[p2p-research] Fwd: [ox-en] No more money trickery propaganda please

[Michel Bauwens]

Stefan,

you persist in wanting me to say that a cushion produces interest, obvious
nonsense

again, I do not want to enter in that game,

obviously, if you had read the sentence as it was intented, in context and
given the long previous arguments, you would have understood that keeping
meant, keeping in the bank, in order to get interest, in other words the
opposite of your nonsensical misinterpretation, which for some mysterious
reason, you want to hold on to, even after repeated denials and explanations
of my part. Assuming that you misread it once, what can be a possible
explanation for holding on to that misinterpration after so many
corrections????

(the reaction of a normal person would have been: "sorry to have
misinterpreted your phrase and having gotten into a irrational fit, I
apologize, now let's move on and learn from each other's arguments")

so let me repeat, perhaps this time in very simple terms, what the essential
argument is, about the role of interest

So, let's assume we have a negative interest rate, as was the case for the
Worgl shilling, in the first renaissance  of high middle ages, or in ancient
Egypt.

What happens for example in egypt is that you bring your rice to a depot,
you get some 'vouchers' in return, but they loose some of their value every
year, because of the price of stockage, and also, a certain profit for the
mediator. In the middle ages, if I recall correctly, every four years, you
had to change five coins for four. Same principle.

In this context, hoarding money makes no sense, because it loses value over
time, it 'rots', just like real commodities do. Historically what people
would do is to re-invest in the productive economy, and the high middle ages
are known for their high rate of technical innovation i.e. sometimes called
the 'first industrial revolution', relatively high living standards  such as
a five day working week with extra 'blue monday' as day off for the family,
long skeletons in cemeteries indicating good heatlh, etc.., a doubling of
the population in 3 centuries, reclaiming and expansion of large swaths of
formerly unproductive land). This system puts a break in the accumulation
process, because accumulation loses value. The market is kept in check and
does not outgrow the rest of the economy. Since your money is worth more
today than say in ten years, you invest it, and this is in part the
explanation for the crowdfunding of the Gothic cathedrals. This is actually
what good money is intended to do, not to be used in speculative,
non-productive activities, but to be used in the process of production
itself, to enhance the living standards of all.

Now say you replace this system with centralized royal money, with a
positive interest rate. It now becomes interesting to keep your money, to
hoard it, not in a cushion of course, don't be silly, but in the bank; or
better yet, to become a banker yourself and to lend the money out. This way,
without working yourself, you are getting rich while those that work have to
pay a rent to you. This system strenghtens the tendencies for accumulation,
created the conditions for increasingly centralized royal power, and created
the deteriorated social conditions that started in the 14th century.

But the systemic effects of compound interest are wider than that. If you
lend out that money, and I have to pay your back approximately double in
twenty years, which is about the going rate for buying a house now (or at
least it was when I bought mine), even with inflation, you are going to need
substantially more money than you have now. The result is that it destroys
any possibility for a balanced growth economy, since that extra money has
only two possible sources:

- either you get it from people who have it in a static economy, in which
case you create absolute poverty

or:

- you create a growth economy, i.e. capitalism, in which noboby can stand
still, and so, you get the extra money from the ever-growing pie.

Please, PLEASE, do not start now talking again about your cushion, and read
again the section about keeping, without taking it out of context,

Michel

On Mon, May 18, 2009 at 5:19 PM, Stefan Merten <smerten at oekonux.de> wrote:

> Hi Michel!
>
> Now I am really upset!
>
> 2 days ago Michel Bauwens wrote:
> > read the sentence again, use your brain,
>
> I find it ludicrous that *you* ask *me* to use my brain. Obviously you
> stated nonsense and now *I* shall use my brain? COME ON!!!
>
> > and use the full context of the
> > dialogue to understand that interests makes it indeed interesting to keep
> > your money in the  bank.
>
> If you give money to the bank then you do **NOT** keep it. This very
> sentence you wrote just makes no sense. It's nonsense again. And it's
> propaganda again because it is only said this way to invoke a feeling
> of injustice in simple-minded people. It hides facts to make a certain
> ideology look more logical and "just". It may not be your intention -
> and frankly I hope it is not your intention. But it is the intention
> of those you have this propaganda from.
>
> If you give your money to the bank in fact you may get your money back
> *under certain conditions* being part of a contract. If you are in bad
> luck you may even not get it back at all, however - as people learned
> during the latest financial crisis once again.
>
> If I *keep* my money there is no such risk. I just keep it.
>
> It is very easy to see that there is a major difference here. In fact
> it is the difference between a pre-capitalist fortune keeper - who
> really keeps her fortune - and a capitalist - who applies her fortune
> by giving it to others to make profit.
>
> > Explain to me how you would get interest under your
> > cushion, I would be very very curious.
>
> Sorry, it was *your* claim that keeping money raises interest. If this
> would be true then I can keep it under my cushion with the same
> effect. I'm just taking your statements serious.
>
> Taking statements serious is a simple necessity in a scientific
> approach. To think about what a statement actually means is a very
> simple test of an assumption against reality. It is basic scientific
> work - by which you are obviously shocked.
>
> > I'm trying to put the conflict behind,
>
> I have no conflict with you. To me all this feels very much like
> shadow boxing on your side.
>
> > but if you descend to such levels of
> > ridiculousness, it makes it very difficult.
>
> I'm really sorry Michel, but that it all but ridiculous. The question
> whether you can keep your money or need to give it to someone else -
> usually mediated by a bank but also in the form of shares - to get
> interest is the all-or-nothing question here.
>
> > Please, let's put that behind
> > thus.
>
> You are free to correct your statements so they make sense and - at
> best - match the observable reality. It would be far better than to
> leave the community just because someone says you are preaching
> nonsense.
>
> Frankly I'm curious how long it will take that you at least agree that
> you can *not keep* your money and get interest for it. In science that
> would be simply to recognize the observable reality and modify your
> basic assumption according to it. As you wrote above you are still not
> ready to modify your basic assumption - though you are now replacing
> your basic assumption with sentences which are inherently
> contradictory.
>
> With a scientific approach the next step would be to question what
> happens with the money you just gave to others. That would be the
> research step. And it would be easy because it is well-known that
> banks give money to capitalists in the form of credit. In turn the
> capitalists then apply it to labor force and machinery to produce
> products they can sell for a higher price than they had themselves for
> the input. The logical conclusion is that interest is a share of the
> profit of a capitalist. The amount of interest is directly coupled to
> the amount of expected profit and the risk involved to actually make
> this profit [1]_. In other words: What you are trying to accomplish
> with your [named above] stuff is what actually happens in capitalism
> all the time. It's in fact the very core of capitalism.
>
> .. [1] Of course in a fully expanded exchange system at the end of its
>       life cycle like contemporary capitalism it is a bit more
>       difficult. It's a interesting task to research that. But the
>       general principle stays.
>
> I, Christian and others explained all that over and over again and it
> is really not hard to understand. In fact it needs no theory at all.
> It's all observable reality. But you constantly ignore this. Feel
> free. But don't be shocked if others call this nonsense or - when
> combined with an attempt to evoke certain feelings in simple-minded
> persons - even propaganda.
>
>
>                                                Grüße
>
>                                                Stefan
>



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