Riots in Greece protesting cuts in government spending. As you know, budget reform was one of the conditions of the IMF led bailout of the free-spending idiots who ran the government (Mr. Papandreou).
When the inevitable hits us, will recipients of government largess take to the streets to protect their entitlements? This is the problem when you have voters with embedded entitlements.
Hat tip John Rolls
[...] This post was mentioned on Twitter by Peter Jalkotzy, Niecie Draper. Niecie Draper said: Entitlement Recipients Riot In Greece: Riots in Greece protesting cuts in government spending. As you know, budg… http://bit.ly/dGEWzz [...]
To all who say that capitalists don’t have a heart, I have two things to say:
1) when you run out of other people’s money, it always ends like this
2) this rips away the veneer of civilization and shows the game for the armed robbery it is: your money or your life
“This is the problem when you have voters with embedded entitlements.”
Boy, that Democracy thing sure is a problem. I guess only Property Owners should have Voting rights.
RE
RE: I can’t believe you really believe in that false alternative.
Yes, democracy is a real problem. That’s why the Founders established the USA as a Constitutional Republic. While representatives are elected by a majority, the document that granted government its powers took your life, liberty, and property off the table. They are not subject to a majority vote, but are yours as a matter of Right and not merely the sufferance of the majority.
Your elected representatives in Congress are better than the Voting Public? Instead of the voting public depriving you of your rights, your elected representavies do it. How does this change the outcome?
RE
RE: what is the point of coming here and reading this blog? I am assuming your time is not infinite but it is obvious the topics discussed are diametrically opposed to the narrative you have bought into (fair enough, but you might not get as frustrated over on huffpo and certainly they all have the same level of economic understanding). so, either you are here to build a better understanding of an opposing viewpoint (which can’t seem to be the case since all you do is fire off empty rhetoric with little discussion) or you are simply a troll. really, what is the point?
The point would be to not allow a constant stream of Capitalist propaganda to be voiced without opposition.
RE
so a troll it is….could you at least bone up on some economic theory so the rest of us that are well versed don’t have to sort through your ramblings to get to actual meat on this board?
What economic theory would that be? Austrian School Mumbo Jumbo? The stuff they teach to Ph.D Economics students at Princeton so they can claim they know something? In the physics department at Columbia, we just made fun of these jackasses, what they call “theory” is mumbo jumbo a Watusi Medicine Man could improve on.
RE
thank god for the national guard. ha ha ha if you keep pushing the public’s buttons to make them think that anarchy is an alternative to the federal government, you will be sorry because i understand your school’s ideology. i think it will backfire if and when you get your laissez faire monopolistic money making machine going. all these avid excuse me for saying this please “tea partier’s” will want to know why you are getting all the money now and will actually want another T Roosevelt to walk softly and carry a big stick. please try to see these issues from other lenses than the ones you usually use. it would be to your extreme benefit. i understand you worked hard for your money i understand the problem that started with dare i say it stockman’s idea of the trillion dollar deficit. i don’t want anyone to lose what they have. please without saying every poor person will have to go under ground do you have a viable option. tax cuts will only buy time not an answer. bearster please don’t get mad. I am seriously concerned and i don’t even think it’s important to bandy terms like democratic government and a republic. this is a global crisis and each country will respond according to their governments defenses and weaknesses
Rev:
What you don’t understand could fill a 1 terabyte hard drive. Here’s the problem: I know your secret. You like to lob grenades without taking responsibility for the consequences of what you say. You get satisfaction from that. My challenge to you: back up your assertions with cogent argument supported by fact and a theory based on reason. We disagree but for the most part I try to back up what I say. Can you do the same? Otherwise you are just pissing into the wind.
I’ll be happy to oblige :-) You probably won’t find the style to your liking, but if you want a calmer version of a similar viewpoint you could just read Stoneleigh at Automatic Earth. I write in a Gonzo style, so you have to be a fan of the Hunter Thompson style to grasp the arguments. Here’s a little polemic recently published on the PMs question.
Despite the fact PMs are bouncing around quite a bit lately the highly vocal
Sound Money crowd who hope to replace Fiat with Metal continue to beat the Gold
Money Drum, as they will right up until the day all the Fiat goes up in Flames.
If they haven’t managed to get it going before fiat collapses, they’ll hope that
having a pile of Gold in the basement safe will enable purchase of any new paper
or digital money issued later. What I would like to examine here are the
practical problems involved in trying to use Gold and Silver as the exchange
medium again once the dollar collapses.
Now first off, who makes up the constituency of people who would like to see
Gold and Silver as Money? Well duh, it is of course the people who HAVE some
Gold and Silver in the basement safe. If these metals are used as money again
and these folks are allowed to KEEP the piles they have accumulated, isn’t life
just GRAND for them? They get to start up in the reboot LOADED, while everyone
who does not have a pile of metal in the basement starts out BROKE.
Now answer this question: What fraction of people here in the FSofA do you
think currently has any decent size pile of gold/silver in the basement safe?
Let us call a “decent amount” say 20 Gold Eagles and 100lbs of Silver Bars. Is
it 1:10, 1:100, 1:1000, 1:10000, 1:100000 or 1:1000000 people? I would guess
the fraction to be one of last 3 choices there, but let us be very generous and
assume 1:100 people has some decent amount of possessible “precious metals”.
Now let us take a random sample of 100 people and ask them to Vote on what we
should use for money. Certainly the 1 who has some Gold will Vote for it, but
how many of the other 99 people would? Why would you vote for using Gold as
money if you have none? If I was in the room voting, I would say “OK, if you
want to use Gold as money, lets distribute out the Gold we have here and then
start using it.” Raised as they are under English Common Law and the concepts
of Private Property the reply from the other 98 people in the room would be “Oh
no, we can’t do that, it would be `theft’ from the Pigman with the Gold coins!”
(unless he is a real smart Pigman and volunteers to give it away, or at least
lend it out at Zero Interest). Iconoclast Tribalist that I am, I then reply,
“Well, I wouldn’t want to steal it, so I won’t vote for using it as money. Let
Lloyd Blankfein keep it and make a Big Paperweight out of it in the shape of a
Golden Calf. He can use it to decorate his front lawn in place of the Pink
Flamingos. Now let’s decide on what the REST of us will use for money.” LOL.
This is obviously reducto ad absurdum of a much more complex problem, but in
reality, people who have no Gold aren’t going to “vote” for using it, since it
is utterly unavailable to them to use in the first place! Once somebody starts
PAYING people in Gold perhaps they would use it, but exactly how many people
would the folks who have some gold be able to pay out here to do some work for
them and be Productive?
