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Twenty Theses About Money

by Cassiodorus Fri May 2nd, 2008 at 06:33:20 AM EST

Since almost all of you forgot to read my diary of last February about Hutchinson, Mellor, and Olsen's The Politics of Money, I'm going to try to encapsulate the wisdom contained therein in a series of bullet points, with links added.  Maybe I was too long-winded back then.

[editor's note, by Migeru] Fold originally here
Preface:

Yeah, there are other things to be concerned about.  Peak oil; abrupt climate change; overfishing; authoritarianism in government; and so on.

One thing we will have to focus upon as we head into the 21st century is the role of the money system in creating the mess we're in.  As Hutchinson, Mellor, and Olsen point out in The Politics of Money, money is not politically neutral.

Promoted by Migeru


The guardians of the "science" of economics would like to pretend that economic life is all about "choices."  Yeah.  We "choose" to eat, or to starve to death.  I suppose the recent occurrence of global food riots were a matter of "choice" too.  Let's look at the most telling sentence in that article:

One reason: billions of people are buying ever-greater quantities of food -- especially in booming China and India, where many have stopped growing their own food and now have the cash to buy a lot more of it.

In short, increasing dependence upon the money system privileges some to eat, and others to starve.  

Our perceptions of economics are colored by the social-scientific division of labor as it developed historically.  Here I would refer you to the link at the bottom of my blogroll, the one labeled "Global Political Economy," to read Kees van der Pijl's "A Survey of Global Political Economy."  Economics is dealt with in chapter 2: the break-up of "political economy" (the discipline of Smith, Ricardo, and Marx) into "politics" and "economics" was motivated as a reaction to Marxism, and so "economics" was created in the 19th century as a science that took the perspective of the investor (through "marginalism").

If we look at economic decisions politically, however, we can see how "the economy" (as it currently stands) is an economic oligarchy, a system where a rich few make the important decisions.  What we need to cope with abrupt climate change, I argue, is an economic democracy, a system where economic decisions devolve unto individual people -- but not individuals conceived as "the masses" (as we currently are), or as "consumers" (as we currently are) or as "voters" (to be plied as we are with psychological strategies via political advertising), but rather as "community members" in systems where all power devolves unto democratic community.  Is that so radical?  Anyway:

TWENTY THESES ABOUT MONEY

   1.  Money wouldn't mean much if it were just a substance.  The residents of "Utopia" (in the Thomas More text) had lots of gold, but it was worthless to them except as jewelry.  So if we are to probe the meaning of money, we must regard money as a social relationship, the same way that it's regarded by the folks who drive the Brinks Trucks which drive the stuff from locked safe to locked safe under armed guard.

   2. Money, then, is a social relationship, as you have to have some to participate in "mainstream society" as a "buyer."  The social relationship that is money defines the social world as composed of buyers and sellers.

   3. Money as such is a social institution, as practically everyone these days participates in the money economy as a seller or as a buyer.  Money's twin institution is property --  when you are a buyer you are also an owner.

   4. Most of the human race has nothing to sell but its labor-power.  In the social world defined by wage labor, the human being is a commodity, a storehouse of labor-power who can be rented by the hour.

   5. In a social world defined by money, everything that can be owned is a commodity, an item that can be exchanged for money.  To own something, however, one has to be able to enclose it.  The planet Mars is not a commodity because we can't reach it, thus we can't enclose it.  The oceans and atmosphere cannot be owned because they cannot be enclosed as such without destroying their character as oceans and atmosphere.  (This is an important refutation of the right-wing position on the "tragedy of the commons": since the air and oceans can't be privatized, there must be a commons, and since there has to be a commons, it must be defended, communally.)  Liquids and gases, however, can be owned if they are enclosed.

   6. Since money is something we exchange for property, money itself is granted social value as a universal property-substitute.  Marx's The Power of Money describes this quality succinctly.

   7. Since the social institution that is "property" assumes the enclosure of things, when we buy something we also buy its enclosure.

   8. Money, then, is a claim upon enclosure.  Or, more generally, money is a claim upon human labor, whether that human labor be expended to enclose things and to defend their property rights, or to manufacture commodities.

