Time for a New Theory of Money

[Die Neue Zeit]

http://dissidentvoice.org/2010/11/time-for-a-new-theory-of-money/



By understanding that money is simply credit, we unleash it as a powerful tool for our communities

By Ellen Hodgson Brown

The reason our financial system has routinely gotten into trouble, with periodic waves of depression like the one we’re battling now, may be due to a flawed perception not just of the roles of banking and credit but of the nature of money, itself. In our economic adolescence, we have regarded money as a “thing” — something independent of the relationship it facilitates. But today there is no gold or silver backing our money. Instead, it’s created by banks when they make loans (that includes Federal Reserve Notes or dollar bills, which are created by the Federal Reserve, a privately-owned banking corporation, and lent into the economy). Virtually all money today originates as credit, or debt, which is simply a legal agreement to pay in the future.

Money as Relationship

In an illuminating dissertation called “Toward a General Theory of Credit and Money” in The Review of Austrian Economics (vol. 14:4, pages 267-317, 2001), Mostafa Moini, Professor of Economics at Oklahoma City University, argues that money has never actually been a “commodity” or “thing.” It has always been merely a “relation,” a legal agreement, a credit/debit arrangement, an acknowledgment of a debt owed and a promise to repay.

The concept of money-as-a-commodity can be traced back to the use of precious metal coins. Gold is widely claimed to be the oldest and most stable currency known, but this is not actually true. Money did not begin with gold coins and evolve into a sophisticated accounting system. It began as an accounting system and evolved into the use of precious metal coins. Money as a “unit of account” (a tally of sums paid and owed) pre-dated money as a “store of value” (a “commodity” or “thing”) by two millennia; the Sumerian and Egyptian civilizations using these accounting-entry payment systems lasted not just hundreds of years (as with some civilizations using gold) but thousands of years. Their bank-like ancient payment systems were public systems — operated by the government the way that courts, libraries and post offices are operated as public services today.

In the payment system of ancient Sumeria, goods were given a value in terms of weight and were measured in these units against each other. The unit of weight was the “shekel,” something that was not originally a coin but a standardized measure. She was the word for barley, suggesting the original unit of measure was a weight of grain. This was valued against other commodities by weight: So many shekels of wheat equaled so many cows equaled so many shekels of silver, etc. Prices of major commodities were fixed by the government; Hammurabi, Babylonian king and lawmaker, has detailed tables of these. Interest was also fixed and invariable, making economic life very predictable.

Grain was stored in granaries, which served as a form of “bank.” But grain was perishable, so silver eventually became the standard tally representing sums owed. A farmer could go to market and exchange his perishable goods for a weight of silver, and come back at his leisure to redeem this market credit in other goods as needed. But it was still simply a tally of a debt owed and a right to make good on it later. Eventually, silver tallies became wooden tallies became paper tallies became electronic tallies.

The Credit Revolution

The problem with gold coins was that they could not expand to meet the needs of trade. The revolutionary advance of medieval bankers was that they succeeded in creating a flexible money supply, one that could keep pace with a vigorously expanding mercantile trade. They did this through the use of credit, something they created by allowing overdrafts in the accounts of their depositors.

Under what came to be called “fractional reserve” banking, the bankers would issue paper receipts called bank notes for more gold than they actually had. Their shipping clients would sail away with their wares and return with silver or gold, settling accounts and allowing the bankers’ books to balance. The credit thus created was in high demand in the rapidly expanding economy; but because it was based on the presumption that money was a “thing” (gold), the bankers had to engage in a shell game that periodically got them into trouble. They were gambling that their customers would not all come for their gold at the same time; but when they miscalculated, or when people got suspicious for some reason, there would be a run on the banks, the financial system would collapse, and the economy would sink into depression.

Today, paper money is no longer redeemable in gold, but money is still perceived as a “thing” that has to “be there” before credit can be advanced. Banks still engage in money creation by advancing bank credit, which becomes a deposit in the borrower’s account, which becomes checkbook money. In order for their outgoing checks to clear, however, the banks have to borrow from a pool of money deposited by their customers. If they don’t have enough deposits, they have to borrow from the money market or other banks.

As British author Ann Pettifor observes:

[T]he banking system … has failed in its primary purpose: to act as a machine for lending into the real economy. Instead the banking system has been turned on its head, and become a borrowing machine.

The banks suck up cheap money and return it as more expensive money, if they return it at all. The banks control the money spigots and can deny credit to small players, who wind up defaulting on their loans, allowing the big players with access to cheap credit to buy up the underlying assets very cheaply.

That’s one systemic flaw in the current scheme. Another is that the borrowed money backing the bank’s loans usually comes from shorter-term loans. Like Jimmy Stewart’s beleaguered savings and loan in It’s a Wonderful Life, the banks are “borrowing short to lend long,” and if the money market suddenly dries up, the banks will be in trouble. That is what happened in September 2008: According to Rep. Paul Kanjorski, speaking on C-Span in February 2009, there was a $550 billion run on the money markets.

Securitization: “Monetizing” Loans Not with Gold But with Homes

The money markets are part of the “shadow banking system” where large institutional investors park their funds. The shadow banking system allows banks to get around the capital and reserve requirements now imposed on depository institutions by moving loans off their books. Large institutional investors use the shadow banking system because the conventional banking system guarantees deposits only up to $250,000, and large institutional investors have much more than that to move around on a daily basis. The money market is very liquid, and what protects it in place of FDIC insurance is that it is “securitized,” or backed by securities of some sort. Often, the collateral consists of mortgage-backed securities (MBS), the securitized units into which American real estate has been sliced and packaged, sausage-fashion.

Like with the gold that was lent many times over in the 17th century, the same home may be pledged as “security” for several different investor groups at the same time. This is all done behind an electronic curtain called MERS (an acronym for Mortgage Electronic Registration Systems, Inc.), which has allowed houses to be shuffled around among multiple, rapidly changing owners while circumventing local recording laws.

As in the 17th century, however, the scheme has run into trouble when more than one investor group has tried to foreclose at the same time. And the securitization model has now crashed against the hard rock of hundreds of years of state real estate law, which has certain requirements that the banks have not met — and cannot meet, if they are to comply with the tax laws for mortgage-backed securities. (For more on this, see here.)

The bankers have engaged in what amounts to a massive fraud, not necessarily because they started out with criminal intent (although that cannot be ruled out), but because they have been required to in order to come up with the commodities (in this case real estate) to back their loans. It is the way our system is set up: The banks are not really creating credit and advancing it to us, counting on our future productivity to pay it off, the way they once did under the deceptive but functional façade of fractional reserve lending. Instead, they are vacuuming up our money and lending it back to us at higher rates. In the shadow banking system, they are sucking up our real estate and lending it back to our pension funds and mutual funds at compound interest. The result is a mathematically impossible pyramid scheme, which is inherently prone to systemic failure.

The Public Credit Solution

The flaws in the current scheme are now being exposed in the major media, and it may well be coming down. The question then is what to replace it with. What is the next logical phase in our economic evolution?

Credit needs to come first. We, as a community, can create our own credit, without having to engage in the sort of impossible pyramid scheme in which we’re always borrowing from Peter to pay Paul at compound interest. We can avoid the pitfalls of privately-issued credit with a public credit system, a system banking on the future productivity of its members, guaranteed not by “things” shuffled around furtively in a shell game vulnerable to exposure, but by the community, itself.

The simplest public credit model is the electronic community currency system. Consider, for example, one called “Friendly Favors.” The participating Internet community does not have to begin with a fund of capital or reserves, as is now required of private banking institutions. Nor do members borrow from a pool of pre-existing money on which they pay interest to the pool’s owners. They create their own credit, simply by debiting their own accounts and crediting someone else’s. If Jane bakes cookies for Sue, Sue credits Jane’s account with 5 “Favors” and debits her own with 5. They have “created” money in the same way that banks do, but the result is not inflationary. Jane’s plus-5 is balanced against Sue’s minus-5, and when Sue pays her debt by doing something for someone else, it all nets out. It is a zero-sum game.

Community currency systems can be very functional on a small scale, but because they do not trade in the national currency, they tend to be too limited for large-scale businesses and projects. If they were to grow substantially larger, they could run up against the sort of exchange rate problems afflicting small countries. They are basically barter systems, not really designed for advancing credit on a major scale.

The functional equivalent of a community currency system can be achieved using the national currency, by forming a publicly owned bank. By turning banking into a public utility operated for the benefit of the community, the virtues of the expandable credit system of the medieval bankers can be retained, while avoiding the parasitic exploitation to which private banking schemes are prone. Profits generated by the community can be returned to the community.

A public bank that generates credit in the national currency could be established by a community or group of any size, but as long as we have capital and reserve requirements and other stringent banking laws, a state is the most feasible option. It can easily meet those requirements without jeopardizing the solvency of its collective owners.

For capital, a state bank could use some of the money stashed in a variety of public funds. This money need not be spent. It can just be shifted from the Wall Street investments where it is parked now into the state’s own bank. There is precedent establishing that a state-owned bank can be both a very sound and a very lucrative investment. The Bank of North Dakota, currently the nation’s only state-owned bank, is rated AA and recently returned a 26 percent profit to the state. A decentralized movement has been growing in the United States to explore and implement this option. [See here for more information.]

We have emerged from the financial crisis with new clarity: money today is simply credit. When the credit is advanced by a bank, when the bank is owned by the community, and when the profits return to the community, the result can be a functional, efficient, and sustainable system of finance.

[S.Artesian]

proudhonism redux. We want capital, we just want it without capitalism. Yuck. This is zombie political economy--Night of the Living Dead with apologies to George Romero.

[Die Neue Zeit]

I posted a worse third-party article than this, one criticizing so-called "municipal development banks" as economism:

http://www.revleft.com/vb/municipal-development-bank-t114824/index.html

I went to the trouble of going to Ms. Brown's blog site to post my own musings on money supply - nothing short of Gosbank SSSR constitutes a good headway towards substantive public control over the money supply:

http://www.revleft.com/vb/nationalising-banksi-t137695/index.html?p=1788576

[turquino]

Two quick points:
1) Credit money is only a substitute for deferred payment in another form of money. It wouldn't be a credit system if all debts could be paid for by other debts. So it's meaningless to say money = credit when the existence of credit requires another existing form of money.

2) The article assumes that because currencies are no longer fixed and convertible to a metallic standard, that commodity money has disappeared. But ignoring the importance of commodity money leads to accepting Say's law (or Walras' law) and the impossibility of crises of overproduction. Has the end of the gold standard abolished overproduction and economic depression? Heck no!

[anarkostalinist]

Community banks and credit unions exists all over the U.S. and they do not constitute an alternative to capitalism, simply because they can't stay in business without a "normal" profit margin based on compound interest, overdraft fees for the poor, etc. By the time we've converted private banks into "state banks" as the author proposes, we've basically overthrown capitalism already, so why have banks at all? Instead consider a theoretical communist system WITHOUT A FINANCIAL SECTOR: in which everyone's prioritized consumption needs are publicly registered in a "demand database" -- and every commodity's labor inputs are known quantities based on established norms for their production. Consumption could then result from "delivery of rations" instead of shopping, and industry could be planned based on modifying labor assignments/raw material deliveries as the known aggregate demand changes. Of course this model assumes the entire population accepts a basically egalitarian standard of living and centralized economic planning to achieve it. This would eliminate the need for money, interest, securities and credit altogether -- which whatever utility they've had for achieving capitalist economic development to date, will always be tools of speculation and private accumulation by the ruling class. They can never result in a stable economic system of full employment, universal healthcare/education, and secure retirement. We need to replace the capitalist financial sector in its entirety with economic planners who have the fulfillment of people's personal consumption goals and general social welfare as their only objective -- instead of profit.

