China's Rare Earth Metal Monopoly

Nick Axline Mingwei Chen Economics 314 Dr. Young

China’s Rare Earth Metal Monopoly

Background In June 2010, China lowered its quotas on the export of rare earth metals by 72 percent, and in December of the same year, continued this policy by slicing them down further to around 35 percent. This series of moves by Beijing has raised serious questions across the globe, especially in Japan and the U.S., which are the largest importers of rare earth elements (REE). In 2010, Japan, the European Union, and the Americans decided to petition to the W.T.O., claiming that China was in violation of the rules set up by the trade organization. China had become a member of the W.T.O. in the year 2000, and thus was under its mandates. The Europeans, for one, called the quota “highly disappoint[ing],” with the W.T.O. warning that China’s reluctance to share its rare earth supplies broke global trade rules. However, Beijing still kept its rare earth supplies under tight fist and claimed that the new quota would satisfy the world market demand. It also claimed its quota was to protect the environment from the mining of the metals and to help growing domestic demand.

Introduction

What are the rare earth elements? They are a group of 17 metallic elements with similar properties and structures that are essential in the manufacturing of a diverse and expanding array of high-technology applications. The periodic table of the elements below shows the elements generally included among the rare earth elements. Lanthanum, for example, is used in hybrid cars’ batteries because they can be packed into a small space, but still deliver plenty of power—being “twice as efficient as the standard lead-acid car battery” (Koerth-Baker). Toyota, the largest car company not only in Japan but the world, has used this element in their Prius hybrid lines—8 percent of their total manufacturing. Rare earths are used in the creation of many high tech goods, which are essential to America’s and Japan’s economies. Erbium is used in the creation of lasers and fiber optic cables, as well as military equipment like night vision goggles and weapons. Many others contain special magnetic properties which make things like cell phones, hard drives, DVDs, CDs, wind turbines, and deep sea drills possible. Koerth-Baker quotes Daniel Cordier in her article in Popular Mechanics, with the mineral commodity specialist saying, “Rare earths have really unique chemical and physical properties that allow them to interact with other elements and get results that neither element could get on its own.”

Distribution around the world

Despite their name, rare earth elements are relatively common within the Earth’s crust, but because of their geochemical properties, they are not often found in economically exploitable concentrations. According to the table below, based on data from the respective countries, China has the largest amount of reserves in the world, sitting at around 37 percent. The U.S. constitutes the second largest segment, with 13 percent of the world’s reserves which are mainly distributed in California. The Mountain Pass mine in the Golden State produced rare earth elements until it closed down in 2002. In the U.S., REE deposits are found in Colorado, Florida, Georgia, Idaho, Illinois, Missouri, Nebraska, New Mexico, New York, and both Carolinas.

Sources :( U.S Geological Survey, 2011) History of rare earth production

Prior to the 1990s, the U.S. was the global leader in REE production. However, when China began its economic reform in 1978, which was headed by then president Deng Xiaoping, it began the process of expanding its rare earth industry. In 1992, Deng Xiaoping said “there is oil in the Middle east; there is rare earths in China.” The Chinese government encouraged the rare earth industry to grow rapidly by loaning to the mining corporations at a low rate. This was accomplished by using government-controlled banks and subsidizing mining corporations to export. Because most of the mining corporations are state-owned and supported by the government, they can get licenses easily, regardless of the environment destruction issues and inferior working conditions. China’s low commodity prices were also supported by cheap and plentiful labor.

The price of rare earth exports from China was much lower than the prices of producers in other countries, like in the Mountain Pass deposit in the U.S., which had to face increasing labor costs and environmental protections. With profits continuing to decline, the company which owned the mine decided to shut down in 2002. Since 2000, Chinese production has continued to increase dramatically, and by 2009, Chinese production increased 77 percent to 129,000 tons from 73,000 tons in 2000, while world production only increased 45 percent to about 132,000 tons from 91,000 tons in 2000. On the other hand, production from other countries decreased to about 3,000 tons in 2009. The volume of China’s rare earth output as a percentage of total world output increased to more than 95 percent in 2008, cornering the market and nearing a monopoly. This paved the way for the showdowns which the world is witnessing today.

Despite Chinese production expanded rapidly, China’s rare earth producers reportedly have struggled to maintain profitability. Throughout the 1990s and 2000s, the government and rare earth producers had met and discussed ways to control production and exports as a means of conserving the country’s mineral resources and protecting the environment, but nevertheless, competition among local governments and enterprises resulted in sustained high levels of production. Local governments depended upon rare earth producers to provide employment and revenue for local economic development and did not always follow the national government’s guidelines on rare earths. As a result, the country’s actual output of rare earth continued to exceed the government’s production target (China State Council, 2006).

