Economic feudalism now official in Detroit -- Detroit "scrip"

[ckaihatsu]

I couldn't believe my ears when I heard about this, so I had to go look it up -- sure enough, there it is -- Detroit scrip. The nobility has risen from their graves and set up shop in Detroit.


> Thank you for participating in the Detroit Community Scrip monetary
> system. We hope this system encourages sustainable community economic
> awareness, or in the vernacular –“show some love to your neighbors”.


As usual, the marketing is first-rate -- the old "community" angle -- gets 'em every time...! And the social / political cost to you? The responsibility of showing "sustainable community economic awareness", or in the vernacular, being obedient to the money issuers.


> Detroit Community Scrip currency is measured in denominations of
> CHEERS and valued on a US Dollar Standard.


Okay, here it is -- if the new currency is directly convertible to U.S. dollars then why bother at all with it?! It costs money to make the money -- what's the game here???


> There are two levels to
> the variety of retail participants. One, are those who simply accept
> Cheers as currency on a one to one with the US Dollar. The 3 Cheers
> note is worth 3 dollars; and change will be issued in US currency for
> purchases made with cheers when the cost of the item is less. The
> second are those who issue the currency and are identified on the tail
> side of the bill. The commitment of those who issue is that they will
> always keep in cash reserve the amount of their issue. Confidence in
> the notes are equal to the trust you have in the people behind them.


Ah -- here it is: The issuers, hereafter referred to as the nobility, get to issue as much of the stuff as they want, with only their signature as backing (and the promise of cash reserves in U.S. dollars to back up the scrip). I think we should just fast-forward to the Mad Max version of society (barbarism) so that we can at least avoid these juvenile economic games....


> The notes are expensive to produce and are as real as money, please do
> not treat them as paper, do not take them if you are not going to
> spend them.


Translation: "We're definitely going to print as many of these things as we can because the federal government isn't backing our auto industry any more so now we need a new political way to deify the propertied class, but this time on a more local level. This isn't Monopoly money, people!!!"


> If you want to keep one as a souvenir please donate the
> value to the issuing business so they might know it is out of
> circulation and can issue a new one.


Translation: "This new money is so cool-looking that you'll get excited and want to buy them at face-value, using U.S. dollars that have a far wider circulation. It only cost us pennies to print each '3 Cheers' note, so by all means buy them up as pieces of artwork for your wall!"


> You may bring it back in
> whenever you like.


"Better yet, after paying us for the note, *don't* keep it yourself -- return it to us so that we can recoup the pennies it cost us to print it."


> Script cost a lot to print, they are on special
> paper with special inks to prevent counterfeiting, this cost is born
> by the issuer.


Um, *whatever*.... So at what time exactly do we vote on who gets to issue currency? And where are the jobs that pay BIG MONEY -- I mean, BIG SCRIP -- ?!


> This system depends on both the honor of the
> participating retailers and the honor of the bearer. A list
> participating retailers will be available at participating locations.


Say goodbye to the industrial bourgeoisie and SAY HELLO to the petit-bourgeoisie!


> http://www.detroitscrip.org/


Chris



By:Jim McNally (Mich.) <[email protected]> (68.41.74.35)
Date: 4/9/09 4:08 pm
In Response To: I just saw something on the news (RUBEN APAEZ (TX) R-7994)

Meanwhile, in Holland Michigan the local currency went belly-up after the printing company went bankrupt. The local chamber of commerce will honor and redeem the scrip (at a loss) and retire the system.

http://www.thechipboard.com/cgi-bin/bbs521/webbbs_config.pl/noframes/read/810469




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-- Of all the Marxists in a roomful of people, I'm the Wilde-ist. --

[cyu]

These guys sound like a bunch of useless hacks :lol:

[ckaihatsu]

These guys sound like a bunch of useless hacks :lol:


Yeah...!

And as if capitalism wasn't parasitic enough, now that there's no real growth (GDP) all the wealthy can do is sit atop their mounds of riches and be bored, or else try to "play God" with the rest of us for their bemusement....