[ckaihatsu]

communist supply & demand -- Model of Material Factors

This is an 8-1/2" x 40" wide table that describes a communist-type political / economic model using three rows and six descriptive columns. The three rows are surplus-value-to-overhead, no surplus, and surplus-value-to-pleasure. The six columns are ownership / control, associated material values, determination of material values, material function, infrastructure / overhead, and propagation.

http://tinyurl.com/ygybheg




Ownership / control

communist administration -- All assets and resources will be collectivized as communist property in common -- their use must be determined through a regular political process of prioritized demands from a locality or larger population -- any unused assets or resources may be used by individuals in a personal capacity only

labor [supply] -- Only active workers may control communist property -- no private accumulations are allowed and any proceeds from work that cannot be used or consumed by persons themselves will revert to collectivized communist property

consumption [demand] -- Individuals may possess and consume as much material as they want, with the proviso that the material is being actively used in a personal capacity only -- after a certain period of disuse all personal possessions not in active use will revert to collectivized communist property




Associated material values

communist administration -- Assets and resources have no quantifiable value -- are considered as attachments to the production process

labor [supply] -- Labor supply is selected and paid for with existing (or debt-based) labor credits

consumption [demand] -- Every person in a locality has a standard, one-through-infinity ranking system of political demands available to them, updated daily




Determination of material values

communist administration -- Assets and resources may be created and sourced from projects and production runs

labor [supply] -- Labor credits are paid per hour of work at a multiplier rate based on difficulty or hazard -- multipliers are survey-derived

consumption [demand] -- Basic human needs will be assigned a higher political priority by individuals and will emerge as mass demands at the cumulative scale -- desires will benefit from political organizing efforts and coordination




Material function

communist administration -- Assets and resources are collectively administered by a locality, or over numerous localities by combined consent [supply]

labor [supply] -- Work positions are created according to requirements of production runs and projects, by mass political prioritization

consumption [demand] -- All economic needs and desires are formally recorded as pre-planned consumer orders and are politically prioritized [demand]




Infrastructure / overhead

communist administration -- Distinct from the general political culture each project or production run will include a provision for an associated administrative component as an integral part of its total policy package -- a selected policy's proponents will be politically responsible for overseeing its implementation according to the policy's provisions

labor [supply] -- All workers will be entirely liberated from all coercion and threats related to basic human living needs, regardless of work status -- any labor roles will be entirely self-selected and open to collective labor organizing efforts on the basis of accumulated labor credits

consumption [demand] -- A regular, routine system of mass individual political demand pooling -- as with spreadsheet templates and email -- must be in continuous operation so as to aggregate cumulative demands into the political process




Propagation

communist administration -- A political culture, including channels of journalism, history, and academia, will generally track all known assets and resources -- unmaintained assets and resources may fall into disuse or be reclaimed by individuals for personal use only

labor [supply] -- Workers with past accumulated labor credits are the funders of new work positions and incoming laborers -- labor credits are handed over at the completion of work hours -- underfunded projects and production runs are debt-based and will be noted as such against the issuing locality

consumption [demand] -- Individuals may create templates of political priority lists for the sake of convenience, modifiable at any time until the date of activation -- regular, repeating orders can be submitted into an automated workflow for no interruption of service or orders


A further explanation and sample scenario can be found here:


'A world without money'

tinyurl.com/ylm3gev


'Hours as a measure of labor’

tinyurl.com/yh3jr9x

[Hit The North]

Just a note about Ellen Hodgson Brown:

In her book The Web of Debt, she regurgitates the fantasy that the Bolshevik revolution was bankrolled by Wall Street in such an uncritical manner that it completely explodes her credibility.

[S.Artesian]

I sure thought I smelled some good old fashioned William Jennings Bryan populist anti-communism in that piece of dreck she wrote.

[ckaihatsu]

Rotation system of work roles

A universal template for covering all work roles through time, going forward, for a post-capitalism, moneyless, collectivized political economy

by Chris Kaihatsu, [email protected], 10-10, for 'Allocating jobs' thread at RevLeft.com, tinyurl.com/24tohdc


- Everyone will assist everyone else in the local area with properly fulfilling the duties of any given work role.

- Unit of time per role must remain consistent.

- People in an area of work roles cannot switch their placement in line in the circle.

- Any roles at larger scales are either in addition to local work roles or else are entirely in replacement of smaller-scale work roles.

- New additions to an area of work roles enter the line in the circle at the bottom, beginning their rotation with a half-cycle of less-popular work roles.

- New collectively agreed-upon work roles will be placed in the existing sequence according to their ranking of a scale of 1 to 10, as averaged from the rankings submitted by those in the local area of work roles.


Rotation system of work roles

http://i51.tinypic.com/104qeqt.jpg

[Vilhelmo]

Two quick points:
1) Credit money is only a substitute for deferred payment in another form of money. It wouldn't be a credit system if all debts could be paid for by other debts. So it's meaningless to say money = credit when the existence of credit requires another existing form of money.


No.
Money is & has always been a debt/credit.



2) The article assumes that because currencies are no longer fixed and convertible to a metallic standard, that commodity money has disappeared. But ignoring the importance of commodity money leads to accepting Say's law (or Walras' law) and the impossibility of crises of overproduction. Has the end of the gold standard abolished overproduction and economic depression? Heck no!

If a Gold Standard is an example of "commodity money" then "commodity money" is merely government fiat money with government price fixing.
Under a Gold Standard the government sets the price of gold, instead of leaving it to the market, & promises to exchange, on-demand, currency for gold at this fixed rate.

To call this "commodity money" as if it constituted something entirely different than "government fiat money" is both disingenuous & misleading.

[cyu]

http://web.archive.org/web/20010417014827/http://infoshop.org/rants/yu1.html

You have just overthrown the government, your far left party has just won a landslide election, or your vast coalition of civic, labor, and religious institutions have simply decided to come together and ignore the existing government. Capitalists are fleeing your country in their private jets. Investors have pulled out all their money. Foreign banks run by capitalists suddenly decide they are no longer willing to make any loans to your "rogue" nation. The former dictator has packed up all his suitcases full of gold, jewels, and cash from your national treasury, and is now nowhere to be found.

Now what?

Economic collapse? Mass unemployment? Depression and starvation? No, of course not.

Wealth is not to be found in currency, in the so-called "precious" metals, in paintings by long-dead painters. None of those are needed to survive. Wealth is found in food, in warmth, in health care, and in the things necessary to produce them. All the land is still yours. All the labor is still yours. Even factory equipment remains, despite the flight of "capital" - that is, the loss of things that represent wealth, but are not wealth themselves. In fact, very little has been lost and virtually all of the productive capacity of your nation remains. All that has changed is the accounting.

Your nation may still have in its treasury the remnants of the capitalist financial structure - gold, other precious metals, paper money from nations around the world. Spend it - as soon as possible. Buy commodities - those things you need to survive and buy any equipment you need to produce the goods you need. That is the real wealth to people who actually have to do the work.

What happens in the rest of the world as the people of your nation are suddenly flooding it with various currencies and "precious" metals, while snapping up real goods? The supply of those currencies and "precious" metals go up, while the supply of real goods go down. These goods become more and more expensive, while "money" becomes more and more worthless. Thus, there is all the more reason to exchange your money as soon as possible for real goods you will need.

When all the old money has been spent, you are free to live, work, and produce the things you need. Self-reliance is the only secure form of wealth. Trade with other nations can still be conducted, but do not hold on to their money - money is mere promise of future wealth, promises that can be broken whether from malice or from inability to fulfill them. Exchange any money for real wealth as soon as you can.

Money within your own economy should be based on real wealth. When farmers produce a bushel of grain, let them issue a paper note representing that bushel of grain. Since that paper note can be redeemed for precisely that amount of grain, there is no inflation between the notes and the grain. These paper notes can be collected by larger farmer organizations that then reissue new notes based on a diversified index of what they produce. While the value of money issued in this way may fluctuate with respect to goods not on the index, it will not change with respect to the goods that back these paper notes. This is the first step to currency stability.

However, be warned that these notes are still only as good as the institutions that issue them. Either you trust that they can always be redeemed, or you redeem them as soon as it is convenient. This is especially true of money you receive from other nations that is supposedly backed in the same way. Distance makes people bolder and less hesitant to break promises. Ultimately, however, convenience would probably mean you will place your trust in an organization of like minded people who will help each other ensure that what you have is really what you have - although you should make sure there are alternatives should you decide to change your mind.

People can probably be trusted when times are easy and when prosperity reigns, but when times are tough, promises are much easier to break than the laws of survival. This is what makes self-reliance of an economy important. This is why local industry and agriculture should be protected. Productively ability is the real source of wealth of the nation.

However, natural disasters also occur. While the world as a whole may be fairly stable, the area around you is much more prone to random fluctuations of climate and geology. Thus self-reliance is not the entirety of a secure economy, but merely the supporting structure. The secondary source of security is prosperity in other geographical locations. The more prosperous others are, the more likely they will come to your aid in times of trouble. The more they have to thank you for their prosperity, the more likely they will come to your aid. Again, merely being creditors to their debt is not enough. Nations are sovereign, whether anarchist or authoritarian. They can break their promises - they can ignore any legalistic claims to debt. It is the general goodwill that can be fostered between two nations or people that will be your salvation in case your own self-reliance fails.

In the end, capital flight isn't really capital flight. Real capital - the people, natural resources, and equipment needed to produce real goods - cannot be packed up in a bag when the capitalist skips town. They will require a lot of labor if they truly want to escape with real capital. What remains when the capitalists are gone are merely the people who are doing the work, and the means to do it.

[ckaihatsu]

This is nice and everything, cyu, but it's also survivalist / Third Worldist -- the capitalist 'real economy' has already developed enough regular infrastructure and options for easily fulfilling everyone's basic needs for everyday non-emergency conditions.

I appreciate the 'we're all in this together' sentiment, but we really can't talk nowadays in a strictly bricks-and-fire way because that leaves the question of mass industrial production unaddressed.

Capitalism obviously leaves something lacking if the economy of the largest empire in world history is dependent on either issuing new debt or else will face an *insolvency* crisis. And capitalism is obviously lacking if one possible reform coming forward would just *enable* unfunded demand by subsidizing it at the ground level:


Swiss to vote on 2,500 franc basic income for every adult

http://www.revleft.com/vb/swiss-vote-2-t183725/index.html


So I'll 'second' the premise of this thread -- it's time for a new theory of money. The approach I advocate is at post #6.

[Vilhelmo]

Money within your own economy should be based on real wealth.

Money is not wealth but a claim on wealth.
To say money should be based on real wealth is merely stating the obvious



When farmers produce a bushel of grain, let them issue a paper note representing that bushel of grain.


That wouldn't be money. It would be private credit, an IOU denominated in bushels of grain rather than money.
Whatever a debt is denominated in it still must be repaid & is still subject to default.

[cyu]

It would be private credit


To anarchists, there is no difference between private credit and public credit. Anarchists don't just encourage assuming control of the means of production, but also assuming any activity that governments claim the right to do.



Whatever a debt is denominated in it still must be repaid & is still subject to default.


Yes, indeed all debts are subject to default. Thus it is in your interest to ensure they are prosperous enough to be able to pay back their debts (if you were smart anyway) - rather unlike capitalist supporters of austerity, who try to suck the last drops of blood out of you while you're still alive and have not yet pushed them off their throne.

[argeiphontes]

^ Debt is slavery!

[Vilhelmo]

Yes, indeed all debts are subject to default.

There is a difference between a debt denominated in another debt (currency user) & a debt denominated in one's own debt (currency issuer).

A debt denominated in one's own debt is NOT subject to involuntary default.
It can always be paid by simply issuing another debt.
This is the case with the Federal Government.
Money is the non-interest bearing debt Federal Government.

[cyu]

Who controls the government? When you say your "own debt" are you saying Vilhelmo is issuing money to pay Vilhelmo? When more than one individual is involved, then nothing is ever your "own debt" - and under capitalism, the government is controlled by the wealthy (and the current United States Supreme Court aims to keep it that way - with some help from Charles Koch).

[ckaihatsu]

There is a difference between a debt denominated in another debt (currency user) & a debt denominated in one's own debt (currency issuer).

A debt denominated in one's own debt is NOT subject to involuntary default.
It can always be paid by simply issuing another debt.
This is the case with the Federal Government.
Money is the non-interest bearing debt Federal Government.





Who controls the government? When you say your "own debt" are you saying Vilhelmo is issuing money to pay Vilhelmo? When more than one individual is involved, then nothing is ever your "own debt" - and under capitalism, the government is controlled by the wealthy (and the current United States Supreme Court aims to keep it that way - with some help from Charles Koch).


Vilhelmo is talking about economic relations, via currencies, among various capitalist nation-states.

Unfortunately V. is identifying the 'currency user' with the interests of the nation, or 'currency issuer'. As revolutionaries -- representing *working-class* interests -- we have *no* interests in common with the bourgeois nation-state -- *any* bourgeois nation-state.

So while a government will be subject to international bourgeois geopolitics for the backing of its own national currency (including imperialism), the working class of the world continues under the global bourgeois regime of wage-slavery, and debt slavery.

[ckaihatsu]

Yes, indeed all debts are subject to default. Thus it is in your interest to ensure they are prosperous enough to be able to pay back their debts (if you were smart anyway)


You seem to be implying that anarchists would be comfortable using some form of commodity money, and debt.

[Vilhelmo]

Unfortunately V. is identifying the 'currency user' with the interests of the nation, or 'currency issuer'.

I did no such thing.
A currency issuer can be any entity.
But today most currency issuers are the Federal Governments of nation states.

[cyu]

You seem to be implying that anarchists would be comfortable using some form of commodity money, and debt.

I would say anarchists would claim the right to issue money, even as many anarchists would refuse to pay any debts if they didn't feel like repaying those debts.

As I mentioned before, I used to only be able to envision a post-capitalist economy that still used money (although it would be money issued and controlled by non-capitalists) - however, since then I've read more psychological articles about drive and motivation. As a result, I now would prefer a society that did not use money, nor even anything tangible as a "reward" for work.

