CHAPTER 4

The main findings from the empirical data and from the expert system Monte Carlo simulations are as follows:

SOUND FUNDING-LIMITED FIRMS ARE EXTREMELY VULNERABLE TO INCREASES IN DARWINISTIC AND PREDATORY PRACTICES IN THE MARKETPLACE. SUFFICIENT REASONS FOR THE DESTABILIZATION AND DESTRUCTION OF FIRMS INCLUDE: FLAWED DISTRIBUTION OF BANK-MONEY AS LOANS OR CREDIT, FLAWED BANK PRACTICES, SIGNIFICANT DARWINISTIC "NET ADVANTAGES" IN THE RULE OF LAW--FAVORING LENDERS OVER BORROWERS--, AGGRESSIVE PREDATORY BEHAVIOR, AND A PROPENSITY FOR GREED. THE SUPERPOSITION OF CYCLICAL PREDATION AND DARWINISTIC BEHAVIOR EXPLAIN BOTH THE PEAKS AND THE UPWARD TREND OF THE AMERICAN AND CANADIAN PER-CAPITA BUSINESS MORTALITY RATE CURVES.

Illustrative simulations show clearly that, as the strength of Darwinistic elements in the business environment is increased from 0% to 100%, the subjective probability that a sound funding-limited firm is destabilized can increase from 0% to about 80%! The subjective probability that such a firm is destroyed or cannibalized can climb to about 60%!

These findings are consistent with evidence from bankruptcy statistics. In the case of Canada, the world's best place to live (at least according to the UN¹), statistics from Consumer and Corporate Affairs Canada indicate that business bankruptcies increased more than threefold, between 1976 and 1982, and more than fourfold, between 1976 and 1992. For the 10-year period ended in 1995, the total number of consumer and business bankruptcies in Canada was an incredible 551,645!² The oscillatory behavior in the Canadian and American bankruptcy rates, which intensified after 1976 in Canada and after 1980 in the United States, suggest that the economic systems in these two countries are predatory.

The findings are chilling news for entrepreneurs. In a Darwinistic business environment, sound funding-limited firms can be highly vulnerable to negative bank actions (possible abuse of concentrated commercial powers can significantly compound problems for owners and their families). Of special concern are strategic and priority high-tech firms. Since these operate with a long-term perspective, they can be extremely vulnerable to destabilization.

THE FACT THAT A FIRM IS FUNDING-LIMITED, BUT NOT TECHNOLOGY-LIMITED, MAY TEMPT A PREDATORY LENDER OR CREDITOR TO SUDDENLY AND DELIBERATELY DESTABILIZE THE FIRM, THEN, IF POSSIBLE, TO MOVE TO TAKE POSITIONS OF OWNERSHIP OR CONTROL IN THE TECHNOLOGY. THE "ABNORMAL LIQUIDATION"³ OR "CREATIVE DESTRUCTION"⁴ OF SUCH FIRMS CAN HAVE DEVASTATING LONG-TERM EFFECTS ON THE ECONOMY.

Lenders

The findings are also bad news for lenders. Continuous tensions between citizens, as consumers or small business owners, and Big Governments, Big Business, or Big Banks, erode the confidence in government, in the marketplace, and in the financial system.

ECONOMIC DARWINISM AND PREDATION SPAWN DISTRUST IN CAPITALISM; AND, WITHOUT TRUST, THE ECONOMY CANNOT THRIVE. THE NEXT OVERINVESTMENT CYCLE IS AROUND THE CORNER. SHOULD THEY MATERIALIZE, GLOBAL MISDIRECTION OF LOANS, GLOBAL SPECULATIVE OVERINVESTMENTS, AND GLOBAL INCREASES IN ECONOMIC PREDATION CAN LEAD TO GLOBAL DOUBLE RUNS ON BANKS AND ON THE JUSTICE SYSTEM.⁵ TO PARAPHRASE THE FAMOUS ECONOMIST RICARDO, AGAINST SUCH PANICS, CREDITORS HAVE NO SECURITY, ON ANY JUSTICE SYSTEM.⁶

The following speculative conclusions and expectances can be derived from my World War III Against The Money Trust?⁷

• Big Business and Big Government have moral and legal responsibilities. Expect the globalization of the Darwinistic practices of the marketplace to increase the perceived moral and legal liabilities of Big Business in general, and of financial institutions in particular.
• Expect the "net advantages" of Big Business and Big Government over the citizen to become the problematic of Capitalism and the central focus of electorates around the world. And expect electorates to demand the elimination of Darwinistic advantages. Since such advantages are typically enframed in legislation, expect massive changes in legislations and judicial procedures.
• If the future is virtually concealed in the past,^8-13 then expect speculative overinvestments, Schumpeterian "creative destruction," and predation to follow global economic expansion. The oscillations of the business cycle will be temporalized ¹⁴ globally. Without profound changes in legislations, expect the global temporalization of the Darwinistic practices of the marketplace to translate into monstrous destruction and predation in the next Global Business Cycle.

