Counter-Currents
2,947 words / 18:40
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Everybody knows you need to work for your money. And if somebody just gives you money, that can only be by the expropriation of somebody else’s labor. Money just doesn’t grow on trees, after all.
But is this really true? Just because you work for your money, did the guy who paid you also work for it? What about the guy who paid him? If you follow the money trail long enough, you are going to find someone who did not work for his money. He simply got it for nothing. He did not even have to go to the trouble of picking it off trees. He just created it out of thin air by bookkeeping. We call this man a banker.
Unlike people who have to produce things of real value before they count them up and enter the number in a book, the banker creates his product simply by bookkeeping operations. The whole panoply of bank services—checking accounts, savings accounts, free toasters, checks with baby ducklings or golden retrievers printed on them—are, arguably, props to disguise the fact that the core of banking is the sheer creation of money out of nothing.
When I was a boy, one of the banks in my hometown gave out free piggy banks to children. Today, that seems a master-stroke of propaganda, fostering the impression that real banks, just like piggy banks, can only give out money that they take in. But banks are not required to keep your deposits on hand. They loan them out. Every dollar in your checking or savings account is loaned out ten times over. This is how bankers simply create money through bookkeeping. And that is just the beginning of how bankers create money. And bankers can do it even if they do not operate in buildings with Grecian columns out front and teller windows inside, even if they do not have checking and savings accounts and all the other props we associate with banking.
But even though the money you borrow was created for nothing, you still have to pay it back, with interest. And when you pay it back, you can’t just create the money. You have to work for it. You have to provide real goods and services. Thus bankers, by loaning out the money they create for nothing, gain a mortgage on future production of real world goods and services.
What is money anyway? Money is a medium of exchange that allows one to covert the fruits of one’s labor into easily portable tokens that one can exchange for the fruits of other people’s labor. What one chooses for tokens does not really matter. Money can be bits of shiny metal, colorful slips of paper, electronic data in computers, or cowrie shells, just as long as they are accepted by the butcher, the baker, and the candlestick maker.
Money does not need to have any intrinsic value. In fact, it helps if its intrinsic value is next to nothing, otherwise people will hoard it rather than circulate it freely, which would cause an economic hardship known as deflation, in which money is a commodity whose value rises because its supply diminishes. (When money is a commodity whose supply rises and its value decreases, that is called inflation. It is worth asking: Can one avoid both evils if money has no value in itself, i.e., if it is not a commodity that can be bought and sold alongside bricks and butter?)
If the best money has no intrinsic value, then the worst sort of money would be precious metals. The best sort of money would be entirely intangible, just data in a computer. Even paper money can be hoarded, for instance, when the price of toilet paper gets too high. (Perhaps the best way to ensure that money is not hoarded is simply to print an expiration date on it.)
Ideally money should be a self-effacing servant of the real economy, which produces actual goods and services. But money has grown into a jealous tyrant that interferes with the real economy. The simplest example is your average economic crisis. In an economic depression, the land does not suddenly go sterile. The udders of cows do not go dry. Men do not suddenly become stupid and lazy. The sun keeps shining; the crops keep growing; the chickens keep laying; people keep working. Goods pile up in warehouses and stores. And on the demand side, people still need to eat. But silos are bursting and people are starving because, for some mysterious reason, there is suddenly “not enough money.”
People have no money to spend, or they are afraid to part with the money they do have, because of a climate of uncertainty. After all, half way around the world, a massive swindle has been discovered; a bank has collapsed; a speculative bubble has burst. So, naturally, back in Hooterville, stores are filled with sour milk and rotting vegetables and children are going to bed hungry.
If an able-bodied man were shipwrecked on a fertile island, he would not starve for lack of money. But on this vast and fertile island we call Earth, people starve amidst plenty because we have accepted the dominion of a monetary economy that disrupts the real economy. That is no way to run a planet.