Well in theory, they can pay an infinite number of people if they break up the
pile into small enough chunks. “Here is your Day’s Wages J6P, 1 Picogram of
Gold!”, which the Paymaster picks up with some Tweezers using a Microscope and
drops in your Pay Envelope. LOL. That is of course another reducto ad absurdum
argument, and the general response to this I have been given by most Gold Bugs
is that you use “Digital Gold” instead of moving around picograms with tweezers,
which then in theory is tied to some absolute supply of Gold somewhere which
they also claim is not going to be Centralized. Rooster over on Raging Debate
used to make this argument all the time. It is “infinitely divisible” by
digitizing it, which makes it infinitely available to do commerce with,
regardless of a fixed supply of the absolute quantity. If you cannot see the
flaw in that argument, you are hopelessly stupid and/or hopelessly attached to
the idea that even the TINIEST quantities of Gold could hold value for J6P.
At the point you cannot make a Gold Coin that is at least big enough to pick up
with your fingers, the whole concept of valuing gold as money is thoroughly
worthless. Call that number maybe a 1/8 oz coin., I cannot see how you could
actually transact with a smaller amount of metal than that. Reminds me a bit of
Cocaine transactions in my college dormitory, where Gram weights were weighed
out and my fellow Ivy Leaguers would drop $100 for a Gram of Coke measured on a
pocket Gram Scale Balance with an error margin of +-.1grams. In any given
transaction, just on the error of the scale by itself you could lose 10%. Then
given the fact the dealer could stuff in another 10% of lactose (milk sugar) the
value of cocaine you could get for the $100 of fiat was again reduced. Imagine
everybody having to weigh out the coins they do their transactions with, and
checking for purity. THAT is metal transaction, and its ridiculously
inefficient as a means to do commerce, which is why it did not last. Frankly
cocaine is EASIER than metals to determine quality and composition. If we ever
did go back to using Metals, EVERYBODY would be melting them down and alloying
with cheaper metals. Counterfeiting would be rampant. Not to say this won’t
occur, but it sure would slow down the velocity of commerce.
Well anyhow, fool me once, fool me twice and all that stuff, but WTF in their
right mind is going to believe those Gold Digibits exist anywhere if they can’t
get the real thing? If you want to pay me in Gold fine, but I am not going to
take a Gold Digibit registered in a database accessed with a Plastic Card and
Password as Gold. Please hand over a Picogram to me NOW! And then another and
another, and all the people working ask for the real thing and POOF, there is no
more Gold left in the safe because everybody wants REAL gold, not digibits. Not
to mention the fact that not even Chinese Slaves will take a Picogram of Gold
and consider that to be worth a day’s wages.
Anyhow, this problem is an old one already, and it got resolved back in 1692
when the Illuminati had most of the Gold already centralized and the brilliant
mind of Sir Isaac Newton applied it to the problem of Money as Master of the
Mint in Jolly Old England. His Illuminati Compadres locked up most of the Gold
in Vaults in Switzerland and in the City of London and in the basement of the NY
Federal Reserve Bank a few years down the line, and when Nation State size
economies or the Illuminati with accounts just as large would resolve their
trade deficits/surpluses, a bunch of Gold Jockeys down in the basement safe of
the NY Fed would move a ton of Gold from one pile belonging to one country over
to another pile belonging to some Illuminati Pigman, thus saving the cost of
transporting a ton of gold across the high seas and the loss coming from ships
being hijacked or lost in storms. Why do all that transportation of metal when
you can much more easily move numbers from one side of a Balance Sheet to
another and accomplish the same task? The physical act of moving one pile of
Gold over to another pile of Gold in the basement safe of the NY Fed was merely
a mirror of the same act occurring on the Balance Sheet at the BIS, where the
REAL wealth was being manipulated, by the NUMBERS.
The bulk of all Gold ever mined up became centralized over time in this way and
went OUT of circulation, plopping itself down in some very large piles held by
Sovereign Wealth funds and nearly invisible Illuminati. If you did chop it up
and decentralize it, it first off would recentralize again for the same reasons
it did the first time, and second of all those who control those big piles are
NOT going to chop them up and hand them out as Coins to J6P to pay for a day’s
labor. It is a totally impractical idea to start paying people with chunks of
metal and expect we will have any kind of global commerce going on, frankly even
the level of commerce we do inside a State-sized geographic area wouldn’t work
this way anymore, not with the number of people who inhabit those areas now
anyhow.
When the original 13 Colonies were formed, there was some Gold and Silver
circulating, but not all that much and so these folks began using their own
Bills and accounting system to do commerce. Then the Crown over in England made
it law that you could only pay your Taxes with Gold or Silver, which gradually
pulled out of circulation whatever there was of these metals circulating at the
time in the Colonies. If you cannot make your own Bills Legal Tender and you
have no Gold or Silver, WTF do you USE for money? This is just a little
deflationary, no? You can see why our Founding Fathers who had been raised to
use money for commerce, who were themselves Property “Owners” got just a little
irritated here and revolted. LOL.
Even Gold Bugs like Antal Fekete don’t think we can actually use metals as
currency by themselves, he thinks they could coexist with Real Bills, a Fiat
type of system of course. I will also bet that as our current Fiat system goes
into the crapper, there will be attempts made to do all sorts of things, like
creating Gold Digibit Cards and LETS systems to keep the money driven commerce
paradigm continuing onward here. However, they will not WORK, not with the
population we have on the planet now and not when immersed in a civilization
being ever more starved of the lifeblood it depends on, OIL.
Death of this Fiat system will for the most part result in Anarchy The
Illuminati who hold MOST of the strings of Power will try to organize up another
Bretton Woods Meeting and now that Cap & Trade hasn’t gained much traction,
perhaps try to establish some Global Currency system once again based on Metals,
but mixed with other Commodities they control through the Conduits. The problem
here is that Have Not Nation-States aren’t a whole lot different than Have Not
J6P who has no Gold in the Basement Safe. Why would they agree to participate
in a monetary system where they got NOTHING? Just like after WWII, they will
have to be FORCED into using whatever money the Illuminati decide on at the
Point of a Gun. This is why Capitalism has always been run at the Point of a
Gun and was never a decentralized system in any era. It has ALWAYS been a force
fed system of the Haves upon the Have Nots using military force, going back to
the Medici and their alliance with the Mongol Horde of Ghenghis Khan, the
British East India company on top of India, the FSofA Calvalry on top of the
Mexicans in the Sapnish American War, I could go on and on here, but you would
be better served reading the original material General Smedley Butler wrote. I
defy ANYONE here to show otherwise. I await the day any Capitalist Pigman on
this board actually TAKES ME ON arguing the history I present (granted, I do
some WICKED spinning of history, but what historian doesn’t? LOL.), rather than
doing ad hom trashing and purposeful misdirection as a response. It will never
happen of course, but it would be nice to have a real argument on the merits of
the case for a change.