² Considering that Canada is blessed with immense natural resources, has access to the world's largest marketplace (the United States), and has a population of only 30 million people, in a geographical area greater than China and Japan combined, this statistic is a monstrosity.

³ Schumpeter's expression; see Joseph A. Schumpeter, Business Cycles (1939), 1964, at 125 and 430 ("Abnormal Liquidation").

⁴ Schumpeter's expression; see Joseph A. Schumpeter, Capitalism, Socialism and Democracy (1942), with a new Introduction by Tom Bottomore, 1976, at 81-86 (The Process of Creative Destruction).

⁵ For a discussion and an analysis of the potential for double runs on banks and on the justice system, and how such panic must be avoided, see Edward, E. Ayoub, World War III Against The Money Trust?, 1997, especially Chapters 16 through 18 in Book I.

⁶ See David Ricardo, On The Principles of Political Economy and Taxation (1817), edited by Piero Sraffa with the collaboration of M.H. Dobb, Vol. 1, published for The Royal Economic Society, 1951, by the Press Syndicate of the University of Cambridge, at 352-372 (On Currency and Banks), especially 359. Ricardo addressed the issue of runs on banks as follows:

• "Should every man withdraw his balance from his banker on the same day, many times the quantity of Bank notes now in circulation would be insufficient to answer such a demand" [my emphasis and italics].
• "Against such panics, Banks have no security, on any system; from their very nature they are subject to them, as at no time can there be a Bank, or in a country, so much specie or bullion as the monied individuals of such country have a right to demand" [italics in the original; the emphasis is mine].

⁸ For a philosophy of the "eternally present" as cyclical "unfoldment," see Hegel, The Philosophy of History, translated by J. Sibree, with Prefaces by Charles Hegel and J. Sibree, and an Introduction by C.J. Friedrich, 1956, at 54 ("The changes that take place in Nature . . . exhibit only a perpetually self-repeating cycle"), 67 (" . . . same circle of transient and corruptible existence"), 76-77 (" . . . monotonous repetition of the same kind of existence"), and 78-79 ("The life of the ever present Spirit is a circle . . . ").

⁹ For philosophical notes on the Eternal Return of the Same, see Friedrich Nietzsche, The Will to Power, translated by Walter Kaufmann and R.J. Hollingdale, edited with Commentary by Walter Kaufmann, 1967, at 544-550 (The Eternal Recurrence), especially 547 and 549.

¹⁰ For insights into the nature and process of "historiological disclosure" and anticipatory repetition, see Martin Heidegger, Being and Time, translated by John Macquarrie and Edward Robinson, 1962, at 163 ("they are what they do"), 376 ("I am-as-having-been"), 436 (repetition of the having-been), 443 ("understand[ing] the 'past' in terms of the 'Present'"; anticipatory repetition), and 447 ("The historiological disclosure of the 'past' based on fateful repetition . . . guarantees the 'Objectivity' of historiology"). See also Martin Heidegger, The Question Concerning Technology and Other Essays.

¹¹ For recent philosophical thinking on Darwinian repetition, see Gilles Deleuze, Difference and Repetition, translated by Paul Patton (Presses Universitaires de France, 1968; The Athlone Press Limited, 1994).

¹² For proofs of three Eternal Return Theorems (Poincar--, Finite Markov Chain, and Quantum Almost-Periodic Recurrence), see Frank J. Tipler, The Physics of Immortality, 1994, at 89-103 (Eternal Return), and 417-431 (Proofs of Eternal Return Theorems and the No-Return Theorem).

¹³ For dissenting views, see Karl R. Popper, The Open Society and Its Enemies, Volume II, 1962 and 1966, at 59 ("Hegel's hysterical historicism"); Frank J. Tipler, The Physics of Immortality, 1994, at 101-103 (No-Return Theorems in General Relativity), and 104-123 (The Triumph of Progress); and Herbert Spencer, First Principles, 1880, at 337-362 (The Instability of the Homogeneous).

¹⁴ On the concept of "temporalization," see Martin Heidegger (1978), The Metaphysical Foundations of Logic, translated by Michael Heim, 1984, at 196-211 (Transcendence and Temporality (nihil originarium)), especially 208-209.