WEB OF DEBT BLOG

TIME FOR A NEW THEORY OF MONEY

29 Responses

1. 

   F. Beard, on October 29, 2010 at 10:59 am said:

   Why just have one theory of what money is? Do you think you’ll ever convince the goldbugs or the usury class?

   How about this: separate money supplies for the government and private sectors?

   1) Government money would be pure fiat (sorry goldbugs, we’re wise to you) and only legal tender for government debts (taxes and fees) not private ones.

   2) Private monies would only be good for private debts not government ones.

   Let’s agree to disagree about the nature of money. Government is force and the private sector is voluntary cooperation. How is it morally possible for them to share just one money supply? It isn’t, I would bet.

   Reply
   • 

     Birch, on October 29, 2010 at 1:34 pm said:

     “Government is force and the private sector is voluntary cooperation.” F. Beard.

     Sorry, it is not nearly so black and white. It is now impossible for many people to procure the basic necessities of life without buying many items from Phillip Morris or one of its subsidiaries, for example. They MUST, to survive. If my car hits the ditch in the middle of nowhere in the middle of winter, I do not “voluntarily” give the tow truck company a week’s pay to come out and rescue it any more than I “voluntarily” pay income tax. I could freely choose to abandon my car or give up over-the-table employment to an equal degree. Private mafia routinely force businesses to pay protection money. Private sector competition is the antithesis of cooperation, and oligopoly makes participation obligatory.

     I think we should be able to agree on what money is and what its general function should be. It is a representation of what we gave up (labour or things) to get it, and it serves to facilitate trade and the devision of labour – trade here includes trading excess labour now for retirement in the future. Pretty straightforward. I think we can also agree that money should not be institutionalized in a way lets it, by itself, create more of itself – this is ensured by the notion that something real has to be given up to get it.

     This, to me, is the nature of money in its natural habitat. Can we agree on that? If we can, it’s a big start and we can base a lot of positive cooperative action on it.

     The evils of government are, for the most part, the evils of private elites imposing their will on government. In this age of advanced imperial decay it is very easy to confuse the two, or to forget that it has been otherwise before and will be again. So long as the plutocrats have power, they will be able to manipulate whatever private monies you come up with as much as they do now.

     You proposition for 1) and 2) type monies is not a solution to the problem. It is an option that should be discussed and perhaps implemented once a solution has been found, but it won’t cure any of the problems we currently face.

     Don’t get me wrong, I love the idea of small private monies, particularly in the style that the indians taught the fur traders in the early days of white occupation of North America. These currencies served Canada and pre-Canada very well for a very long time. However, there is a reason why these currencies slowly became the single national currency we see today I bet lots of good research could be done on this: while the bankers were consuming England (well researched), how exactly did the classic beaver pelt token become the nickel we use today? I’ll bet you legal tender laws weren’t the cause of this change, merely the nail in the coffin.

     The plutocrats, being lazy, wanted easier control of the whole system from their tall buildings and estates out east. They chose the centralized system, and used government as a cover-up so we would think it was public money when really the only “public” monies were the private tokens of the old days. You can’t re-invent that old system until you’ve delt with the power that destroyed it.

     A truly public cetralized money system could work great, indeed examples have flourished in communities and empires for thousands of years. If it were truly public, there would be no reason for it to demand to be the only money. That public and private monies need to be mutually exclusive or totally separated seems random and irrelavent.

     Regardless, once we have the luxury of debating these things seriously, it will mean we’ve already won. Step 1 is to agree on the fundamentals of money. In doing so, we agree that the present debt system is unacceptable. Step 2 is to overthrow that damning system. If we ever get that far, there will be much discussion of Step 3 at the victory party.

     Whether we can salvage the benefits of democracy while exhorcising the plutocrats I don’t know, but it would be a real shame to loose the social freedoms and surficial equality we’ve gained over the past couple hundred years. This is why Ellen’s ideas of non-revolutionary change are appealing.

     Reply
     • 

       F. Beard, on October 29, 2010 at 3:04 pm said:

       Agree on a common definition of money?! Not likely.

       I am aware of the following definitions of money:

       1) Money as a scarce commodity.
       2) Money as debt
       3) Money as that which is accepted for taxes
       4) Money as equity such as common stock
       5) Money as a tally for work performed or goods delivered
       6) Money as a medium of exchange
       7) Money as a store of wealth.

       Are all those definitions valid? Maybe. Let’s find out with a true free market in private money creation. And practically speaking, a true free market in private money creation would crush the goldbugs once and for all since other, non-usury forms of private money would out compete them.