So, we roll right back around here to the War Solution, which should tell you
that there is simply no way that any kind of monetary regime is going to be
instituted by anyone without a major War being fought here. Then comes the
question of whether in the aftermath of such a war, there will be One Winner as
strong as the FSofA was at the end of WWII to force through an agreement like
Bretton Woods? It is unlikely under any scenario that you get one winner like
that at the end of WWIII. So you can pretty much forget about the possibility
of a Global Currency working for any great length of time here.
Meanwhile, for the near term future, we look to be immersed in a period of
extreme Volatility where various parts of the current economic system keep
dropping into Failure Mode and the Illuminati run around like Headless Chickens
trying to prop the system up and use it to sieve off the last remaining wealth
they can from it that they do not already control in some way. I can’t see that
letting EITHER the Dollar or the Euro experience a complete collapse in the
short term serves that purpose. Rather it seems more likely that one currency
will be played against the other for as long as possible, with money sloshing
back and forth between the various players here, one week one currency getting
hit hard, the next week another one getting hit. Besides the Dollar and the
Euro, certainly money will slosh as well over to Swiss Francs or Japanese Yen or
Chinese Yuan as well. For most of us Plebes, you negotiate this period of
Volatility not by shoveling vast quantities of your money from one currency to
another as the Big Boys do, but by having a “Buffer” of food preps and fuel
preps.
Here is how this works. Most of you who read my rants know I have about 2 years
worth of Preps for food. For Fuel (as in Gas for the Mazda & the Bugout
Machine), much less, only around 2 months worth at “full driving”. However,
here is what happens each time there is a price spike in either food or fuel in
RE’s little world. When Gas goes UP in price, I drive far less. I ride the bike
to work or I carpool with friends. Instead of cruising the Grocery stores every
day, I go every other day, a 50% reduction which withstands up to a doubling in
price. My fuel usage is extremely elastic. I can go from using a lot to very
little without too much discomfort.
For food, it has not yet occurred that EVERYTHING goes up in price at the same
time. There is always a SALE on some type of industrialized food product. I
just always buy whatever is overstocked and on sale. If it DID occur that
EVERYTHING went up in price simultaneously, I would cut back on my purchases and
use some of my preps to make up the difference in nutrition content. All that
happens every time Commodity speculators raise the food prices is I buy less of
them. They cannot keep raising the prices indefinitely because this simply
causes people to buy less of the products. This is the “margin compression
issue KD has been focusing on over on Ticker.
Remember, MOST Americans, even poor ones are for the most part overfed and can
substitute cheaper products into their diet. So in the FSofA, food remains an
ELASTIC commodity. Not true in impoverished countries of course where they are
already living on minimal amounts of the cheapest food available, but very true
here where the biggest profit margins are for selling premium food. If premium
food producers want to keep their products on the shelves, they have to cut
their margins, not raise prices. KD illustrated this problem recently with
respect to Krafft and Dean Foods, and again with Campbells Soup. The result of
this right now is not Hyperinflation, its Price Cutting in many premium foods
that once had a large profit margin. To keep market share, these producers are
cutting their prices by shaving their margins on premium foods. So they go On
Sale. So while raw bags of Rice go UP in price, Calorie Laden Frozen Foods from
Stouffers go DOWN in price. What do I buy during such a period? Obviously, I
buy the stuff that drops in price.
Over a period of a few months with high prices, because of the way the
industrial food apparatus works, Inventories increase in the inputs of raw foods
because people aren’t buying the processed ones as fast as the raw food is
produced. When the inventory increases enough, the price on the Comex for the
raw foods will crash again. This is just like what happens with Oil as it
spikes up and down. Only once enough producers and distributors of food go
under as a result of this kind of volatility will there not be affordable foods
on the shelves. Runaway Hyperinflation is still a ways off, since there is no
indication whatsoever that J6P will have more purchasing power in the near
future. Prices probably will work on an upward trajectory overall, but you will
have a volatile market with price spikes followed by crashes. Speculators can
raise the prices using Funny Money Helicopter Ben prints, but a couple of
months down the line if they hold that or take delivery, they’ll be stuck with a
warehouse of food they cannot sell. This is a classic Liquidity Trap/Asset
Class Sinkhole.
Anyhow, what this results in is a kind of topsy turvy version of “the market can
remain irrational longer than you can remain solvent”. In this case, J6P RE can
remain solvent longer than Krafft Foods can. All it takes for Krafft to be
forced into selling at a loss is a few weeks or at most months dealing with a
price spike. If they price upward to match their input costs, they will lose
market share. So they don’t price up past a certain point, what they do instead
is to cut their margins to keep selling the food product. You don’t have to
believe me, Denninger will show you the graphs.
This clearly cannot persist in perpetuity, so the paradigm has to change.
Demand for the inputs will drop as inventories rise, and at some point the
market will correct. The only way you would get runaway hyperinflation is if
somehow people kept paying the ever higher prices being paid by speculators
loaded with hot money from Helicopter Ben. J6P cannot do that, he is already
tapped out. J6P isn’t part of the money pipeline from Helicopter Ben, but he IS
the end consumer of all the products. If the end consumer does not have ever
increasing quantities of money, a hyperinflationary spiral cannot occur.
Just as $147/bl Oil had a few months run before crashing, high food commodity
prices have about the same window before they also will come back to earth.
Nothing Helicopter Ben can do will change this, only CONgress could change it by
somehow shoveling money out the door to J6P. This may happen when J6P shows up
with the pitchforks, but until then no Free Money will be handed out to him, or
a least it will only be doled out in a trickle through SNAP Cards keeping him
fed. Right now, the only people holding a Gun to the head of our Elected
Representatives are the BANKSTERS, who promise Mad Max if they don’t get Bailed
Out, so they can keep running those great parties in the Hamptons stuffing the
noses of Ford Models full of Coke and their other orifices full with Bankster
Tube Steak. Only when/IF J6P gets off his Fat Ass and threatens his OWN version
of Mad Max will he be on equal footing with the Banksters. Here in the FSofA,
this appears to be a ways off still, but across the Pond in Europe and Jolly Old
England, this game is already afoot. One suspects here in the FSofA it will NOT
be Fat Assed Aging White Tea Partiers who will cause the Mayhem necessary, but
rather the FSA and the fairly large and well armed bunch of Gang Bangers and
assorted imported Drug Traffickers from South of the Border. LOL.
