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critique of loon theories around banking/money creation/the federal reserve

Not even that. Look at all the stuff sihhi posted. It's about a fantasy of a kinder, gentler, volksgemeinschaft capitalism that would exist if only the wretched foreigners would stop their interference.

According to this, it's been taken up by Ron Paul's acolytes:

http://rationalwiki.org/wiki/Federal_Reserve

Not surprising, the libertarian movement in the US has long courted (and been run by) out and out racists

Ayn+Rand+Native+Americans.png


Also

http://articles.washingtonpost.com/...letters-ron-paul-survival-report-jesse-benton
http://holocaustcontroversies.blogspot.co.uk/2010/07/murray-rothbard-lew-rockwell-and.html
 
You don't need a proletariat or a bourgeoisie either.

The logical contradiction is between capital and labor. These forces may sometimes be incarnated in social classes, as they arguably were in the industrialized nations of the C19th. Or they may not--as in our situation today.

Really off for breakfast now.

You'll need to explain THAT peculiar claim in a bit of detail for me Phil ! You say , "These forces MAY sometimes be incarnated in social classes" (?) You most certainly DO need a bourgeoisie and a proletariat for a capitalist system to exist. The classes may very often not be "class conscious" of their role. But that doesn't alter their historical or social reality --- Marx's distinction between a "class in itself" as opposed to the much higher level of self identity ,ie, "a class FOR itself" . For instance the "bourgeoisie" may be in a historically aberrant form , eg, the collective bureaucratic ruling class of the Stalinist regimes, but which are actually just a temporary collective , proxy, bourgeoisie awaiting full conventional bourgeois capitalist restoration. But "Capital" still has a social class personification. Likewise, it doesn't matter what the form of work it is that "labour" does, from very indirect value-producing "coupon clipping" (huge numbers of wage workers in the Western economies) , or working in a shopping mall, or making cars,or in a steel mill, if that activity is a part of the overall value-producing global capitalist process, then the people involved in it are objectively part of the social class of "proletarians" . Admittedly in the western advanced economies there are large numbers of proletarians left in idleness as a no longer needed reserve army of unemployed, but this doesn't alter the fact that without a value producing class of people , working for money wages, , a "proletariat" there is no "capitalism". Doesn't matter whether subjectively at various times most of the entire proletariat is persuaded that it is "middle class" or whatever bogus subjective, lifestyle-led, classification people adopt. The objective historical reality is Capital versus Labour - and both ALWAYS have human , social class representatives. The globalised geographic subdivision of the work process , with the purely localised illusion of "Post industrialisation" in the "back office - coupon clipping " advanced states of world capitalism simply doesn't abolish the class of " proletarians". Why do you think otherwise, Phil ? The concept of a "post industrial society" which has moved "beyond class struggle" and marxist "social classes" manifesting the fundamental conflict between Capital and Labour " sounds very like all that dreadful old Cold War 1960's US sociological bollocks by the likes of pro capitalist "Functionalist" ideologues like Talcott Parsons - promoted as a counterpose to Socialist/Marxist social/economic analysis. It was rubbish then, and its certainly rubbish now.
 
What a loathsome, vile, contemptible person.
I agree. But, this just what Locke, bentham etc and the people who are the heroes of liberalism argue though. That those who are in a position to have a duty to take land not being 'improved' when the chance to 'improve it' (i,e adopt capitalist relations and agricultural techniques) existed.
 
I agree. But, this just what Locke, bentham etc and the people who are the heroes of liberalism argue though. That those who are in a position to have a duty to take land not being 'improved' when the chance to 'improve it' (i,e adopt capitalist relations and agricultural techniques) existed.

Quite right. There's been debate for years about the nature of property relations in pre-contact America. From memory, I think some have argued that Indian/Native American groups controlled "ranges" in ways that implied some sort of exclusive ownership. You can be sure that even if that was proven, Rand or Locke or Bentham would move the goalposts. . .
 
