While standing in line at the grocery store yesterday, I overheard the following conversation between a mother and her daughter:
“Mom, can I have some gum?”
“Do you have any money?”
“Yeah.”
“Not pretend money. They don’t take pretend money here.”
“I have real money.”
“Show it to me then.”
“It’s orange.”
“Let me see. No, you need real money here. They don’t take pretend money.”
“Mom?”
“Yeah?”
“Can I have some gum?”
It’s sad but true. The store doesn’t accept imaginary orange money, not even from adorably cute little girls. But the mother wasn’t entirely correct in telling her daughter that the store didn’t accept pretend money. The store does accept certain kinds of pretend money, so long as it comes from the right people. It accepts my debit card, for example, which, since it withdraws money from my bank account, is only slightly less substantive than the empty hand the little girl showed to her mother. That doesn’t help me any. Whatever money I spend with my debit card represents real wages that I’ve earned with my labor. But when I deposit my earnings into a bank account, most of my money, about ninety percent of it, even though I use the full amount to make purchases, will disappear. The only reason I’m able to make purchases with my money is because its value is secured through other people’s debts, debts that generate profits for the banks. And if everyone in America paid off his or her debts, I wouldn’t have any money. NO ONE would have any money! Here are a couple videos to explain it all in more detail:
Moneyasdebt
moneymasters
I haven’t watched the second one yet (it’s REALLY long), so I can’t really vouch for it. Let me know if it isn't worth my plug.
Wasting time..
2 months ago
7 comments:
Okay, I have watched the first video. I think it is given that US currency is a manufactured trade fiction that is exchanged for goods and services. But isn't truth, truth by agreement?
We agree that a dollar can buy a dollars worth of goods. When you go to Starbucks do they accept some other form of fictionalized trade? IF you tell them that money is just a social moray, do they jut give you a cappuccino, and accept your assertion?
I really don't understand how a person who trades four hours of work for a bushel of corn, is different from a guy who trades 50 bucks for a blowjob. Both are obeying the Smithian rules of supply and demand.
Now, the argument could be made as to "why we should accept the status quo here. I retort, trade is trade. Seems slightly tautological, I know, but it is all I have to offer here.
I would like to see socity change. I would like a more simple lifestyle to be adopted. And, yes, I would love to see the reported life of the hunter-gatherer to be adopted by all. Given this, the Utopian ideal is too far out of reach (even you can't give up technology and your car).
Much Love,
Trav
I think you missed the point entirely, HH. You need to take those Libertarian lenses off for a moment and watch the video again.
First of all, forgetting the fact that Adam Smith was a retard, our current system of trade has nothing whatsoever to do with the "Smithian rules of supply and demand". There IS no difference between a person who trades four hours of work for a bushel of corn and a guy who trades 50 bucks for a blowjob if something of REAL and agreed upon value is being exchanged. And if we had a financial system based on the gold or silver standard then your analogy might have some minuscule relevance, but it has nothing to do with the system that's in place. The American financial system is not only based on nothing of tangible value, it's based on negative value. We create money from debt! What that means is that we can never get out of debt. The system requires infinite expansion (in a world of finite resources@!). Every time the Federal Reserve creates money it creates debt; consequently, paying off the national debt means destroying the money supply. We're talking Alice-in-Wonderland logic here: I create money by creating debt and I pay off my debt by creating more money which creates more debt which creates more money which creates more debt which creates more.... That, of course, is absolutely fucking ridiculously insane!
As the movie points out, in our system, the Federal Reserve (which isn't a Federal Institution at all) purchases bonds on the open market by issuing credits to the seller's bank. In other words, it buys these bonds with nothing. Banks then use those credit deposits as reserves to be lent out with interest (at a 1/10 ratio). You might, like certain Reagan Republicans used to, respond by saying that there isn't anything wrong with debt. Debt is what makes our country work, after all. But the problem with debt is that debt requires interest--and the larger share of that interest is usually imposed on the less wealthy members of society (the ones who DON'T control the money system). The other problem with a financial system based on debt is that it requires infinite spending to avoid collapse--consumer culture, in other words--something that hasn't proved a blessing to the natural and Third World resources we've been pillaging, because of our system's needs, to stay afloat.
Secondly, when you say that truth is truth by agreement, who the hell is making this agreement? Did YOU agree to this? If so, I'd like to make you a permanent trading partner. I'll lend you $100 in the form of a ten dollar bill and charge you 5 percent interest on the one hundred dollars. Deal? By my calculations, if you take five months to pay me back, I'll gross $125 for my ten dollar exchange. And, by the way, my ten dollar bill is orange.