Would using metals as currency fix any of the problems listed above? No,
because even under a gold based system you still end up with the problem of
hoarders and speculators who will bet on the value of money and commodities and
occasionally call in markers and pull all the money out of circulation,
bankrupting everybody. This is how it was always done from the time of the
Medici onward (and probably back in Babylon also), so why anyone thinks it would
be different now is beyond me. As Einstein said, the definition of stupidity is
doing the same thing over and over again and expecting a different result.
There is no more protection from predatory financial practices using a metals
based economy than a fiat one. It might function to keep runaway Goobermin
Spending in check, if you could somehow avoid having Da Goobermint corrupted by
Banksters who have a lot of Gold loaning it out to them, but there isn’t a
Goobermint in all of recorded History that hasn’t fallen into this trap,
regardless of its ideological persuasion. Communist and Socialist Goobermints
fall into the same trap just as Democracies and Republics do.
So, what do we have to look forward to as the Collapse progresses here, and more
Dominoes fall? About everyone here considers the current levels of debt held
throughout the world to be unsustainable. Also about nobody here thinks that
printing more Fiat will solve anything, just probably make the crash even worse
when it finally does occur. The only real disagreements revolve around exactly
how long it will take and how some new system might evolve to replace this one.
Some folks believe our Illuminati Masters have this ALL figured out already and
will sit tight in their bunkers while the Big Shitties go up in flames, ready to
establish a New Feudalism once this system goes the way of the Dinosaur. Others
believe they will be able to take the Gold in their Basement Safes and negotiate
the spin down using their Maple Leafs to transact Bizness when the Fiat goes
worthless. Some others figure they can sit tight also on their remote Doomstead
Permaculture Farms, growing Veggies and Chickens Peacefully, occasionally
picking off the raiding Zombies with their vast Armories of Guns and Ammo.
NEWZFLASH! When this system does collapse, as it must, nobody is gonna be far
enough out to ride the storm out in complete peace. Just the outcomes will be
somewhat different in different locations, but ALL will be affected
significantly. As far as what sort of Monetary sytem will drop down to replace
the failing Dollar, that also will depend on exactly where you are, and how Da
Goobermint in your neighborhood reorganizes. Unless your neighborhood is
absolutely SWIMMING in precious metals, my best guess is that they will not be
used as money. However, if you have enough and are otherwise well prepped,
taking your excess and buying metals with it might have some benefits, so I
don’t advise against burying some Yellow Metal for the Future. In the shorter
term, make Connections inside your community, and develop a PLAN for local
sustainability. Stay away from highly populated Big Shitties and have at least
6mo worth of Food Preps to buffer against price spikes. Have Cash available and
be ready to divest yourself of it into hard goods if/when things get really ugly
in your neighborhood.
If/when the society reboots, whether under the control of the Illuminati or your
own Local Goobermint, if there is some Peace in the society, all the traditional
forms of Work will become available to do again. Farmers, Fishermen,
Toolmakers, Protectors, Teachers, Prostitutes, Leaders, Medicine Men and Holy
Men will all still be in Demand. If you can do more than one of those jobs, you
should be OK. The one traditional Job I would NOT recommend would be Banking or
Financing. Just a Hunch, but I suspect folks trying to use their supplies of
Gold in the Basement safe and Loaning Money at interest won’t be very well
liked, so unless you like a Tar & Feather overcoat, this is not a good choice
for the future.
The Clock is Ticking here. The Collapse has been Extended and Pretended for a
long time here already, starting at least as far back as Nixon closing the Gold
Window, but really further back than that. The half-life of the Can Kicks gets
shorter all the time here. What we have going cannot last in perpetutity, there
will be a Tipping Point. When it comes, as it inevitably must, be as ready as
you can be and then “GET READY LITTLE LADY, HELL IS COMING TO BREAKFAST.”
RE
See my response in the Death and Taxes article comments.
Oh wow, another precious metals/money system thread. What fun.
@Jeff Harding: There is no one on earth, nor will there ever be, whose ignorance would not fill terabytes of disk space. Ignorance is a necessary permanence for many wonderful reasons, chief of which is probably that change is the only constant.
@Marco: economic theory is a joke, tottering precariously atop a rotting heap of untested assumptions like perfect knowledge, equilibrium and homo economicus, which do not bear even the slightest scrutiny. The only economics PhDs and professors I respect are those who acknowledge this. And they exist by the way. One quote from way back:
“Juanita Kreps, outgoing Secretary of Commerce in 1979, said flatly she found it impossible to go back to her old job as professor of economics at Duke University, because ‘I would not know what to teach.’” From “The Turning Point” by Fritjof Capra.
More recently (2010):
“Sadly, the economic sciences have often been exposed as mathematically faulty, and therefore as unscientific and a pure propaganda tool of the financial elite, by, among others, Nobel Prize winner George Stigler 50 years ago.” [My translation.] Franz Hoermann, Professor of Economics at the University of Economics in Vienna (an Austrian no less).
But it seems here that money itself is being debated, particularly its defining qualities and its effects upon society, and how that relates to capitalism. Fascinating subject, one studiously ignored by mainstream economics.
Store of value: Nothing can store value in isolation, especially not by virtue of its permanent shine and durability. Value and wealth are complexes of environmental and societal interrelationships, like soil fertility, farming knowledge, organizational ability, language, social cohesion, air quality, water cleanliness and quantity, and so on. No single thing can ‘store’ value; value is an emergent property like beauty, not intrinsic. To suggest any one thing can ‘store’ value is to lie or be ignorant of how value and wealth are perceived and generated. Money is no exception. Money derives its value from the viability of the environment and society’s ability to deploy money wisely as an enabler of economic activity.
Unit of account/measure of value: Inflation and deflation anyone? We’re not measuring length and weight here, we’re measuring value. Value lies in the eye of the beholder. Quick story: A woman had to sell her Bechstein grand piano for health reasons. She had it valued by an expert who told her €14,000. She sold it for €4,000 to a musician who loved it in the way she did (she had offers of €14,000). That love was more valuable to her than the ‘value’ denoted by the unit of account we call money. I’m not saying that a unit of account is impossible, only that it can never be scientific, like millimeters or grams. Also, the price of air is zero because it is easily accessible and in infinite supply. Yet don’t we all value air very highly? Isn’t there a deep flaw in here?
Medium of exchange: Cool, while you need it. Here one has to say that paper or digital money is the best for its convenience, while commodities are inconvenient. If you digitize a metal, it becomes fiat anyway, which kind of defeats the purpose. Actually, all money must be fiat by definition, since there must be consensus on what money is, whether from ‘on high as decree’ of from the ‘collective’ democratically. Either way it’s a decision.