Still, I could easily see a transitional economy make temporary use of self-issued money as traditional "capital flight" occurs. However, even as I would try to show how capitalist controlled money can be replaced by working-class issued money, I would still be pushing for an economy in which extrinsic rewards are not considered the primary vector of motivating people... that is, assuming I'm working toward a world in which people are happy, then you need to move toward a world in which extrinsic reward has been replaced by intrinsic motivation.

http://bookoutlines.pbworks.com/w/page/14422688/Punished%20by%20Rewards

[Vilhelmo]

You seem to be implying that anarchists would be comfortable using some form of commodity money, and debt.

Anarchism is not inherently against monetary systems or monetary economies

[ckaihatsu]

I would say anarchists would claim the right to issue money, even as many anarchists would refuse to pay any debts if they didn't feel like repaying those debts.


This is interesting, but -- administrative logistics aside -- wouldn't those who regularly use such currency from several sources have a common interest in some kind of *standards* for the issuing of money and the valuations of those currencies -- ?

If so then we're back to the need for a state to *regulate* this myriad-monetary system among all of the (possibly conflicting) claims of ownership that each issue their own money. And some would undoubtedly use various kinds of *financialization* in order to hedge against the dynamics across several kinds of monetary assets.

Also, 'money' implies the potential for profit-making, and mergers-and-acquisitions.





As I mentioned before, I used to only be able to envision a post-capitalist economy that still used money (although it would be money issued and controlled by non-capitalists) - however, since then I've read more psychological articles about drive and motivation. As a result,




I now would prefer a society that did not use money, nor even anything tangible as a "reward" for work.


Then how do you propose a post-capitalist society would handle the material complexities of the inorganic world?





Still, I could easily see a transitional economy make temporary use of self-issued money as traditional "capital flight" occurs. However, even as I would try to show how capitalist controlled money can be replaced by working-class issued money, I would still be pushing for an economy in which extrinsic rewards are not considered the primary vector of motivating people... that is, assuming I'm working toward a world in which people are happy, then you need to move toward a world in which extrinsic reward has been replaced by intrinsic motivation.




http://bookoutlines.pbworks.com/w/page/14422688/Punished%20by%20Rewards


This is all fine and good, and is certainly more-enlightened, but it neatly sidesteps the question of political *co-administration* for a post-capitalist, post-hierarchical social relations. The entire content of the page you linked to is based on a hierarchy of power where any arbitrary superior or teacher either *individually* adopts these best-practices, or doesn't.

[Vilhelmo]

Also, 'money' implies the potential for profit-making, and mergers-and-acquisitions.


A monetary economy does not necessitate that any of its institutions be profit-seeking.

A Participatory Economy, a Parecon, (an alternative, "anarchist" economy) is an example of a monetary economy that lacks profit-seeking institutions.

[cyu]

wouldn't those who regularly use such currency from several sources have a common interest in some kind of *standards* for the issuing of money and the valuations of those currencies -- ?



Yes, yes they would. It's like language really. If everybody speaks the same language, it would help communication. But if you don't feel like learning something new, nobody is forcing you to.


'money' implies the potential for profit-making, and mergers-and-acquisitions.

As long as anarchists remember they always have the right to disregard any property claim, I don't think it would be a problem. Thus "ownership" isn't something magical that can't be violated - it's just a suggestion - you may be able to lay claim to some "property" but that claim is only as good as the anarchists that feel like letting you control it. If they change their mind, then that "property" is no more yours than any other piece of "property".



The entire content of the page you linked to is based on a hierarchy of power where any arbitrary superior or teacher


Yep, indeed it does. Kohn is investigating motivation and is offering alternatives based on the current power structure. He's not assuming a revolution has already happened and, at least publicly, Kohn takes no strong pro-capitalist or anti-capitalist positions. However, the results of the same psychological research can also be applied to post-capitalist society.

For example, both Valve and Gore http://www.revleft.com/vb/valve-corporation-no-t170623/index4.html also offer partial solutions as to the management of resources without hierarchy or domination. However, they too operate within our current capitalist society and still contain some of the demotivational pitfalls pointed out by http://www.alfiekohn.org/books/pbr.htm

Would a synthesis of Valve, Gore, and Kohn be exactly what I'm looking for? No, but I would say it could be an improvement on all of them, and a vast improvement on how work and resources are controlled in the rest of society.

[Vilhelmo]

As long as anarchists remember they always have the right to disregard any property claim

This is utter rubbish.
Anarchism is not against any & all system of property rights. It recognizes the fact that all societies have some form of property rights system, the only question is what form.

[cyu]

Anarchism is not against any & all system of property rights.


Oh, so you're going to tell me what an anarchist should and shouldn't believe now, eh Mr Randroid? (Why is it that whenever I see a new account, with a handful of posts, in the Economics forum, I automatically think it's a pro-capitalist "libertarian" who thinks his political ideology actually makes him some kind of "expert" on economics? I guess their brainwashing makes them automatically assume all leftists are clueless about economics so they head straight for the Economics section to impart some of their "infinite wisdom" on the "uninformed" masses.)

http://cjyu.wordpress.com/article/if-they-do-not-give-you-work-or-bread-gcybcajus7dp-10/

“Ask for work. If they do not give you work, ask for bread. If they do not give you work or bread, then take bread.”

The laws of man are much easier to break than the laws of survival. If your society isn’t providing enough legal ways to make a decent living, then more and more people will resort to illegal ways.

This isn’t to say I’m encouraging everyone to take bread or engage in armed robbery on the high seas, because while I think it’s justified for those who need to do it to survive, I don’t believe (for obvious reasons) that it’s a good economic strategy.

I would instead encourage the taking of the actual means of production (land, raw materials, equipment, etc) – like what the MST of Brazil did or what the rest of the Latin American recovered factory movements are doing.

[ckaihatsu]

A monetary economy does not necessitate that any of its institutions be profit-seeking.

A Participatory Economy, a Parecon, (an alternative, "anarchist" economy) is an example of a monetary economy that lacks profit-seeking institutions.


Actually, it's *inevitable* that profit-seeking will become the norm once commodity-money is in circulation. This is because -- unless a centralized state authority enforces a ban on profits -- those *with* money will find it easier to buy low and sell high in order to realize monetary gains.

Sure, maybe not *everyone* would do it, like today, but as long as the opportunity is there, some *will* and they could even become ideological about it as well.





[W]ouldn't those who regularly use such currency from several sources have a common interest in some kind of *standards* for the issuing of money and the valuations of those currencies -- ?





Yes, yes they would. It's like language really. If everybody speaks the same language, it would help communication. But if you don't feel like learning something new, nobody is forcing you to.


Your metaphor here is too facile -- you're not really addressing my economic point, which is that economic ratings standards would inevitably emerge (like Moody's, etc.). Credit standards implies competition, and competition leads to exploitation of labor, even if it's a workers-ownership or petty-bourgeois type of self-exploitation.





'[M]oney' implies the potential for profit-making, and mergers-and-acquisitions.





As long as anarchists remember they always have the right to disregard any property claim, I don't think it would be a problem. Thus "ownership" isn't something magical that can't be violated - it's just a suggestion - you may be able to lay claim to some "property" but that claim is only as good as the anarchists that feel like letting you control it. If they change their mind, then that "property" is no more yours than any other piece of "property".


There's a contradiction, then -- which has the *prevailing* authority, the organization of local anarchists, or the currency that any or all of them may have issued -- ?

This is the problem with using *any* kind of commodity-money: It inherently abstracts value, which then introduces issues of financing over time, and requires an overarching financial authority for *enforcement* of whatever standards are used -- a state, basically.





The entire content of the page you linked to is based on a hierarchy of power where any arbitrary superior or teacher





Yep, indeed it does. Kohn is investigating motivation and is offering alternatives based on the current power structure. He's not assuming a revolution has already happened and, at least publicly, Kohn takes no strong pro-capitalist or anti-capitalist positions. However, the results of the same psychological research can also be applied to post-capitalist society.


I don't doubt or question your *psychological* conclusions, but my previous point remains outstanding:





This is all fine and good, and is certainly more-enlightened, but it neatly sidesteps the question of political *co-administration* for a post-capitalist, post-hierarchical social relations. The entire content of the page you linked to is based on a hierarchy of power where any arbitrary superior or teacher either *individually* adopts these best-practices, or doesn't.


So, in other words, what *social standard* could a post-capitalist society use -- one that doesn't rely on any job-position-based caste structure -- ?





For example, both Valve and Gore http://www.revleft.com/vb/valve-corporation-no-t170623/index4.html also offer partial solutions as to the management of resources without hierarchy or domination. However, they too operate within our current capitalist society and still contain some of the demotivational pitfalls pointed out by http://www.alfiekohn.org/books/pbr.htm

Would a synthesis of Valve, Gore, and Kohn be exactly what I'm looking for? No, but I would say it could be an improvement on all of them, and a vast improvement on how work and resources are controlled in the rest of society.


I'll roundly disagree here since you're not specifying how bureaucratic-type hierarchical social relations could be transcended, as for a post-capitalist society.

[cyu]

which has the *prevailing* authority, the organization of local anarchists, or the currency that any or all of them may have issued -- ?

If the locals truly considered themselves anarchists, then there is no promise you can hold them to, no contracts, no agreements, no money. This isn't to say they won't fulfill any promises, but it is simply their choice - you can't force them to do anything - if you can't convince them to do it, then it won't be done. If your relationship with them sours, then too bad for you.


you're not specifying how bureaucratic-type hierarchical social relations could be transcended, as for a post-capitalist society.

Have you taken a look at how Valve and Gore are run? Basically there are no assigned managers. Employees simply show up and decided for themselves what they want to do and who they want to listen to (or if they want to listen to anybody at all). Managers are not appointed by an autocrat, nor are leaders elected by employees. Instead, leadership simply "emerges" - that is, if others like what you say, they help you do what you want to do. If they don't like what you say, then they pat you on the head and move on.

[ckaihatsu]

If the locals truly considered themselves anarchists, then there is no promise you can hold them to, no contracts, no agreements, no money. This isn't to say they won't fulfill any promises, but it is simply their choice - you can't force them to do anything - if you can't convince them to do it, then it won't be done. If your relationship with them sours, then too bad for you.


You're still missing the point because you're too focused on the *individual* level -- over time all users of various monies would be reporting their experiences and results to the world, and/or the same would be done by journalism. (Think of Yelp or something similar.)

The competition among locals (money-issuers) might come to resemble the dynamics of the fledgling start-up companies of today -- will they exploit labor and gain the attention of venture capitalists in order to grow and make it to the next level -- ?





Have you taken a look at how Valve and Gore are run? Basically there are no assigned managers. Employees simply show up and decided for themselves what they want to do and who they want to listen to (or if they want to listen to anybody at all). Managers are not appointed by an autocrat, nor are leaders elected by employees. Instead, leadership simply "emerges" - that is, if others like what you say, they help you do what you want to do. If they don't like what you say, then they pat you on the head and move on.


So the organization is just sub-divided, that's all -- what counts at the end of the day is *profitability*, however that may happen to emerge. You're cheerleading a 'flavor-of-the-week' here.

[cyu]

The competition among locals (money-issuers) might come to resemble the dynamics of the fledgling start-up companies of today

From above: "If they do not give you work or bread, then take bread."

In other words, behaviors that you currently believe are "illegal" would simply be what keeps exploitation in check. If whatever system is put in place results in your poverty, anarchists would not only encourage you to simply take what you need to survive, the braver ones would help you do it.

By the way, have you read Le Guin's The Dispossessed? In the anarchist society described there, they have "shops" but not in the traditional sense of a place where you go buy stuff. These anarchist shops are more like warehouses, where you simply showed up, picked out something you wanted, and walked out without paying - in other words, no sense of property at all.


what counts at the end of the day is *profitability*

Valve and Gore operate within a capitalist environment, so yes, profit does matter for them. The same would not be true if it were applied in post-capitalist society. There would be no distinctions between groups, factories, companies, etc etc. Anybody could freely move to any location they felt like, and join (or not join) any group they found there - it would be as if Valve / Gore had taken over the world, but there is no longer any threat of bankruptcy if your company doesn't make a profit, since you are no longer operating within a capitalist environment.

The would be no measure of profit at all. Simply people working and discussing what should be worked on, and others either joining them, or working on something else that they think is important.

[The Garbage Disposal Unit]

Uh, so this got a bit derailed, eh?

I'm actually still pretty interested in the topic of what-actually-is-money, and its relationship to commodities and production. So, a few starting points/questions:

Do we accept that, historically, money emerged as a representation of debt?
What is the historical relationship between this debt and commodities?
Is "commodity" the correct word in this context, or do "things" and activities only become commodities at a later juncture, with changes in production?
Is there a point where money changes fundamentally?
Are "financialization" and tying money to a precious metal or whatever mutually exclusive? In this context, is "whatever" a commodity?

I hope someone can address these things.

[ckaihatsu]

From above: "If they do not give you work or bread, then take bread."