Because of these continued issues, China’s main goal in recent years was to consolidate the various companies so that they could be more tightly controlled. According to the record, the number of rare earth producers fell from 59 in 2006 to 31 in 2011. Most of the REE producers are state-owned, so central and local government have more power to regulate the production and supervise the working condition and environmental protection. Second, the Chinese government has encouraged the export of high-value downstream products and discouraged the export of raw material. The Chinese enterprises do not have the high technology to refine the material, so most of exports are raw material which are shipped to Japan and are refined by Japanese companies, and then resold to China. Beijing has encouraged the firms that have the technology to refine the raw material in Chinese factories, which will not only enforce the application in China, but also bring up the employment rate and the national income. Third, the China cut quota to 30,000 tons per year in 2010 and 2011 from 5000 tons in 2009.

Table.1 China's rare-earth production, consumption, and export quotas for 2000 through 2011. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Production MIIT 119,500 110,700 89,200 N/A Quota MLR 55,000 N/A N/A N/A N/A N/A 86,620 87,020 90,180 87,620 89,200 N/A Prodction (est.) 73,000 81,000 88,000 92,000 98,000 119,000 133,000 12,000 125,000 129,000 12,000 N/A Consumption (est.) 19,000 20,000 22,000 30,000 34,000 52,000 63,000 73,000 67,700 73,000 77,000 N/A Export quota Domestic producers and traders 47,000 45,000 N/A 40,000 45,000 48,010 45,000 43,574 34,156 31,310 22,512 14,446   Sino-foreign joint ventures N/A N/A N/A N/A N/A 17,570 16,070 16,069 15,834 16,845 7,746 15,738 Sources: China Ministry of Commerce (2006, 2008a, b, 2009, 2010a, b, c) According to the table above, between the 2005 and 2007, Beijing allocated a quota of 60,000 tons; however, they began to cut the quota after 2007. Until 2010 the quota was 30,258 tons, which was a reduction of 39.5 percent from 2009. In 2011, the quota was 30,184, reduced by 74 tons (0.2 percent) from 2010. Last year, the world’s rare earth market was worth about $2 billion. China currently controls 95 percent of the world’s rare earths, producing about 120,000 tons in 2010. Based on the international economics theory, the production of rare earths will be changed in the short run, so the supply curve is inelastic. When China exports a large amount of rare earth, it causes the price to fall, but after Beijing cut the quota and because of the inability of competitors to raise the production immediately, the price of the rare earth metal in the international market will rise rapidly in the short run. When China lowered the quota of rare earth, the price of rare earth skyrocketed in 2010 and the first two quarters in 2010 because of their control of the supply. According to the table above, the FOB China price of REO in 2009 was 10.23 per kilogram, and increased to 31.35. In Q2 2011, the price went up to 173.20 and increased 16 times from 2009. The value of export of rare earth from China increased by 930 percent in the first half of year 2011, mainly because the price went up so rapidly.

Table 2: FOB China Prices Rare Earth Oxide 2008 2009 2010 Q2 2011 Q3 2011 28/11/11 Lanthanum Oxide 8.71 4.88 22.40 135.02 117.68 65.00 Cerium Oxide 4.56 3.88 21.60 138.29 118.65 55.00 Neodymium Oxide 31.90 19.12 49.50 256.15 338.85 240.00 Praseodymium Oxide 29.48 18.03 48.00 220.08 244.73 210.00 Samarium Oxide 5.20 3.40 14.40 125.60 129.45 90.00 Dysprosium Oxide 118.49 115.67 231.60 921.20 2262.31 1970.00 Europium Oxide 481.92 492.92 559.80 1830.00 4900.00 3800.00 Teribium Oxide 720.77 361.67 557.80 1659.20 3761.54 2820.00 Av. Mt Weld Composition 14.87 10.32 31.35 173.20 193.21 122.39 Source: Metal Pages Who gains and who loses? The Chinese government will gain from the quota if the prices continue to remain high. Beijing has placed a tariff on exports which is a percentage of the price. Because of this, if the price goes up so does the tariff. In recent years, the country has been trying to compete in the international market. By forcing foreign firms to work with state-controlled ones because of the freedom it gives from quotas, China can hope to learn and mimic some of these advanced technologies, and having such ready access to the deposits also allows China’s goods to become more attractive to foreigners because they have “privileged access” to green technology. Politically, China may be given more leverage in international disputes if they can halt the trade of REE to the offending country. This actually happened in September, 2010, when China ceased the sale of REE to Japan during the boating dispute in the Pacific Ocean where a Chinese man was detained. On top of these reasons, there are also the stated government benefits of reducing harm to the environment and helping domestic demand.