At its simplest money is a mechanism for distributing scarce goods and services via price, where “scarce” is the key word. Important then is how to get money to people so that they can buy stuff for sale, which is where labour comes in. That is, money has to flow from economic corner to economic corner. There are many problems with this scarcity-based system which I don’t have time to go into, but the principal one is hoarding, an obvious impediment to flow. Money has the systemic problem of relying on scarcity for its continued usefulness. It therefore engenders, in my view, an excessively competitive dynamic where reward is riches, which can be hoarded, and punishment is poverty, which becomes terribly hard to escape. In short, money necessitates deep societal divisions, and if such are escaped within a nation for a period, this certainly not happen across the planet.
The problem is, humans are not in a jungle any more. We are not tigers, bears, mice or parrots, we are homo sapiens sapiens. We create dynasties, Written Laws, institutions, etc. Divisions become entrenched, the ‘victors’ consolidate their position because being poor is necessarily horrible, and things get stuck until collapse occurs. That’s been the pattern over the millennia. I would say the chief reason is crap money-design and over-focus on money as store of value/wealth and sign of success. And please don’t say human nature and greed. That’s a bunch of crap.
This isn’t about capitalism/socialism — that’s a false dichotomy and detracts from the deeper problem — the problem here is money and the High Priesthood of Economics working so hard to keep it jargon-rich and unnecessarily confusing. As long as We The People (Sheeple really) allow ourselves to be divided and thus conquered along left-right lines, we only continue to ensure our own enslavement and the continued destruction of the true wealth — ecosystems and societies — upon which we all totally depend. For me the way forward is a deep revolution, one in which we redefine wealth and redesign money for a sustainable way of living right across the planet. Silvio Gesell’s negative interest (or rotting) money is an important plank in this area, but there is much else that needs to be done. The ructions in Greece are just the start.
Perhaps the biggest logical disconnect encountered currently in the minds of supposedly rational thinkers, is that although gold has proved to be a reliable “store of value” in times of surplus; in times of scarcity and economic contraction gold is nothing more than a shiny yellow metal paper weight.
Anyway, Gold would be confiscated by Governments prior to ever being used as a monetary medium. What’s the point of hoarding it?
What’s up Jeff? Cat got your tongue? LOL. Hopefully you are now aware your first assumption of my “secret” that I just lob grenades without a regard for consequences was hopelessly ill advised. I am quite aware of the consequences, I’ve been writing on the subject of economics for quite some time and almost invariably I get Capitalistas who troll my threads doing precisely what I did here to bait you. You took the bait, so now you get the opportunity to put your concepts to the test. I hope you don’t mind that I invited in leftrightleft to join in the debate with us :-) This board is slightly weighted with the opposing viewpoint so I evened up the odds a bit.
Anyhow, we look forward to your response. Remember, if you make a wrong assumption, you have to pay the consequences for that, and often most everything after the wrong assumption you made to begin with is wrong as a result. This is a fundamental problem of most economic theories as well as making assumptions about anyone’s level of ignorance.
RE
Rev:
I’ll respond. Busy now.
This reads like a bad conspiracy thriller. Thankfully, RE understands nothing of search engine optimization. Its input here will effectively raise your readership and help draw attention to the value of capitalism and Austrian theory.
All the while, her/his/its endless diatribes will go unnoticed by the bulk of readers. Google will find them with its spiders and show even more content is being published, and they weigh user generated content highly. Making your site rank higher for all terms of relevancy. The process can take time, but I have no doubt in RE’s desire to hear her/his/itself. Unfortunately for RE, the readership data does not support extended nonsensical comments. Short meaningful ones go a long way (yay Bearster).
Also, Columbia Physics dept? It has always been my opinion that these people are more interested in proving something than doing something.
Was there a meaningful contribution made here I missed?
RE
Dear RE :
This reply is in response to your very long comment in the Greek riots article.
I obviously misjudged you and underestimated your genius. Sucker me for having fallen into your brilliantly evil plans. First, let me say that I have no idea WTF you are talking about. If gonzo journalism means rambling random thoughts not supported by reason or logic, then in that sense I “get it.” I never liked Hunter Thompson anyway.
The challenge I offered you was to back up your comments with reason in a coherent fashion. Instead you offer us a rambling statement on Armageddon you posted in a distant galaxy a long time ago. I assume you chose to post it because you wished to demonstrate your ability and knowledge. If you wish to refute the idea that gold isn’t feasible as a monetary system, then I would point you in the direction of Murray Rothbard’s “What Has The Government Done To Our Money/The Case For A 100% Gold Standard.” That would be my statement on the subject. Since it is my blog, I choose the topic of conversation and you can pick it apart. I have published “What is Money” but apparently you haven’t read it. Perhaps you can respond logically to that argument.
Your response here is way off topic. I don’t even know how to address it since it’s so off the wall. I am sure that is your intent, but, if you wish to debate then I urge you to rejoin the world of intellect, reason, logic, and erudition that I strive for here on The Daily Capitalist. Didn’t say I always live up to my own expectations, but I do try. Again, you may disagree with me, but my articles are based on ideas which are quite well worked out. I really dislike anti-intellectualism which I view you as being an exemplary.
In the future it would be a waste of my time and my readers’ time to respond to such comments. I don’t have the time to discuss off topic items.
Jeff, just so I know what to expect….
what is the average length of time that you might normally be “busy”?
Thanks
You requested the following:
“My challenge to you: back up your assertions with cogent argument supported by fact and a theory based on reason.”
I posted up with a cogent argument supported by fact and a theory based on reason. At least most of the folks who read it didn’t have any trouble understanding it, but apparently you do. You simply choose not to respond to it because its your blog and you set the agenda.
Anyhow, for the most part here you preach to the choir, and everyone cheers in Group Think for Austrian School Mumbo Jumbo, like a bunch of doomed lemmings walking off a cliff. Since you don’t care to debate, I’ll just periodically drop by and comment when your write something particularly egregious.
Have a Merry Christmas.
RE
You need to debate with cogent ideas on the topics on this blog. It would take me hours and hours to write a response to what you wrote, assuming I was smart enough to ‘get it.’ To say that we are Austrian theory lemmings lacks knowledge and insight into the subject. You may think you are cogent, I don’t. Sorry, Rev. If anyone here can give me a cogent summary of what you said, god bless.