I agree. But, this just what Locke, bentham etc and the people who are the heroes of liberalism argue though. That those who are in a position to have a duty to take land not being 'improved' when the chance to 'improve it' (i,e adopt capitalist relations and agricultural techniques) existed.

Christopher Hitchens subscribed to this view, as well.

http://christopherhitchenswatch.blogspot.co.uk/2008/11/is-only-good-injun-dead-injun.html

And in the person of Christopher Hitchens, writing in the Nation, the political left then sounded its voice. To Hitchens, anyone who refused to join him in celebrating "with great vim and gusto" the annihilation of the native peoples of the Americas was (in his words) self-hating, ridiculous, ignorant, and sinister. People who regard critically the genocide that was carried out in America's past, Hitchens continued, are simply reactionary, since such grossly inhuman atrocities "happen to be the way history is made". And thus "to complain about[them] is as empty as complaint about climatic, geological, or tectonic shift". Moreover, he added, such violence is worth glorifying since it more often than not has been for the long-term betterment of humankind - as in the United States today, where the extermination of the Native Americans - the American Indians - has brought about "a nearly boundless epoch of opportunity and innovation".

One possible exception Hitchens allowed to his vulgar social Darwinism, with its quasi-Hitlerian view of the proper role of power in history, was the Euro-American enslavement of tens of millions of Africans. But even then, Hitchens contended, those centuries of massive brutality only "probably left Africa worse off than they found it". Clearly, however...if it could be shown to Hitchens' personal satisfaction that Africa was in fact "better off" following the enslavement and simultaneous mass killing of 40 million to 60 million of its people, he would celebrate the abominations of the slave trade with the same vim and gusto that he did the genocide against the native peoples of the Americas.


These are, of course, precisely the same sort of retrospective justifications for genocide that would have been offered by the descendants of Nazi storm troopers and SS doctors had the Third Reich ultimately had its way; that is, however distasteful the means, the extermination of the Jews was thoroughly warranted given the beneficial ends that were accomplished. In this light it is worth considering again what the reaction would be in Europe and elsewhere if the equivalent of the actual views of Krauthammer and Schlesinger and Hitchens were expressed today by the respectable press in Germany - but with Jews, not Native Americans, as the people whose historical near-extermination was being celebrated. And there is no doubt whatsoever that if that were to happen, alarm bells announcing a frightening and unparalleled postwar resurgence of German neo-Nazism would, quite justifiably, be going off immediately throughout the world.
 
Well it's obviously up to you, but I predict that even if he does make you feel better by engaging with you it'll lead into bloody pages of arguing minutiae.
Well I do think Jazzz is fetishising money. I also suspect dwyer is doing so too, to the extent that I can understand what he is getting at. It isn't money that rules the world at all. The distribution of money cannot be separated from the wider society that produces the money.

So, I agree with Keen about how money is created, that the loan creates the deposit. This means that money is created in response to demand for money. This bit has to be considered. Who is asking for loans and why? What is it about the wider society that causes them to ask for those loans? You cannot separate off the money system from society and consider it in isolation.
 
Well I do think Jazzz is fetishising money. I also suspect dwyer is doing so too, to the extent that I can understand what he is getting at. It isn't money that rules the world at all. The distribution of money cannot be separated from the wider society that produces the money.

I don't think either Jazzz or I is fetishizing money. What we are doing is calling attention to the fact that society fetishizes it.

Until quite recently, this fetishization took the traditional form of attributing financial value to a physical substance--gold, for instance, or precious stones, or even banknotes. But today the physical object has disappeared and only the fetish remains.

That does not of course deprive the fetish of its power to alter reality.

