revol68 said:well Baudrillards problem is that having shown that the boundary between use value and exchange value is extremely fluid, he goes on to completely reject it.
slaar said:Something like that, exactly. My area of expertise is Economics, so I can only comment authoritatively on McCloskey. I'm a big fan, and she doesn't go anywhere near the kind of drivel that zArk is sprouting here.
I said near the beginning of the thread, I agree that money is not real, any more than the numbers chalked on the blackboard next to the darts board are "real". It is, however, a convenient way of keeping score. It is not autonomous and doesn't rule anything. However people have certain innate drives and behaviours, and that can make the flow of money seem to have its own drive - however, that is an illusion.phildwyer said:But absurd as it is, that *is* the empirically "real" world. Money, which rules the world, is a system of signs with no *visible* guiding intelligence, although I'd argue that it does in fact have an autonomous agency in the sense that it obeys its own logic which transcends human intentions.
I note you have made no comment on my post #283. I am wondering if you now accept that banks create money by virtue of making ledger entries.slaar said:Great philosophy is engaging, revealing, profound and grounded in objecive reality. So not applicable to anything here. I love philosophy, but not pomo dead ends. There are much betetr things to do with your over-eager brain.
White Lotus said:I said near the beginning of the thread, I agree that money is not real, any more than the numbers chalked on the blackboard next to the darts board are "real". It is, however, a convenient way of keeping score. It is not autonomous and doesn't rule anything. However people have certain innate drives and behaviours, and that can make the flow of money seem to have its own drive - however, that is an illusion.
White Lotus - you are an intelligent poster. The question is not whether money is 'real' or not.White Lotus said:I said near the beginning of the thread, I agree that money is not real, any more than the numbers chalked on the blackboard next to the darts board are "real". It is, however, a convenient way of keeping score. It is not autonomous and doesn't rule anything. However people have certain innate drives and behaviours, and that can make the flow of money seem to have its own drive - however, that is an illusion.
Thank you for that compliment.Jazzz said:White Lotus - you are an intelligent poster. The question is not whether money is 'real' or not.
The issue on which this all depends is whether it is debt-based or interest-free. Do you appreciate the difference?
Suppose you had a society and you needed a form of exchange. Aha! I say, you need money. Jolly hockey sticks, you say, what a good idea. So I go, I will supply you with your money, only thing is I'm lending it to you, I will lend you five billion jazzz on which your society will pay 5% interest per annum. And if you can't stump up repayments, I'll have to take away some of your stuff like houses and land. Hang on a sec, you say, I smell a rat, there's no reason why you should get all that money for nothing and eventually we won't be able to pay back the interest for the simple reason it was never there in the first place! Ah, don't worry, I say, I'll simply lend you MORE jazzz at my discretion to take care of that on which I'll charge more interest, no problem.
What would you say? Of course you would realise that your economy would spiral into debt with me just being able to sit back and count the money as it rolled in and wait while you all pleaded with me to lend you more jazzz & I wouldn't lend to the guys who were really struggling or anyone I had a beef with and like this I'd lord it over you so thoroughly and lazily it would be quite disgusting.
You would run me out of town with a pitchfork, and rightly so.
So why haven't we done so to the banks?
White Lotus said:However, historically money came about in a slightly different way from your scenario. It was originally based on something with an agreed value and scarcity: silver and gold. Then governments started issuing paper money, backed by gold ... which was later abandoned. However, it is not a private individual or institution that issues money, it is the government itself.
White Lotus said:Thank you for that compliment.
However, historically money came about in a slightly different way from your scenario. It was originally based on something with an agreed value and scarcity: silver and gold. Then governments started issuing paper money, backed by gold ... which was later abandoned. However, it is not a private individual or institution that issues money, it is the government itself.
There are checks and balances: Germany's hyperinflation showed what happens to a government that prints more money than it can back. Today exchange rates between currencies perform a similar function, and certain agreed economic conditions such as government borrowing levels, determine entry into the Euro.
On an individual basis, money is still a way of keeping score. Anything I borrow is secured against assets or future earnings, I may use it for ephemeral pleasure, such as a holiday, or I may buy assets (eg property) which will produce an income that would service the debt and give me a surplus. But it's still just a medium of exchange.