       Reply
       • 

         Birch, on October 29, 2010 at 3:58 pm said:

         Yah, you missed my point altogether. While I was defining the role of money, you came back with various descriptions of it in different forms. Two different issues.

         And your free market will eat you up and leave little to the worms.

         Reply
         • 

           F. Beard, on October 29, 2010 at 4:13 pm said:

           And your free market will eat you up and leave little to the worms. Birch

           Actually, though I believe in separate money supplies for the government and private sectors, I also advocate a full bailout of the population with Greenbacks before that reform to free the population from the FR bankers.

           Poor me! Caught between the fascist goldbugs and the socialists.

           Still, I’d rather be right than popular.

           Reply
           • 

             Birch, on October 29, 2010 at 4:29 pm said:

             We agree on lots of things. That’s why I think it would be useful if we could agree what role money should play in society. Once that role is determined, its form is much more flexible. I’m still not sure what your views on this are.

             I haven’t the time of day for free markets, as I like the idea that a society can determine what sort of market serves it best and then just do it. This is entirely seperate from planned economies and certainly doesn’t make me socialist, because it can done by any sort of government or style of social organization. I find ismism rather useless and misleading at the best of times.

             Reply
             • 

               F. Beard, on October 29, 2010 at 4:38 pm said:

               Though we don’t agree on everything, the goldbugs are our common enemy. Let’s prove to them, as Stepehen Zarlenga says, that it is the state that gives value to gold as money and that it is not a viable purely private money form.

               I am all for sharing wealth justly which is why I am for a bailout of the population and for common stock as a private money form which shares wealth rather than loots it.

               Reply
               • 

                 Birch, on October 29, 2010 at 4:55 pm said:

                 Sounds good.

                 It’s good to remember that inequality lies beneath most, or all, of these problems we discuss. If we can reverse the trend to greater inequality (big if) and bring all incomes closer to a proper representation of effort expended, then I believe solutions will present themselves that we can’t even dream of now, and consensus will form where we now see confusion.

                 Reply
           • 

             michael Z, on January 4, 2011 at 3:31 am said:

             Time to shift out of the choice of only two choices an perhaps look at the economic ideas
             of Robert Theobald. The Avant-Guard econ
             professor from Princeton in the 50″s who died
             two or three years ago. His themes centered on
             “An Economy Of Abundance”. The following are some of his ideas an interpretations of them taken from Wikipedia.

             “Today our social econ and world system
             neither needs all the available workers to
             provide goods & production nor can it pro-
             vide work opportunities for them.

             This is due to the development technology
             capacity to do more with less. Labor + the
             complex of technological inventions increases the production in less time with
             requiring less labor…..which =’s more leisure
             time for workers.”

             “$$$ should be issued by the State only when there,s ‘Real’ wealth & real goods to correspond to it. Inflation is creating more $$
             than goods an increases $$$ not to equal
             the GNP but to pay of the debt to private
             Bankers.”

             “The real wealth is productive capacity. Technological expertise has replaced gold
             as the backing for all paper but is usually exploited by & for private advantage.”

             “The National Debt is somewhat of a National
             disgrace, and is added to, with the greatest
             of reluctance, except for the promotion of war and the stockpiling of obsolescent wea-
             pons…and of course carries%only a tiny pro-
             portion of which is paid to the small bond
             holder. Most of it swells the coffers of The
             International $$$ Lenders….WE NEED SOCIAL INSTEAD OF ECONOMIC SOLVING.”

             One current person who addresses the
             “Social Solving” issue is J.W. Smith who holds PhD in Political Economics. Smith tells
             us a trenchant truth: “an enormous share of
             our wealth was stolen an began with the monopolization of land by especially a few
             wealthy elites.” This sentiment, I think, was expressed by the French philosopher & writer Rousseau, who wrote,”The first man
             who,having enclosed a piece of ground,be-
             thought himself as saying ‘this is mine,’ and
             found people simple enough to believe him,
             was the real founder of ‘civil’ society. From
             how many crimes,wars,and murders,from how many horrors and misfortunes might not
             anyone saved humankind,by pulling up the
             stakes,or filling up the ditch,and crying to
             their fellows: “Beware of listening to this impostor ; you are undone if you once forget
             that the fruits of the earth belong to us all,
             and the earth itself to nobody.” (The Commons?)

             In a similar vein a Cree Indian Chief once ex-
             pressed; “When the last stream is poisoned
             and the last fish dead,and the last tree cut
             down. The white man will learn he cannot eat
             $$$$$$ money.”