Maybe workers, at some point, will realize that the best way to escape their clutches is to collectivize and take over factory production once and for all...! *Everywhere* feels like the suburbs when you don't have true control over what makes the world go 'round....

[JazzRemington]

I don't think issuance of scrip is feudalism. The usage of scrip as a method of payment was popular back during the old factory towns (towns that were literally owned and run by a corporation, usually oil or steel). If anything, this hints at a return of factory towns as being popular.

[ckaihatsu]

I don't think issuance of scrip is feudalism. The usage of scrip as a method of payment was popular back during the old factory towns (towns that were literally owned and run by a corporation, usually oil or steel). If anything, this hints at a return of factory towns as being popular.


I hope, as Marxists (scientific socialists), we *don't* get confused by mere terminology -- we need to keep in mind the actual *structures* (economic and political) that are represented by the terms we decide to use....

Whether one wants to call it company towns, economic feudalism, rule by nobility, or pockets of fascism, the reality is the same in all cases, with some minor differences -- we're talking about the *shrinking* of the economic sphere of goods and services available, due to the local currency, accompanied by massive *deflation*, meaning that jobs are few, pay is poor, circulation is bad, and the wealth disappears upwards.

This is *regressive*, however you look at it -- no wonder the libertarians get the willies in this kind of environment because their rose-colored glasses show them a period of nationalist *expansion* from the 18th and early 19th centuries -- well before mass industrialism and its dramatic financial recessions and depressions.

We need to be firm that the issuance of scrip is just more financial bullshit, which attempts to sidestep the overall reality that there is no *real growth*, nor can the capitalist class do *anything* that could reinvigorate the capitalist economy. Company towns are not owned or run by the workers -- *that* is the crux of the situation and problem with company towns. Why not a globalized economy, with all of its diversity and availability, run by the world's working class?!

[Hoxhaist]

If these people can print as much scrip as they want doesnt that create rampant inflation?

[Hoxhaist]

This is a bizarre step backward in economics the last time municipalities or anything smaller than the Fed tried issuing currency was under the Articles of Confederation in like 1783 or something

[ckaihatsu]

If these people can print as much scrip as they want doesnt that create rampant inflation?


I've addressed the "inflation" cry in other threads here at RevLeft -- it's crucial that we don't fall into the economic nationalism line that is prevalent in the mainstream -- put forth ad nauseum thanks to libertarians and other nationalist types.

The "sky is falling" mantra that we hear from them is based on a strict money-supply orientation to economics that is chanted so repetitively that it comes across as being the din from either religious pilgrims or mindwashed marketing minions.

Yes, there are plenty of historical examples of inflation rampant to the point where the physical currency itself has a higher value than its own face-value, but the present economic situation does not resemble that kind of scenario. Probably the most recent and memorable historical example was the '70s -- I think of it as being a very *specific* case of inflation, or stagflation, which was particular to the U.S. taking a tumble down from its vaulted perch.

In that case the U.S.'s imperialism and adventurism -- expansionist warmongering -- reached its widest extent -- driven by the mythology of American capitalism being superior to Eastern communism. The cost of waging its decades-long offensive in Southeast Asia finally caught up to it, and the bills came due.

In that case that meant that over-extended caches of U.S. dollars -- foreign reserves -- stopped being so popular, and so the U.S. had to officially re-define its currency, down a solid peg from the Bretton Woods gold-standard of gold convertibility, and forced to float as a typical, everyday currency among all others in the world's markets. The U.S.'s manufacturing competition caught up with it as well, throwing the U.S. economy into the malaise of stagflation -- this is the archetypical example of inflation that is usually evoked when it's used as an political scare tactic against the working class.