In other words, behaviors that you currently believe are "illegal" would simply be what keeps exploitation in check. If whatever system is put in place results in your poverty, anarchists would not only encourage you to simply take what you need to survive, the braver ones would help you do it.


Okay, this may be good advice, but then what you're describing is just *informality* -- you're no longer defending your concept of individuals issuing their own respective monies.





By the way, have you read Le Guin's The Dispossessed? In the anarchist society described there, they have "shops" but not in the traditional sense of a place where you go buy stuff. These anarchist shops are more like warehouses, where you simply showed up, picked out something you wanted, and walked out without paying - in other words, no sense of property at all.


No, I haven't read it.

This, too, is informality, and could probably be done in the way of what's outlined at post #9. My critique of this approach is that people would necessarily be very bound by their *physical proximity* to whatever workplaces and distribution centers. All of the advantages of a monetary system -- like transportability and flexibility -- would be forfeited.





Valve and Gore operate within a capitalist environment, so yes, profit does matter for them. The same would not be true if it were applied in post-capitalist society. There would be no distinctions between groups, factories, companies, etc etc. Anybody could freely move to any location they felt like, and join (or not join) any group they found there - it would be as if Valve / Gore had taken over the world, but there is no longer any threat of bankruptcy if your company doesn't make a profit, since you are no longer operating within a capitalist environment.

The would be no measure of profit at all. Simply people working and discussing what should be worked on, and others either joining them, or working on something else that they think is important.


I have no differences here with this part, and I'll note that it's congruent with my model at post #6.

[cyu]

but then what you're describing is just *informality*


Well, anarchists are all about informality - after all, we accept no laws imposed on us, nor any property claim imposed upon us ;)



you're no longer defending your concept of individuals issuing their own respective monies.



As I mentioned before, ultimately I don't actually want a society that uses money at all. However, until we get there, if part of that path (ie. destroying the capitalist financial structure) requires that people issue their own money, anarchists claim for themselves all the rights that any government claims.



people would necessarily be very bound by their *physical proximity* to whatever workplaces and distribution centers.


But aren't people already bound in the same way? You can only get the groceries that are available in the grocery stores near you. You can only do work at the workplaces near you. Of course, you can always travel to another city, continent, or planet - but I don't see that as a limitation in anarchist society. I'd go so far as to say that there would be even more freedom of movement, given that you could simply hop on any train, plane, or spaceship you felt like, without being restricted by the ability to pay.

[ckaihatsu]

Well, anarchists are all about informality - after all, we accept no laws imposed on us, nor any property claim imposed upon us ;)


Yup, I hear ya.

I would find that acceptable, and would be that way myself, if I truly thought that it would be enough / sufficient for what's called for, for a post-capitalist society.

However I think the challenge here -- the reason I developed that 'communist supply & demand' model -- is to *supersede* the functioning of capitalism, and its economics.

My politics are of a set that looks to resolve any and all inconsistencies that can be pointed out in the 'grand vision' of communism, and how it should work. I think it's important and worthwhile to have as clear and defined a sense of what could be possible, so that there's something to 'point to' in response to any serious-minded objections.





As I mentioned before, ultimately I don't actually want a society that uses money at all. However, until we get there, if part of that path (ie. destroying the capitalist financial structure) requires that people issue their own money, anarchists claim for themselves all the rights that any government claims.


Sure -- understood. But as with any science, a proposal should be able to stand up to scrutiny, and I've noted that using individually-issued monies could readily lead into financialization, which would be extremely problematic.

I am also skeptical of sheer voluntarism, in whatever form, because I don't think it would allow full-enough complexities of social / work organization, for the sake of mass production. Could, for example, regular PCs be manufactured, with all of the requisite supply chains and work roles involved, with just informal voluntary efforts -- ? I think some kind of formalism for such -- such as with using 'labor credits' -- would facilitate such required social productive organization.





[P]eople would necessarily be very bound by their *physical proximity* to whatever workplaces and distribution centers.





But aren't people already bound in the same way? You can only get the groceries that are available in the grocery stores near you. You can only do work at the workplaces near you. Of course, you can always travel to another city, continent, or planet - but I don't see that as a limitation in anarchist society. I'd go so far as to say that there would be even more freedom of movement, given that you could simply hop on any train, plane, or spaceship you felt like, without being restricted by the ability to pay.


Yeah, I wasn't speaking about the *consumer* side of things, but rather about the political and liberated-labor *logistics* of global mass (industrial) production -- if a product or service couldn't be supplied strictly locally then that would create an opportunity for the market mechanism to re-assert itself, to satisfy demand, and that would be a failure of our politics.

That's why I insist that we need something that will function *better* than capitalism's markets, so that our revolutionary organization isn't *weakened* by (black) markets.

[argeiphontes]

(



My politics are of a set that looks to resolve any and all inconsistencies that can be pointed out in the 'grand vision' of communism, and how it should work. I think it's important and worthwhile to have as clear and defined a sense of what could be possible, so that there's something to 'point to' in response to any serious-minded objections.

I think that's very important.
)

[cyu]

I am also skeptical of sheer voluntarism

I don't consider myself a "voluntarist" - at least not in the sense of those pro-capitalists that have attempted to take control of the word in the same way they have attempted to take the word "libertarian".

That being said, what alternative is there to voluntary activity? Forced activity? Is there anything besides voluntary activity and forced activity? If you don't believe in voluntary activity, would you say forced activity is justified? I would say that would lead us right back down the path to oppression and repression - possibly the same road taken by Lenin and Mao due to an inadequate understanding of psychology and sociology.

However, when I say I'm against forced activity, that does not mean I am against advertising-supported activity. Just as when I say I'm against advertising-supported consumerism, that does not mean I'm against advertising-supported activity.

For those who do not believe pure voluntary activity can work, I would say they don't fully understand the power of advertising. For those who do not believe advertising is effective enough to get the "right jobs" done, I would say they lack understanding of psychological tactics.

However, I would add that the role of anarchist psychologists isn't just to manipulate others to do what they want, but rather to teach others how to use the same psychological tactics that they understand. In other words, the distribution of power, in typical anarchist fashion.

[ckaihatsu]

I am also skeptical of sheer voluntarism, in whatever form, because I don't think it would allow full-enough complexities of social / work organization, for the sake of mass production.





I don't consider myself a "voluntarist" - at least not in the sense of those pro-capitalists that have attempted to take control of the word in the same way they have attempted to take the word "libertarian".


Okay, acknowledged.





That being said, what alternative is there to voluntary activity? Forced activity? Is there anything besides voluntary activity and forced activity? If you don't believe in voluntary activity, would you say forced activity is justified?


Sure -- I hear ya.

Please note, though, that you truncated my quote, which left out its full meaning -- I included the full sentence above so that you can see why I'm skeptical of *sheer* voluntarism. It's for strictly *logistical* concerns, as I explained in my previous posting.

So, to clarify, a *reliance* on *sheerly informal local voluntarism* is problematic because it won't provide a universal standard of what liberated labor is socially worth -- this makes more-complex productive organization more difficult, if not impossible, because people will find it safer and easier to just stick with what they know, in their hometowns, than to attempt to organize anything more complex, even if the potential material social payoff might be greater.

This is bad for revolutionary politics because we have a collective interest in making *technology* do the work -- the simpler and lower-level the work we decide to adopt through the revolutionary process, the *less* technological we'll be and the more human-labor-hours we'll have to put in with such basic things like farming. Also, depending on actual conditions of struggle, settling for lower-level work roles could also negatively affect our revolutionary activity in actual class struggle.





I would say that would lead us right back down the path to oppression and repression - possibly the same road taken by Lenin and Mao due to an inadequate understanding of psychology and sociology.


I disagree with your historical conclusions here.

I will note, though, regarding your main point, that certainly liberated labor cannot be anything *but* voluntary, by definition (or else it's no longer 'liberated').

Here's a relevant excerpt from the model:





communist supply & demand -- Model of Material Factors

This is an 8-1/2" x 40" wide table that describes a communist-type political / economic model using three rows and six descriptive columns. The three rows are surplus-value-to-overhead, no surplus, and surplus-value-to-pleasure. The six columns are ownership / control, associated material values, determination of material values, material function, infrastructure / overhead, and propagation.

http://tinyurl.com/ygybheg




Infrastructure / overhead

labor [supply] -- All workers will be entirely liberated from all coercion and threats related to basic human living needs, regardless of work status -- any labor roles will be entirely self-selected and open to collective labor organizing efforts on the basis of accumulated labor credits

[Prometeo liberado]

Haven't been able to read much of these posts but what I did read could use a looking over of Graeber(sp) book on Debt as a precursor to money.Money is simply a form of IOU, debt. From there all else flows. :unsure:

[cyu]

liberated labor cannot be anything *but* voluntary, by definition (or else it's no longer 'liberated').

I agree with this. But if you support this, I don't see a problem. However, would you say money and purchases implies something involuntary? Not so much that both the purchaser and the seller volunteer in the transaction, but that if the purchaser does not have enough money, then he is involuntarily forced away from using whatever "property" is involved.

[ckaihatsu]

However, would you say money and purchases implies something involuntary? Not so much that both the purchaser and the seller volunteer in the transaction, but that if the purchaser does not have enough money, then he is involuntarily forced away from using whatever "property" is involved.


If we're talking about the present-day, then certainly the lack of access to an equitable share of the world's production is *discriminatory* based on one's objective relationship to the means of mass production. (Meaning that if one could either control or use such implements oneself and/or collectively, there'd be no lack of access to the fruits of production, as for life and living.)





liberated labor cannot be anything *but* voluntary, by definition (or else it's no longer 'liberated').





I agree with this. But if you support this, I don't see a problem.


Good. I also need to clarify that the labor credits are *not* exchangeable for material goods, as we're used to doing with commodity money. This is because commodity-exchange cannot exist under communism. So, in eliminating exchanges, we can just look to mass demands / orders / procurements for indications of what liberated labor should be producing.





I have developed a model that [...] uses a system of *circulating* labor credits that are *not* exchangeable for material items of any kind. In accordance with communism being synonymous with 'free-access', all material implements, resources, and products would be freely available and *not* quantifiable according to any abstract valuations. The labor credits would represent past labor hours completed, multiplied by the difficulty or hazard of the work role performed. The difficulty/hazard multiplier would be determined by a mass survey of all work roles, compiled into an index.

In this way all concerns for labor, large and small, could be reduced to the ready transfer of labor-hour credits. The fulfillment of work roles would bring labor credits into the liberated-laborer's possession, and would empower them with a labor-organizing and labor-utilizing ability directly proportionate to the labor credits from past work completed.




http://www.revleft.com/vb/blog.php?b=11269

[Vilhelmo]

Oh, so you're going to tell me what an anarchist should and shouldn't believe now,


I'm saying no such thing.
You are free to believe what you want.

But as someone farmiliar with & heavily influenced by anachist thought I feel the need to correct misleading claims as to the nature of anarchists & anarchist thought.

The claim that anarchism is inherently against all systems of property rights is factually incorrect.

Every human society has a system of property rights.





...eh Mr Randroid? (Why is it that whenever I see a new account, with a handful of posts, in the Economics forum, I automatically think it's a pro-capitalist "libertarian" who thinks his political ideology actually makes him some kind of "expert" on economics? I guess their brainwashing makes them automatically assume all leftists are clueless about economics so they head straight for the Economics section to impart some of their "infinite wisdom" on the "uninformed" masses.).

I am not an Objectivists.
Neither am I a Libertarian nor am I an Austrian.

I am at heart a Libertarian Socialist who advocates a mixed economy & the Classical Reform Program of Industrial Capitalism.

[Zulu]

The idea that debt could be a historical precursor of money is retarded.

Debt needs to be denominated in something. Meaning a particular economic debt must be counted in some units. And it can't be "units of debt". If I owe You, that means I owe You SOMETHING. If I owe you a certain amount of grain, then grain is money. If I owe you paper, than paper is money. (It is sometimes said that paper money was a ancient Chinese invention, but the thing is, back then it wasn't just token because paper was really fucking hard to produce, so then it was real money, a money commodity, vouching for its own value AKA socially necessary labor time.) Precious metals became a common money commodity mainly because of their physical durability, which allowed them to store value practically indefinitely.

[Vilhelmo]

Actually, it's *inevitable* that profit-seeking will become the norm once commodity-money is in circulation.


What do you mean by "commodity money"?
Can you give an example.

I only ask because every example of so called "commodity money" turns out to be fiat money.

[ckaihatsu]

What do you mean by "commodity money"?
Can you give an example.

I only ask because every example of so called "commodity money" turns out to be fiat money.


Sure -- for the purposes of any revolutionary politics all money is the same since it's used as an economic tool, and weapon, by the capitalist ruling class.





Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects that have value in themselves as well as value in their use as money.[1]
Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, large stones (such as Rai stones), decorated belts, shells, alcohol, cigarettes, cannabis, candy, and barley. These items were sometimes used in a metric of perceived value in conjunction to one another, in various commodity valuation or price system economies.




http://en.wikipedia.org/wiki/Commodity_money

[cyu]

Every human society has a system of property rights.


http://cjyu.wordpress.com/article/reconciling-property-rights-with-gcybcajus7dp-9/

There are many definitions of theft – different societies have different laws governing control over objects and resources. This control is basically how property is defined. Different kinds of laws mean different concepts of property. Some wealthy property owners, when confronted with the possibility that the (more numerous) poor may vote for higher taxes on the wealthy, will argue that taxation is theft. Other less wealthy people, particularly those who work under someone else, may believe exploitation is theft. Then there’s Proudhon’s famous declaration that, “Property is theft.”

The following are reactions to the concept of conquest from two different types of pro-capitalists.

Ownership Through Conquest is Justified

This view claims that conquest is justified because the conqueror risked his life (or at least risked the lives of his minions) in battle, and thus has earned the right to control.

However, these pro-capitalists are opposed to the concept of an anti-capitalist revolution, claiming that would be a violation of their property rights. If employees “conquer” their places of work by escorting their boss off company premises, these pro-capitalists do not see that as a “legitimate” form of conquest.

Ownership Through Conquest is Not Justified

Other pro-capitalists do not believe conquest is justified and yet they oppose returning conquered land and resources to the natives (or their descendents). They believe conquest is an injustice, but do not have a good idea of how to rectify that injustice.

Conquest results in wealth for the conquerors. Then that wealth is distributed to cronies and offspring. On and on it goes – not just in this country, but around the world. If you trace back the history of ownership of land and resources, how much of it doesn’t originate in conquest (or what some would call theft)?

How far back do you have to go before you consider property valid? If one group of Australopithecus or Cro-Magnon conquered land from another group of Australopithecus or Cro-Magnon, do their ancestors have to return it? If not, why not? Is there a “statute of limitations”? If so, how many years does it have to be, and who decides on this number?

Why Have Society?

Personally, I don’t (that’s right, don’t) support giving back everything to the natives (or their descendants). Instead, I assert that the resources be used for the benefit of everyone in that area, whether it’s later settlers, recent immigrants, the natives, whatever. Human beings form societies in order to protect themselves. The point of the political, economic, and religious systems they set up is to benefit as many of the individuals in the population as possible. Because property requires society to enforce it, why should society enforce something that is not beneficial to it? It is not an “axiomatic” right – if it has become perverted to the point at which it is judged no longer beneficial, then it (or at least parts of it) should be dispensed with – especially if it is causing the death of others.

[Vilhelmo]

The idea that debt could be a historical precursor of money is retarded.



Money was developed in the temples & palaces (public sector) of Bronze Age Sumer to coordinate resource flows and denominate debts owed to these public institutions.
Money was the overall schedule of price equivalencies, created along with weights & measures to form a system of interlocking parts able to coordinate resource flows and denominate debts owed to the public institution.

To quantify these resource flows a measurement system had to be developed and prices assigned. On the broadest level ‘money’ represented the overall schedule of interlocking price ratios. This enabled flows of commodities, rents & fees to be quantified, allocated & made fungible, so that land rents & related rural debts could be paid in crops at the official price equivalencies.
The value dimension was provided by accounting formalities that enabled temples & palaces to coordinate their internal resource flows and dealings with the rest of the economy.

The Mesopotamian breakthrough was one of standardization.
The essence of money is not to be sought in the material from which it was made, but in the fact that it provided a common denominator to co-measure prices.
Accounting prices were an intrinsic part of the system of weights and measures, with weighed silver designated as the common denominator, it being also the sanctified store of value. Prices were not determined by shifts in market supply and demand or in the supply of silver, or even of barley.
Like our acre, bushel or pound they were supposed to provide stability by being uniform and unchanging. That is the essence of any reference point – standardization, not variability.

The public sector’s administered prices, interest rates, rental charges and crop estimates provided the context within which economies grew accustomed to operate on a stable basis. Only thereafter could price flexibility begin to make headway

The raw silver used in Sumerian "silver money" was acquired by the temples & palaces (Public Sector) who imported it from abroad. The silver was then refined, issued as money & set as the unit of account, a shekel set equal to a gur of barley, all by the Public Sector.

Summarized from M Hudson.

[cyu]

it being also the sanctified store of value


That's a joke, right?

http://www.revleft.com/vb/third-worldist-economics-t182096/index.html

Social value is what gives paper money its "value" since without other people, both paper money and gold would be pretty worthless. There's also personal value - that is, even if everybody else vanished, somethings still have value since they are of use to you personally - like a hot dog, or a house, or a replicator.

The problem discussed above is that "social value" in a capitalist system is not simply defined by what others want, it's defined by what the rich want. While poor people do have some say in determining social value, the greater the gap between rich and poor, the more the rich get to decide what is valuable, and the less the poor get to decide what is valuable.

The result in a market economy like this is that more and more economic resources are devoted to producing goods and services for the rich, and less and less are left for the poor as the gap between rich and poor increases.

[Vilhelmo]

That's a joke, right?


No.
Why?

[Vilhelmo]

Social value is what gives paper money its "value" since without other people, both paper money and gold would be pretty worthless.

The value of all Money derives from the imposition of taxation (fees/fines/etc) payable in it alone.

[Zulu]

Summarized from M Hudson.
Yeah, cool story, bro.

Not a single word about money being debt there though.

[Vilhelmo]

Then there’s Proudhon’s famous declaration that, “Property is theft.”


Proudhon wasn't referring to systems of property rights in general.
He was speaking of the modern notion of private property.



The following are reactions to the concept of conquest from two different types of pro-capitalists.

Ownership Through Conquest is Justified
...
However, these pro-capitalists are opposed to the concept of an anti-capitalist revolution, claiming that would be a violation of their property rights....

Ownership Through Conquest is Not Justified
...
How far back do you have to go before you consider property valid?



I think you are confused by the term "Property Rights System"
You seem to think it is synonymous with "Private Property".
It is not.
The modern notion of Private Property is a characteristic of a specific Property Rights System.

Property Rights Systems determine the privileges, obligations and restrictions that govern ownership.
They feature extreme variation.

It would be incorrect to assume the universal existence of:
• right to the product of one's labour
• right to engage in exchange
• right to property
• right to engage in production
• buying & selling

[cyu]

The value of all Money derives from the imposition of taxation (fees/fines/etc) payable in it alone.

http://www.revleft.com/vb/crashing-mediums-exchange-t175288/index2.html

Let's say the working people of America stopped accepting dollars as payment for any goods and services. Let's say they started using a new currency "rallods" instead. You might argue there would still be some conversion rate between dollars and rallods - in effect, it would just be like the introduction of a new currency in the foreign exchange market, and the value of the dollar wouldn't crash.

However, if working people only kept their money in "rallods" and immediately converted any holdings of dollars they had into rallods, what would happen? The amount of dollars floating around the market would shoot up - a massive supply increase affecting the ratio of dollars to actual goods and services - leaving the dollar ever more worthless as more people start dumping dollars - with "value" now being held in "rallods". Of course, real value originates from what working people are willing to accept as payment.

Now you might argue that the pro-capitalist government will still only accept taxes in dollars. Let's assume that "revolutionaries" were willing to pay a pro-capitalist government, if the working class held their savings in rallods and a 5000 dollar tax bill were due, they could merely convert their rallods into dollars for the fraction of a second necessary to pay the tax. After that, they carry on using rallods.

This in essence is still flooding the currency market with dollars - most people don't use it, and when they do, it's only for a tiny fraction of time - the rest of the time, the dollars are just floating around chasing goods, but nobody wants them. The more people that dump their dollars, the less it is worth. As a result, the 5000 dollar tax bill may be worth only a few rallods - or even less - no skin off the teeth of the working class.

...and no ability for the pro-capitalist government to keep funding a military that props up pro-exploitation regimes around the world.

[cyu]

It would be incorrect to assume the universal existence of

The only rights you have are the ones other people are willing to grant you. In times of dire poverty, I doubt the poor want to grant the rich many rights.

[Vilhelmo]

Yeah, cool story, bro.

Not a single word about money being debt there though.

The physical "silver money" was a debt/credit.

Here is the full article from which I summarized:
The Archaeology of Money Debt vs . Barter Theories of Money’s Origins by Michael Hudson (http://cas.umkc.edu/econ/economics/faculty/wray/papers/hudson.pdf)



The idea that debt could be a historical precursor of money is retarded.


Why is it so hard to believe?
All money today is debt/credit.

[Vilhelmo]

The only rights you have are the ones other people are willing to grant you. In times of dire poverty, I doubt the poor want to grant the rich many rights.

We're talking about Systems of Property Rights.

[Vilhelmo]

. Let's say they started using a new currency "rallods" instead..

Who would be the issuer of "rallods" & why would anyone use them?

[cyu]

Who would be the issuer of "rallods" & why would anyone use them?

Do reread this from earlier in this very thread http://www.revleft.com/vb/time-new-theory-t144224/index.html?p=2672219

[Comrade Chernov]

I've been wondering more and more about this lately: is there merit in either,

A) Backing up currency with a more stable and easily-accumulated commodity than precious metals (for example, food, which is renewable, much more useful than money, and can actually have its quantity increased)?

B) Outright eliminating money and instituting a form of bartering? (A Canadian was able to, via bartering, make one red paperclip (http://en.wikipedia.org/wiki/One_red_paperclip) go a long way, remember...)

[Vilhelmo]

Do reread this from earlier in this very thread http://www.revleft.com/vb/time-new-theory-t144224/index.html?p=2672219

I cannot find where you explain how such an alternative currency would function.
Again, who would be the issuer "rallods"?

[cyu]

Since anarchists claim all the rights of government, any anarchist can issue money.

If you live in an oil producing region, perhaps the oil well workers will issue a note for each barrel of oil they produce.

If you live in a farming region, perhaps the farmers will issue a note for each bushel of wheat they produce.

None of that requires capitalist intervention. It comes straight from the working class.

If various farmers and energy workers choose to work together (ie. free association), then they could issue notes based on an index of food and energy.

Depends how far you want to go of course. If the index you are basing your notes on is similar to the CPI, then inflation is "by definition" to be zero.

Then again, as I've mentioned earlier in this thread, I only support the issuing of money as part of a transitional period in order to destroy the current capitalist financial structure. Ultimately I would prefer an economy with no exchange at all. Why? See http://en.wikipedia.org/wiki/Alfie_Kohn How? See http://en.wikipedia.org/wiki/The_Dispossessed

[Vilhelmo]

I've been wondering more and more about this lately: is there merit in either,

A) Backing up currency with a more stable and easily-accumulated commodity than precious metals (for example, food, which is renewable, much more useful than money, and can actually have its quantity increased)?


There are generally two forms of commodity standards, "International" & Domestic.

The Gold Standard that came to an end in '71 was "International"
Under an International Standard only nations can redeem currency for commodities.
This places limits on a nation's ability to run trade & balance of payments deficits

A domestic Gold Standard essentially amounts to government price fixing & on-demand redeemability.

Under any such standard, it is the government, not the market, that sets the price.



B) Outright eliminating money and instituting a form of bartering? (A Canadian was able to, via bartering, make one red paperclip (http://en.wikipedia.org/wiki/One_red_paperclip) go a long way, remember...)

No society has ever been documented to use barter as its primary means of exchange.
There are no barter economies.
Why would anyone want such a thing?

[cyu]

Under any such standard, it is the government, not the market, that sets the price.


Lol - sounds like typical pro-capitalist "libertarian" claptrap. Not that I'm going to debate this useless statement, but it has all the keywords and hallmarks of a follower of Hayek.

In any case, do allow me to teach you some market economics that has not been funded and pre-approved by wealthy donors to large universities:

http://cjyu.wordpress.com/article/demand-is-not-measured-in-units-of-gcybcajus7dp-4/

A market economy can work pretty well to determine what needs to be produced, provided there’s one condition: that everyone has relatively equal amounts of spending power. Consider the concept of supply and demand: in theory, the more demand there is for some product or service, a market economy will be encouraged to increase the supply for that product or service.

However, there is a flaw in the theory above that many pro-capitalists overlook: demand (in a capitalist economy) is not measured in units of people, it is measured in units of money. Thus you can have 99% of the people “demanding” basic necessities of life, but it won’t matter a bucket of spit compared to a rich man with millions of times more money, who is demanding luxury goods. As the gap between rich and poor increases, the market economy will be focused more and more on producing luxury goods for the oppressive minority.

In order to have a market economy that serves everyone, rather than the wealthy few, spending power must be relatively equal.

http://blogs.wsj.com/wealth/2007/01/08/plutonomics/

Ajay Kapur at Citigroup came up with the term “Plutonomy” to describe a country that is defined by massive income and wealth inequality. According to their definition, the U.S. is a Plutonomy, along with the U.K., Canada and Australia.