             I think if were are survive as a global people
             those in power will have to organize and de-
             velop around economic models in the spirit
             of the concepts expressed above. That may be to tall an order for the social engineering
             that has to take place ‘between their and our
             ears’.

             Reply
           • 

             michael Z, on January 4, 2011 at 3:55 am said:

             Time to shift out of the choice of only two choices an perhaps look at the economic ideas
             of Robert Theobald. The Avant-Guard econ
             professor from Princeton in the 50″s who died
             two or three years ago. His themes centered on
             “An Economy Of Abundance”. The following are some of his ideas an interpretations of them taken from Wikipedia.

             “Today our social econ and world system
             neither needs all the available workers to
             provide goods & production nor can it pro-
             vide work opportunities for them.”

             “This is due to the development technology
             capacity to do more with less. Labor + the
             complex of technological inventions increases the production in less time with
             requiring less labor…..which =’s more leisure
             time for workers.”

             “$$$ should be issued by the State only when there,s ‘Real’ wealth & real goods to correspond to it. Inflation is creating more $$
             than goods an increases $$$ not to equal
             the GNP but to pay of the debt to private
             Bankers.”

             “The real wealth is productive capacity. Technological expertise has replaced gold
             as the backing for all paper but is usually exploited by & for private advantage.”

             “The National Debt is somewhat of a National
             disgrace, and is added to, with the greatest
             of reluctance, except for the promotion of war and the stockpiling of obsolescent wea-
             pons…and of course carries%only a tiny pro-
             portion of which is paid to the small bond
             holder. Most of it swells the coffers of The
             International $$$ Lenders….WE NEED SOCIAL INSTEAD OF ECONOMIC SOLVING.”

             One current person who addresses the
             “Social Solving” issue is J.W. Smith who holds PhD in Political Economics. Smith tells
             us a trenchant truth: “an enormous share of
             our wealth was stolen an began with the monopolization of land by especially a few
             wealthy elites.” This sentiment, I think, was expressed by the French philosopher & writer Rousseau, who wrote,”The first man
             who,having enclosed a piece of ground,be-
             thought himself as saying ‘this is mine,’ and
             found people simple enough to believe him,
             he was the real founder of ‘civil’ society. “From
             how many crimes,wars,and murders,from how many horrors and misfortunes might not
             one have saved humankind,by pulling up the
             stakes,or filling up the ditch,and crying to
             others: “Beware of listening to this impostor ; you are undone if you once forget
             that the fruits of the earth belong to us all,
             and the earth itself to nobody.” (The Commons?)

             In a similar vein a Cree Indian Chief once ex-
             pressed; “When the last stream is poisoned
             and the last fish dead,and the last tree cut
             down. The white man will learn he cannot eat
             $$$$$$ money.”

             I think if we are survive as a global people
             those in power will have to organize and de-
             velop around economic models in the spirit
             of the concepts expressed above. That may be to tall an order for the social engineering
             that has to take place ‘between their and our
             ears’.

             Reply
2. 

   Mary Rose, on October 30, 2010 at 2:48 am said:

   “Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions.”

   Ellen,

   I was curious about YES! Magazine, so I checked out their website to see who funds it. I saw the word “foundation” so I wanted to know what foundation because I’ve learned they’re often fronts for the powers that be. Under the Board of Directors I see that the Chair and Co-founder is David Korten, and it states, among other things, that: “He is an associate of the International Forum on Globalization and a member of the Club of Rome.”

   My understanding is that the Club of Rome is about as Illuminati/New World Order as one can get.

   Please comment.

   Reply
   • 

     Joseph Danison, on October 31, 2010 at 6:08 pm said:

     You ought to read Korten’s “When Corporations Rule the World” if you want to know who the man is. He’s a progressive thinker, and a very decent chap. I’m sure “Illuminati/New World Order” means something specific to you, like maybe “global totalitarian dictatorship”. If this is the case, then rest easy. That is NOT David Korten.

     Reply
     • 

       Mary Rose, on November 1, 2010 at 12:25 am said:

       Tell me what you think of him being a member of the Club of Rome.

       Reply
       • 

         Joseph Danison, on November 3, 2010 at 6:11 pm said:

         Don’t have an opinion. David Rockefeller is nearly fossilized right now, one among the living dead. It’s out of his hands. Korten has an article in Common Dreams today. You might read his article and become familiar with what he has to say. It’s not fair, nor intelligent, to make uninformed judgments about people you don’t know….

         Reply
         • 

           Mary Rose, on November 4, 2010 at 7:19 am said:

           I don’t know why you mention David Rockefeller.