By David North
26 March 2009


The beginning of US economic decline

19. However, it was inevitable that the system would come under mounting stress as the reemergence of European and Japanese industries undermined American dominance. By the late 1950s, economists such as Robert Triffin began to express concern about the deterioration of the US balance of payments, warning that the accumulation of a dollar deficit would call into question the ability of the United States to honor its pledge to redeem dollars with gold. And these fears were justified by the collapse of the Bretton Woods system on August 15, 1971, when the Nixon administration, without warning, suspended the convertibility of the dollar into gold. This act represented a turning point in the post-World War II history of capitalism. It unsettled the financial equilibrium that had made the post-war expansion of global capitalism possible. In the aftermath of August 1971, world capitalism became increasingly susceptible to destabilizing shocks. Indeed, as I have already suggested, the present crisis is in many respects the culmination of the process of disequilibrium that has been under way for the last 37 years.

20. The collapse of the system of dollar-gold convertibility and fixed exchange rates was a dramatic expression of the deterioration of the position of the United States in the global economy. But an understanding of the far-reaching consequences of this decline, and especially its relationship to the specific form taken by the crisis of American capitalism (that is, a series of speculation-driven bubbles and financial breakdowns), requires that attention be given to significant changes in the strategic orientation of US corporations over the last 45 years.


[...]


The end of dollar dominance

42. This crisis cannot be reversed by reviving a mythical "Golden Age" of American capitalism. First, the objective position of American capitalism in the world economy has deteriorated dramatically over the past 40 years. As I explained earlier in this report, the weakening of the dollar as far back as the late 1950s was among the earliest signs of the deterioration of the global position of the United States. In 1971 the US ended dollar-gold convertibility. Still, the dollar has remained the world reserve currency even as the United States became the largest debtor nation and accumulated a massive current accounts deficit. But, in yet another sign that this crisis marks a historic turning point, Chinese Prime Minister Wen Jiabao has publicly expressed concern about the future viability of the American dollar and the safety of Chinese dollar holding. "We have lent a huge amount of money to the US. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried," he said recently.

43. The financial viability of the United States has been called into question by a major economic power—one that happens to be the largest foreign holder of US dollars. While American commentators have, for the most part, brushed off Wen's statement—on the grounds that China would not, for its own sake, risk the global financial consequences of lowering its dollar holdings and igniting a run on the American currency—it is difficult to exaggerate its significance. Up until now, the global role of the dollar provided the United States with a unique financial advantage. The United States controlled the printing of a currency that functioned as the world reserve currency.

44. Were the dollar to lose its unique global status, this would have immediate consequences not only for the global position of American capitalism, but also for the conduct of its domestic economic policies. It needs only to be pointed out that the entire stimulus package of the Obama administration, which entails running multi-trillion-dollar deficits, depends upon the willingness of foreign creditors to hold US dollars.

http://wsws.org/articles/2009/mar2009/dnor-m26.shtml


My take on the China-U.S. step-brothers relationship is that there is a *slight* chance that China would actually decide to decouple and try to walk away as the winner -- while it could easily *technically* do so, its relationship to the U.S. is more interconnected, especially in the political realm, and the U.S. is still the de facto super-cop to the world because of its global military presence.

Certainly China would get more mileage out of being the nouveau-riche buddy to the big-brother U.S., being the silent partner in this new top-of-the-world adventure.... Both superpowers really have their shit together, particularly in repressing and exploiting their own populations, and so are seen as solid, stable, respectable governments for their respective sides of the globe.

This means that at this, the highest of plateaus, the joint China-U.S. economies are in practice subsumed to *political* command and control. Both drink the blood of China's never-ending supply of country-raised labor, brought to the cities and put through the meat grinder.

The recent, present abrupt halt in world growth means that this reality -- along with other poorly hidden government crimes -- will be more sharply exposed in the coming months and years, as world leaders play "hot potato" with an ever increasingly hotter and bigger hot potato....





It is only important that we acknowledge that inflationary measures and and a productive slump cause currency devaluation and hyperinflation.
So, if and when it happens we as socialists are more prepared for it than taken by surprise.





