hade to use buses and subways to work instead of driving to
offices, such behaviors evitable made the oil price fall down and
prevented the sale of cars. The greed of the capital triggered the
collapse, capital whished to control the ownership powers of
resources to get more profits, but that also harmed themselves at
final time. In 2006, Goldman Sachs predicted that oil price would be
over 100$ per barrel in 2007, and over 200$ per barrel in 2008. In
reality, at the end of 2007, the price smoothly rose over 100$, and
in the first half of 2008, the price rose over 140$, but till the
November of the year, the price steeply fall under 40$ per barrel.
Such anticipation, made huge quantities of money vanished, and lot
of money out of circulations, so it brought on lots of unemployment
and bankrupting, it also brought pessimistic anticipating, that lead
more shrunk in retail and investment market. Globe economy began the
horrible vicious cycle. As a figure of speech, this financial crisis
like a profuse blooding in a human body. If the governors understand
“what is money”, that would help they to reverse the brutal economy
contraction.

The fundamental role of money is regularizing the order of exchange,

it should not harm the manufactures and severs in such brutal
degree. People should do more attention for regularizing the order
of exchange and rebuild the new ethics of allocations than seek the
new sources of money. For modern economy’s enormous scale, the gold
standard monetary system is evitable out of the societies. So
issuing and distributing money become the duties of governments, how
to issue it, how to distribute it, and how to supervise government’s
monetary action, publics have to face such questions and make their
decisions. Central bank in the future is the fourth power of the
separation of powers for the political architectures in democratic
nations. Money is the warrant of power, how to distribute money, it
is a political question more than a economic question.
Chapter 6: market

In ancient china, 81 BC, the Emperor of West Han dynasty presided a

controversy meeting about whether government should monopoly the powers
of franchises. These speech had be recorded by the history officer Huan
Kuan, that the classic book in Chinese history, the Discourse on the
Salt and Iron, Yan T’ie Lun. In that time, the franchises became major
revenues sources of central government, it was a form of taxes power.
It revealed that how to manage the market that is a question of power.
Now, it lasted more than two thousand years, economists still argue
about whether market should be controlled or liberated by governors.
Classic economists or neo-classic economists insist that laissez fair
market could allocate resources of societies efficiently. And left
theorist liking Ernest Mandel, criticize the laissez fairs as the
“monetary tyranny”.

As we know, the commodity is a form of power, so the market is the

circumstances which exchange of powers take place in. There are lots of
countries which are market economic regimes, like U.S. U.K. Japan, the
European Union, Australia, Mexico, and so on, but they are enormous
difference between these countries’ laws and market systems. The
laissez-fair had caused innumerable chaos, speculation, financial
crisis, supply-demand crisis, and Fluctuations in the modern history.
As I mentioned in last chapter, in 2008, the crisis of oil price and
crisis of raw materials price, it show that free market do not always
allocate resources efficiently and rationally, but market allocate
resource by speculation that cause incorrectly allocating and
triggering globe financial disaster.

Back to the basic of market: exchange. Exchange is the mechanism which

formed by the human’s evolution, exchange is the mutual benefit traits
which exist in the multilevel. But there are lot of mainstream
economists insister that the market could be the best allocation to all
resource. Coase argued that without transaction costs it is
economically irrelevant who is assigned initial property rights; the
rancher and farmer will work out an agreement about whether to restrict
the cattle or not based on the economic efficiency of doing so. But, in
fact, whatever the transaction cost be, how to work out an equally and
efficient agreement between the different power level individuals?

Chomsky argued that the economic rationalism is despise human being in

its root, because in its perspective human demand do not provide any
validity for getting resources; It also suggests that whether people
could get the resource is relied on the mechanism of market supply and
demand; The economic rationalism just mean death and starvation to the
poverty peoples.
Although the exchange behaviors beginning from the stone age, but in
most time in the human societies, people allocated resources by the
ethics, customs, and laws.

In chapter 2, I motion that in the south Africa Kalahari desert, local

aborigines have composite ethics for distribution of foods; For
example, they hunted by poisoned arrows, one who killed the quarry can
drink the blood at first time, but only the owner of poisoned arrow
which killed the quarry have the power to distributing the meat; When
they hunted collectively, the meat also belonged to the tribe, one who
participated only get opportunities to eat quarry’s innards. Such
strict distribution customs is derived from the scarcity of food in
local circumstances.

Matt Ridley had mentioned a instance of how aboriginals distributing

the foods in his book, the Origins of Virtue. In New Guinea, there are
Ponam island, aboriginals fish with forks and nets, collective owned
local coral reef had been plot out, every plot had been allocated to a
paternal family. Canoe and net was private property. If the owner of
plot want to using the canoe or net, they must get the agreement of
canoe owner or net owner. After they fish, they distribute their gain
equally. Every one who involved the work would get a portion, owner of
the plot would get a portion, owner of the canoe or net would also get
a portion.