The obvious solution is simply to increase the money supply. One must make consumer demand effective so the market clears and life can go on. And the simplest way to do that is for the government to print money and give it to people. Remember George W. Bush’s 2008 “stimulus checks”? That was money for nothing, handed to people to stimulate economic activity. The effect, of course, was negligible. But it was morally and economically far preferable to the massive “bailouts” and the Obama stimulus plan that followed.
Whereas the Bush stimulus checks went directly to millions of consumers, who injected the money directly into the economy when they purchased goods and services, the bailouts and stimulus spending went to a relative handful of politically connected insiders. It turns out, furthermore, that very little of the money went to stimulate the US economy. Instead, a lot of it was invested overseas. Other recipients of bailouts held onto their cash, hoping that they could buy up real assets for cheap if the economy continued to slide deeper into depression. Moreover, whatever money did go into the US economy came with strings attached: the necessity to repay principal and interest. At least with the Bush stimulus checks, the money went directly into the economy with no strings attached in straight up purchases of goods and services.
But, as we have seen, money for nothing is not merely part of an occasional emergency stimulus measure. It is business as usual for banks.
But if money is being created out of nothing all the time, then we have to ask: Should this be left to the banks, or is there a better way of doing it?
Why not simply have the government create money and send each individual a monthly check, to be spent as he sees fit? This money would stimulate the economy directly, through the purchases of goods and services, whereas money created by banks in the form of loans must be paid back, with interest, creating a parasitic class of people who get a share of real production by loaning at interest a commodity they get for nothing.
Again, every industry that produces real goods and services has accounting and inventory costs, but actual production has to come first. You have to make toys before you can count them. With banks, money is by created simply by bookkeeping operations, e.g., making loans. Bankers “produce” merely by juggling numbers.
But if money for nothing is simply a feature of the modern economy, why not cut out the parasitic “private sector” middlemen and simply have the government create money and distribute it directly to consumers?
Why is the government preferable to the private sector as the creator of money? Because, unlike private businesses, the government is accountable to the public. Its purpose is to secure the common good. Moreover, when the private financial sector is in crisis, the bankers look to the government to bail them out—at the expense of the taxpayers. Time for the government to bail the people out—at the expense of the banks. Let’s repudiate all our debts and start fresh with a new financial system.
“But simply creating money and mailing out checks would be inflationary!” some would object. True. But it would be no more inflationary than allowing banks to create money.
Furthermore, there is a deeper issue here: Is inflation or deflation simply a product of the commodification of money? The commodification of money means that money is not merely a tool of exchange, but a commodity that is exchanged, a commodity with a cost of its own (interest). Would it be possible to decommodify money, i.e., to eliminate interest and a secondary market in money, either partially or altogether? Would the creation of money that expires after a while cut down on the commodification of money?
“But money for nothing would be socialism!” others would object. Yes, I am proposing socializing the creation and initial distribution of money. But what people do with the money at that point is their own business. The system I propose is completely consistent with private property and private enterprise. Indeed, it would strengthen and secure them, because it would eliminate a parasitic class of people who steadily mulct the real economy, and occasionally send it into crises, by creating and loaning out money that is free to them and should be free to all.
“But how would businesses capitalize themselves without bank loans?” That is a fair question. Perhaps the best answer is to say that that just as individual consumers could get money for nothing from the state, creditable producers could do so as well. But nothing about my proposal would prevent banks and credit unions from forming to capitalize businesses. But they would not be allowed to create money out of thin air. They would have to attract savings by paying interest, then loan out their deposits—and no more than their deposits—at interest to creditworthy businessmen. To do this, banks would have to offer serious interest for savings and charge serious interest on loans, but it could be done. It would definitely be “tight” money, though, which might be a good thing in the long run, since it would discourage speculative investments. Of course if money went bad after a while, it would make no sense to save it. But none of this might be necessary if interest-free state financing is a viable option. It is certainly a question worth exploring.