I have to go to the shop now. But I will be back soon to answer Ayatollah and others who have raised interesting questions. In the meantime, I suggest that everyone reads "The Diamond As Big As The Ritz" by F. Scott Fitzgerald, who understood the psychological effect of money better than anyone this century:

"By the end of a fortnight he had estimated that the diamond in the mountain was approximately equal in quantity to all the rest of the diamonds known to exist in the world. There was no valuing it by any regular computation, however, for it was one solid diamond--and if it were offered for sale not only would the bottom fall out of the market, but also, if the value should vary with its size in the usual arithmetical progression, there would not be enough gold in the world to buy a tenth part of it. And what could any one do with a diamond that size?

It was an amazing predicament. He was, in one sense, the richest man that ever lived--and yet was he worth anything at all? If his secret should transpire there was no telling to what measures the Government might resort in order to prevent a panic, in gold as well as in jewels. They might take over the claim immediately and institute a monopoly.

There was no alternative--he must market his mountain in secret. He sent South for his younger brother and put him in charge of his colored following--darkies who had never realized that slavery was abolished. To make sure of this, he read them a proclamation that he had composed, which announced that General Forrest had reorganized the shattered Southern armies and defeated the North in one pitched battle. The negroes believed him implicitly. They passed a vote declaring it a good thing and held revival services immediately."

http://www.sc.edu/fitzgerald/diamond/diamond.html
 
Today, the physical object has disappeared, and only the symbol remains. I agree with you that the use of 'valued but useless' things such as jewels and gold actually obscured the purely symbolic nature of money. In that sense, fiat money is far more sensible. It does not hide what it really is behind shiny things.

I don't get the last paragraph of that FSG quote. Is that the authorial voice saying 'darkies'? Like Celine and others from his era, he hasn't aged well.

I agree with you about one thing. When I look at a banknote, it does feel like more than a piece of paper. The purchasing power it represents is a part of what it is. It isn't just a piece of paper in that sense as that purchasing power is a real thing. I'm just about to go to the shops and prove it.

There are other things like this. Certificates for qualifications, for instance, are more than just paper. They can be valued simply for the writing on them and what it represents in the real world.
 
Today, the physical object has disappeared, and only the symbol remains. I agree with you that the use of 'valued but useless' things such as jewels and gold actually obscured the purely symbolic nature of money. In that sense, fiat money is far more sensible. It does not hide what it really is behind shiny things.

I don't get the last paragraph of that FSG quote. Is that the authorial voice saying 'darkies'? Like Celine and others from his era, he hasn't aged well.

I agree with you about one thing. When I look at a banknote, it does feel like more than a piece of paper. The purchasing power it represents is a part of what it is. It isn't just a piece of paper in that sense as that purchasing power is a real thing. I'm just about to go to the shops and prove it.

There are other things like this. Certificates for qualifications, for instance, are more than just paper. They can be valued simply for the writing on them and what it represents in the real world.

I've posted this on this thread once before but it's just about the best explanation I've ever seen of the kinds of stuff lbj is getting at here - of money as social power, relating it to value production/abstract labour and explaining it in terms of a commodity fetish/bad abstraction. All the Kapitalism101 videos are great but this one is particularly good, only a couple of 10 minute clips but it helped me get my head around a few things I'd been struggling with.

Part 1:


Part 2:
 
I don't get the last paragraph of that FSG quote. Is that the authorial voice saying 'darkies'?

He's comparing slavery to wage slavery, and suggesting that people who believe in money will believe in anything. Basically we are the "darkies."

I agree with you about one thing. When I look at a banknote, it does feel like more than a piece of paper. The purchasing power it represents is a part of what it is. It isn't just a piece of paper in that sense as that purchasing power is a real thing.

A fetish, in other words.

I think we can all agree on that. We differ over the ethical status of fetishes.
 