Actually, I thought that LeftRightLeft did a decent job of summary of the basic questions with respect to monetary theory, which was why I asked him to join the debate. I realize that my style of writing is a turn off to many folks who consider themselves erudite and expert on these topics, and who present their arguments by using graphs and statistics rather than metaphor and imagery as I do. If you find my prose too cumbersome and confusing, just answer his response, its much shorter. He is more plain spoke also, he doesn’t rev up the prose with Gonzo like I tend to do.
Would it take hours and hours to respond to every last argument I made in my post? Possibly, but then it would also take me hours and hours to deconstruct all the posts you put up here. By no means are you much more concise than I am Jeff, often your diatribes run to 2 or 3 or 4 parts after all. Could we ever find a common ground upon which to actually debate? So far it seem unlikely, but I figured I would make the effort at establishing a dialogue.
If you merely wish to preach to the choir, that is your choice of course, its your blog after all. I am just presenting you with the opportunity to debate issues with people like myself and LRL who take an opposing viewpoint to your own. As I said, if you don’t want to debate the topics with me, this is fine I’ll just drop in occassionally and express my discontent with some of the stuff you write. Personally, I learn things by debating with others who hold differing viewpoints rather than just chatting with firends who hold similar ideas to my own. That is just me though. You can approach this problem however you please.
RE
See my response to LeftRightLeft.
Jeff,
I’ve known RE (Internet-wise) for a while now. He’s a very intelligent man who knows what he’s talking about. As he’s pointed out, his style rubs up some the wrong way (me included at times ;-) ), but the content is sound. Also, he’s honest and courageous enough to concede points when they are well made. He can be intensely emotional when writing under the whiff of inspiration, but is not fanatical generally. Personally, I disagree about Armageddon (though anticipate total systemic collapse, so…), but agree strongly with a long or deep historical approach to understanding capitalism, money, society, etc. Which other makes sense? However, such an approach calls for very long postings. One’s position has to be framed in sufficient detail and context, and no matter how long, it’s never enough. Only a book would suffice. Debate on the Internet is severely hampered by this factor.
I don’t know you or your work, but came along here to offer an old friend some support. Most likely there is plenty we would agree on, Jeff, and plenty we would disagree on, and in that light I offer an apology for initiating debate in this fashion. Armageddon or not, we probably all agree that humanity faces multiple crises. The least helpful stance at such a moment in history is antipathy and entrenched defensiveness.
Some cards on the table: I am an enemy of large government and concentrations of power. I believe that the money-system we have is designed to ensure both, thus the money system, debt money, is my enemy. But, I do not believe in commodity money, because it’s too similar in it’s core attributes — scarce by design and a source of too much competition — so I seek something far more radical.
My motto is “demote money, promote wealth.” I seek a money that is not joined at the hip with scarcity, one that encourages cooperation and environmental and human concern, a money spent into existence — perhaps multiple monies spent into existence — which ‘rot’ with negative interest. This way society’s focus, its orienting and core operating principles would be turned around 180 degrees. Wealth would no longer = money accumulation, in whichever form. Thereafter, and including a guaranteed income for all living humans and much else besides, market dynamics could be reintroduced and function fairly, even right down to optional education, ‘private’ because not mandatory. With the wrong money and cultural attitude, The Market inevitably leads to the concentrations of power and wealth I want to end. We need markets in all their messy and uneven beauty, not The Market, which is in the end the other face of The State, and vice versa.
I don’t want to write a huge post, so have left out plenty of explanatory detail. We are all short on time here. This post is an apology for my first ever post on your blog being unnecessarily provocative, and an attempt at transparency and openness.
Cheers
Toby
Toby:
Here’s the problem. I don’t think he knows what he is talking about. It’s not so much about style but rather content. He states conclusions of opinion rather than a logical argument. If he wishes to communicate ideas then he has to do so in a way that one could critique. Pretend you were giving a white paper on economics at a conference and then you listen to critique.
As far as your ideas about money we are quite far apart on monetary theory. Since you don’t state how you are going to achieve utopia I have no way to respond other than to say it sounds like Chartalism which fails tests of most basic economic theory. If your concept is that, then without even getting into monetary theory I will say that such schemes have failed whenever tried. It fails to understand what money really is and how “money” is necessary for any economy to function successfully. Fiat money is not “money”. You can’t create it out of thin air. It is money/wealth only if it is supported by production and savings. It is also necessary for calculation of prices and many other things. These things are all tied together in the concept. Otherwise it won’t work.
The failure to understand “money” is one of the fundamental problems underlying our current problems. I see a lot of these schemes floating around now (Ellen Brown) which seek utopia through such “John Law” schemes.
If anyone wishes to explain how your scheme would work in the real world I would be happy to discuss it. But you must present your ideas in a logical structure that we can understand.
Thanks for the comment.
“If he wishes to communicate ideas then he has to do so in a way that one could critique. Pretend you were giving a white paper on economics at a conference and then you listen to critique.”
Nonsense. You don’t have to write in a “White Paper” style to subject it to criticism. Matt Taibbi’s Squid article in Rolling Stone wasn’t written in an Academic style,but nevertheless has had a steady stream of critical analysis it was subjected to, not the least of which came on Zero Hedge, which itself is hardly an Academic format. I mean really, would William Banzai7s stuff ever make it into an academic forum? Nevertheless, Zero Hedge serves as a powerful conduit for information you don’t find in mainstream academic publications. Do you not publish on Zero Hedge under the nom de plume of “Econophile”?
You are just dodging Jeff. First you claim you “know my secret” and ask me to provide a more detailed argument. After I do that, then you say its not in a format you can understand or critique. Then in responding to LRL you draw the conclusion I don’t know what I am talking about, except you already stated you can’t critique the information contained therein. If you can’t critique it, how do you know whether I know what I am talking about or not? You make a blanket statement without addressing a single argument! That is dodging.
Insofar as LRLs post goes, you infer that he has a Utopian fantasy of what money is and make the analogy to Ellen Brown, and that most people don’t understand what money is. You apparently think you do understand what money is, but you clearly do not because you make all sorts of insupportable statements like “It fails to understand what money really is and how “money” is necessary for any economy to function successfully.”, when for most of human history prior to the development of agriculture all economies ran without money.
You dismiss Chartalism as a solution based on your assertion it has never been proven to work successfully, but then neither has Metalism. Economies based on circulating metals crash with extreme regularity due to problems of centralization, compounding interest and hoarding, and also have never been proven to work successfully for more than around 80 years or so. A rare commodity based money like Gold is particularly vulnerable to hoarding and manipulation of its value relative to other assets, the obvious one being land. If there is a lot of Gold in circulation, then the cost of land in Gold is going to be relatively expensive, it will take a lot of Gold coins to purchase an acre of land. When the Gold goes out of circulation, the price of land in Gold coins deflates, and you can pick up land on the cheap for just one Gold coin.