   9. The property of money as a claim upon human labor is realized by the fact of social labor.  Since we work for money, money has value.  If we did not work for money, money would have no value.

  10. The ability to manufacture money is called "seigniorage."

  11. Our US dollar-based money system grants the rights of seigniorage to the banks.  Banks are granted the right to issue debt "based on reserves" or, more specifically, with their relationship with the Federal Reserve to continually have reserves.  The right to issue debt "based on reserves" is not 1-to-1; banks can issue debt without each dollar being accounted-for in reserves.

  12. The government, as the guarantor of property, can borrow as much from the banks as it wants; thus it, also, possesses seigniorage.

  13. Thus we have a debt-based money system, in which money is created by debt.

  14. In a debt-based money system, businesses must continually strive to increase profits, because only with continual profits can debts be paid off (or can further debt, i.e. money, be generated).

  15. The businesses which are most successful at doing this are the domain of an investor class, a group of people who possess a sort of oligopoly of money- and property-power.

  16. The so-called "free market" actually requires extensive planning and organization.  The overall framework for this, the capitalist economy, "has been centrally planned and controlled from its origins in the interests of the ruling elite." (Hutchinson et al., p. 91)

  17. Everything is buyable in a debt-based money system, but only at the cost of incurring further debt.  If the processes of debt-accumulation are allowed to proceed toward their logical ends (and with the help of the new bankruptcy laws), the folks who have seigniorage (the banks, the government, and, essentially, the investor class) will possess everyone else in what is called "debt peonage."  "Debt peonage" is, in essence, the claim of some upon whole lifetimes of labor by others.

  18. The alternative to "debt peonage" is to be written out of the economy altogether.  This is the fate of those living in the world's slums today.  Increasing slum populations are the cause of practically all of the world's population growth.

  19. The alternative to a debt-based money system is a credit-based money system.  In such a system, money is issued as "credit" by communities of workers, who back its value with their labor-power.  The institutionalization of a credit-based money system, however, would mean economic democracy, or, rather, socialism.

  20.  The alternative to slum life outside of the money economy is "living off of the land," a matter continually impoverished by business interests within the money economy for the sake of their own profits.  (See Maria Mies and Veronika Bennholdt-Thomsen's The Subsistence Perspective for more detail on this matter.)

Display:
Labour, albeit mighty, is only one container of value. Land, resources, and prestige are others.

You can't be me, I'm taken
by Sven Triloqvist on Mon Apr 21st, 2008 at 02:18:42 PM EST
8. Money, then, is a claim upon enclosure.  Or, more generally, money is a claim upon human labor, whether that human labor be expended to enclose things and to defend their property rights, or to manufacture commodities.

"Imagine all the people/ Sharing all the world" -- John Lennon
by Cassiodorus on Mon Apr 21st, 2008 at 03:04:59 PM EST
[ Parent ]
There are still vast tracts of land, and, indeed, the oceans (!), where labour has a zero or insignificant role in enclosure.

I accept your basic argument, but it is too neat.

You can't be me, I'm taken

by Sven Triloqvist on Mon Apr 21st, 2008 at 03:13:05 PM EST
[ Parent ]
There are still vast tracts of land, and, indeed, the oceans (!), where labour has a zero or insignificant role in enclosure.

Which means that nobody really owns them.

"Imagine all the people/ Sharing all the world" -- John Lennon

by Cassiodorus on Tue Apr 22nd, 2008 at 01:33:24 PM EST
[ Parent ]
Money works as money because it works like a claim on human labor, but the human labor is not conscripted by the monetary institutions.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Apr 22nd, 2008 at 04:32:34 PM EST
[ Parent ]
The "conscription" lies in the general state of obligation that forces people into the money economy -- which is to say that they are generally deprived by business forces of the means of living off of the land.

"Imagine all the people/ Sharing all the world" -- John Lennon
by Cassiodorus on Tue Apr 22nd, 2008 at 05:38:48 PM EST
[ Parent ]
Precisely ... the conscription lies in property institutions, not monetary institutions.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Apr 22nd, 2008 at 05:45:50 PM EST
[ Parent ]
Interesting.  Taking it to the next level, as it were, you're implying a tendenz to debt peonage.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sun May 4th, 2008 at 11:03:43 PM EST
[ Parent ]
A lot of food for thought..; I'm looking forward to ChrisCook's reaction!