You'll need to explain THAT peculiar claim in a bit of detail for me Phil ! You say , "These forces MAY sometimes be incarnated in social classes" (?) You most certainly DO need a bourgeoisie and a proletariat for a capitalist system to exist. The classes may very often not be "class conscious" of their role. But that doesn't alter their historical or social reality --- Marx's distinction between a "class in itself" as opposed to the much higher level of self identity ,ie, "a class FOR itself" . For instance the "bourgeoisie" may be in a historically aberrant form , eg, the collective bureaucratic ruling class of the Stalinist regimes, but which are actually just a temporary collective , proxy, bourgeoisie awaiting full conventional bourgeois capitalist restoration. But "Capital" still has a social class personification. Likewise, it doesn't matter what the form of work it is that "labour" does, from very indirect value-producing "coupon clipping" (huge numbers of wage workers in the Western economies) , or working in a shopping mall, or making cars,or in a steel mill, if that activity is a part of the overall value-producing global capitalist process, then the people involved in it are objectively part of the social class of "proletarians" . Admittedly in the western advanced economies there are large numbers of proletarians left in idleness as a no longer needed reserve army of unemployed, but this doesn't alter the fact that without a value producing class of people , working for money wages, , a "proletariat" there is no "capitalism". Doesn't matter whether subjectively at various times most of the entire proletariat is persuaded that it is "middle class" or whatever bogus subjective, lifestyle-led, classification people adopt. The objective historical reality is Capital versus Labour - and both ALWAYS have human , social class representatives. The globalised geographic subdivision of the work process , with the purely localised illusion of "Post industrialisation" in the "back office - coupon clipping " advanced states of world capitalism simply doesn't abolish the class of " proletarians". Why do you think otherwise, Phil ? The concept of a "post industrial society" which has moved "beyond class struggle" and marxist "social classes" manifesting the fundamental conflict between Capital and Labour " sounds very like all that dreadful old Cold War 1960's US sociological bollocks by the likes of pro capitalist "Functionalist" ideologues like Talcott Parsons - promoted as a counterpose to Socialist/Marxist social/economic analysis. It was rubbish then, and its certainly rubbish now.

As I say, the logical contradiction is between capital and labor. There can be no peace, no reconciliation, no long-term co-existence of capital and labor, because they are opposites.

In the late C18th, C19th and early C20th, in the industrialized world, capital and labor were approximately incarnated in two social classes: bourgeoisie and proletariat. The bourgeois lived from capital, the proletarian lived by labor.

But since the Second World War, the vast majority of people in the post-industrial West do both. The opposition between capital and labor is therefore internalized.
 
He's comparing slavery to wage slavery, and suggesting that people who believe in money will believe in anything. Basically we are the "darkies."

Hmmm. Ok. I thought his point was something like that. I'm still hmmm at 'darkies' in the authorial voice like that. I also don't really agree with fsg. It's very sensible to believe in the purchasing power of money. I'm cooking a meal on the basis of it right now.

A fetish, in other words.

I think we can all agree on that. We differ over the ethical status of fetishes.

Ok, if that's how you'd like to use the word fetish, then yes. And yes, we differ over its ethical status, I think. I don't see how money could not be like that. And I do see the practical use of a concept like money. The fact that it is a fetish isn't in and of itself a reason to be against it.
 
As I say, the logical contradiction is between capital and labor. There can be no peace, no reconciliation, no long-term co-existence of capital and labor, because they are opposites.

In the late C18th, C19th and early C20th, in the industrialized world, capital and labor were approximately incarnated in two social classes: bourgeoisie and proletariat. The bourgeois lived from capital, the proletarian lived by labor.

But since the Second World War, the vast majority of people in the post-industrial West do both. The opposition between capital and labor is therefore internalized.

I think that's the second time you've made that assertion on this thread.

It sounded like bollocks the first time, and it sounds like bollocks now.

Can you back it up?
 
But since the Second World War, the vast majority of people in the post-industrial West do both. The opposition between capital and labor is therefore internalized.

To an extent. And to a varying extent depending on the country. This is also complicated by the growth of the state post-WW2. In most industrial countries around 40 percent of GDP goes to the state, and a varying amount of the means of production are owned by the state. In these mixed economies, capitalist relations do not totally hold sway.
 