There is no “average” consumer in Plutonomies. There is only the rich “and everyone else.” The rich account for a disproportionate chunk of the economy, while the non-rich account for “surprisingly small bites of the national pie.” Kapur estimates that in 2005, the richest 20% may have been responsible for 60% of total spending.

The best way for companies and businesspeople to survive in Plutonomies, Kapur implies, is to disregard the “mass” consumer and focus on the increasingly rich market of the rich.

[Vilhelmo]

Since anarchists claim all the rights of government,


There may be some anarchists making such claims but the vast majority do not.
In fact, I bet most would call a claim like that to be "utter nonsense".
Never have I heard this claim by any anarchist or fellow traveller.



any anarchist can issue money.


Anyone can issue money. The problem is getting it accepted.

[cyu]

So you do not believe that anarchists should have all the rights that governments have? Do you believe some rights should belong only to governments and not to anarchists?



Anyone can issue money. The problem is getting it accepted.


Yep, it's just a political matter. Just like you can say any government can be overthrown - the problem is convincing the people to become revolutionaries. It's little different.

[Vilhelmo]

Lol - sounds like typical pro-capitalist "libertarian" claptrap. Not that I'm going to debate this useless statement, but it has all the keywords and hallmarks of a follower of Hayek.



Most Libertarians & Hayekians would NOT make such a statement.
I am neither.
Instead of name-calling you should try argumentation.

I hold that money is endogenous & not merely a veil.

[cyu]

Instead of name-calling you should try argumentation

So would you agree or disagree with the analysis of market economics above (including the article from Citigroup and the Wall Street Journal)?

[Vilhelmo]

So you do not believe that anarchists should have all the rights that governments have? Do you believe some rights should belong only to governments and not to anarchists?

Yep, it's just a political matter. Just like you can say any government can be overthrown - the problem is convincing the people to become revolutionaries. It's little different.

You seem to think that anarchists are against all forms of government, they are not.

I advocate the decision-making principle known as self-management.
Self-management - all persons should have a say in decisions proportionate to the degree to which they are affected by them.

My favourite "anarchist" society is Participatory Economic & Polity

[cyu]

all persons should have a say in decisions proportionate to the degree to which they are affected by them

Indeed I like this as well: http://cjyu.wordpress.com/article/tyranny-of-the-majority-versus-gcybcajus7dp-7/

However, are you going to answer my question? Would you agree or disagree with the analysis of market economics above (including the article from Citigroup and the Wall Street Journal)?

[Zulu]

The physical "silver money" was a debt/credit.

So you see: silver was money before money was debt.




Why is it so hard to believe?
Because the idea of an almighty Allah chilling out on a cloud is much more credible.




All money today is debt/credit.
You see, that's the point. There is no money today, like, at all. Just like Ol' Charlie predicted: the mass of commodities grew so huge, that none of them could longer be a universal equivalent. What Marx did not predict though, and even quite mistakenly assumed impossible, was that money could be canceled without abolition of private property, and substituted for with Proudhonian free credit, denominated in the "units of credit". Which is nonsense, of course. But who cares, capitalism's having been basically an institutionalized extortion scheme from the get go?

[Vilhelmo]

Pretty much.
I agree that income & wealth inequalities are bad both morally & economically.

Which is why the concept of "Economic Rent" & the distinction between "earned" & "unearned" income sorely needs reintroduction.

[cyu]

I agree that income & wealth inequalities are bad both morally & economically.



What would you propose be done about this? What would you say to those that will die in the next few days due to the lack of goods and services brought on by poverty? Do you have any solutions for them?

[Vilhelmo]

So you see: silver was money before money was debt.



You misunderstand.
Silver was NOT money.
"Silver money" was a debt/credit the value of which was set by fiat equal to a gur of barley & had NOTHING to do with the value of silver as a commodity.



Because the idea of an almighty Allah chilling out on a cloud is much more credible.


Why?
What alternative do you suggest?



You see, that's the point. There is no money today, like, at all. Just like Ol' Charlie predicted: the mass of commodities grew so huge, that none of them could longer be a universal equivalent


What are you talking about?
Money is not & never has been a mere commodity.
All money for the last 5000 years has been fiat.

[Vilhelmo]

What would you propose be done about this? What would you say to those that will die in the next few days due to the lack of goods and services brought on by poverty? Do you have any solutions for them?

Just to name a few:


Job Guarantee at living wage & benefits
Economic Rent Taxation (& untaxing labour & business/industry - productive activity)
Universal Healthcare, Pharmacare, Dental care.
Free Higher Education
Zero Interest Rate Policy
Zero Reserve Requirement
High-speed rail
Public Transit

[Zulu]

You misunderstand.
Silver was NOT money.
"Silver money" was a debt/credit the value of which was set by fiat equal to a gur of barley & had NOTHING to do with the value of silver as a commodity.

Then barley was money AKA measure of value. And debt/credit had nothing to do with this.




What alternative do you suggest?
I already said - Allah. Faith in Allah is much more logically comprehensible and rational, than the belief that money originated out of some kind of pure debt.




All money for the last 5000 years has been fiat.
Even if that was true (which it obviously isn't) it would still have nothing to do with debt. Debt is a social relation which cannot exist unless it's object is explicitly specified and comprehended by the both parties of the relation. Therefore, debt cannot appear out of itself - otherwise it would mean that debt existed, like, forever and has no beginning.

I could understand an argument along the lines of something like: "lending of items began much earlier than exchange, so universal equivalents appeared as a means of redemption, not of exchange". But that would be blatantly against both science and common sense. Monkeys exchange items, but they don't lend items. So exchange was there even before man became man. Out of exchange developed primitive barter economies, and in the barter economies certain items began to be used for universal equivalents, which evolved into money.

[Vilhelmo]

Then barley was money AKA measure of value. And debt/credit had nothing to do with this.


No.
Money was not a mere commodity.
It was the overall schedule of price equivalencies, created along with weights and measures to form a system of interlocking parts able to coordinate resource flows and denominate debts owed to the public institutions.

"The monetary breakthrough was one of standardization. The essence of money is not to be sought in the material from which it was made, but in the fact that it provided a common denominator to co-measure prices, a unit of account"

"The silver shekel was assigned the same accounting value as that for the gur of barley. These two measures became equal standards of value against which other commodities were measured, creating a bimonetary price ratio that was the first step in administering prices. It enabled accounts to be kept interchangeably in silver and barley so as to coordinate production and land rents, trade and services, debt and its interest charges in a single overall system"

"Prices were not determined by shifts in market supply and demand or in the supply of silver, or even of barley. " - Hudson



Out of exchange developed primitive barter economies, and in the barter economies certain items began to be used for universal equivalents, which evolved into money.

This is a myth with no supporting evidence.

There has been no documented account of any society using barter as its primary mode of exchange.
There is no such thing as a barter economy.

The only reasons for claiming that money evolved out of barter are ideological.

[Zulu]

The only reasons for claiming that money evolved out of barter are ideological.
Ideological is the Graeber religious bullshit you keep parroting here. Funny how convenient it is that he comes up with his "criticism of capitalism" when said capitalism has been completely transformed to rely on pure credit/debt means of circulation instead of real money, which happens to be exactly the thing Graeber advocates. Funny how he bemoans the fate of all those 3rd world countries at the hands of the IMF - after the fact - but before the same fate comes to hit all those fat 1st worlders. Funny how he says it's difficult to distinguish between gift and credit, when gift by definition is something quite opposite of credit, and credit is actually a form of exchange. Of course, this conflation is needed to propagate the idea of simple debt cancellation, which would reboot capitalism afresh and deliver even more free lunches to the 1st worlders.

But the most funny thing is that when it comes to showing some positive proof of his bullshit, there is zip, save for stupid stories about Joshua & Henry and the ones beginning with "a guy told me".

[Vilhelmo]

Ideological is the Graeber religious bullshit you keep parroting here.

Graeber?
Here I rely on primarily on the work of Michael Hudson and other members of ISCANEE - International Scholars Conference on Ancient Near Eastern Economies (an international group of Assyriologists and archaeologists that has published a series of colloquia analyzing the economic origins of civilization).
On money in general I am most influenced by Chartalism/ Modern Monetary Theory (MMT).

There is no evidence that money evolved out of barter.
There is, however, overwhelming evidence of its development in the Public Sector of Bronze Age Sumer.

[Vilhelmo]

instead of real money,

What do you mean by real money?

I hold that all money is fiat.

[cyu]

Just to name a few:


Job Guarantee at living wage & benefits
Economic Rent Taxation (& untaxing labour & business/industry - productive activity)
Universal Healthcare, Pharmacare, Dental care.
Free Higher Education
Zero Interest Rate Policy
Zero Reserve Requirement
High-speed rail
Public Transit
Yes yes, these all sound like fine liberal proposals, but that's not what I meant. All of this implies that society has already implemented your proposals. What I am talking about is the people currently living in capitalist socities, and are about to die within the next few days.

A job or medical care system isn't going magically materialize within the next few days to save them. What solutions do you have for them?

[Vilhelmo]

[/LIST]
What solutions do you have for them?

What solutions are there?
I'm not a dictator.

[cyu]

What solutions are there?
I'm not a dictator.


So if someone were about to die of hunger, and Emma Goldman was encouraging him to simply walk into a grocery store, pick up a piece of bread, and eat it, what would your reaction be?

What if Emma herself were to walk into that grocery store, pick up a piece of bread (without paying) and give it to someone dying of hunger?

[Vilhelmo]

So if someone were about to die of hunger, and Emma Goldman was encouraging him to simply walk into a grocery store, pick up a piece of bread, and eat it, what would your reaction be?


Get the man some fucking food!
But its not up to me.
I can barley feed myself.

[cyu]

Get the man some fucking food!
But its not up to me.
I can barley feed myself.


Let's take this a step further. Let's say Emma was planning on visiting a grocery store and taking food for the hungry. However, she knows cops sent by the pro-capitalist mayor will try to arrest her. So she begins to organize large groups of anarchists to help protect each other from arrest - arming themselves in cases where pro-capitalist minions are armed. What would your reaction be to this call for protection?

Let's say her "raids" on grocery stores are successful and the Emma Goldman Brigades are able to save various starving people from death. Obviously, since there's no profit to be made from such actions, the grocery stores are threatened with bankruptcy - or their pro-capitalist suppliers simply refuse to provide any more food to these grocery stores.

In response, Emma organizes anarchists to take control of the entire supply chain, from the grocery store to Monsanto, Cargill, and ADM. What would your reaction be to this call?

[Vilhelmo]

Who controls the government?

In theory, the people, in practice, the Fiancial Sector.


When you say your "own debt" are you saying Vilhelmo is issuing money to pay Vilhelmo?

No.
But I'm glad you asked for clarification.
"A debt denominated in one's own debt"

If I issue an IOU denominated in USD ($5 IOU) I promise to give $5 USD upon maturity.
If I issued an IOU denominated in my IOUs, I promise only to accept back my own IOUs in payment of any debt owed to me.
The unit of account is my IOU.
I could give it a name, say the "Elmo"
I would issue notes in "Elmos", abbreviated as "MOs". An IOU worth 5 MOs.
I could even give those IOUs denominated in Elmos a name.
And, if I wanted to generate confusion, I could give these IOUs the same name as my unit of account, the Elmo.

Government money is another example.
The government sets its, non-interest bearing debt (state IOU) as the national unit of account, naming it the Canadian Dollar, CAD.
It then issues non-interest bearing debts (money) denominated in the national unit of account (which it also calls the Dollar) along with interest bearing (bonds)

A Canadian $5 currency note represents a non-interest bearing financial asset of the holder & liability of the issuer (Federal Government).
The government promises only to accept its money (non-interest bearing debt) in payment of taxation, that & to exchange a "five" for two twoonies & a loonie.


When more than one individual is involved, then nothing is ever your "own debt"

I'm not sure what you mean.
My debt is another's asset?


and under capitalism, the government is controlled by the wealthy

Not necessarily.
It wasn't meant to be that way.

[Vilhelmo]

Unfortunately V. is identifying the 'currency user' with the interests of the nation, or 'currency issuer'.

I did no such thing.

[Vilhelmo]

Well, anarchists are all about informality - after all, we accept no laws imposed on us, nor any property claim imposed upon us ;)

Nonsense.
Such an absurd claim makes a mockery of anarchism.
Every society, including any Anarchist, has a legal system & system of Property Rights.
It is not possible to have a society without them.


anarchists claim for themselves all the rights that any government claims.

Maybe some calling themselves "anarchists" do make such a claim but the vast majority do not.

[Vilhelmo]

Lol - sounds like typical pro-capitalist "libertarian" claptrap. Not that I'm going to debate this useless statement, but it has all the keywords and hallmarks of a follower of Hayek.

Under the Gold Standard the US government set the price of gold not the market.
Under the US Gold Reserve Act of 1934 the government set the price of gold, changing it from its previous peg of $20.67 to $35.

How anyone can deny this I do not know.