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Apr 21st, 2008 at 04:45:24 PM EST
So the basic difference between credit and debt is that debt can grow without limit and credit is limited by the labor-power of its issuers?
That would solve a lot of problems.
by generic on Mon Apr 21st, 2008 at 05:30:15 PM EST
So the basic difference between credit and debt

The difference between credit and debt is one's perspective: either one is a creditor or a debtor.

The distinction I'm making here is between credit- and debt-based money systems.

"Imagine all the people/ Sharing all the world" -- John Lennon

by Cassiodorus on Tue Apr 22nd, 2008 at 07:50:49 AM EST
[ Parent ]
Somehow forgot to type "based systems"
by generic on Tue Apr 22nd, 2008 at 08:30:41 AM EST
[ Parent ]
... is that you can create a liability on your own account, but you can only receive a credit on your account by the consent of someone else (who agrees to create a liability on their account).

The second difference is that you can fail to satisfy a liability that you have created, but you cannot fail to satisfy a credit that you have received.

Or, IOW, the debt/credit relationship is an asymmetric relationship.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Apr 22nd, 2008 at 04:36:07 PM EST
[ Parent ]
What we need to cope with abrupt climate change, I argue, is an economic democracy, a system where economic decisions devolve unto individual people -- but not individuals conceived as "the masses" (as we currently are), or as "consumers" (as we currently are) or as "voters" (to be plied as we are with psychological strategies via political advertising), but rather as "community members" in systems where all power devolves unto democratic community.  

Margouillat (posts at ET) suggested the word "collectivities"--I like it; the community has to pull together but it is made of collectivities, including the singular collectivities....I dunno, the community pulling together--if it necessarily worked, wouldn't all communities necessarily pull together into one huge community?  the fault lines are where the collectivities meet--but okay, like a nation state is a community, global decisions should be decided by the global community, one vote each, and (I like this phrase) "certain deterministic systems have formal predictability limits" so keep those decisions where the unpredictability won't cause too much possible harm--thinking long term--

Great paragraph!

1 - 7, excellent.

since the air and oceans can't be privatized, there must be a commons, and since there has to be a commons, it must be defended, communally.

Liquids and gases, however, can be owned if they are enclosed.

Excellent!

8. Money, then, is a claim upon enclosure.  Or, more generally, money is a claim upon human labor, whether that human labor be expended to enclose things and to defend their property rights, or to manufacture commodities.

Okay, money means I can close my hands over it, or have someone else protect it for me (by handing over some of the money?)  So....the money is a signifier for "I can come and take that", or "I can put it into my hand and close my fingers over it and no one can take it away."  So....it is a claim on human labour--it says, "Give me one of those (or, let me keep this), and I'll give you some money (I gave you some money for it.)"  So the protectors....of the money...and the makers of the commodities--are all working for...How about, though, if money is used as an abstract medium of exchange, given value in the various collectivities such that it can carry trust--because without an abstract means of exchange, every exchange becomes profound, but there are lots of exchanges to be had, and here the best (most efficient) exchange is to pass each other shiny objects which represent (are abstractions of) some fascinating conversations, maybe.  So, I give this person I've never met before some wine, and he or she gives me a shiny coin.  Tomorrow I take the shiny coin and give it to someone else for something that's not wine, and sooner or later that shiny coin (or it's equivalent) will be back with the person who gave it to me, given to him or her in return for something given by...getting rid of money doesn't change the power game, just different tools are used.  Today, debt money, yesterday, slaves, tomorrow, rations--okay...heh...great diary so far!

Since we work for money, money has value.  If we did not work for money, money would have no value.</div.<p> And between those, the sliding scale where if we worked less for money, money would have less value, but it would still have value.  Seen as a positive--the money is an abstraction, you can use it to obtain useful items that you could not produce yourself.  (Assuming a free and fair market--oops!)