           The Club of Rome is associated with the man-made global
           scam. Their book in the 70s The First Global Revolution states
           on page 75: “In searching for a common enemy against whom we
           can unite, we came up with the idea that pollution, the threat
           of global warming, water shortages, famine and the like, would
           fit the bill.”

           Reply
           • 

             Mary Rose, on November 4, 2010 at 7:21 am said:

             Correction: “global scam” should be “global warming
             scam.”

             Reply
           • 

             Joseph Danison, on November 4, 2010 at 5:31 pm said:

             I thought it was founded by Rockefeller, but I’m mistaken.
             Wikipedia says Aurelio Pecce, 1968.

             The common enemy is environmental disruption, .We do
             have to unite against it.

             That’s better than the war on terror, yes?

             Reply
             • 

               step back, on November 6, 2010 at 1:20 am said:

               The common enemy is population-overshoot.

               That is a polite way of saying we spotted the
               enemy in the mirror and
               OMFG … it is us.

               Reply
             • 

               Mary Rose, on November 9, 2010 at 8:50 am said:

               Oh dear. I see “Notify me of follow-up
               comments” didn’t work.

               I am of the opinion that it’s important to
               separate environmental issues like pollution from population/resources.

               I believe that the Club of Rome is interested in
               controlling the world’s resources – for the good
               of the members and their associates – not the
               planet or the vast majority of people.

               Reply
           • 

             Mary Rose, on November 15, 2010 at 6:59 am said:

             Correction: The book in the 70s was not The First
             Global Revolution – it was The Limits to Growth
             (1972), which was the first publication
             of the Club of Rome: a report based on a
             study commissioned by the Club.

             The First Global Revolution came out in 1991.

             Reply
             • 

               hungry4food, on November 15, 2010 at 8:59 am said:

               Mary Rose heres some more of that One World Order stuff

               Please go to this website ; http://ning.it/a1Comj
               , and scroll down to Sec.2 Policy(B-iii) you will read the line (iii)under “The United States shall promote this policy by”: pursuing the United States’ accession to the Law of the Sea Convention; the ” Law of the SEA Convention ” Which regulates ONLY ” International Waters ” what Obama wants to do Is place USA waterways into control under this UNITED NATION REGULATORY POLICY Which would Require the United States to Conform on USA Land to the Environmental Management and Commercial Developments of our Water Ways as How the United nations would DICTATE the USAGE LAWS, and If the USA did Not Abide by these Standards then UN NATO FORCES would Have the Right to Invade the USA and Enforce these LAWS , and if you read this link you can read how the International Water ways are regulated in all forms , this would Undermine the USA sovereignty , and would be Un-Constitutional as if we were a One World Order under UN Agenda 21 , see here ; http://en.wikipedia.org/wiki/United_Nations_Convention_on_the_Law_of_the_Sea

               Reply
3. 

   Ivan .M, on October 30, 2010 at 2:53 am said:

   I’m weary of leaving the issuance and regulation of currency in private hands, as the value currency represents is created by collective need instead of by individual productivity. The nature of that value creation is one criteria I use for determining whether a service or product should have government be specially involved in it or not. The other determining factor I weigh is the size of the jurisdiction in question; socialistic programs tend to function much better in smaller communities since the populations are usually more homogeneous (this naturally facilitates cooperation) and their local economy is simpler.

   Frankly, I don’t even consider small town collectivist programs to be socialism. Implicit in the theory of socialism is that it works on a mass scale regardless of the greater complexities & degrees of spontaneous behavior in large industrial societies. As Soviet Russia and Maoist China have clearly demonstrated, this folly leads to Hell on Earth.

   Getting back to value creation, if the value of the good/service being discussed is largely created by the productivity of the individuals producing it, free markets work. This is not the case with corporations, as their capacity for capital concentration and mass production is only possible through limited liability — a privilege granted by the public.

   When you understand that socialism is not “redistribution of wealth” but rather “consolidation and control of wealth”, it becomes obvious that socialism may develop in both the public and private sectors. Our current monetary system diminishes individual humans for the sake of non-human collectives known as “banks.”

   If you’re going to oppose socialism, oppose it without discrimination; do not cherry-pick based on your biases against either business or the state.

   Reply
4. 

   step back, on October 30, 2010 at 3:41 am said:

   Ellen,

   Nice article.

   But how about money being seen as a set of implicit “promises” being made by anonymous parties to each other?

   When my boss pays me for a day’s work well done with “money” there is an implicit promise buried into the transaction that somehow, somewhere out there in society, I will be recompensed at fair value for what I did for my boss.

   But my boss washes his hands over seeing to it that the implicit promise is actually fulfilled. And no one else in society can know what (if anything at all) I contributed by means of my work and what therefore will be fair compensation for it.