However, private Chinese companies will lose and many have already been driven out of the industry in the past three years because of newly required licenses which will be discussed later in the paper. Producers of rare earth in other countries can expect to gain from continuing high prices though. Because of the shortage of rare earth on the market and the inflated price for which they are selling, mining for REE will become increasingly attractive as long as the additional product cost is less than the marginal revenue. That is why the price of stock for Molycorp has increased three times over in 2010 and ‘11. Like usual, consumers lose. As the prices of the REE go up, the cost of products which rely on REE will rise as well, and the consumer surplus will decrease.

What will the impact be on the United States? The value of refined rare earth imported by the United States in 2010 was $161 million, an increase from $113 million imported in 2009. Is that a big number? Let us look at some numbers:

· In 2010, the total imported REE by the United States was $2,337,604 million. · In 2010, the total imported REE by the United States from China was $364,943.9 million. · In 2010, the total imported crude oil by the United States was $252,161 million. (U.S. Census Bureau, 2011) So, in 2010, the value of rare earth imported by the United States was 0.0068 percent of total imports, 0.041 percent of the imports from China, and 0.064 percent of the imports of crude oil. The increased price of rare earths recently would not have the same impact as the increased price of oil by the OPAC in ‘70s and ‘80s because the value of the industry is trivial compared to the value of the oil industry. Therefore, the increased price of rare earth does not have much impact on the imports of the United States and the whole of American society.

Environmental concerns and substitutes

The mining of rare earth metals has been destructive on China’s land and people. Keith Bradsher reported in the New York Times of the havoc it has waged on the environment. In one example of the small village of Guyan, the devastation the mining caused on the local community is indeed terrible. Where bamboo, banana trees, and rice once grew, now there is only red clay dead zones which have to be washed away by the workers using acid—acid that pollutes rice paddies, fish farms, and water supplies after rain storms. REE deposits also often contain radioactive material, like uranium and thorium, which have to be separated from the other metal to be used. This is obviously dangerous to the people involved, both the mining employees but also the surrounding farmers and villagers. In Southern China, miners often report growing ill, with the ‘heavier’ rare earths being the hardest on the local environment. On top of the ill effects on the country’s ecological well-being, many of the deposits are run illegally by dangerous Chinese gangs from the cities. After the ore is brought to the surface it is sold to traders, who then bring it to processing centers, leaving the origin anonymous.

All of this is somewhat ironic given what much of the metal is used for—wind turbines and other ‘green’ technologies. One wonders of the hypocrisy of elitists in Western countries who preach of their ‘green’ cars, and wind and solar energy. Often the materials which go into these products are obtained in ways that are a net negative on the Earth’s environment. As long as they cannot see the ‘deadly’ carbon fumes leaving their exhaust pipes, they can live in ignorance of the activities going on in countries like China. However, Pugel’s International Economics reminds the reader that often the cost associated with pollution regulation is not enough to force companies to move to countries with more lax laws—indeed, other factors such as “comparative cost advantage, transport costs, and external scale economies, are usually more important” (Pugel 284). There is evidence also to support that the Chinese are increasingly becoming more aware of their local environment, with Beijing claiming to the W.T.O. that the rationing of REE is to do with the ecological cost to the country.

Despite the name, most rare earth metals are not hard to find, but the environmental price of bringing them from the earth has led many developed economies to export the pollution elsewhere. However, with the threat of China’s continued monopoly of the trade and rising prices at the beginning of 2011, many REE mines around the world are looking at reopening, with developers in Canada, Greenland, South Africa, the U.S., and Australia examining the possibility. The largest mine in America is located in San Bernardino County, California, and has a history of being the biggest producer of REE in the world until 1984. Mountain Pass, the name of the deposit, has reserves of over 30,000,000 tons of ore. This supply would be able to meet current U.S. demand for at least 150 years but take several years to start up, with some economists warning of a time span of up to 5 to 10 years. The deposit is owned by the American corporation, Molycorp. In November 2011, Molycorp’s reported record sales of $138.1 million, a 39 percent increase over the previous quarter in 2011. Sumitomo and Mitsubishi Corp., two Japanese firms who have both shown interest in diversifying away from Chinese ore, signed agreements in late 2010 to be supplied by the Mountain Pass deposit and the American firm, W.R. Grace & Co. (a catalyst manufacturer) has also decided to participate. This mine can only produce “light” rare metals, lanthanum and samarium, but if other known U.S. sights opened up which contain “hard” deposits, America would be able to self supply completely.