10 - 11 - 12, the US banking system--leads to

a debt-based money system, in which money is created by debt.

Isn't there something banks do even when they are handing out zero debt?  If the banks stopped offering out extra money right now, certain funds are nevertheless in accounts and can be transfered to other accounts--the transaction process continues, but the debt stops--and then there's all the work needed to pay off the debt (somehow--by getting those who have credit accounts to simply hand over the debt money directly proportional to how much credit money they have in their accounts--as there is more credit money than debt money in the system by a ratio of say five to one, then twenty five percent of all the money is the price of ending the debt system, and then the system (of the remaining money) is no longer a debt-based money system?

14 - The creation of debt money necessarily reduces the value of the money already in circulation?

15, 16 - Okay, of these people are all of them in the process of generating debt?  A business where the starting costs were labour and raw materials, both in good supply.  Then money is handed over for the products.  So the bank created that money without something to back it up, but now there is something to back it up--the product, and the money has (more) value.  Make more products, receive more money.  Now--that money isn't debt based; but it relies on the central bank not to devalue it (by e.g. creating lots of debt ;)--am I getting this at all right?).  But what if that money is used to buy forests, islands, machinery, govts.--such that if the money loses its value, certain transactions will stop but others will continue as before--supply lines that aren't made of (but some of which were bought with) money.

18, 19 - ...and this credit system has to live within a world which will always, potentially, contain a debit system--loan sharks and up; and different collectivities might use different forms of money, so there have to be exchange rates of some kind (for some transactions); if debt (from the receiver's end) is the money for tomorrow, what do I do if I have no money today?  The community will provide, but it doesn't seem to, or only begrudgingly, as little as possible--it (they -- the various communities) could clean the mess up now, even using the debt money, just place it where it's needed, it's a slight deflation of money's power, so....some people don't want that--they begrudge the constant erosion--but any money simply moves around the cycle--created on the back of human activity then passed out such that the human activity seeks its advantage--

20 - What I see is that there is a lot of money which could be put to productive use, write off the debts--and put the abstract value objects remaining into use as fluid--liquidity--I like Chris's idea of energy credits--call them renewable energy credits--freely exchangable for goods and services wherever renewable energy is generated--

Heh...if it's down to us to change govts, look who some italians just voted into power.  If I wants rights in the community, best start by finding the collectivities that offer me (at least to some extent--better than others) those rights.--

Hey, enjoyable read!

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Mon Apr 21st, 2008 at 07:57:43 PM EST
Whoops.

Since we work for money, money has value.  If we did not work for money, money would have no value.

And between those...

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Mon Apr 21st, 2008 at 08:01:14 PM EST
[ Parent ]
So, I give this person I've never met before some wine, and he or she gives me a shiny coin.  Tomorrow I take the shiny coin and give it to someone else for something that's not wine, and sooner or later that shiny coin (or it's equivalent) will be back with the person who gave it to me, given to him or her in return for something given by...getting rid of money doesn't change the power game, just different tools are used.

But it DOES change the power game to use money!  If you have to exchange the wine for "something that's not wine" through MONEY, you've granted power to those who print the money, the possessors of seigniorage.

Thanks for commenting.

"Imagine all the people/ Sharing all the world" -- John Lennon

by Cassiodorus on Tue Apr 22nd, 2008 at 07:58:41 AM EST
[ Parent ]
What I mean is, "taking ten percent off the top" doesn't stop because you remove money from the equation; it just means that the 10% will be measured with another instrument (10% of the crop; 10% from your ration book, etc--)

Also, I understand that this diary is dealing specifically with the US fiat money system, but that's not the only money system--I was thinking of money as the abstraction-of-exchange (something like that ;)--in your point 19 your workers' money will still have the same issues: someone will be responsible for producing value tokens, the production of which does not equal the value of the token--I was trying to think of other examples where the item produced has a social value that the producer is (in order to avoid seigniorage) obliged to forgo in order to keep the process running--maybe law enforcement, or any form of security, where the payment for the security is less than the value of the items secured.  These seem (to me as I type) to be problems inherent in any system where valuable items are in circulation and/or are in storage--how would your workers in 19. resolve it?  I would assume that the shiny coin-wine transaction could happen under the same scenarios.