   Moreover, no one worries about running out of resources (i.e. oil) needed to fulfill the implicit promises.

   Money does not convey the signals for these concerns.

   Reply
5. 

   Carl V, on October 30, 2010 at 12:07 pm said:

   A true free market in currencies would drive most of global trade in a medium that could be trusted, like gold backed money.

   As long as the debate is framed between one type of fiat money over another, banks will pretend to publicly protest. But like the past, they know they can work around it in time.

   Remember when the Federal Reserve act of 1913 was passed, Federal Reserve Notes was still backed by gold and the US Treasury Secretary sat on its board.

   Reply
6. 

   Jacob Richter, on November 1, 2010 at 6:33 pm said:

   Why aim low, when aiming higher is better?

   http://www.revleft.com/vb/nationalising-banksi-t137695/index.html?t=137695

   Simply put, there should be no private banking at all. The most public control over the money supply as possible should be achieved, and Gosbank came closest to achieving this.

   Reply
7. 

   Stanley Mulaik, on November 8, 2010 at 3:46 pm said:

   There is a fascinating book you need to read by
   Howard T. Odum, who was a famous ecologist,
   famous for his ideas about how to analyze an
   environment in terms of energy and material flows
   from source to ground in that environment. Here’s the reference:
   Odum, H. T. (1971). Environment, Power and Society. New York: Wiley-Interscience.

   In a section of Chapter 6 “Power and Economics” titled
   ‘Money as a loop reward selector’ he says: “Money is
   a special currency evolved to allow the production of one person to be rewarded by a feedback loop from some other part of society. Some authors have compared money to energy, but the two are not the same and they flow in opposite directions. We receive food from the grocery store by passing money in the opposite direction to the grocer. We receive money when we put energy into work that makes an energetic contribution to the function of at least one other unit. The money system keeps its members contributing useful work for the network and money provides a means for organizing energy flows. Money circulates whereas energy flows are unidirectional….” He then
   proceeds to discuss economics in terms of the energy flows and feedback circuits in the societal environment.
   His book provides a totally different way of looking at the problem of money. You have to consider the role of the physical environment and physical laws to really
   understand what is going on.

   Reply
8. 

   hungry4food, on November 9, 2010 at 10:46 am said:

   Ellen you might try and model a monetary theory around this much needed project like a long term Brettonwoods approach , ” How to build a desalination system to desalinate ocean water out of the Gulf of Mexico , and pump it inland to the edge of the Ogallala Aquifer and pump the water back into the ground refilling the depleting resource for food production . http://www.suite101.com/content/ogallala-aquifer-a-finite-environmental-asset-a125008 , http://en.wikipedia.org/wiki/Desalination
   And design this to be part of the Clinton call for a pipeline from Canada through the Midwest to supply energy to the Refineries in the Louisiana area ad we the people would see some stability in our Primary Wealth creation markets come back for future generations . http://thehill.com/blogs/e2-wire/677-e2-wire/125035-clinton-seems-poised-to-approve-transcanada-pipeline

   And develop things like this into the plans of the project ; http://www.verticalfarm.com

   The FEDERAL RESERVE should be targeting their QE program towards specific areas of expansion so that proper goals for growth can be accomplished , rather than the Spaghetti approach , and The only way to drive this fundamental to gain its expansion is to tie a incentive reason to the desire to risk expanding the areas of this type of growth , and here are some ideas ;
   http://en.wikipedia.org/wiki/Commodity_money

   http://online.wsj.com/article/SB10001424052748703597204575482932002419218.html

   Reply
9. 

   Brutarius, on November 10, 2010 at 8:02 am said:

   New theory of money, huh…kinda like that new “in theory only” money concocted for Brazil that you point to as a shining light?

   You know, the “money” that’s at heart of a Brazilian banking crisis right now?

   http://www.zerohedge.com/article/bank-crisis-spreads-brazil-where-banco-panamericano-plunges-after-warning-liquidation-could-

   Reply
10. 

    Robin Smith, on November 13, 2010 at 1:58 pm said:

    Are we certain that credit is money?

    I ask because credit in the proper sense is a receipt for goods of some kind. That is, as it still works today, bills of exchange used between traders. No money was involved. Thought you could say the credit notes were money.

    I feel there is still a difference. Credit as above is based on something solid. Goods and services whose final input was labour. Therefore it MUST operate in a true market of supply and demand.

    Whereas ‘credit money’ as banks create is mostly based on nothing. And most of it is used to buy land, that has no cost of production.

    Does this make sense?

    Reply

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