Another mine in Australia owned by the Lynas Corporation is also rearing to relaunch and a massive deposit was recently discovered by Japan in a Pacific sea bed; however, most other companies lack the knowledge or the means to do so. This can give China the advantage in the short run, but not in the long run because Beijing will lose control of the prices. This is similar to ‘dumping’, where one country will unload products with cheap prices on another to drive out competition, and then raise the prices later. Dumping is hard to do because once the prices are raised, other companies will move in and take back market share. This is what is going on now—China will not be able to hold onto its monopoly if others start producing and selling for cheaper prices.

Foreign mining competition is not the only threat China might have if it continues its predatory pricing—companies, both in the West and Japan, have been trying to find alternatives to rare earth metals or, at the very least, use less of them in their manufactured, high-tech goods. In 2009, the U.S. Congress ordered the Department of Defense to review the military’s dependence on the foreign REE and yet another bill introduced called for the stockpiling of the metals for national security if China started halting the trade entirely, which it was threatening to do in 2012. Toyota of Japan and Siemens of Germany have also been working to reduce their purchases of the metals, as are many other companies around the world. Other options presented to countries that use REE extensively include recycling rare earth metals from landfills and dumps. High tech items, such as motors, televisions and cell phones, could be used in new gadgets if there is enough salvage value left in the materials, and there has been other research indicating that pyrate (or “fool’s gold”) may be “able to replace Rare Earths in many applications” (Blankenhorn).

The present and future At the end of 2011, the price of rare earth metals dropped at an average of 20 percent, with Chinese exports of lanthanum declining 60.4 percent and cerium 92.3 percent. This was a result of falling demand because of the higher prices. China reacted by consolidating REE companies across the nation, cutting mining entirely in mid-October, and devising a system of ‘special invoices’ to more tightly regulate the industry and weed out illegal businesses. The new ‘invoices’ will require producers to have special permits to sell their material to the market. However, this action may actually cause the price to drop even further because some smaller firms may decide to exit the market, liquidating their reserves and flushing the marketplace with more metals. Because of this, buyers may halt purchases because of anticipated lower future prices, creating a multiplier effect—the price will continue to fall even quicker. With threats like these, China’s position is deteriorating. If Beijing is going to take advantage of their monopoly they will have to move quickly.

For an investor, volatile commodity markets can be a great area to place money because there is much to be made both on the upside and downside. In the short run, we predict that REE prices will become increasingly volatile yet show a general upward trend. This is in line with how other commodities, such as gold, copper, and oil, are currently performing. In the long run, however, prices may be driven down to sustainable levels, preventing a bubble from bursting. This could be a long time in the future, so there is still plenty of money to be made. In 10 years, China will have lost complete control of their monopoly with the threat of substitutes like pyrate, recycling, and new mines killing it by a thousand cuts. In the interim, they may use their control to leverage their position against America if there is an economic or militaristic showdown. China is increasingly allying itself with regimes like Iran and Russia, and tension is increasing in the South China Sea with a heavier American presence and countries like Vietnam, Thailand, and the Philippines growing increasingly anxious with China’s growing prominence.

Citations:

Blankenhorn, Dana. "Don't Worry About Rare Earths." Renewable Energy World. 19 January 2011. Web. 4 Dec. 2011. Bradsher, Keith. "Challenging China in Rare Earth Mining." The New York Times. 21 April 2010. Web. 4 Dec. 2011. Bradsher, Keith. "Earth-Friendly Elements, Mined Destructively." The New York Times. 25 December 2009. Web. 4 Dec. 2011. China State Council, 2006, Instruction for mineral resource development: Beijing, China, China Koerth-Baker, Maggie. "4 Rare Earth Elements That Will Only Get More Important." Popular Mechanics. Web. 4 Dec. 2011. Koyano, Taro. "Firms eye U.S. rare earths / Sumitomo, Mitsubishi link with Molycorp to diversify from China." Daily Yomiuri Online. 20 December 2010. Web. 4 Dec. 2011. "Leading article: An elemental challenge for China and the world." The Independent. 2 January 2010. Web. 4 Dec. 2011. Lee, John. "Beijing's Motives Behind Rare-Earth Metals." Forbes. 3 January 2011. Web. 4 Dec. 2011. Lifton, Jack. "The Battle Over Rare Earth Metals." Journal of Energy Security. 12 January 2010. Web. 4 Dec. 2011. Martina, Michael. "China to control rare earth extraction, pollution." Reuters. 7 January 2011. Web. 4 Dec. 2011. Milmo, Cahal. "Concern as China clamps down on rare earth exports." The Independent. 2 January 2010. Web. 4 Dec. 2011. "Molycorp In A Rare Earth Bubble That Is Quickly Deflating." Seeking Alpha. 22 November 2011. Web. 4 Dec. 2011. Montgomery, Michael. "China Stalls Rare Earth Production to Curb Falling Prices." Rare Earth Investing News. 7 November 2011. Web. 4 Dec. 2011. Pugel, Thomas A. International Economics Fourteenth Edition. New York: McGraw-Hill Irwin, 2009. "Rare-earth metals." Think Global Green. Web. 4 Dec. 2011. Russell, Karl. "Many Want Rare Earths, but Few Are Mining Them." The New York Times. 6 February 2011. Web. 4 Dec. 2011. State Council Circular 108, December 31, 5 p. (In Chinese.) U.S. Census Bureau, 2011, U.S. International trade in goods and services annual revision for 2010 U.S Geological Survey, January 2011, Mineral commodity summaries