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Tue Apr 22nd, 2008 at 10:57:28 AM EST
[ Parent ]
Oh, sure -- exploitation did not come into being with the invention of money.  Yeah I agree.

And, yeah, the US fiat money system is not the only money system.  Worker's money will have issues, but they will not be the same issues.  

As for worker's money, actually what Hutchinson, Mellor, and Olsen are doing in The Politics of Money, the book I reviewed, is playing with the "social credit" ideas of Clifford Hugh Douglas, so yeah there is a line of authorship for these ideas.  

The main idea of worker's money as I see it will be to invest the power of seigniorage locally, in the hands of democratic communities of workers.  That way you don't have toploaded economies, which are one of the main economic problems of our time (especially here in the US).  And the folks possessed of seigniorage are the ones doing the work.  Since under any money system someone has to have seigniorage, you have to be careful in choosing that person or group.

Douglas, as I understand him, suggested two types of credit: the "consumer's credit," which would grant everyone a fair standard of living, and the "producer's credit," which would compensate business producers for start-up costs and otherwise make up for the general prohibition on business avarice in what would be a democratically-regulated economy.

A democratically-regulated economy would be the best way of tackling global warming, i argue, because in such an economy everyone would be responsible, individually and collectively, for the problem, rather than throwing up their hands and saying "what can one person do?"

"Imagine all the people/ Sharing all the world" -- John Lennon

by Cassiodorus on Tue Apr 22nd, 2008 at 11:59:05 AM EST
[ Parent ]
Mustn't disappoint my Public.. ;-)

Particularly as the workshop I just attended in Seattle covered this subject from several perspectives.

Theses 1 to 3.

Money - like its twin institution Property - is universally regarded as an Object, rather than as the Relationship it actually is. When you refer to "some" Money in Thesis 2 the reference is implicitly to Money as an Object. Likewise, I suggest the Brinks Mat guards see the Money in their van as an Object.

Moreover, you are missing the important point that a "Buyer" need not be an "Owner" - it is enough for him to be "credit worthy" to either a Seller, or a Bank.

The best description of Money I know is by E C Riegel in his book "Flight from Inflation".

    Breviate

The purpose of money is to facilitate barter by splitting the transaction into two parts, the acceptor of money reserving the power to requisition value from any trader at any time. .

The method of money is to employ a concept of value in terms of a value unit dissociated from any object.

The monetary unit is any adopted value, which value is the basis relative to which other values may be expressed.

The monetary system is a cooperative agreement among traders to regulate the issuance of monetary instruments, to express and exchange values in terms of the monetary unit, and to keep account of such exchanges.

Monetary instruments may be any evidences of monetary transactions that serve the convenience of trade and the purpose of accountancy.

We must distinguish "Money's Worth" - which is an Object to which the (Subject) Individual relates via the Property relationship - from Money.

Theses 4 to 9

Your analysis is - as with conventional and Marxist economics - entirely anthropocentric. You assume the Sun of Capital goes around the Earth of Labour.

In fact a very large number of us "own" rights to streams of land rental value through the institution of Property in (ownership of) land. Likewise the streams of value which derive from ownership of productive assets via the institution of the Joint Stock Limited Liability Company ("the "Corporation").

As for "Labour power" that appears to me to be an extremely tired and obsolescent concept. A very large - and increasing - amount of value in circulation is the "use value" not of our "labour power" but of the enclosed "Commons" of Knowledge, through the institution of "Intellectual Property". eg software, books, videos, art, film, patents.

Our Money today consists of Credit issued by a credit institution aka a Bank. Over two thirds of Money created in the US and UK came into existence as loans secured over property. It had nothing whatever to do with claims over Labour power and everything to do with claims over land rentals.

Only a very small proportion of money in existence - but a large part of that in circulation - is related to the future production of labour power by individuals.

Theses 10 to 14

Indeed we do have a "deficit-based" monetary system based upon "Money as Debt" consisting of interest-bearing loans created by Banks.