In such case, it show that every power involved to the fishing, could
get the reward correspondingly and equally, power of capital such as
net canoe plot could not dominate the distribution of fishing out put;
as contrast, the ethic of capitalism distribution is dominated by the
power of capital. The one of the greatest defect of contemporary Globe
economic system is the abusing of capital power. We should learn more
from the resident of Ponam island.

In ancient China， how to allocate the resources depend on the ethics at

that time. There are lot of historical book passed down, one of the
most famous book is, the Classic of Rites, in fact it should be called
as “the Classic of Ethics”, it also one of most important classic
Confucian work. in the chapter: Single Victim At The Border Sacrifices,
it recorded such ethics: the King shouldn’t let his serfs or farms to
cultivate the gains, he just could product melons and vegetables. Why?
That is because according the political ethic the King is the
arbitrator, so he could not participate the competitions of normal
peoples in markets. In the latter half of nineteen century, Japanese
famous enterpriser Hidekazu Shibuzawa had concluded that Japanese
enterprisers who lived in Meiji era were working with the Analects of
Confucius and abacus. That proved that in east Asia, Confucian ethics
influenced the exchange and allocation greatly.

In Alps Switzerland ， there are some villages, from 1224, residents had
confirmed the five main resources as common property, such as alpine
meadow, forest, wild land, water source, and road; From 1517, they had
defined the heads of livestock for every family; people could cut woods
in forest only once per year, assigning specific people to supervise,
if they found one violate the rules, one should be punished a fine, and
the half of the fine should be allocated to the supervisors,
supervisors tagged the trees could be cut down, residents worked
collectively and allocate wood to every family. In Alps, the private
property and common property coexisted for hundreds years, and autonomy
in village formed their successful ethics in the economic systems.

The open field system was the prevalent agricultural system in much of
Europe from the Middle Ages to as recently as the 20th century in
places. Under this system, each manor or village had several very large
unfenced fields, farmed in strips by individual families.

In 1968 ， Garrett Hardin published his work ： the Tragedy of the Common,
In Hardin's view, it is in each herder's interest to put as many cows
as possible onto the land, even if the commons is damaged as a result.
The herder receives all of the benefits from the additional cows, while
the damage to the commons is shared by the entire group. If all herders
make this individually rational decision, however, the commons is
destroyed and all herders suffer. But as we know, the commons had exist
for hundreds years properly. In most time, as tragedies had not
happened. That because ethics and legislation limited the individuals
to overuse common properties. Laissez-fair capitalism economist have
criticized the inefficient for common properties for long, they have
boosted marketization and privatization all the time. Even these
economist allegation is right, but the metaphor of it likes that: If
one cooked fish was not delicious, is there any one else could rob his
fish and make it for a delicious meal for others? The ownership and
efficient essentially at different categories, it like that people
could not deprive private right by his inefficient behaviors in most
circumstances. Classic economists argued lots of theories supporting
the privatization of common properties, and politicians began to
deprive common resources for relative groups. That is essential ethics
for economic philosophy.

Hayek believed that collectivism is inevitable becoming the tools of

little groups who want to use it to achieve their own propose. In the
central planning economic systems, individuals and groups never could
get enough information to decide that how much product should be
manufactured and where or who those product should be allocated. Hayek
believed only market could play the role in such question. It is called

“economic calculation problem”. The planning economics are also manipulated

by some groups such as parties, bureaucrats, and interest relatives.

Both tyranny of planning allocation and market monetary tyranny are

formed by the unlimited power of governor and capitals. Human societies
had struggle for thousand years to renowned the power to manage their
societies democratically, the question is government how to manage the
societies but not whether governments should exist. In economy, for the
same reason, the essential issue is how to manage market and legislate
for the market, but not whether market should exist.

A very important factor in market is the power of persuading. Exchange

behaviors are so complex, to achieve a exchange, it need multifactor
induce both side of the exchange. Advertiser’s experiment show that
people are not always rational, consumers are very easy to be
influenced by the advertisement persuading.

What is the essential of persuading? persuading is power or a form of

power, it a kind of ability to achieve one’s purpose, it is measure to
get power. It manipulate others to act as one wished, it expand the
range of one’s ability who persuading others. Dennis H Wrong in his
work, Power: Its Forms, Bases, and Uses, had argued the persuading as a
form of power, because it represent a measure which participate could
get the results that they anticipated before. Persuading is also
unequal in most circumstances, that is mainly because the information
for participators are not symmetrical. In contemporary, lots of
advertisements promote people goods which they needn’t it at all. I
mentioned the important role which manipulate mass mind in history in
chapter 2, persuading is a form of manipulation. In many ancient
cultures, wizards manipulated the mind of mass, finally they became
kings. In modern societies, stock markets are such mechanisms which
participators exchange the power of firms with each other. That also
relied on the persuading investors to achieve the exchanges, in a free
stock market there are always supplying over demand stocks, because
lots of firm and individuals want to issue stock to get enough money.
In most time the supply and demand curves is not work in the markets.

