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

[frogwoman]

one of them iirc stood on a platform of "vote for me and i'll get you free drinks in the bar". no, fuck off.

 

[DotCommunist]

one of them iirc stood on a platform of "vote for me and i'll get you free drinks in the bar". no, fuck off.

you can see the beer hall putsch forming in his mind 'You've had your free beer and bread rolls'...

 

[Idris2002]

you can see the beer hall putsch forming in his mind 'You've had your free beer and bread rolls'...

Now it's time for the circus! He said, brandishing a whip. . .

 

[rekil]

Law Society Of Ireland on the Freemen Of The Land.

“These guys are liable to get a lot of vulnerable people into trouble."

Earlier this week, Francis Cullen, a businessman from Clonard, Co Wexford, who was adjudicated a bankrupt in July 2011, was returned to Mountjoy Prison after telling High Court judge Ms Justice Elizabeth Dunne he didn’t recognise her authority. He referred to himself as Francis of the Clan Cullen and, according to the court’s official who deals with bankruptcy cases, Chris Lehane, every time he corresponded with Mr Cullen he received a bill “to be paid in gold” for “using his name”. He had been in prison for contempt of court since February.

Barrister Andrew Robinson, who has defended homeowners in the High Court, said of the freemen: “To hold yourself out as knowing some kind of secret formula and something about the legal system and then to take a vulnerable person who is facing losing their home or getting a judgment against them and to purport to tell them how they can conduct themselves in court is an appalling thing.”

(Dunno if this is the correct thread for this)

 

[kavenism]

He referred to himself as Francis of the Clan Cullen and, according to the court’s official who deals with bankruptcy cases, Chris Lehane, every time he corresponded with Mr Cullen he received a bill “to be paid in gold” for “using his name”. He had been in prison for contempt of court since February.

If only they could just find those Barons to overthrow the Queen.

 

[kavenism]

Just looking at the Freeman board on Icke's site there was a surprisingly clear (although no less paranoid) discussion on the idea of self and world ownership. Some twitchy fellow was apparently worried that on receiving a vaccination the government would then have a claim to his body! But in the ensuing discussion on the legal distinction between self-ownership and ownership of property someone posted this.

http://www.bailii.org/uk/cases/UKHL/2005/18.html

It’s hilarious, seems like the OB were trying to do someone for possession of an imitation firearm that was in fact the persons hand! Conviction was quashed.

 

[love detective]

It’s hilarious, seems like the OB were trying to do someone for possession of an imitation firearm that was in fact the persons hand! Conviction was quashed.

Pretty surreal some of that

The Crown argument, however, depends on the contrary, untenable, proposition that, when carrying out the robbery, the appellant had his own fingers in his possession

Is that a gun in your pocket or are you purposively constructive?

Also this:-

One cannot possess something which is not separate and distinct from oneself. An unsevered hand or finger is part of oneself

clears up the abortion debate as well, an unborn foetus can't be considered anything other than part of a woman's body, so she can do what she wants with it :-

also suggests wage-labour should be made illegal, as if the labour power of labour is not considered to be in the possession of labour then it really shouldn't be getting sold to capital - capital is buying something that is not in the possession of labour to sale

 

[kavenism]

also suggests wage-labour should be made illegal, as if the labour power of labour is not considered to be in the possession of labour then it really shouldn't be getting sold to capital - capital is buying something that is not in the possession of labour to sale

Ah but labour power is an externalisation which produces something new and separate from the barer of that power. It would be a fairly crude materialism that claimed the status of substance for surplus value. I think I heard it rationalised that surplus value is abstract until the point of exchange at which time it is concretised in its money form, but it’s never something you “own” per se. Or something like that anyway.

 

[love detective]

Ah but labour power is an externalisation which produces something new and separate from the barer of that power.

but capital doesn't buy from labour the thing that labour produces, it buys labour power, it buys the potential for externalisation, it doesn't buy the externalisaiton

labour power as sold to capital is not at that point an externalisation, it's an internalisation, it is merely potential

 

[kavenism]

but capital doesn't buy from labour the thing that labour produces, it buys labour power, it buys the potential for externalisation, it doesn't buy the externalisaiton

labour power as sold to capital is not at that point an externalisation, it's an internalisation, it is merely potential

I’m not convinced of the soundness of a materialsm that allows either the ownership or sale of a potential power. I think in Marx it’s the category of abstract labour as measured by time which is in theory “sold”. But this only realises itself concretely as an externalisation in those products of labour. To see it otherwise just doesn’t make sense. You’d have to account for the appearance of quantity from something potential and abstract, and cover how the loss or alienation of a thing still leaves the same potential quantity of that thing in the bearer.