In my opinion - recently published here

Peak Credit - a Flight to Simplicity

the true economic function of a Bank is in fact that of guaranteeing the credit of individuals.

Theses 15 to 18

The inevitable consequence of the combination of:

(a)exponential growth mandated by compound interest;

(b)the profit motive; and

(c)the uncompensated enclosure of "Commons";

is the concentration of "wealth" in fewer and fewer hands.

This was recognised as far back as Babylonian times and led to "Jubilee" years of debt forgiveness. More recently the result of mathematical unsustainability has been resource wars, booms and busts.

Thesis 19

Not "the" alternative, I would submit, but rather "an" alternative, and moreover, one that has not been conspicuously successful.

To monetise only the individual's "time value"/ or Labour power is to ignore entirely the vast bulk of value in existence which is in fact the use value of "Capital" and "Land" (which I prefer not to conflate).

It is necessary also to recognise that Capital/ Land is in fact also "productive". ie that conventional anthropocentric assumptions have the same relationship to Reality as Ptolemaic Cosmology.

I believe that it is possible - and indeed necessary - to also monetise energy units and units of land rental value, and while doing so to apply Henry George's principle that those who have exclusive rights of "ownership" of a Commons should compensate those they exclude.

Thesis 20

The alternative to a deficit-based economy is IMHO an "asset-based" economy. Credit need not, and indeed IMHO should not be money, but is inherent in a monetary system.

Moreover, a financial system involving Profit and Loss may be conventional, but it is unnecessary. Within a partnership-based economy, there is no profit and no loss, but rather the creation and exchange of value in all its forms, tangible and intangible.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Apr 21st, 2008 at 09:14:27 PM EST
The monetary system is a cooperative agreement among traders

That sounds so sweet!  "Cooperative agreement" indeed!  Say, for instance, I put a loaded gun to your head and tell you to sit in the corner while I steal your stuff.  You comply.  We've made a "cooperative agreement," right?  I'm really surprised that people are lulled to sleep by such rhetoric.  

In monetary exchanges, likewise, power (backed ultimately by the government's guns) rests in the hands of buyers or sellers, depending upon who has market power.  There are no "equal" exchanges as such.  The archetypal "free market" exchange was described in the Bible -- Esau's sale of his birthright to Jacob for a mess of pottage -- the quintessence of "cooperative agreement."  Money only complicates the equation by granting ultimate power over transactions to the possessors of seigniorage.

Your analysis is - as with conventional and Marxist economics - entirely anthropocentric. You assume the Sun of Capital goes around the Earth of Labour.

First off, "Marxist economics" isn't "entirely anthropocentric," having recognized the ultimate source of values in the natural world, and secondly, there is no "Sun of Capital" for any "Earth of Labour."  Without workers, and without the regulatory structure that forces said workers into the straitjacket of production for capital, there is no capital.  And without nature, there would be no workers.  Nature, however, did not sprout money or property all by herself, but through these mediating forces.  The dinosaurs used neither money, nor property.

As for "Labour power" that appears to me to be an extremely tired and obsolescent concept.

No, the above is just a tired and obsolescent sentence.

A very large - and increasing - amount of value in circulation is the "use value" not of our "labour power" but of the enclosed "Commons" of Knowledge, through the institution of "Intellectual Property". eg software, books, videos, art, film, patents.

It took labor-power to produce said "intellectual property," and it takes labor-power to enclose "intellectual property" as such (and to charge people for its use, thus to forbid the violation of its copyright) rather than to let the products of the intellect circulate freely among users.

By the way, "value in circulation" in a capitalist society is exchange-value, not use-value.  It's an important distinction.  Exchange-value is what you can get on the market for a thing; use-value is what you do with it.  The latter can exist without "markets."

Over two thirds of Money created in the US and UK came into existence as loans secured over property. It had nothing whatever to do with claims over Labour power and everything to do with claims over land rentals.

It requires labor-power to enclose land, and it requires labor-power, specifically the labor-power of the police, to enforce laws over the land to require "tenants" to pay rent to "landlords" and to evict "squatters."  No, you don't pay the police to evict squatters; but without the money to buy that land, and without the institution of property to back up your enclosure, you don't elicit their services as such.  Police power is labor-power; it makes money and property possible.  Thus a claim over "land rentals" is in fact a claim over labor-power.