Market is not always reflect the supply and demand accurately, the
exchange in market is like our brains, market exchanges work in multi
modular and multi levels. It is improper to simplified such complicated
behaviors as “invisible hand”. In market, lots of demands were created
by the suppliers. For instance, a writer wrote a book, and it sale to
the reader who not demand to read it until reader happened to meet it.
Such demands are hard to be create by the politicians. Human’s decision
processes is complicated, so the role of market is irreplaceable in the
modern economies.

When people mentioned planed economy, they should concern the autocracy
risks which Hayek had argued before. But the some kind of planning
economy is inevitable in modern societies, that is for maintaining the
stable circulation and distribution, governor must do some thing to
keep economy running especially in the time of crisis. For instance,
the president Roosevelt’s New Deal is such kind of planning economy.
The "First New Deal" of 1933 was aimed at short-term relief programs
for all groups. The Roosevelt administration promoted or implemented
banking reform laws, work relief programs, agricultural programs, and
industrial reform, and end the gold standard. A "Second New Deal" (1935–
1938) included labor union support, the Works Progress Administration
(WPA) relief program, the Social Security Act, and programs to aid the
agricultural sector, including tenant farmers and migrant workers. New
Deal is action which maintained the democracy of America, it proved
that planning action not evitable lead to autocracy.

In chapter 5, we mentioned a model about money, in that hypothetical

case, there are farmers, masons, and merchants living in a isolated
island. In that case, the piece of wood is the money in the island.
Merchants give every product a fixed price. That is convenient for
local residents, farmer could save the wood tile their need buy new
stone axes, and masons could buy foodstuff any time they want. Suppose
that one day, merchants’ room get fired, all money (pieces of wood)
fired out. So the farms would not sell out their product to buy stone
axes, and the masons had not enough money to get food. This is the
metaphor of modern financial crisis. To solute this crisis in the
island, it is easy that just cut some pieces of wood again and merchant
buy products again. Modern monetary crisis is a fire set on the
monetary system, if the bank is nationalized such crisis is more easy
to overcome. But in the market and private dominated banks systems, it
is almost no solution for big crisis like 2008 financial crisis. So
nationalizing banks is inevitable.

In market, how monetary tyranny worked? It is achieved by manipulation

and monopoly. I would like use a simple model to show this again.
Supposing in a isolated market, there are equilibrium of supply and
demand for foodstuff. In this equilibrium foodstuff supply for 110
tons, and demand 100 tons, price of foodstuff is 1000 per ton. A
business group decides to manipulate the foodstuff market for higher
profit, if they regrate enough foodstuff they could dominate the
foodstuff market easily. They stock 60 tons foodstuff, but they only
let 40 tons foodstuff supply to market, and the rest 20 tons would be
stock up. In this point, the equilibrium is broken out, demand of
foodstuff which is inelastic, it is still remain 100 tons, as contrast,
supply reduce to 90 tons, such situation make the food price skyrocket
immediately. So the group sold they food price in 3000 per ton, that
make they getting 20000 profits at least, (40×3000-40×1000＝20000). That
may cause few people death of starvation. That time the group would
play a responsible role in community, they sold out rest 20 tons at the
price at 1000 to build their reputation. The higher price made the
farmer make more foodstuffs, that caused the oversupply next years.
Farmers have to sell their grain at price of 500. such case show that
market is not naturally efficient and equality, laissez-fair capitalism
just the monetary tyranny.

In the market, monopolization could get high profits for long period.
in the West Han dynasty, the profits from the franchises of salt and
iron were comparable with the income of taxes.

The powerful men or women allover the world and history were always
focus on the right of land, whatever used force, money, and cheating,
they know if they controlled the land, they almost controlled every
thing in the market economy. If one controlled the land, most deals
would yield to him. The ratio of total wages of Chinese labors vs. GDP
in china, in 1990, it is 15.9%, till 2005, such ratio decline to
10.75%. In contrast, in 2007 in china, the revenue of land rent is 1200
billion RMB, the GDP is 24661.9 billion RMB, the total investment of
real estate is 2528 billion RMB. The land revenue cost half of total
wage of Chinese labors, and investment cost equally to the total wage
of Chinese labors. Such data show that all labor in china have to pay
half of their wage to rent the land which naturally belong to them
common, even more they could not get any reward directly from the huge
quantities of land revenue. (these data is from the Zhou Tianyong,
Chinese macroeconomic flow; Xie fuzhan the chief of National Bureau of
Statistic China; Chinese Youth Daily)

Market would never be replaced, because it micro level mechanism, it

reflect demand and supply of every individual of economy, but in macro
level, people have to do some thing to make it peacefully and equally.
All of those issues, base on the powers and the ethics, market itself
is the circumstance where commodity-exchanges take place in, for the
commodity is a form of power, so market is the circumstance where
power-exchanges take place in.