 

[love detective]

I’m not convinced of the soundness of a materialsm that allows either the ownership or sale of a potential power.

there's no contradiction, it's the very basis of the purchase and sale of use values as commodities

just like any other commodity - the purchase of labour power, as a commodity, by capital is done to ultimately access the use value of it (in the case of labour power the use value is the very peculiar type that allows, potentially, more value than it contains to be created)

and just like any other commodity, the use value of a commodity is only realised upon the actual consumption of the commodity (productive consumption in the case of labour power and MOP)

therefore at the point of purchase of any commodity (labour power included), the use value is still only potential use value and not realised. Only when the commodity is consumed (productive consumption in the case of labour power & MOP) is the use value truly accessed and realised. Up until that point of consumption it remains only potential. If consumption does not occur for whatever reason, the use value is not realised.

I think in Marx it’s the category of abstract labour as measured by time which is in theory “sold”. But this only realises itself concretely as an externalisation in those products of labour.

Abstract labour in Marx's terms has nothing (directly) to do with the exchange of labour power for money between labour and capital though. The occurrence of the later does not guarantee the existence or 'production' of the former.

Also, abstract labour represents the value of the commodity produced by labour, i.e. it includes the surplus value element. Capital does not pay for surplus value, so you can't say that it is abstract labour that is 'sold' to Capital. To assert this would mean profit would be impossible as labour would receive the full value of what it produced (as opposed to receiving the full value of what is required to (re)produce it/labour power)

You’d have to account for the appearance of quantity from something potential and abstract, and cover how the loss or alienation of a thing still leaves the same potential quantity of that thing in the bearer.

not sure I understand exactly what you're getting at here, but the reproduction of labour power in capitalist society (through wage-labour itself and subsequent consumption of MOC on the part of labour) is exactly how the loss or alienation of a thing (labour power) still leaves the same potential quantity of that thing (labour power) in the bearer (labour). And this applies both at the individual level on a daily basis (until the person dies/retires/can't reproduce the capacity to renew labour power anymore) and also at the societal level through the reproduction of labour power over generations

 

[ItWillNeverWork]

It is also disputed that the deposit comes first. Endogenous theorists claim that it doesn't - and that the system of overnight interbank lending provides cover for this - as long as the system is functioning, the 'loan-first' nature of the business can be obscured.

On this issue (old post, I know), the Bank of England have just released a paper on how money is created.

In the modern economy, most money takes the form of bank
deposits. But how those bank deposits are created is often
misunderstood: the principal way is through commercial
banks making loans. Whenever a bank makes a loan, it
simultaneously creates a matching deposit in the
borrower’s bank account, thereby creating new money.
The reality of how money is created today differs from the
description found in some economics textbooks:

• Rather than banks receiving deposits when households
save and then lending them out, bank lending creates
deposits.

• In normal times, the central bank does not fix the amount
of money in circulation, nor is central bank money
‘multiplied up’ into more loans and deposits.

Although commercial banks create money through lending,
they cannot do so freely without limit. Banks are limited in
how much they can lend if they are to remain profitable in a
competitive banking system. Prudential regulation also acts
as a constraint on banks’ activities in order to maintain the
resilience of the financial system. And the households and
companies who receive the money created by new lending
may take actions that affect the stock of money — they
could quickly ‘destroy’ money by using it to repay their
existing debt, for instance.

eta: sorry if dragging up this old thread is the equivalent to lobbing a stink-bomb into a crowded steam room. I suspect any kerfuffle that might ordinarily ensue will be dampened by the absence on the boards of certain usual suspects.

 

[Bernie Gunther]

Hardly qualifies as a 'loon theory' but the Beeb have just done a 'Minsky might have had a point about the origins of financial crises' article.

http://www.bbc.co.uk/news/magazine-26680993

 

[yield]

Hardly qualifies as a 'loon theory' but the Beeb have just done a 'Minsky might have had a point about the origins of financial crises' article.

http://www.bbc.co.uk/news/magazine-26680993

Have you heard of a man called Minsky?