[ckaihatsu]

There is a difference between a debt denominated in another debt (currency user) & a debt denominated in one's own debt (currency issuer).

A debt denominated in one's own debt is NOT subject to involuntary default.
It can always be paid by simply issuing another debt.
This is the case with the Federal Government.
Money is the non-interest bearing debt Federal Government.





Who controls the government? When you say your "own debt" are you saying Vilhelmo is issuing money to pay Vilhelmo? When more than one individual is involved, then nothing is ever your "own debt" - and under capitalism, the government is controlled by the wealthy (and the current United States Supreme Court aims to keep it that way - with some help from Charles Koch).





Vilhelmo is talking about economic relations, via currencies, among various capitalist nation-states.

Unfortunately V. is identifying the 'currency user' with the interests of the nation, or 'currency issuer'. As revolutionaries -- representing *working-class* interests -- we have *no* interests in common with the bourgeois nation-state -- *any* bourgeois nation-state.

So while a government will be subject to international bourgeois geopolitics for the backing of its own national currency (including imperialism), the working class of the world continues under the global bourgeois regime of wage-slavery, and debt slavery.


---





Vilhelmo is talking about economic relations, via currencies, among various capitalist nation-states.

Unfortunately V. is identifying the 'currency user' with the interests of the nation, or 'currency issuer'.





I did no such thing.


Okay, you're correct -- rather, under your plan, any individual could economically act the same way the U.S. does, and just issue debt in their own name, endlessly:





A debt denominated in one's own debt is NOT subject to involuntary default.
It can always be paid by simply issuing another debt.

[cyu]

and under capitalism, the government is controlled by the wealthy

Not necessarily.
It wasn't meant to be that way.
...Every society, including any Anarchist, has a legal system & system of Property Rights.

Sounds like this part of the discussion belongs in Opposing Ideologies. Do we really need to deal with pro-capitalist spam here?

[Vilhelmo]

Do we really need to deal with pro-capitalist spam here? Are you serious? How can these comments be, in any way, interpreted as "pro-capitalist"? If anything I was defending Anarchism.

[cyu]

How can these comments be, in any way, interpreted as "pro-capitalist"?


Are you an anti-capitalist? If so, in what way?

[Vilhelmo]

Are you an anti-capitalist? If so, in what way?

If I could choose any political/economic system in which to live, it would be the Participatory Economics/Polity of Albert/Hahnel & Shalom. But, as I see no way of achieving such a society, I do not advocate actions, policies or reforms based on it. I advocate the Industrial Capitalism of the Classical & Progressive Era Reformers of Adam Smith, David Ricardo, JS Mill, Johann Heinrich von Thünen, Friedrich List, E Peshine Smith, Georg Friedrich Knapp, Henry Charles Carey, Simon Patten, Thorstein Veblen, Joseph Schumpeter, Michael Hudson, etc.

[Remus Bleys]

Sounds like this part of the discussion belongs in Opposing Ideologies. Do we really need to deal with pro-capitalist spam here?I know, right?

If I could choose any political/economic system in which to live, it would be the Participatory Economics/Polity of Albert/Hahnel & Shalom. But, as I see no way of achieving such a society, I do not advocate actions, policies or reforms based on it. I advocate the Industrial Capitalism of the Classical & Progressive Era Reformers of Adam Smith, David Ricardo, JS Mill, Johann Heinrich von Thünen, Friedrich List, E Peshine Smith, Georg Friedrich Knapp, Henry Charles Carey, Simon Patten, Thorstein Veblen, Joseph Schumpeter, Michael Hudson, etc.
What do you mean, if you could choose? Economic systems are not sat down and thought up of, such thought is idealism.
If you don't advocate for it, what's the point in evening mentioning it? Well, as long as you don't at least claim your utopianism is
To think that this previous capitalism was somehow better than the current stage is, well, naive at best. Capitalism was the same, it followed the same rules, it simply manifested differently.

Are you an anti-capitalist? If so, in what way? There is really only one way someone can be anti-capitalist that is actually doable. So this question really doesn't make any amount of sense.

[cyu]

as I see no way of achieving such a society, I do not advocate actions, policies or reforms based on it. I advocate the Industrial Capitalism of the Classical & Progressive Era Reformers

Sounds to me like you're just a pro-capitalist spammer looking for an excuse to slap down some pro-capitalist propaganda when leftists are trying to talk about anti-capitalist topics.

[Vilhelmo]

I know, right?.

Please, tell me how this comment was "pro-capitalist"?


What do you mean, if you could choose? Economic systems are not sat down and thought up of, such thought is idealism. .

Actually, they are.
The most detailed description of an "Anarchist" society (its institutions, values, principles, operations, etc) is called Participatory Economics (https://en.wikipedia.org/wiki/Participatory_economics) or Parecon.


If you don't advocate for it, what's the point in evening mentioning it?.

As part of my response to the question, "Are you an anti-capitalist? If so, in what way?"


To think that this previous capitalism was somehow better than the current stage is, well, naive at best. Capitalism was the same, it followed the same rules, it simply manifested differently..

Nonsense.
It belies a complete ignorance of economic history & the history of economic thought.
I would be happy to elaborate.

BTW, what I call "Industrial Capitalism" many would call "socialism".

[cyu]

Anyway, here's an old repost, just because I like to see cappies squirm ;)

"Only when the last tree has died and the last river been poisoned and the last fish been caught will we realize we cannot eat money." - old Cree saying

In a pyramid scheme, those who get in early, get all the money. Those who are late, lose their money. The same was true of the dot-com boom / bust, as well as the housing bubble.

To be fair, a real pyramid scheme has little basis in "true" value, while stock prices reflect a mixture of both a rational assessment of value and just jumping on a bubble-based bandwagon. The question is, what fraction of the stock price is reflected in bubble-based behavior? Anyway, on to the thought exercise:

Imagine if you woke up tomorrow and all the money in the world had disappeared. All stocks, all bonds, all the numbers in a banker's computer. The end of the world? Will you die? Will investors be jumping out of windows? No. Your house is still there (or at least the house you say is yours). Supermarkets still have food. Electric companies can still produce electricity.

The world would only end if people stopped going to work (for example, because of mass layoffs). It would only end if mass destruction follows. If people burned houses and smashed computers. If human lives are wasted in violence. Knowledge is still there, labor is still there. Real products can STILL be produced.

So what does happen if everyone suddenly dumped their stock and all life savings went to zero? Probably not much if people kept their cool - only the accounting has to change. It's time this pyramid scheme was revealed as the get rich quick scam that it is. The emperor has no clothes.

[Vilhelmo]

Sounds to me like you're just a pro-capitalist spammer looking for an excuse to slap down some pro-capitalist propaganda when leftists are trying to talk about anti-capitalist topics.

Everywhere else I'm considered a left-wing, socialist, communist, government loving crank.
Here I'm a capitalist, right-wing, fascist crank.

I am a crank & cranks make revolutions.

[Vilhelmo]

There is really only one way someone can be anti-capitalist that is actually doable. So this question really doesn't make any amount of sense.

Would you be so kind as to enlighten me?

[Vilhelmo]

So what does happen if everyone suddenly dumped their stock and all life savings went to zero? Probably not much if people kept their cool - only the accounting has to change. It's time this pyramid scheme was revealed as the get rich quick scam that it is. The emperor has no clothes.

How naive.

[cyu]

How naive.


If you think so, you merely do not understand economics. It's forgivable though, since economics departments in capitalist countries aren't about to teach you how anything other than capitalism works (after all, they get funding from the likes of Charles Koch).

From http://www.revleft.com/vb/crashing-mediums-exchange-t175288/index2.html

Mediums of exchange (whether paper currency or "precious" metals) only have value so long as the people of an economy conduct their trade in it. If the working people of a country stopped accepting any medium of exchange as payment, then that "money" would become as worthless as any other piece of paper or rock.

Let's say the working people of America stopped accepting dollars as payment for any goods and services. Let's say they started using a new currency "rallods" instead. You might argue there would still be some conversion rate between dollars and rallods - in effect, it would just be like the introduction of a new currency in the foreign exchange market, and the value of the dollar wouldn't crash.

However, if working people only kept their money in "rallods" and immediately converted any holdings of dollars they had into rallods, what would happen? The amount of dollars floating around the market would shoot up - a massive supply increase affecting the ratio of dollars to actual goods and services - leaving the dollar ever more worthless as more people start dumping dollars - with "value" now being held in "rallods". Of course, real value originates from what working people are willing to accept as payment.

As for the stock market, it too is easy to crash, assuming leftist politics succeed.

Employees merely have to take control of their own workplaces. Since the value of stocks depends on the ability to control corporations, once employees have control, the "control" implied by a stock certificate evaporates. The "value" formerly implied by the stock price now rests in the hands of the employees themselves, since they now control their own destinies.

If employees seize control of their companies, the stock market is definitely going to crash - it's just a side effect of stocks no longer having their stated purpose. However, would you oppose seizing the means of production simply because it would crash the stock market?

As for replacing the medium of exchange - what we currently have is a wealthy class with vast amounts of economic power - and part of that power (besides resource ownership) derives from them holding more money than everyone else. If you replaced the medium of exchange (which would almost surely crash the old medium of exchange), then that removes another plank from the economic structure that gives capitalists undue power.

See also http://cjyu.wordpress.com/article/demand-is-not-measured-in-units-of-gcybcajus7dp-4/

[Vilhelmo]

Mediums of exchange (whether paper currency or "precious" metals) only have value so long as the people of an economy conduct their trade in it. If the working people of a country stopped accepting any medium of exchange as payment, then that "money" would become as worthless as any other piece of paper or rock.

False.
Medium of exchange is a function of money not its definition.
Government money gains acceptance & value through the imposition of taxes payable solely in government money.
As long as government money is needed for taxes it will always have some value & acceptance.


Let's say the working people of America stopped accepting dollars as payment for any goods and services. Let's say they started using a new currency "rallods" instead. You might argue there would still be some conversion rate between dollars and rallods - in effect, it would just be like the introduction of a new currency in the foreign exchange market, and the value of the dollar wouldn't crash.

You left out the most important details.
Who is the issuer of "rallods"?
Why would working people decide to accept "rallods"?


However, if working people only kept their money in "rallods" and immediately converted any holdings of dollars they had into rallods, what would happen? The amount of dollars floating around the market would shoot up - a massive supply increase affecting the ratio of dollars to actual goods and services - leaving the dollar ever more worthless as more people start dumping dollars - with "value" now being held in "rallods".

Yes, if people dumped dollars for rallrods then the exchange rate would increase.
But, as such a situation arises only in fantasy land, I fail to see the point.


Of course, real value originates from what working people are willing to accept as payment.

Value depends on a nation's productive capacity.
Working people are willing to accept Government Money because of taxation payable solely in Government Money.


However, would you oppose seizing the means of production simply because it would crash the stock market?

No, I oppose it on the grounds that it requires a coherent alternative.

It's easy to know what to be against, much harder to know what to be for.


If you replaced the medium of exchange (which would almost surely crash the old medium of exchange), then that removes another plank from the economic structure that gives capitalists undue power.

Replaced it with what?
Why/how would this "removes another plank... that gives capitalists undue power"?
Who do you think should issue the nation's money other than the government?

[cyu]

Government money gains acceptance & value through the imposition of taxes payable solely in government money.
As long as government money is needed for taxes it will always have some value & acceptance.



Nope, same thing can be done, even if the government (or OPEC or any economic entity) continues to insist on collecting dollars. In other words, everybody dumps dollars for rallods, and only on the day they have to pay the government, they convert just enough rallods into dollars for the transaction.

The result? Basically the market continues to be flooded with dollars. So if the government (or OPEC or whatever) is still trying to collect $1000, what it is collecting is in fact worth a lot less than before the dumping started.



Who is the issuer of "rallods"?



Anarchists, of course, claim the right to issue money for everyone. Anybody that wants to issue money, they have the right to do so. Sure you may claim that just leads to chaos - but compared to the capitalist induced suffering in Greece right now, I'm sure even anarchists can get organized.

See also https://web.archive.org/web/20010417014827/http://infoshop.org/rants/yu1.html



Why/how would this "removes another plank... that gives capitalists undue power"?



See http://cjyu.wordpress.com/article/demand-is-not-measured-in-units-of-gcybcajus7dp-4/

[Vilhelmo]

Nope, same thing can be done, even if the government (or OPEC or any economic entity) continues to insist on collecting dollars. In other words, everybody dumps dollars for rallods, and only on the day they have to pay the government, they convert just enough rallods into dollars for the transaction.

How does this refute my comments regarding money & taxes?
It's not even an argument.


Anarchists, of course, claim the right to issue money for everyone.

Maybe some do but definitely not all.


Anybody that wants to issue money, they have the right to do so.

If rallods can be issued by anyone why would anyone accept them in payment for goods/services?
Why would anyone exchange goods/services for rallods when they can just create them?
It seems that rallrods are a liability of nobody & an asset of everybody.
The entire notion is patently absurd.