That's why you can have all the asset bubbles you like holding things up in the short term, but long term it's technological improvement and driving social processes like what's going on in China and India that propel countries forward
er, no. the price of gold has little to do with the cost of getting it out of the ground however the vaibilty of a gold mine has a lot to do with the price of gold.ZWord said:So originally, its value came from the work of getting it out of the ground,
er, not neccessarily (Spanish South America was, I guess the exception)ZWord said:which basically had to be done by coercing slaves,
er, a military force perhaps but probably not a state owned military force.ZWord said:and having a military to enforce ownership of the mine,
ZWord said:so its value was based on violence, and the power of those with the means to coerce, to give something tangible in return for silver and gold.
slaar said:That's inflation, zArk. A basic result of more money chasing the same amount of goods. And it's precisely the reason why control over the money supply doesn't entail control over the real economy.
That's most peoples argument, not yourszArk said:That is your argument not mine.
So, I think you should admit you don't fully understand what's going on here.slaar said:It's just quite tedious debating with somebody who keeps on repeating the same mistake.
Not my error slaar. But I fancy we are getting somewhere. Now, would you mind telling me where the new loan comes from, if not the bank's computer keyboard? Or do you now concede that banks create credit out of nothing?There is no difference between a bank accepting promissory notes in exchange for credits to the borrowers' transaction accounts and a loan. That is a loan by definition, as your last quote makes clear. Your error, repeated, is that if that credit to the transaction account is taken out and hidden under somebody's bed, no more money can be leant out.
Ah, in previous posts you were describing it as rather simple. Now you suggest it is complicated! I think you should admit you don't really understand it.The next iteration is dependent on that money being held in the bank, which typically loans are not (most often they are taken out, spent and deposited into a different bank by the recipient); it's not therefore automatic that £10,000 primary deposit can be multiplied into £100,000. It also depends on reserve and liquidity requirements. You're taking a complicated process and turning it into some conspiracy. It doesn't wash.
In addition, as White Lotus makes clear, all this is accounted for; banks are held to account for loans they make, consumers for loans they take out. It's a medium of exchange. Banks make a big profit, and many think credit creation should be limited, but money is just a medium of exchange. What really matters, fundamentally, is what an economy is producing, and what people are doing. That's why you can have all the asset bubbles you like holding things up in the short term, but long term it's technological improvement and driving social processes like what's going on in China and India that propel countries forward. Money really doesn't have the significance you claim.
zArk said:That is your argument not mine.
Your argument is exchange value and use value.
My argument is that use value is a myth.
The economy is based upon myth, there is no 'real' economy.
There is nothing to say that the credit they give out will be recouped for a profit.Jazzz said:Well let's see what we can agree on. In an earlier post you said;
"Banks can't just type in figures into a spreadsheet and call it money. That's illegal."
Yet this is exactly how credit is created when banks lend money, and unfortunately it is perfectly legal. Do you now accept this?
err... the interest charge? Securities? Bankruptcy laws? Bailiffs? Court orders?sleaterkinney said:There is nothing to say that the credit they give out will be recouped for a profit.
zArk said:Well, lets approach this from an alternative angle.
The value of money changes and so does use value where is the stability for the realness of the economy?
Value of money – is granted as changing
Use value though requires understanding of cultural changes. Cultural changes emerge from where? Multi-lateral points. There is no overseer pulling the strings (in the traditional sense). People have agency to create, change or keep things the same. So use value is emerging from the individual as a personal choice.
Well, not really. That may be the moral lesson which the banks draws from its involvement, but it is not that from which the profit is actually created. That derives from their posession of capital and the borrower's absence of same. This unequal position enables the bank to make a profit from lending. They may feel they deserve it, but it is made regardless of whether or not it is deserved.slaar said:The loan is attached to a real cost, the cost of the possibility of the borrower defaulting, and hence leaving the bank with less money than it started with and unable to meet its legal obligations to depositors, and going bust. That's the whole point, the bank takes a risk by creating credit, and is rewarded for doing so.