A return to sanity -- the markets and the feminine

Since I was young, I have loved cities. The character built up on years of life, of blood, sweat, and tears. Little alleys and tucked in areas that only certain people can access. They are mazes--great big mazes constructed over years and from different minds. The city is like a bazaar, or even a social computer structure like Linux. They are put together, made beautiful, because of the different architects who decided to place their mark on them. Eric Raymond, in his essay "The Cathedral and the Bazaar", argued this same 'open-source' system could be applied to society at large. I think it already does inside the limits of the city. Here the soil is plotted by the physical infrastructure, property laws, and zoning and other regulations facilitated by the federal and local government, but is seeded and nurtured by private institutions. Later in this essay, I will use this framework to attempt to depict a deregulated system that is aided by the government and not hurt by it as is often the case in modern city management.

In my mind's eye I am constructing roads. They line the earth like a map and sink into the dirt. The physical land is ready to be drawn upon by man. The industrial sector starts to see promise in its easy-to-use layout. Workers quickly follow and the business worlds bustles, ready to construct building atop of building geared toward finance and economics. Each individual unit is ready to use his energy to improve the structure of the city. To lay a road here or build a bench there. Alleyways develop, gardens are planted atop of roofs, and a banker orders a fountain to be constructed in front of his building. This is the decentralized world which could be guaranteed through proper institutions. The government, instead of intruding, can actually facilitate private development by creating the proper infrastructure for its nourishment. However, for something like this to be realized, one must first understand the wildness of the market and the collective unconscious which drives it. I wish to showcase this tension for the reader and the danger man faces when he attempts to interfere with the actual mechanisms of the economy.

But first I want to set up a mythological set of images. Cities, as I have experienced, are where the doers do. The country, on the other hand, is where the passive stay passive. Nothing changes in Montana, but things change in the city all the time. They transform with each foot pushing into mud or a dime thrown in a bum's cup. In the southern district, people chuckle dismissively in a comedy club, a woman asks a man for a smoke outside a 30 story building, and a drunk pees on a red brick wall as a train passes by. Somewhere in the north, an ill college student writes his passions on the blank pages of his journal, on the floor under him two people make love, and under them is an older woman watching Starz. Nothing interests her tonight so she decides to go to bed early. Down below, far below, in an alley with a thrown over garbage can, someone is getting mugged. A man of great wisdom or terrible pride can render a city raw with the bite of his words or the tip of his pen. Revolutions can happen in the country, but they are always a result of a person inspired by vitriolic ideas from the urban world.

In Montana, the entanglement of branches, leaves, and bark with the high peaks in the West and the empty plains of the East have a sort of order to them as well, but what they lack is the energy and spirit of man's will. His desire to transform perceived chaos into order (blocks, ovals, window panes, side walks, cement). Both are necessary. Both realms of delight. But a city is where a man goes to construct his ego; the wilderness the place to dissolve it. It reminds him that nature is all-consuming, endless, and that man's world is a strict illusion. The city grows from the gifts of the earth and orders it to understand it, the earth is the foundation of man's world--they complete each other and are the masculine and feminine energies of the cosmos.

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It is my belief that modern Western man has blinded himself. He has focused his attention (as is the left brain's inclination) to the ego at the expense of the subconscious. This blindness has translated into Keynesian economics, and ultimately man's belief that he is the Earth's master and it his servant. Keynesian economics is, of course, predicated on the belief that the government can positively affect the market by enacting certain policies. It has also led to the establishment of fixing interest rates at near zero, the printing of dangerous amounts of fiat money, and the corruption of the private banking system. The Federal Reserve, created in 1913 by Woodrow Wilson with the Federal Reserve Act, is a socialist institution at the heart of America's 'free market'. This manipulation has only been amplified further when in 1971 Richard Nixon abolished the last vestiges of the gold standard which were established with the Bretton Woods monetary system in 1944. After this, the American dollar was no longer tied to a commodity. It was primed for manipulation by the private bankers in charge of the Federal Reserve. The market, which was uncontrollable by a single man's will, was now under the purview of the men who did seek to control it. This system led to the growth of the military industrial complex, pork barrel spending, and overall, the average American's enslavement to debt. If the creation of wealth meant nothing but the pressing of a button on a computer screen, then America, as long as her currency was still respected, could do anything she pleased. And she did.

