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| Mar 27, 2010 7:15 pm |
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re: money and debt in today's environment ... |
James Booth
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"The obligation to meet the commitment is what gives "money" value" is much the same as Quigley's initial description of money in "Tragedy and Hope"
... yet it does not describe all money.
There IS another kind of money which has value of its own: an example in "Progress and Poverty" mentioned in Henry George's introductory argument that "demonetization of silver" has been offered as one cause of economic depression reminds us of what was.
It is not in our experience today to have in our hand, most of us, *real money* - that is, a coin which has its own worth in weight of metal.
Not in our lifetime have we been able to dig silver, or gold, from the ground and take it to the Mint, which we paid for as a people, and have it "coined" - stamped into coin - for use by our friends and neighbours and people we do not even know, as well as ourselves.
What we use today is all "debt-money" - money created in the act of authorizing indebtedness: that is, our signature on a "loan" document, or our promise to pay, or our government's promise to pay
... and yes, that "promise" DOES give our current, otherwise worthless, money, "value".
"If the debt carried no obligation to supply goods or to make repayments the "money" would be valueless"
... applies when "money" is debt-based, but not when money is "real" - that is, has value of its own.
If you have a 1922 United States Quarter in your hand today, you CAN purchase the same as that coin would have purchased in 1922, although obviously if that coin is accepted at "face" value you cannot.
Except that no Standing Liberty Quarters were issued in 1922.
What *cost* twenty five cents in 1921 or 1923 costs a good amount more today, in terms of current U. S. Dollars, but the VALUE of a 1921 or 1923 Standing Liberty Quarter in average condition is more today (due to scarcity) than the value of what it would buy when the coin was issued; therefore, the *exchange in value* remains essentially the same in that you could purchase the same product or service today with the same coin, because the coin itself retains *value* above and beyond its *face value*.
What has changed is the *value* of the 2010 U. S. Quarter itself, which has so little metal content *of value* as to be essentially "worthless" - at least as compared to the Silver Quarter.
If the argument is that the same coin is "worth" only face value, then it may hold up to say "The obligation to meet the commitment is what gives "money" value"; however, what once was *money* - a 1920s issue Standing Liberty Quarter - is, or can be considered to be, STILL money, in that it can be used to satisfy an exchange, a transaction between two individuals or between an individual and a business.
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"The villagers are acknowledging the power and authority of the village Chief.
The Chief is exercising his power and authority, and making the village more
unified and probably more prosperous. At the same time he is creating a channel
through which obligations to do work, or to pay tribute flow back to him."
The "Chief" does not long occupy his position without the consent of The People, which consent "regulates" the "power and authority" of the Chief.
The Chief may serve as "judge and jury" to arbitrate disputes, yet within limitations of "fairness" judged by The People.
Therefore "unity" is not a one-way operation, but is a mutual act of Chief and People.
However much "unity" a Chief may decide to impose, a People who are not spiritually happy will not be prosperous.
That a Chief exacts some "tribute" for his service of "power and authority" does not preclude that same Chief sharing such "tribute" with those of The People who are unable to provide for themselves - as long as Chief has no cause to *sanction* such individuals.
The same is true of Mafia, yes, and that an "obligation is very strictly enforced" is reasonable in that milieu the same as it is reasonable to expect that all Americans abide by Rule of Law within the framework of the Constitution; otherwise there would be no Mafia nor village "power and authority" resting in any Chief, although Mafia "enforcement" may be somewhat excessive at times.
Extending that "logic" to saying, "The banks and the government together perform this same function..." I find a bit of a stretch.
In the village setting, an individual possesses livestock or produce, whether gathered, grown or hand-made, or possibly right to a portion of land, and it is possible that an individual may consent to some "service" in exchange for a loan of definite period, such as seed to grow a crop in exchange for committing a portion of the crop as "tribute" and / or repayment, either to the Chief or to someone else in the village.
Mafia "enforcement" does not leave the same room for an individual to transact (perhaps even to exist) as does the village Chief, although the Mafia is much more open about "consequences" of transacting within its "jurisdiction" if we can call it that.
The relationship between "banks" under a central bank and "government" is anything BUT "open" as regards consequences of individuals transacting within such a system.
As with the village Chief or Mafia Dons, there is *selectivity* (some are favoured, others not) under a central banking scheme, but rather than "skimming" off the top, the central bank has hidden, and more devious, ways of extracting its "tribute" - the moreso as "government" is increasingly beholden to the central bank.
Unlike both the village and Mafia settings, which in both cases allow "repayment" to be made in a variety of ways (more kinds of "money"), the central bank scheme limits transactions to only ONE kind of money, which is created and emitted BY the central bank, "legitimized" by government "legislation" so as to make it seem part of government, even when it is not.
Imagine Mafia being characterized as relatively honest ?
"... asking (begging) for a loan" is no good unless one can demonstrate *ability* to pay: *need* is not enough.
Home "ownership" or business success comes sooner, at much lower cost, WITHOUT any "obligation to repay" and while such "ownership" may not keep a person "chained" to the economy, it does represent a vested interest in the economy, and in both cases one is kept working and "busy supporting the system" without destructive "taxation" except for the inevitable losses due to inflation (a hidden tax) - the constant devaluation of a fiat currency - or perhaps kept working *because* of that devaluation.
Nothing is necessarily evil "unless power is abused" - yet a "debt-based" economy is itself abuse of power in that "hidden taxes" constantly diminish any *wealth* an individual who works (and transacts) honestly - within prescribed limits of the system - can hope to accumulate.
JB Private Reply to James Booth (new win) |
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