The point of the movie is that we have a financial system that REQUIRES debt and interest. It's impossible for you and I to exchange money without giving some of the money involved in that exchange to the Federal Reserve, and it's impossible for the nation as a whole to decrease spending. Are you still sure you want to agree to that? To reiterate, the Federal Reserve and its banking subsidiaries create money by creating debt. So, if you really do agree to that, I'd like to ask you to not only become my permanent trading partner but to give me five percent of every financial transaction you make. I mean, if you agree to give that sum and more to the money changers, surely you're willing to do the same for a family member, right? As is evident, fair and equal exchange--and "Smithian rules of supply and demand"--can't exist in that system.
So, are you SURE about this agreement? I'm trying to save up for an extra long vacation this summer.
One more thing: I can't give up technology so long as I live within a system that requires I live with it. But I could easily give it up if that weren't the case--and if I weren't a technology-reared "civilized" human being.
And my car would be the EASIEST and the FIRST thing to give up!
Also, if you think the so-called "Utopian Ideal" is out of reach, then it is. That's the kind of thinking that has got us to buy into this pathologically fucked-up system for as long as we have. In my view, there's nothing Utopian about a sustainable lifestyle at all. It's a necessity if we want to survive.
I wrote:
"It's impossible for you and I to exchange money without giving some of the money involved in that exchange to the Federal Reserve, and it's impossible for the nation as a whole to decrease spending."
That might be a bit of an overstatement--but not by much. If I give you ten dollars and you choose not to deposit that money in your bank account or spend it so that someone else can deposit it in a bank account, then the Fed wouldn't make a profit. Either way, though, the profit isn't necessarily exacted from you as an individual. So it's probably more accurate to say that SOMEONE has to pay for NEARLY every money transaction that you make. Also, it is possible to decrease spending (not very likely but possible), but it isn't possible to pay off the debt. As a result, the system indirectly ENCOURAGES spending because it doesn't encourage saving and because money created from debt has to be reinvested. So, while it's possible to decrease spending, it's not possible to STOP spending--even after the population has satisfied all its needs and wants.
It also occurs to me that I may've presented this issue as being less complex than it is. I'll watch the other movie--and maybe the first one again--and post a follow-up that might clear things up (as much for myself as for anyone who reads it).
Shane...I'm gradually working through your posts. They are almost always so densely packed and require intense concentration. This one blew me away. We took a vacation to DC a couple years ago with the kids. We did the typical touristy things...visited museums, the mall, the capital, saw the magna carta, etc. One of the places we visited was the US mint. I remember having this exact question...what kind of capital is used to back money production? Is it still gold? I imagined some cavern full of golden bars kept under tight security. A vision of something out of a James Bond movie came to mind. Oh I was so naive! I got only blank clueless stares from the nice mint worker who were there to babysit us. I left thinking, even though I never got an answer...of course they back it with some kind of tangible thing..maybe it isn't gold but it certainly is something REAL. I just watched the first film and I was shocked. It feels just like when I gave up organzied religion. When I saw the man behind the curtain in the land of Oz. Except this man is the boogie man. It's like one of those movies where the murder happens inside a church. A place that you think is safe, something to protect you and then you see the murderer is really the nice old grannie who always sits on the first pew but she's really a psychopath with a hockey mask and a chainsaw chopping up the congregation to feed them to her demon of death dog with an insatiable appetite for human flesh. Am I overreacting? Is this all alarmist leftist propaganda? I think not.
I've been reading Greek Myths with my 9 year old at night and this video reminds me a little of these stories. Which of course, need I say, always end so tragically.
I'm scared.
Hold me.
I'm not kidding. This really frightened me. Especially as you look around and listen to the current economic news. At least what I can almost understand. The foreclosures, the mortgage crisis, the recession talk. It's all connected isn't it? This current system cannot logically sustain itself. What the fuck are we doing?
Okay, I'm ready for more punishment. Onto video two. You're right, it is really long, so I'm going to break it into multiple parts.
I LOVE when you leave comments like this. This is awesome:
"It's like one of those movies where the murder happens inside a church. A place that you think is safe, something to protect you and then you see the murderer is really the nice old grannie who always sits on the first pew but she's really a psychopath with a hockey mask and a chainsaw chopping up the congregation to feed them to her demon of death dog with an insatiable appetite for human flesh."
And yeah, I know your fear. Hold me back!
Good words.
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