The markets themselves are not a masculine force; in fact, they are quite feminine. They mimic nature in that they are often cyclical, based on the seasons, and even the cycles of the day. The macro-economy is the collective unconscious of a greater body of individuals, just like 'nature' is the collective unconscious of the Earth itself. It represents the animal, plant, fungi, virus, and bacteria kingdoms, the deeps of the oceans and highs of the mountains. The economy is likewise separated into various kingdoms, industrial, financial, high-tech, etc. and their various linkages. And just like nature, there are individuals in the market's systems--huge organisms like multinational corporations and small one-cell units like people themselves. Man often puts an emphasis on bigger creatures, thus when a large firm fails, he feels the need to save it and the individual cells which make it up. This is often labeled 'progressive' and 'compassionate'. What it is is unnatural. Even elephants and tigers should be allowed to die if they are found wanting. It's called 'the survival of the fittest', and when this is not allowed to happen, the overall economy will become less able to provide utility to the masses and weather more severe storms in the future. It is only when man tries to direct the market's, nature's actions for his own need do they become corrupted by man's will. This is not to say that saving a good business (or animal) is an evil, especially if it was killed by something alien, like the government's will or a madman with a shotgun. However, if it dies because it can no longer compete, it should be allowed to perish. Just like nature, a new company will spring up to replace it, a better, more fit company. That is, if nature/the markets are working properly, which today, neither are.

This was a result of man's ego--his need to control nature for his own end. And it was and is arrogance.

It gave him a drive to control the world around him, to live completely separated from the danger that nature (the market) represents. There is nothing in science that detracts from the majesty of the universe. In fact, it enhances it. However, this knowledge (logos) also gives the holder a new power to weild--it makes him start to believe that he may be different than the rest of the cosmos, and this leads to a great deal of hopelessness on one end, or a sense of superiority and entitlement on the other. Nature is transformed into a mere resource that can be used, not something that can be worked with as an equal. In the history of humanity, this is the turning of the Neolithic to the Axial age. Goddess cultures began to waste away and give way to sky-god dominated ones. We can see a graphic representation of this in the Babylonian tale of the slaying of Tiamat by the new god, Marduk. This change seems to coincide with the invention of the alphabet and the growth of cities. With the collapse of female worship, women began to be treated as property, people's ownership of slaves, and the mistreatment of nature. Man's sense of self, something that is quite different in oral cultures, set him on a path of hierarchy, boxing, kings, and feudalism--and the creation of the great abstract god in the sky who denied the existence of the female half of Himself completely and could not be depicted in pictures, but only writing.

This is the work of the left brain, Saturn, who is the mythological representation of time and death, and to the Romans, civilization itself! However, it also leaves out the female aspect of the godhead, the Mother, she who represents eternity, wildness, and the invisible dimensions of our lives--the subconscious as opposed to the conscious. There is also a completeness to her that the masculine ego lacks. She is everything, not just the 'nouns' but also the 'verbs'. Saturn, on the other hand, is pure will. He is the Titan of individuality, boxing, of beginnings and endings. His desire is to control the Mother to his own ends. In other words, he wants to be free of her wildness, not having to worry about her mood-swings. The story I want to set up is this: Saturn's desire, the great material force in the universe, is not only to control the market, but to eventually eliminate it completely. In this case the great Titan is represented by the will of government to control a wild economy. This 'wild economy' is the Mother--a great, holistic force that is susceptable to the whims of the collective unconscious.

It is, indeed, a fallacy to assume that the goal of the market is continual expansion. It is analogous to saying that the ultimate goal of evolution is continual expansion from bacteria to higher creatures, to humans, and then to whatever comes after. It only gains this significance when man starts to form a framework of memories and desires, constructing a story from the patchwork. This is the masculine ego trying to take control of something it does not completely understand. A single person does this constantly. We form goals, a narrative, from our memories and hopes. This happened because this happened because this happened. In fact, studies have shown that much of our happiness depends on the forming of these false narratives. Viktor Frankl discovered this inside the horror of a concentration camp. And Maury Kelly concludes in a recent article for the Atlantic:

As studies have shown, depressives tend to have more realistic—and less inflated—perceptions of their importance, abilities, and power in the world than others. So those of us who benefit from therapy may like it in large part because it helps us to do what others can do more naturally: to see ourselves as heroes; to write (and re-write) the stories of our lives in ways that cast us in the best possible light; to believe that we have grown from helpless orphans or outcasts to warriors in control of our fate.