To monetise only the individual's "time value"/ or Labour power is to ignore entirely the vast bulk of value in existence which is in fact the use value of "Capital" and "Land" (which I prefer not to conflate).

"Capital" is itself a product of labor, and "land" attains the cultural status of "value" through the institutions of property and money, both of which require labor-power in their enforcement.

"Imagine all the people/ Sharing all the world" -- John Lennon

by Cassiodorus on Tue Apr 22nd, 2008 at 08:40:22 AM EST
[ Parent ]
The 19th Century is over and so are its theories about money. There are now many forms of "money" besides paper calls on central banks. In fact even this call means nothing. All the US Federal Reserve promises to do when presented with US currency is to redeem it for more of the same.

The current crisis is because many of the new types of "money" that have been created over the past several decades have become decoupled from any pricing mechanism. The full faith and credit of Bear Stearns turned out not be worth much.

In addition to these new complex financial instruments, "money" gets created when credit cards are used or lines of credit are granted, or even deferred payment incentives are offered on retail purchases - "pay no money until 2009!"

Using old models just doesn't work anymore and there aren't any new ones. In fact most economists seem constitutionally unable to think beyond the rules they learned in Eco 101. Things like supply and demand, elastic vs inelastic demand, fiscal vs monetary policies by governments, etc.

The only new thought that has entered their world in the past several decades concerns externalities. Not that this is actually new, but now they have to acknowledge that it is important enough to factor into economic decision making.

They aren't yet ready to reconsider replacing the continual growth model demanded by capitalism/consumerism. Money is just a side show.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Tue Apr 22nd, 2008 at 03:53:38 PM EST
In addition to these new complex financial instruments, "money" gets created when credit cards are used or lines of credit are granted, or even deferred payment incentives are offered on retail purchases - "pay no money until 2009!"

Indeed -- this is why Hutchinson, Mellor, and Olsen call the money system "debt-based."  Have you read their book?

The current crisis is because many of the new types of "money" that have been created over the past several decades have become decoupled from any pricing mechanism. The full faith and credit of Bear Stearns turned out not be worth much.

As long as nobody was demanding the repayment in US dollars of such debts as were generated by "the full faith and credit of Bear Stearns," it was worth quite a lot.  No?

"Imagine all the people/ Sharing all the world" -- John Lennon

by Cassiodorus on Tue Apr 22nd, 2008 at 05:45:33 PM EST
[ Parent ]
rdf:
Using old models just doesn't work anymore and there aren't any new ones.

The idea of monetising credit other than Bank credit  is not new. The idea of creating a credit "Clearing Union" with an abstract Value Unit is not new either. That is essentially what Keynes proposed at Bretton Woods.

But the creation of fungible Value Units as "quasi Equity" eg redeemable energy units, and redeemable land rental units is,as far as I know, a new concept. It is the consequence of an entirely new, and I believe, optimal "Open" Corporate form which may yet render existing "Corporations" redundant.

Whether or not these Units will be superior to the alternatives remains to be seen.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Apr 22nd, 2008 at 06:33:40 PM EST
[ Parent ]
Here is a homeless man in Paris.



Blaugustine

by Augustinatalie (endapressNOTblueyonderNOTcoNOTuk) on Fri May 2nd, 2008 at 10:43:54 PM EST
nice exposition Cassiodorus!

I recommend, of course, Alf Hornborg's The Power of the Machine on the "solvent" nature of money and the meaning of "solvency".  Money makes it possible to equate values which cannot sanely be equated -- as the quotable bit goes, to trade rainforests for CocaCola.  As soon as both are merely price-tagged items, there is no restraint on swapping one for the other.  Alf also exposes the myth of comparative advantage and "free trade," pointing out that raw materials costs always have to be set (by the dominant colonial/industrial "partner" at the core) artificially low, for the whole shebang to keep lurching along.

we've been muttering about a wide-field critique of money over at FS but it looks like you've scooped us...

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Fri May 2nd, 2008 at 10:51:35 PM EST


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