Nothing, moreover, would prevent businesses from capitalizing themselves by selling shares and paying dividends, either.
“But shouldn’t people work for their money?” Yes and no. Money needs to get into circulation. And the modern welfare state gives people money for nothing all the time in the form of unemployment insurance, old age pensions, welfare payments, food aid, healthcare, etc. Why not bundle all these benefits together into a single, flat monthly payment? These payments would be enough to ensure the basic social safety net we all have anyway. It would also be fairer than the present system, which expropriates the fruits of some people’s labor to redistribute them to others. It would, in effect, be welfare without redistribution.
But the basic payments I envision would not allow people to live opulently. Thus most people would choose to work. Some might choose to invest their monthly checks. Others might wish to defer them so they can enjoy better old age pensions. But the whole character of work would be changed, because people would not work because they have to. They would work because they want to. The socialist dream of the “de-commodification” of labor would be realized.
Sure, some people might choose to spend their time smoking dope and strumming guitars. But one of them might be the next Goethe or Wagner. And surely we would be better off extending the adolescences of a million bohemians than supporting a thousand scheming Wolfowitzes, Madoffs, and Shylocks along with all their warmonger and pornmonger cousins.
“But this system would create public debt!” some might object. But I am talking about creating money, not borrowing it. Why should the government allow banks to create money and then loan it, at interest, to the government, when the government can create money itself? The very existence of public debt goes back to the time when money was something of intrinsic value (like gold) that banks might possess and that the government could not just make up. A government that can simply create money has no need of public debt.
“But this system will create idleness!” is another objection. Yes, but there is nothing wrong with idleness. In fact, as I see it, the whole point of social and technological progress is to create a world in which machines put us all out of work. The goal of social policy should be to create conditions of ever-increasing productivity through scientific and technological progress.
But it would be ecologically irresponsible, indeed catastrophic, if people were to take the gains of increased productivity in the form of more consumer goods or burgeoning population growth. Thus the goal of social policy should be to keep consumption roughly stable and cash out productivity gains in terms of ever-shorter work weeks. As productivity increases, it might be possible to maintain a comfortable standard of living with 20 hours of work per week, then 10, then 5, then 1.
When the work week approaches zero hours, we would be living in a “Star Trek” economy in which scarcity of physical goods is abolished through the invention of unlimited cheap and clean energy sources and the “replicator” which can turn energy into any desired good, simply poofing it into existence. In such a world, the only scarcity would be ecological carrying capacity, which would have to be zealously guarded by keeping populations in check—or sending them out to colonize the stars, terraform dead planets, create galactic empires, etc.
But what to would people do with their leisure? Such a society would be the culmination (and, I would argue, following Hegel, the hidden inner purpose) of all human striving, from the moment man first differentiated himself from the animal and stepped into history. It would obviously be a farce if mankind struggled for millennia only to give birth to a world of indolent, empowered morons. Imagine Homer Simpson poofing donuts and Duff into existence while watching holoporn until he becomes one of the boneless blobs in hoverchairs depicted in Wall-E. Utopia would be wasted on such people. Thus along with scientific, technological, and social progress, we would also need to pursue cultural, spiritual, and genetic progress to create a race worthy of utopia.
A job is just something you do to make money so you can do the things you really enjoy. A job is just a means to doing things that are ends in themselves. Once machines put us out of work and the lollygaggers and lotus-eaters are bred out of the gene pool, people can busy themselves doing the things they find intrinsically rewarding: raising children, writing books, playing and composing music, writing software, inventing machines, playing sports, tending gardens, perfecting recipes, advancing science, fighting for justice, exploring the cosmos, etc.
It will be a realm of freedom in which the human potential to create beauty, do good, and experience joy will be unhampered by economic necessity.
This is the stuff of science fiction and other utopias, staples of the American imagination. Yet the dominant political paradigm in America and the rest of the white world is profoundly regressive and dysgenic. While whites dream of the Space Age, our system is headed toward to the Stone Age, worshiping Negroes as heroes and gods (Morgan Freeman has been typecast as God) and placing a product of dysgenic miscegenation in the highest office of the land.