In other words, we can accept a bad event happening or our own egregious actions if it was the inevitable stepping stone to the person we needed to become. The error occurs when we start to associate too much with our 'roles'--when we forget that they are just drops which fell from the subconscious like rain from a cloud. There are, of course, many more where that came from.

Socialist Liberals often have it wrong in this regard. They argue for a government that is compassionate and will save everything, but at the same time ideologically chip away at the masculine half of nature. This makes no sense. They deny what makes the feminine special and instead attack the masculine with masculine tactics. Women are of the base. They nourish the soil, the roots, so the the masculine has a solid foundation to build from. Her basic desire is not to hunt, but to provide elements of a successful endeavor, not actually taking part in it. Many feminists may argue that this is somehow a lesser function, but it is important to remember that during Paleolithic times, the woman's role as mother, gatherer, and home-keeper was equally as important as the man's role as hunter. The man's quick spurt of energy and then instant success or failure was more heroic; however, if he did fail, then the clan would have to rely on the women's gathering abilities. She provided the fail-safe, the jumping pad which men felt comfortable enough to leap from.

Men and women during these times were on equal footing; however as civilization progressed and people moved into cities, her function was deminished. It is one of the great achievements of our age that her power is returning. It is the markets, a great equalizer, which will eventually return her to her status. Statistics support this fact. Feminists often bring up the pay disparity, but any sane individual can see these numbers are slanted. If it were true, companies would hire many more women to take advantage of their less-than-equal pay. This decrepancy, in the first place, is often a result of women leaving to take care of children and not advancing as far as men would in a similar period. It is also true that women are often attracted to careers that are not as high-paying as a man's. Should this be seen as unequal? I say no. Men often risk more in the jobs they choose and thus often receive higher pay. This is the essence of the hunt, of striking out on a quest and completing it no matter the risks. It is also supported by various financial equations that show that higher risk results in a higher value in the denominator, lowering the attractiveness of the investment. It simply makes sense. Many women feel disillusioned because they have lost the sense of the feminine inside themselves in a man's world. However, with the advent of the internet, which is highly feminine in the way it works, the continued interdependence of the world economy based on the market, and continued linkages via IGOs and NGOs, a return to equality is not only coming, it is almost here, at least in the Western world. However, as I will try to show, the goal of life is not continual growth as put forth by the left brain; nor is it the continual change acknowledged by the right. It is a balance between the two.

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The markets have 'gone wrong.' There is no denying that fact; however, some believe that it is the markets themselves that are inherently evil and not the system of government attempting to control them. When I say 'system', I am talking about the revolving door of the private and public sector, the gerrymandering of districts, the stink of lobbyists in Congress, the secret mechanisms of control, of private vetting, of criminal activities perpetrated by government employees, the nascent police state, the military-industrial complex, and the horror of self-inflicted terrorism on our home soil to justify it. Both parties, no matter their campaign promises, inflate the federal government's power when they are placed in office. This should reveal the duplicitous nature of the two-party system. It is a red herring to keep us distracted from the real corruption and evil. Enslaved with debt and overwhelmed with pop culture, sports' statistics, and social networks, people, in general, do not have enough energy to enlighten themselves on important things like the national debt, bills passing through Congress, or the drones filling the skies. They rely on the people in government to do what's right, and this is a dangerous assumption.

What we all must realize is that to attempt to control the will of the market is like trying to control the will of a river by damming it, siphoning off water for irrigation, or fishing from her waterways. Heidegger talked about a similar concept when it came to technology--on one end, we can see nature (or 'the market') as a resource that can be owned or, on the other, as something that cannot be owned but instead, worked with. Picture a boat atop the waves. It is still a technology, but it is one that doesn't destroy the resource. Yes, things like dams, irrigation, and fishing can be done sustainably; however, when put under the control of government, this result is unlikely. People and markets, for the most part, are rational. It is not in their best interest to destroy their livelihood (especially if they own it). And even when man is irrational, what is wrong with that? Wasn't man born to be irrational if he wants? Shouldn't the markets then reflect his irrationality? In theory, one person should not be able to affect the entire system if capitalism isn't corrupted anyway. However, with the engorgement of government, this will always be the case.