A fair overview I thought. Still relavent as none of the lessons of 2008 have been learnt and the debts have been socialised. Kicking the can down the road.

The stock markets are back at their highs due to interest rates being below inflation. I reckon there'll be a correction within the next six months.

 

[ItWillNeverWork]

Have you heard of a man called Minsky?

A fair overview I thought. Still relavent as none of the lessons of 2008 have been learnt and the debts have been socialised. Kicking the can down the road.

The stock markets are back at their highs due to interest rates being below inflation. I reckon there'll be a correction within the next six months.

Not sure about there being a 'correction'. The word kind of implies some sort of natural equilibrium from which the economy has diverted. Something I'm not sure I'm on boArd with.

Nevertheless, I reckon post Keynesians like minsky have a point with regard to private debt levels. Any crisis will be when unemployment drops below 7% and the Bank of England put up interest rates if you ask me.

Why would you say six months?

 

[littlebabyjesus]

Only took them six years to find out about Minsky.

IMO the credit crunch was a bit of an acid test for economic theories. Either theorists predicted it (as Minsky did, and so did many Marxists) and so are still credible, or they didn't (like Bernake and most people at the IMF/World Bank) in which case their ideas must be ditched as wrong.

As Steve Keen (something of a Minskyist) has pointed out, much mainstream economic theorising pre-credit crunch considered that debt levels were entirely irrelevant!

 

[littlebabyjesus]

Not sure about there being a 'correction'. The word kind of implies some sort of natural equilibrium from which the economy has diverted. Something I'm not sure I'm on boArd with.

Nevertheless, I reckon post Keynesians like minsky have a point with regard to private debt levels. Any crisis will be when unemployment drops below 7% and the Bank of England put up interest rates if you ask me.

Why would you say six months?

Yeah, you still hear economists coming out with this 'correction' stuff. There's precious little evidence for it - it's a leap of faith rather than some scientific idea.

 

[yield]

Not sure about there being a 'correction'. The word kind of implies some sort of natural equilibrium from which the economy has diverted. Something I'm not sure I'm on boArd with.

It's just business speak for a crash. That's what I thought anyway?

Nevertheless, I reckon post Keynesians like minsky have a point with regard to private debt levels. Any crisis will be when unemployment drops below 7% and the Bank of England put up interest rates if you ask me.

http://www.bbc.co.uk/news/business-26153122

The Bank's rate policy will now be determined not just by unemployment, but by a wider range of indicators.

Why would you say six months?

The US Federal Reserve are going to keep cutting the stimulus / quantitative easing.

 

[JimW]

Saw this on Doug Henwood's twitter, him reviewing Piketty's Capital in the Twenty-First Century:

The core message of this enormous and enormously important book can be delivered in a few lines: Left to its own devices, wealth inevitably tends to concentrate in capitalist economies. There is no “natural” mechanism inherent in the structure of such economies for inhibiting, much less reversing, that tendency. Only crises like war and depression, or political interventions like taxation (which, to the upper classes, would be a crisis), can do the trick. And Thomas Piketty has two centuries of data to prove his point...

...
There’s another trend that intensifies the upward concentration of wealth: Fortunes themselves are ratcheting upward; within the proverbial 1 percent, the 0.1 percent are doing better than the remaining 0.9 percent, and the 0.01 percent are doing better than the remaining 0.09 percent, and so on. The bigger the fortune, the higher the return. Piketty makes this point by looking not only at individual portfolios but also (and ingeniously) at US university endowments, for which decades of good data exist. The average American university endowment enjoyed an average real return—after accounting for management costs—of 8.2 percent a year between 1980 and 2010. Harvard, Yale, and Princeton, in a class by themselves (with endowments in the $15–$30 billion range), got a return of 10.2 percent a year. From that lofty peak, the average return descends with every size class, from 8.8 percent for endowments of more than $1 billion down to 6.2 percent for those under $100 million. In short: Money breeds money, and the more money there is, the more prolific the breeding...

Thought it would be of interest here and this seems a reasonable thread to stick it in. Anyone read the Piketty book?