If we are to resume the path to the stars, we will have to begin by addressing four principal evils: dysgenics, economic globalization, racial diversity (including non-white immigration), and finance capitalism.
What do we call this alternative economic paradigm? Ultimately, I would call it National Socialism. But the little florilegium of economic heresies I have assembled above is drawn primarily from the Social Credit ideas of Clifford Hugh Douglas (1859–1952) and Alfred Richard Orage (1873–1934), partly by way of Alan Watts, who was my first introduction to these ideas, and Ezra Pound, who is the most famous exponent of Social Credit.
It is my conviction that the North American New Right, if it is to provide a genuine alternative to the existing system, must break with all forms of “free market” economic orthodoxy and work to recover and develop the rich array of Third Way economic theories, including Social Credit, Distributism, Guild Socialism, Corporatism, and Populism. This essay and others, including ones to come, are my naïve attempts to start a conversation in the hope that it might draw in other writers who are more qualified to construct a critique of capitalist orthodoxy.
Creating an ideal world will cost us, and our enemies, a great deal in real terms. But the first step toward freedom, namely the act of imagining it, is free.
21 comments
This has to be one of your greatest articles, i think it also ties in to the “masters of the universe” speech by Alex Kurtagic. A nuanced critique of the current system followed by a coherent vision for our people that includes a take on economy that goes beyond naive leftism and messianic libertarianism a la Ron Paul. Masterful piece, thank you Greg for your work and happy Yule!
Greg,
In general, I strongly agree with your economic views (and possibly may be further to your left economically), and I basically agree with your premises here. But, while I’m no economics expert, doesn’t money ultimately have to be backed up by some sort of productivity? My understanding of inflation (in crude terms) is when there is too money circulating compared to the available goods and services that can be purchased with that money; deflation being the opposite. If you are just going to print money to hand out to people without an accompanying increase in “economic growth” you will degrade the worth of that money via inflation. I don’t think that the “decommidification” of money can solve this problem, which is based on supply/demand fundamentals.
Maybe in part the money for distribution should come from the confiscated wealth of the plutocrats, who’ll be spending their time breaking rocks in a labor camp? And via a properly progressive income tax, and corporate tax (and no whatever remaining private corporations would not be allowed to flee overseas).
It’s possible by economic understanding of inflation/deflation is flawed and in that case I await edification.
You are right about the evil nature of fractional reserve banking. However, this statement is the direct opposite of the truth: “Because, unlike private businesses, the government is accountable to the public.”
Your article ignores the actual history of how true money evolves in a society of free men, as a cultural phenomenon, not a bureaucratic one. Money is any “thing” (often a commodity, but not necessarily) which happens to be most widely in demand in any given circle of people freely trading value for value. I emphasize: “happens to be”. By that I mean that money arises from a culture of shared values. It is not defined or created by ghastly bureaucrats.
In point of historical fact, it was precisely the intervention of governments that led to the ruination of money. The fiat banking system you rightfully denounce would arise naturally or be sustainable in a free society — and even if it were, alternatives would abound so we could escape its nonsense. It is entirely the creature of government force.
Please look once again at the history. Money is the creation of free men exchanging their values in shared culture of production and integrity. It is not the creation of pathetic government functionaries.
There’s no argument here, just libertarian emotionalist disdain for government.
The argument is historical, with two major points.
(1) Money in fact arose as the creation of free men exchanging their values in a shared culture of production and integrity. (This by the way is how all good things arise.)
(2) Money in fact was ruined by vicious parasites who forcibly eliminated the honest money and substituted their own dishonest banking money for the purpose of enslaving those free men forever.
I am astounded by how many people rightfully decry the current miserable state of affairs, while demonstrating no historical knowledge of how we arrived here.
