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

Tue May 19 18:31:41 CEST 2009

This is a reasonable intro to money that you list.  It is a difficult
topic.  With no logical starting point...I use marginalism because
economists (orthodox ones) do.  It is hard to explain marginalism to
people.  I've tried many times with limited success.

I think the real difficult one to accept is monetizing the debt.  You
explain money creation well, but I challenge anyone to explain to me what is
going on when the Federal Reserve buys debt of the US government with money
it creates!  I have no idea what that is.  A bond is an asset, and
governments can simply make a balance sheet by "buying" the bonds it already
sold?  What is that!?!

The real challenge to all economics is where does money come from?  This is
the real problem for P2P systems of money.  Usually one will see a commodity
theory (or a labor theory of value) behind money.  Those simply don't work
very well for well-known reasons that fill economics texts.

The real answer is that if everyone believes someone can create money, they
can!  The US government or the Japanese government adjust money supply all
the time--usually by expanding it.  Now you are pushed to explain
inflation...which your document punts on...

Ryan Lanham

On Tue, May 19, 2009 at 12:04 AM, Stan Rhodes <stanleyrhodes at gmail.com>wrote:

> I've posted on related matters of how money works, from a basic
> conceptual viewpoint, because of misunderstandings in the past.  See
> here:
>
> http://listcultures.org/pipermail/p2presearch_listcultures.org/2009-January/001116.html
>
> Feel free to make derivatives from pieces of it, if it's useful at all.
>
> It's hard to explain that money is inherently trust of the people in
> the "money network"--trust in their solvency in meeting obligations as
> commonly valued, and trust in the liquidity of good and services
> within that network.  It's even harder to go from that to Hocus
> pocus!!! that trust is now given form by Federal Reserve Notes and
> bits in the global financial system.
>
> Which, of course, pretty much all of society and the media paints as a
> commodity.  Even we do sometimes, in our language: you said "stored."
> I think the use of words like "stored," is still a bit misleading, but
> that's a minor quibble.
>
> Kevin and I don't disagree much on foundational descriptions of
> concepts like credit.
>
> -- Stan
>
> On Mon, May 18, 2009 at 12:03 PM, Ryan Lanham <rlanham1963 at gmail.com>
> wrote:
>  > Is there anyone who disagrees with what Kevin is saying here?   That
> these
> > points are in doubt I think is the beginning of the discussion.
> >
> > Some basic understanding of the theory of money and its history has to be
> > understood.  I'm more than willing to discuss or sort out any ideas, but
> I
> > for one need to understand what someone accepts or rejects, or the
> discuss
> > is truly nonsensical.
> >
> > For example, money is taken to be fungible by its very nature:
> > http://en.wikipedia.org/wiki/Fungibility
> >
> > More importantly, money is a token for an idea...it isn't a physical
> thing.
> > The idea is that value can be transferred from one activity or good to
> > another and stored in between.  During that storage, it can be lent
> > out...like any good or service. People may more may not charge a fee
> while
> > it is lent out...that fee is called "interest."
> >
> > The vast majority of world money has no physical manifestation at all.
> > Money is an idea that is created and moved under certain social rules
> that
> > are quite explicit and quite strict.  Without it being an idea, we are in
> > commodity economies...and bound to be poor and hopeless
> inefficient...that
> > IS an equality of sorts.
> >
> > These discussions filled the US newspapers--in 1890!  It spurred the rise
> of
> > neoclassical (Marshallian) economics and then Keynesian economics as
> > response when Marshallian economics argued for permanent equilibria in
> > economies.   Bretton Woods, etc. are essential points of basic
> understanding
> > to have any meaningful discussion of modern concepts of money.
> >
> > I am starting to think three fundamental P2P Foundation Projects are in
> > order... 1. A discussion on the nature of value.  2. A discussion on the
> > relationship of property to value.  3. A discussion on the relationship
> of
> > money to value and property.  All of these are basic modern social ideas.
> > Breaking with those social ideas leads rapidly to nonsense in trying to
> > interact with a modern world.
> >
> > Ryan
> >
> >
> > On Mon, May 18, 2009 at 1:14 PM, Kevin Carson
> > <free.market.anticapitalist at gmail.com> wrote:
> >>
> >> On 5/18/09, Stefan Merten <smerten at oekonux.de> wrote:
> >>
> >> >  > 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.
> >>
> >> I think this vehement reaction to a semantic dispute over whether one
> >> "keeps" money in a bank is just plain silly.  Obviously, someone who
> >> deposits money in a bank isn't "keeping" it in the same sense as
> >> someone who physically hoards cash in their personal possession (under
> >> a mattress or whatever).  But I don't think Michel was suggesting
> >> anything of the sort in the first place.  And the expression "keep
> >> money in a bank" is just normal, idiomatic English usage.
> >>
> >>  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.
> >>
> >> I think you're missing the fact that the causality works two ways.
> >> The scarcity of credit, the difficulty of obtaining it and the
> >> artificially high price of credit, also influences the rate of profit.
> >>
> >> Interest is not just determined by the rate of profit, but by
> >> state-enforced entry barriers against competition in the supply of
> >> credit, and restrictions on self-organized credit by producers
> >> advancing their own products to one another against future production.
> >>  As both Thomas Hodgskin (a Ricardian socialist) and Alfred Marshall
> >> (the founder of mainstream neoclassical economics) pointed out, the
> >> "wage fund" doctrine was nonsense because the capitalist was not
> >> advancing the savings from past labor, but rather giving workers a
> >> claim on current production by other workers during the production
> >> process.  And both Hodgskin and Marshall both pointed out, also, that
> >> that function could be carried out directly by workers themselves in a
> >> cooperative manner, if the capitalist had not interposed himself
> >> between producers and preempted the function of advancing current
> >> production against future production.
> >>
> >> That was one of the fundamental disagreements between Marx and
> >> Proudhon (whom I suppose you'd include among the "money tricksters").
> >> Proudhon believed that eliminating the barriers to free,
> >> self-organized credit among the producing classes would make it easier
> >> for ordinary working people to aggregate their own capital, and thus
> >> drive down the rate of profit.  As a whole host of people have pointed
> >> out, wage employment competes with self-employment:  the capitalist
> >> can only extract surplus value unless he can use the state to
> >> foreclose direct access to the means of self-employment on more
> >> favorable terms.  Marx wanted to treat credit as neutral in this
> >> system, but it's not.
> >>
> >> --
> >> Kevin Carson
> >> Center for a Stateless Society http://c4ss.org
> >> Mutualist Blog:  Free Market Anti-Capitalism
> >> http://mutualist.blogspot.com
> >> Studies in Mutualist Political Economy
> >> http://www.mutualist.org/id47.html
> >> Organization Theory:  A Libertarian Perspective
> >>
> http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html
> >>
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> >
> >
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>
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