I think that's the second time you've made that assertion on this thread.

It sounded like bollocks the first time, and it sounds like bollocks now.

Can you back it up?
He just means that people may be waged workers but also own their house, have money invested in the stock exchange via pension funds, etc. TBH, I think this is more true in the US, where dwyer lives, than in most of Europe. It's more true in the UK now than it was pre-Thatcher, though.

The internalisation is a result of on the one hand wanting higher wages, and on the other having a certain self-interest in company profits going up. I think its importance should not be exaggerated, though. Most of us are more proletariat than bourgeoisie in terms of where our income comes from, and even post-Thatcher, the mixed economy provides a certain degree of services outside capitalist relations altogether.
 
He just means that people may be waged workers but also own their house, have money invested in the stock exchange via pension funds, etc. TBH, I think this is more true in the US, where dwyer lives, than in most of Europe. It's more true in the UK now than it was pre-Thatcher, though.

The internalisation is a result of on the one hand wanting higher wages, and on the other having a certain self-interest in company profits going up.

Well, we'll see what he says for himself, but owning your own home has absolutely nothing to do with living from capital.

If you are going to answer phil, I want proper figures, not just bold assertion...
 
Well, we'll see what he says for himself, but owning your own home has absolutely nothing to do with living from capital.
In a capitalist society, that home you own has a potential rental value. Sure, you need to live in it, so you don't rent it out, but it certainly puts you one rung above those who don't own their home as you don't have to pay rent yourself. And you also potentially have a stake in the price of assets, something that has everything to do with capital. Even just the potential to rent out a spare room to a lodger has to do with living from capital - a house is capital when it is used like that, no?

After the rise in house prices of the last 40 years, plenty of people have found themselves with a lot of money in their pockets because they bought a house. Friends of mine who bought a house in London in the 70s for £8k have just sold that house for £750k. Regarding their jobs, they would be considered skilled working class, I guess - they're retired now; he was a printer and a chef, she worked in admin. But now they have a big wedge in their pockets - that's due to the workings of capitalism .
 
In a capitalist society, that home you own has a potential rental value. Sure, you need to live in it, so you don't rent it out, but it certainly puts you one rung above those who don't own their home as you don't have to pay rent yourself. And you also potentially have a stake in the price of assets, something that has everything to do with capital. Even just the potential to rent out a spare room to a lodger has to do with living from capital - a house is capital when it is used like that, no?
You can live in it AND rent it out :D
 
Hmmm. Ok. I thought his point was something like that. I'm still hmmm at 'darkies' in the authorial voice like that.

It's tempting to argue that it's the narrator, who is a Southerner, but it certainly sounds discordant today. But then again the story is an allegory for the economic history of America, so it would be strange if it didn't include a bit of racism.

I also don't really agree with fsg. It's very sensible to believe in the purchasing power of money.

It's not sensible, it's just compulsory.

How can you not agree with Fitzgerald? He certainly understood money:

"From 1870 until his death in 1900, the history of Fitz-Norman Washington was a long epic in gold. There were side issues, of course--he evaded the surveys, he married a Virginia lady, by whom he had a single son, and he was compelled, due to a series of unfortunate complications, to murder his brother, whose unfortunate habit of drinking himself into an indiscreet stupor had several times endangered their safety. But very few other murders stained these happy years of progress and expansion.

"Just before he died he changed his policy, and with all but a few million dollars of his outside wealth bought up rare minerals in bulk, which he deposited in the safety vaults of banks all over the world, marked as bric-_-brac. His son, Braddock Tarleton Washington, followed this policy on an even more tensive scale. The minerals were converted into the rarest of all elements--radium--so that the equivalent of a billion dollars in gold could be placed in a receptacle no bigger than a cigar box.