How do you manipulate how much Gold is in circulation? Well, in the case of the original 13 Colonies, you did it by Taxation and only taking payment for taxes in Gold or Silver. This rapidly pulls the metals out of circulation. Another way is to extend a lot of credit, and then when debtors are at their most extended point, withdraw the credit and demand repayment in Gold or else repo all their assets.
Money is basically a lubricant of commerce, where you really run into problems is when you also use it as a measure of stored wealth. That is the motivator for hoarding money, be it Fiat bills or Gold coins. Thing is, in both cases its just notional value, not real value. Both forms of money are representations of real wealth in the form of physical assets, but the real value of physical assets themselves can change for any number of reasons. A simple example would be a nice piece of farmland with a stream running through it which one day has that stream dry up, or get diverted upstream for some other purpose, like say rinsing out toxic byproducts of a manufacturing process. After that happens, the real value of the land downstream drops precipitously of course. Similarly, a large pile of Gold might have great value while there is plenty of food around but Gold is scarce, but once Food goes scarce a Twinkie can have more value than a Kruggerand. Real Value is a relative thing, and you cannot set an absolute value on it by using metals as money.
Anyhow, I am not sure what LRL will argue with respect to his structural concept of money, though I have argued it with him in the past and I don’t generally agree with it as a permanent solution, but it is likely a better solution than using metals as money, which has never worked very well at any time in the past, and is less likely to work now as a result of the size of the population relative to the extant metal available to use as money. Centralizing it and issuing Bills on it or digitizing it is just another form of Fiat or Chartalism, and the absolute value of a big pile of it is subject to vacillations in the real value of assets it represents, be it land or factories dependent on the thermodynamic energy of Oil to operate and produce.
Clearly, the model of the Suburban McMansion with the Hummer in the Driveway which in 2005 held the notional value of $500K is no longer worth that. Similarly, the value of an Industrial production plant which produces Hummers is no longer worth what it once was. Both were dependent on the steady supply of cheap energy to hold up their value. As energy increases in price and becomes more scarce in its availability, the asset value of those things which depend on that decreases, and with that goes the solvency of any baking institution that bet on such things, and they all did. It wouldn’t matter whether the money was Fiat or Gold, those assets would lose value either way.
I don’t really expect a reply to this post other than perhaps some lemmings here calling me a fool or an idiot, and I don’t know if LRL will make a detailed description of his theories or not. What disappoints me most as I read the financial blogs is the dearth of any real debate between opposing viewpoints. Lots of Pundits out there each running their own Blogs, and each one accumulates a following of Lemmings, but each one operates in a vacuum of real debate. When you try to get one going, the Napalm Artist come out from behind the refrigerator, and the primary authors Dodge the questions. They are too “busy” writing their own spin, responding to a detailed argument is too time consuming, its not on their personal agenda. Its sad of course, considering we have at least for a while longer this medium upon which to discuss the issues that nobody really will do that. So for me, I will return to being an annoying fly who occasionally buzzes around this board, dropping the occasional grenade. You can’t say I didn’t TRY though to get a debate going. It just got Dodged.
RE
Rev,
Here is my problem with you and LRL. I feel I need to explain basic economics plus Austrian theory, plus the Austrian theory of money and credit, and the concepts of knowledge (epistemology) in order to refute Chartalism. But you are correct, just saying it doesn’t work is not an answer. When LRL says that “standard” theory is wrong, I would agree. But I don’t think you or LRL understand Austrian theory and its concept of money. I’m not avoiding you guys. I just don’t know where to begin. I have seen these arguments before and I ignore them but Chartalism keeps springing up. Maybe one of these days I’ll write an article on it, but you guys have to appreciate the fact that I don’t have the time to do that and pursue my main interests in the blog. I will say that I have read about Chartalism and as I understand it, it is not based on good theory or economics. But again, that’s not the answer you are looking for. If I avoid the issue you guys will sit back and say smugly, “See, he can’t defeat us. He avoided us.” Jeez, give me a break. I thought I put some issues to you but LRL didn’t address them such as the concepts of the foundation of money, the subjective value of money, the supply and demand for money, and the need for market based (money) prices in economic calculation. I did read up on Chartalism and am aware of Brown’s book (I saw her speak once). I would be more reassured if you could tell me that you have read anything by Austrian theory economists.
That would only be fair to me. It’s a time thing, guys.
I will say this. If … and a big if, I have time over the holiday to address Chartalism, I will do so. But again, it’s my blog and my focus is on other things I feel are much more important which is economic analysis and an explanation of the world through Austrian theory. I get the feeling though, that no matter what I say, you will just ignore and say I’m wrong. But I urge you to continue writing about it here so that I can further understand your ideas and then pick them apart.
Yikes! I should just tell you guys to f*ck yourselves and go on my merry way.
But I will leave you with this excerpt from Hulsman’s Mises bio:
At this point in the bio he is explaining Mises’s Theory of Money and Credit.
P. 223
Fourth, and finally, Mises dealt more explicitly than Menger
with the claims of the monetary statists or “chartalists.”
Whereas Menger had argued that money could emerge spontaneously on the market, the statist scholars asserted that money
was a creation of the state. Debate on this topic can be traced
back to the times of Plato and Aristotle. It ran all through the
Middle Ages and was only settled, for a short while, by the classical economists, who had argued along Mengerian lines. But at
the end of the nineteenth century the statists struck back. Cernuschi in France, Neupauer in Austria, and Lexis in Germany
reasserted the view that money is what the state declares to be
such.
But the most famous champion of this view was Georg
Knapp—the same Knapp who had pioneered the studies on
Germanic rule as a liberating force for East-European peasants.
In his Staatliche Theorie des Geldes (State Theory of Money),
Knapp argued that money was a creation of the legal order and
that the theory of money therefore had to be studied as a branch
of legal history.
According to Knapp, money came into being
through government proclamation. The state says that this or
that is money, and it suddenly becomes a token for some corresponding amount of real goods. The essence of money was
therefore to be a government-proclaimed token (charta in
Latin) that could be used as a legally valid means of payment.
Knapp’s views were not well received at first, but did find
early support from prominent bankers
and eventually won
many converts to the state theory of money. His chartalist theory did, after all, perfectly complement the statist convictions
already prevalent among German economic professors. As
Mises later observed:
The statist school of German economics has probably reached its high point in Georg Friedrich Knapp’s
State Theory of Money. It is not per se remarkable that
this theory has been formulated; after all, its tenets
have been championed for centuries in the writings of
canonists, jurists, romantics, and certain socialists.
What was remarkable was rather the success of the
book.