This is >>> utter bullshit <<<. The U.S.'s national debt and current accounts deficit have been, and are, so huge that if they would have any direct bearing on the U.S. dollar we would have seen currency devaluation and hyperinflation long ago.

Since the dollar is a major currency, representing a major economy, it enjoys far more backing and confidence in its markets than it should, by the numbers alone. And since it floats against all other currencies its strength is ultimately measured in relative terms, as against the Euro, or whatever. This detaches it rather neatly from representing just one national economy, the U.S.'s, which is what 1971 was all about, when the U.S. went off of the Bretton Woods dollar-gold convertability standard. In that one moment the entire definition of the currency changed, and with it the national identity, the national culture, and the country's relationship to other countries.

We should *not* be rushing to hold hands in a circle *or* hoarding gold *or* preparing for the U.S. to turn into a Third World country overnight. While the *national* economy has obviously been slowing down and shrinking in size, this does *not* mean that living standards would necessarily slip dramatically -- I refer to the massive underwriting of U.S. debt from China, and to the massive production of cheap consumer goods by hyper-exploited Chinese workers.

If we get flustered so easily by *only* looking at the economic news from mainstream sources we're just playing right into the hands of the ruling class -- we *must* look at the overarching political relationships among the factions of the ruling class to see how they're managing the global infrastructure among themselves. This tells us far more than a linear approach to the balance sheets can.

[ckaihatsu]

If these people can print as much scrip as they want doesnt that create rampant inflation?


Gotta butt in here and add *still* more...!


While inflation is a headache for those who are buyers, because of rising prices, the flipside to this is that workers actually become *more empowered* because the cost of labor goes up, meaning better take-home wages...(!)

In this way the term 'inflation' itself becomes a codeword among the propertied class for "Oh, shit, we're having to pay out of hard currency [back in the '60s] because the working class is organized enough to demand better wages."

In a *real* manufacturing- and market-based economy this would be considered as rising costs for doing business, or, synonymously, the falling effectiveness of the currency.

These days everything is credit- and political based, for an ever-revolving service sector, so it's really become more like economic feudalism *everywhere* -- Detroit's issuing of scrip is just feudalism-within-feudalism, or bullshit inside of bullshit. Economic announcements these days are mostly for p.r., or political propaganda, than are real economic events. (And that's because the *real* goods are imported from abroad.)

[ckaihatsu]

Soooooooooo, *in conclusion*, we can fall into the trap of talking about the money supply *itself*, as the nationalists would have us do, or we can talk about economics from the standpoint of the working class. *How many* of those dollars or scrip notes will be heading our way, exactly?

Considering that -- contrary to the complexities of manufacturing -- there are usually no elaborate supply chains in the *service* sector (just several layers of parasitic management), then the issue becomes *who* gets to be waited upon, and how much is going to actually be *paid out* for that service?

When we look at it from the perspective of *wages*, the money supply isn't as much of a concern any more. If *more of* the money supply ends up in the pockets of the workers, independently from the concerns and politics of the propertied class, then that's a *proportional shift* of economic control from ownership to labor -- (and all that *exists* is labor and capital...).

You simply *won't* hear the supply-side arguments flipped over into labor's hemisphere, as in "Oh, no, we're seeing a slowdown in consumer spending due to a lack of paying work positions and sufficient incentives for people to gain employment -- quick, let's monetize the labor sector with subsidized wages in order to get production going again...!"

That's, of course, because in class war terms this is giving in to the working class -- it would *not* be in the bourgeoisie's best interests to empower labor because a shift in economic power (as we saw during WWII) would embolden the working class *politically*, towards labor strikes, factory occupations, revolutionary movements, and so on.

Please see:

Labor & Capital, Wages & Dividends

http://tinyurl.com/6bs6va

[cyu]

Company towns are not owned or run by the workers -- *that* is the crux of the situation and problem with company towns.

Exactly - if it were instead a company town where the company was run by a democratic assembly of its employees, that would be an entirely different story.