"When Fitz-Norman had been dead three years his son, Braddock, decided that the business had gone far enough. The amount of wealth that he and his father had taken out of the mountain was beyond all exact computation. He kept a note-book in cipher in which he set down the approximate quantity of radium in each of the thousand banks he patronized, and recorded the alias under which it was held. Then he did a very simple thing--he sealed up the mine.

"He sealed up the mine. What had been taken out of it would support all the Washingtons yet to be born in unparalleled luxury for generations. His one care must be the protection of his secret, lest in the possible panic attendant on its discovery he should be reduced with all the property-holders in the world to utter poverty."
 
The objective historical reality is Capital versus Labour - and both ALWAYS have human , social class representatives.

the point being made here, which I agree with to an extent, is not that the contradiction between capital & labour is no longer, but that there is an increasing internalisation of class struggle/antagonism within the individual himself/herself

The nice clean mapping between Capital & Bouregoise and Labour & Proletariat isn't quite as distinct as it once was

For sure the tension & struggle between Capital & Labour is still the fundamental dynamic within society, but this doesn't map out quite as neatly into sets of individuals as it once did

Class analysis is not about defining individuals anyway, it's about roles played in the reproduction of society, and increasingly the same individual can play a number of increasingly conflicting/contradictory roles. The worker with pension funds/investments who wants their money to work harder for them. The chief executive who doesn't really own capital in any real sense (no one really does in the same sense as they used to anyway) and seeks as high a compensation package as possible from the 'owners' of the company. It's not as widespread or developed as Phil would have us believe but there is an increasing tendency for class antagonisms/struggle to become internalised within individuals that just didn't exist 150 years or so ago.

Marx touches upon this a bit in Vol 3 of Capital in relation to limited companies (albeit as a focus initially on the development of the transition from functioning capitalists to 'mere' managers and the emergence of money capitalists, first as individuals and then 'socialised' through the credit system)

Vol 3 Ch 27 said:
Formation of stock companies. Thereby:

The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.

Transformation of the actually functioning capitalist into a mere manager, administrator of other people's capital, and of the owner of capital into a mere owner, a mere money-capitalist. Even if the dividends which they receive include the interest and the profit of enterprise, i.e., the total profit (for the salary of the manager is, or should be, simply the wage of a specific type of skilled labour, whose price is regulated in the labour-market like that of any other labour), this total profit is henceforth received only in the form of interest, i.e., as mere compensation for owning capital that now is entirely divorced from the function in the actual process of reproduction, just as this function in the person of the manager is divorced from ownership of capital. Profit thus appears (no longer only that portion of it, the interest, which derives its justification from the profit of the borrower) as a mere appropriation of the surplus-labour of others, arising from the conversion of means of production into capital, i.e., from their alienation vis-à-vis the actual producer, from their antithesis as another's property to every individual actually at work in production, from manager down to the last day-labourer.

In stock companies the function is divorced from capital ownership, hence also labour is entirely divorced from ownership of means of production and surplus-labour. This result of the ultimate development of capitalist production is a necessary transitional phase towards the reconversion of capital into the property of producers, although no longer as the private property of the individual producers, but rather as the property of associated producers, as outright social property. On the other hand, the stock company is a transition toward the conversion of all functions in the reproduction process which still remain linked with capitalist property, into mere functions of associated producers, into social functions.
 
Although if neo-class analysis worked you'd expect the working class to be more enthusiastic about the solutions flowing from it.
 
Well, we'll see what he says for himself, but owning your own home has absolutely nothing to do with living from capital.

If you are going to answer phil, I want proper figures, not just bold assertion...

You are the one who thinks we should boycott people for quoting Abraham Lincoln:

I think that's a cue for everyone to put him on ignore...

Abraham Lincoln was one of the greatest men who ever lived. Your assertion is simply preposterous, so much so that I am persuaded there is nothing to be gained by the furtherance of our acquaintance. Good day Sir.
 
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