My argument for the restriction of government is not that it is inherently evil, but that it is so easily corruptible. Yes, it is nice to imagine a perfect utopia where the government is controlled by people who are selfless and intelligent, but this can never be the case if humans still act like humans. Unless you are willing to fundamentally alter mankind to extirpate his natural desires for power, sex, and wealth (and believe me, some people really are), then a perfect benevolent system of government can never be. The alternative to father government, some people wrongly believe, is America's capitalism gone wrong--the conglomeration of banking, MNC's, and government into something of a corporotacracy. But again, this system is one where government is still too big. By planting seeds in the market's soil and burning down an overgrown, dying forest, there can possible be real 'green shoots.' This, however, requires a recognition of life and death. People fear death. They fear change. To allow something to die is against the ego's natural tendency. The subconscious, on the other hand, has an innate knowledge that everything will eventually perish, but the parts that make it up never will. There is only change but never true destruction. In the West, death is hidden away in a hospital bed. It is a terrible sad event and people only mourn. We can be controlled by our fear of death, you see, and we often are by those in control. After we realize that death is simply another illusion we can progress into a healthier and saner way of seeing of the world.

The government's role should not be a masculine one. It should, instead, upkeep a feminine one. In other words, a structure which the 'hunt' can leap from. The soil from which his seeds can grow and reach for the sky. How can it achieve this goal? (1) By providing the proper laws which assure the rights to property, due process, and free speech. (2) Guarantee a certain level of autonomy--the right to be able to own guns, alcohol, and drugs. (3) The right to equality not based on aptitude but on guarantees of being fairly treated no matter age, race, sex, or sexual orientation. (4) A pledge of transparency, and a law on the book that will oust the government official if he does not perform par standard. (5) I call for the end of the private Federal Reserve banking system, for fiat currency, and the end of impeding other country's right to self-determination except in some cases such as genocide and/or war crimes like torture. (6) As well as make illegal the taking of private money from large MNCs and banks once elected to a position in government unless voted on by his constituates. (7) A police force and army should be maintained to enforce the laws. (8) I believe it is better for the government to have a monopoly on certain sections of the physical infrastructure like roads and energy. This is proven in easy to understand graphs which economists can produce. Issues like education, health care, and insurance can be solved by allowing the market to out compete the government. Here I call for deregulation--people will go to the best and the best will prosper, guaranteed. (9) And lastly, the right to fail. The stakeholders have a right to take over and do as they see fit once bankruptcy is declared. This gives the potential for a new, better business to birth from the ashes.

Of course, I have a certain love for research funding and higher education. I think, at least, this sort of thing invests in the future of the country's well being and should continue if it is what the people want the government to do with their tax money. For my part, I think this would be a much better investment than pointless wars and saving businesses which do not need saving. As far as the tax system goes, I see a fixed tax of something like 10% being the most fair. Some argue falsely that taxing the rich at a higher rate is 'fairer', if that is a word; however, statistically, richer people save more so this money would end up in new, more advantageous investments from the banks anyway. This seems right and a more progressive stance on the future of the country's economy. Once emotions become involved in the government's decisions, it results in lame attempts to help which often result in the complete opposite outcome. The government, in turn, should be the boat on the river helping us coast on the waters of the market, not the dam, irrigater, or fisher. Remember, the market is a feminine force and should boost not only the elephants but the worms when it is working properly.

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I bring you this last section in a moment of clarity. Looking back at my progression over the past two semesters of college, I have learned of the limits of one's love of another. This love can only extend as far as the person loving loves himself. With this in mind, I will speak of a theoretical hero who will save us from our sins. It will be he who loves himself as much as he loves mankind. This is not to suggest that this theoretical person is full of himself or arrogant; instead, it implies someone with the conviction to extend his love as far as it will go. Compassionate love that does not interfere with another's life, but enhances it. It coasts on the waves of his waters, not altering or impeding his flow. This man will come from a place not from the desire for his own gains, but his love for all mankind.

I often speak of the meaninglessness of politics as a cynical college senior; however, if someone could emerge from the masses not wishing for material wealth, fame, or sexual liaisons, I could stand behind him fully, willing to give myself over for his cause of a better world. A world not predicated on a Utopian paradise, but one of respect, compassion, and most of all love and a knowing that God's love does not come from his desire to control our every action and thought, but a God who respects our freewill to make our own choices. Did God not know we would be thrust from Paradise always longing to return? If He is all that they say He is, then the answer is yes!

Understand what I am saying: I want an end to the counterproductive cynicism towards politics and 'the system', and instead, a call to rise above it! I long for an age that respects the individual as much as the community, a true balance between the masculine and feminine aspects of our inner selves. I also say this knowing that ultimately the respect of the community comes from the respect of the individual. By respecting the 'negative' rights of the individual, there can be true growth. The grand buildings will rise, spinning their webs, layer after layer, making all of us wealthy again. Making all of us respect ourselves again--a true love that comes from inner light not from thankless help.