Knapp’s fundamental error was in failing to see that government orders can only be relevant in the context of presently
existing contracts involving deferred payments. Ex post, governments can determine what should be counted as “money” and,
hence, what should be counted as payment. But it does not have
the power to impose on market participants the future use of
any means of exchange:
Business usage alone can transform a commodity into
a common medium of exchange. It is not the state,
but the common practice of all those who have dealings in the market, that creates money.
At least as far as I am concerned Jeff, refuting Chartilism is a Straw Man argument. I never made any reference to Chartilism, you were the one who brought this theory into the agument. I suppose its because of your interpretation of what LRL wrote, but at least as much as I know about his structural concept of money you couldn’t peg it as strictly Chartilist. He founds his theories in the ideas of a resource based economy as I recall. I expect he might fill in further, but the real problem here is that you expect the debate to be about econmics as defined either by Keynes or the Austrian school. Neither LRL or myself do that, we both basically work from first principles. He posed a simple question which you didn’t answer, “what is wealth”? simple questions like this get obfuscated when you start nitpicking details of extant economic theories.
Now, you most certainly can (and probably will as you get more frustrated) simply say f#$% you to pursuing a debate here on the stucture of money and its relationship to Capitalism and its social implications, since as you say it diverts you from your own interests in analyzing the economics of the world through an Austrian Looking Glass. However, what is the real purpose here for any of us? To my mind, it is to elucidate the problems and find solutions to them, and you cannot do that if you write in a vacuum. You have a good blog, you are a good writer on economics, but you have a very narrow viewpoint. I am trying here to get you to look outside your Austrian Box, because from my analysis, money is not the answer here at all, Metal, Fiat or Chartilist, however you wish to define it. I haven’t yet written anything which defines the allocation of resources in a society, because as of yet I have not been able to establish a debate platform we both can agree on. You want me to write “White Papers” which I most certainly will not do. It all depends here really what your objectives are. If your objective is to Preach to the Choir, to explore ideas in a vacuum with pats on the back from lemmings here who buy into Austrian economics, then you will say F*&^ you to me and LRL.
If you really want to explore ideas though and seek better solutions, you will explore deeper ideas of money, value and social systems. Its your choice though on your blog. I will just leave you with this thought, which is that you are trapped looking at the world as a numerically defined set of values. Its not that way at all, and this is why you cannot find a solution with the paradigm you are working under. I can do no more than this without a much more extensive dialogue, so if you do not have the time or inclination to pursue it, so be it.
RE
“But it does not have the power to impose on market participants the future use of any means of exchange: Business usage alone can transform a commodity into a common medium of exchange. It is not the state, but the common practice of all those who have dealings in the market, that creates money.”
This is the crux of the piece you quoted, Jeff.
My critique: First, State and Market are inseparable, the two Janus faces of society if you like. Market processes determining what money is, are not usefully to be distinguished from proclamations by the state that X is money. This applies to metals/commodities as it does to paper. Both are decision making processes guided by relevant factors. For example, the State cannot proclaim that air is money, or sand, or water. Whatever it ‘decides’ will be constrained by prevailing theory, market conditions, cultural expectations and so on. Chief among them, though hidden and not up for debate, is the way we understand wealth, which feeds directly into the way we organize society generally. This is the pointedly ignored question which is so important to making progress. What is wealth?
Second, the State evidently has the power, though constrained as I outlined above, to say ‘this is money’, because it has the power to tax. That power is very effective in this regard. Of course, that power is manifested through police and army, but that’s the point — there is power. I’m sure here you’ll want to mention market forces and the invisible hand, but unless we have the right fundamentals — like sound and rational cultural relationships with wealth and value — and hence a decent money, market forces and the invisible hand will not produce the expected creative destruction, but lead us again and again to where we are now; obscene imbalances of wealth and power and imminent collapse. Until, that is, our ‘success’ and power of production and consumption ruins the environment’s ability to play along, or the fossil fuel runs out.
Third, you are too deeply in the current paradigm of scarcity to really see what RE and I are trying to address. We reject the core assumptions that underpin orthodox economics. This is not about Chartalism, it’s about value and wealth and society’s guiding principles.
Oh one more thing.
“I get the feeling though, that no matter what I say, you will just ignore and say I’m wrong. But I urge you to continue writing about it here so that I can further understand your ideas and then pick them apart.”
Far as ignoring goes, at least so far I can’t see where you have addressed a single argument made here, so take care as the Pot here in calling the Kettle Black.
Second, in the absence of a legitimate debate, at least for myself (I cannot speak for LRL) I will limit my participation here to picking apart things you write, so you simply won’t have opportunity to pick apart my concepts. You are the sitting target Jeff.
RE
Yes of course my concept of money is far from standard theory. That’s because standard theory is wrong. Nevertheless, I have presented my ideas in a logical format and in a manner which is clear and easy to understand. But I am not going to lay out a road map to ‘utopia,’ since the sheer amount which has to change prohibits such at this stage. You also do not want reams to read and analyze, so I purposefully left out details, stated clearly in my post. I don’t trust road maps anyway. Finally, we three here are at odds at the foundations, so they need to be addressed first, not the fine details at the top.
BTW, Chartalism does not call for demurrage and does not call for any changes in banking either. The basic idea in Chartalism I accept is that money should be ‘spent’ into existence, because money is not wealth. Chartalism should not be compared directly to John Law’s scheme, in which money is created as debt. What matters is the way money is created, and the objectives or qualities we knowingly or unknowingly give it, an area resolutely ignored by the mainstream.
RE has said other things I would have said. And you do appear to be dodging the questions and resorting to ad hominem. A sign either of desperation or boredom with your assailants. Which is it?
But let’s start with the economic basics: what is wealth?
Got in on this late. RE – you are a fool. Sorry.
“The Fool does not follow any ideology. He rejects all appearances, of law, justice, moral order. He sees brute force, cruelty and lust. He has no illusions and does not seek consolation in the existence of natural or supernatural order, which provides for the punishment of evil and the reward of good. Lear, insisting on his fictitious majesty, seems ridiculous to him. All the more ridiculous because he does not see how ridiculous he is. But the Fool does not desert his ridiculous, degraded king, and accompanies him on his way to madness. The Fool knows that the only true madness is to recognize this world as rational.” Jan Kott
RE
Just a fool, standard definition. A fool that loves to listen to itself.
And you are a standard message board troll, who since he has nothing worthwhile to contribute busies himself by insulting others. Didn’t your mother ever tell you that if you don’t have something nice to say you shouldn’t say anything at all? So go crawl back behind the refrigerator with the rest of the cockroaches and STFU.
RE