Even more, it belies a misunderstanding of the nature of money.
Money is a financial instrument, the financial asset of one entity (the holder) & the financial liability of another (the issuer).

Government Money is a state IOU that serves as the national Unit of Account.
It is a state IOU denominated in itself.

Anybody can attempt to issue their own currency (IOUs denominated their IOUs), the problem is getting anyone to accept it.

[cyu]

How does this refute my comments regarding money & taxes?
It's not even an argument. The point is that as the people actually holding the old currency drops, the value of the currency also drops. If nobody conducts their trade in it, then it is basically worthless, at least with respect to the rest of the world. When you're left with only the US government holding dollars, is that government actually rich?

It's like asking if only one person owned all the gold in the world, but nobody actually conducts any trade using gold - is that gold holder actually rich? Well, he might be if he could force others to give him gold - but then, it's not the gold that makes him rich, but rather the fact that he has the weapons to force people.



If rallods can be issued by anyone why would anyone accept them in payment for goods/services?

Again, see https://web.archive.org/web/20010417014827/http://infoshop.org/rants/yu1.html

[Vilhelmo]

The point is that as the people actually holding the old currency drops, the value of the currency also drops.

When individuals dump their dollars they may decrease their dollar holdings but the total number of dollars in existence remains unchanged.
Even if every US citizen dumped their dollars the total amount would still remain the same. It would simply decrease the dollars held by US Private Sector & increase those held by the Foreign Sector.

Public Sector + Private Sector + Foreign Sector = 0


If nobody conducts their trade in it, then it is basically worthless, at least with respect to the rest of the world. When you're left with only the US government holding dollars, is that government actually rich?

This has no effect on the amount of dollars in existence (held by the Private Sector & Foreign Sector).
It is only by Federal taxation that currency is destroyed (removed from the economy - the Private & Foreign Sectors).

As long as dollars are required for taxation they will always have some value/acceptance.

[cyu]

When individuals dump their dollars they may decrease their dollar holdings but the total number of dollars in existence remains unchanged.

It's the same as if people dump their stock. When stocks are dumped, their prices go down. You don't seriously believe that dumping stocks changes the number of shares in existence, do you?

There are, in fact, foreign policy implications if the value of the dollar crashes - or if the value of the currency of any imperialist power crashes. From http://everything2.com/user/gate/writeups/Strong+dollar+policy

A strong dollar means those with the most dollars (perhaps the US government or perhaps not) have a lot of purchasing power around the world, especially in those Third World countries. This allows them to buy up the natural resources to produce American weapons instead of local goods, for wealthy corporations to easily bribe any government official they want, to hire the media to push propaganda in any direction they choose, and to make high quality weapons available only to those backed by the wealthy.

[Vilhelmo]

It's the same as if people dump their stock. When stocks are dumped, their prices go down. You don't seriously believe that dumping stocks changes the number of shares in existence, do you?

No, of course not.
But I got that impressions from the following comment,

When you're left with only the US government holding dollars, is that government actually rich?
This seems to imply that dumping currency leaves the private & foreign sector's without dollars.


There are, in fact, foreign policy implications if the value of the dollar crashes - or if the value of the currency of any imperialist power crashes.

I concur.

[cyu]

This seems to imply that dumping currency leaves the private & foreign sector's without dollars.

Crashing the value of a currency is little different than crashing a company's stock (or crashing the value of a "precious" metal). It's not like the number of shares (or the amount of the "precious" metal) disappears - they become worthless instead.

[Vilhelmo]

It's not like the number of shares (or the amount of the "precious" metal) disappears - they become worthless instead. Then what else could you possibly have intended the following comment to mean?
When you're left with only the US government holding dollars, is that government actually rich? I apologize if I have mischaracterized your views.

[cyu]

what else could you possibly have intended the following comment to mean?
Like you yourself asked, what happens if some random guy issues money but nobody else wants to use it - how much is that money worth? The same is true of government (or a corporation). If it can force tax collection using the money it issues, it's not actually the money that has value, but rather their ability to force people to pay them.

If it just comes down to the ability to force people to pay up, then it is just becomes a matter of firepower (weapons) and influence (media control) - whether the working class has more power or whether plutocrats have more power.

[Vilhelmo]

If it can force tax collection using the money it issues, it's not actually the money that has value, but rather their ability to force people to pay them. No. All money is a financial instrument (asset/liability) All financial assets derive value because of a contractual claim, a corresponding liability. No liability, no asset.

[cyu]

All money is a financial instrument (asset/liability)


Sounds like a rather irrelevant point. What's more important is that if wealthy capitalists have taken over your currency structure, how would you invalidate their control? (Besides executing them, which I wouldn't support... and what if their printing presses or metal mines were overseas or on another planet, to which you have no access?)

[Vilhelmo]

What's more important is that if wealthy capitalists have taken over your currency structure, how would you invalidate their control?
I'm not sure what it means to take over a "currency structure".

[cyu]

Sounds to me like you're just trolling and not offering any real discussion.

Again, assuming employees armed themselves, any currency only has value if it's something working people are willing to accept as payment. Otherwise, you won't be getting what they're producing.

This is why if Wall Street takes over an economy, or if London financiers take over an economy, it starts to doom itself - since real goods are being produced overseas - if the real producers ever refuse to accept the "financial instruments" coming out of those finance computers, those finance geeks are just going to starve.

[Vilhelmo]

Sounds to me like you're just trolling and not offering any real discussion. Would you rather I lied?
This is why if Wall Street takes over an economy I agree, Finance has taken over the economy. They are returning us to a neo-Feudal economy based on extraction. At least Capitalism was supposed to be productive. But this is NOT a problem of government money or monetary systems. It is a problem of bad policy & propaganda.

[Vilhelmo]

Sounds to me like you're just trolling and not offering any real discussion.
I have taken more time than it deserves to explain why your proposal would not work & why everyone cannot issue the same currency. I have been completely sincerely & honest in all my comments.

[ckaihatsu]

I agree, Finance has taken over the economy. They are returning us to a neo-Feudal economy based on extraction.


This is ridiculous -- neither extraction, nor finance, is anywhere *near* being a recent development:





Primitive accumulation of capital




In Marxist economics and preceding theories,[1] the problem of primitive accumulation (also called previous accumulation, original accumulation) of capital concerns the origin of capital, and therefore of how class distinctions between possessors and non-possessors came to be.




David Harvey summarized Karl Marx's description of it: primitive accumulation "entailed taking land, say, enclosing it, and expelling a resident population to create a landless proletariat, and then releasing the land into the privatized mainstream of capital accumulation".[4]




[A]ccording to Marx, before there could be money with which to make more, i.e. capital, an original accumulation must take place. This might take the form of resource extraction, conquest and plunder, and/or enslavement.

As Marx writes:

"The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the indigenous population of that continent, the beginnings of the conquest and plunder of India, and the conversion of Africa into a preserve for the commercial hunting of black-skins, are all things which characterize the dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation."[8]

In a case history of England, Marx looks at how the serfs became free peasant proprietors and small farmers, who were, over time, forcibly expropriated and driven off the land, forming a property-less proletariat.

He also shows how more and more legislation is enacted by the state to control and regiment this new class of wage workers. In the meantime, the remaining farmers became capitalists, operating more and more on a commercial basis.




http://en.wikipedia.org/wiki/Primitive_accumulation_of_capital


---





At least Capitalism was supposed to be productive. But this is NOT a problem of government money or monetary systems. It is a problem of bad policy & propaganda.


This is *also* ridiculous -- as if it's simply that the major capitalists are just doing a poor job at what they do.

The mere *existence* of markets implies that *no one* is 'at the wheel', and also that the 'invisible hand' is an *emergent* property that is not -- and *cannot* be -- controlled by *anyone*.





While the [late '90s] global financial crisis has come as a considerable shock to the bourgeoisie and its representatives, it arises out of tendencies of development that have been at the centre of the analysis made by the International Committee of the Fourth International over the past decade.

In our perspectives resolution of 1988, we pointed to the profound significance of the globalisation of production:

"The fall in the rate of profit in the 1970s and the general economic stagnation provided the impulse for an explosive growth in the activity of transnational corporations. The result has been an unprecedented integration of the world market and internationalization of production. The absolute and active predominance of the world economy over all national economies, including that of the United States, is a basic fact of modern life. Advances in technology associated with the invention and perfection of the integrated circuit have produced revolutionary changes in communications which, in turn, have accelerated the process of global economic integration. But these economic and technological developments, far from opening up new historical vistas for capitalism, have raised the fundamental contradiction between world economy and the capitalist nation-state system, and between social production and private ownership, to an unprecedented level of intensity."[1]

Our resolution also dealt with the rise of the so-called "tiger economies", which were being cited as definitive proof of the viability of capitalism. It drew attention to the profound contradictions at the heart of their rapid growth.

"The capitalist economies of the Asia Pacific," we wrote, "are based on ... brutal exploitation of the working class. The native bourgeoisie defend the 'export strategy' preferred by the International Monetary Fund with military-police dictatorships, rooted in state systems which preserve semi-feudal vestiges that have never been swept away by genuine democratic revolutions. While functioning as reservoirs of superexploited labour for the transnational corporations, the economies of all these so-called mini-Japans are desperately vulnerable to world trade patterns."[2]

The events of the past few weeks and months certainly provide a powerful vindication of the scientific method of Marxism, as opposed to the pragmatic and ahistorical approach of the bourgeois economists and pundits.




http://www.wsws.org/en/articles/1998/01/glob-j04.html

[Criminalize Heterosexuality]

Would you rather I lied? I agree, Finance has taken over the economy. They are returning us to a neo-Feudal economy based on extraction. At least Capitalism was supposed to be productive. But this is NOT a problem of government money or monetary systems. It is a problem of bad policy & propaganda.

Good productive capital and evil finance capital. I wonder where I've heard that dichotomy before. Hint: it involved associating a particular race with evil finance capital and supporting good productive capital of the dominant nationality against workers.

[Vilhelmo]

This is ridiculous -- neither extraction, nor finance, is anywhere *near* being a recent development: I did NOT claim that they were.
This is *also* ridiculous -- as if it's simply that the major capitalists are just doing a poor job at what they do. I did not realize that this was at all controversial. It implies nothing of the sort.
The mere *existence* of markets implies that *no one* is 'at the wheel', and also that the 'invisible hand' is an *emergent* property that is not -- and *cannot* be -- controlled by *anyone*. I'm not sure what you're saying. All economies since the Neolithic are planned. The only question is by whom.

[ckaihatsu]

[I] agree, Finance has taken over the economy. They are returning us to a neo-Feudal economy based on extraction.





[N]either extraction, nor finance, is anywhere *near* being a recent development:





I did NOT claim that they were.


You said that [1] 'Finance' has taken over the economy and is 'returning us', [2] to a 'neo-Feudal economy'.

'Returning us' indicates that a certain set of conditions existed in the *past* -- conditions (feudal-like) that no longer exist in the present, but which may be re-introduced at some point in the *future* (neo-feudal).

So, for the *present*, it's that [1] finance didn't *used to* have economic hegemony over the economy *in the past*, but now it *has* taken over the economy, according to your words.

So that means, *yes*, you *did* indicate that finance *has* not-always dominated the economy, but now, *more recently*, it 'has taken over the economy'.

I mean to point out that *both* extraction (of natural resources, and indigenous labor) *and* finance, have historically existed since the beginning -- since the commodification of all goods, resources, labor, and materials.


---





At least Capitalism was supposed to be productive. But this is NOT a problem of government money or monetary systems. It is a problem of bad policy & propaganda.





[A]s if it's simply that the major capitalists are just doing a poor job at what they do.





I did not realize that this was at all controversial.


So are you implicitly agreeing with the statement that 'The major capitalists are just doing a poor job at what they do' -- ?





It implies nothing of the sort.


Please clarify this.


---





The mere *existence* of markets implies that *no one* is 'at the wheel', and also that the 'invisible hand' is an *emergent* property that is not -- and *cannot* be -- controlled by *anyone*.





I'm not sure what you're saying. All economies since the Neolithic are planned. The only question is by whom.


Okay, sure -- we have to acknowledge the attribute / quality / aspect of *scale*, then, since, sure, everyone makes plans over the collection of things that they may have (some) control over, but -- in the *broadest* scopes of things *nothing* is planned, since contingencies are either addressed as-they-happen (an *un*-planned, ad hoc, 'emergent' basis), or else the bourgeois nation-state is looked-to for some kind of bailout and/or resolution for the owners involved.

Again, the markets are *not* planned -- are not under anyone's direct control, or will.

[Vilhelmo]

Sounds like a rather irrelevant point.

It was the point of the article at the source of this thread.

[Prof. Oblivion]

Good productive capital and evil finance capital. I wonder where I've heard that dichotomy before. Hint: it involved associating a particular race with evil finance capital and supporting good productive capital of the dominant nationality against workers.

This doesn't make any sense.