I am also astounded by how often when I laud the freedoms we enjoyed before 1965, and still more freedoms we enjoyed before 1913, and still others before 1865, I am derided as a “individualist” and a “libertarian”. For all of you wondering why the current ecconomy, government, and culture are corrupt cesspools, please keep in mind that it might have something to do with scuttling those freedoms like so much garbage. In other words, ask yourself precisely what is different between now and any halcyon date in the past that you care to choose.
I completely disagree with “sound” money policies and broad-brush anti-government sentiments. Only a state can create a pure fiat currency, which would rid the world of the curses of inflation and deflation and fully unlock the utopia potential of technological progress.
I agree that only a state can create a pure fiat currency, I simply regard the product as one of the principal causes of the economic and cultural decay we see today.
To fully unlock the utopia potential of technological progress, I suggest a regressive policy instead of the progressive one of fiat money. I say regress straight back to the models of America in the 19th and early 20th centuries, and England in the late 17th through early 20th centuries. Those fine souls demonstrated how a real civilization can and should function: not perfectly, but with a vibrant and growing productive class and a notable lack of cultural degeneracy. For example, a man working at Ford Motor Company could pay for a year at Yale for his son with just one month’s wages.
You should note well that my statement is not anti-government, since America and England in those times did have governments. They were just far better than the ghastly examples we see today.
Very inspirational stuff about the Utopian goal of an ever shortening work week, and as you say once achieved with be a culmination of all human striving, and allow us to move onto purely intellectual pursuits.
But I want to point out a misunderstanding regarding interest and money that permeates your work, and no doubt its because you are a specialist in philosophy. Money is not the cause of interest. Interest has nothing to do with money. Interest is the difference between man’s propensity to satisfy his wants now or in the future.
We are not immortal gods, we live a finite lifetime, and because time is short, man prefers a want satisfied sooner rather than later. The time difference between present and future is the phenomenon of time preference, which leads to a personal interest rate for that individual. It could be high or low. But it’s got nothing to do with money. It’s a category of human action and human cognitive function.
The reason why I painstakingly explain this, is once understood you will see how all the ideas for ‘social credit’ and abolishing interest are built on unsound foundations. They are built on denying a basic category of human behavior, which is that man prefers a present good to a future good.
This is not to say the current banking system should not be abolished, of course the monetary system is ripping us off and impoverishing the poorest of us, but don’t conflate the issue by thinking the solution it to abolish interest and lending.
Time preference is a real phenomenon. And of course it is a foundation of interest. Abolishing interest does not, however, require abolishing time preference. An analogy: sexual desire is the foundation of prostitution. One can abolish prostitution without abolishing sexual desire.
Centralization will always attract the corrupt and the corruptible. Only decentralized currencies (such as Bitcoin and its anonymous cousin Monero) that are mathematically guaranteed to be secure and uncensorable and that require no trusted third parties can usher in the utopian age Greg invokes.
fwiw, I have a computer scientist acquaintance who has worked on projects of interest to the powerful from a software standpoint. Without sharing any details (because he can’t), he assures me their top priorities in the field of computer science have nothing to do with the NSA; he says they are working overtime to remove all anonymity and pseudo-anonymity from the internet and to abolish cash and make all currency transactions electronic.
This excerpt came from a little book, A Matter of LIFE or DEBT , page 97:
Between 1817 and 1820 in the island of Guernsey, they had been suffering the general depression and unemployment that followed the Napoleonic wars. Guernsey’s State debt stood at 19,137 pounds and bore an annual interest charge of 2,390 pounds when its annual revenue was only 3,000 pounds. The island badly needed a new market hall, and its harbor, dikes and roads were in urgent need of repair. An appeal to London was made for a loan but the Government said it had no money to spare. The island’s governor then called a meeting. Was the work urgently needed? he asked. Yes, was the unanimous reply. Had they enough materials on the island, had they plenty of unused labor? Again, the reply was an emphatic yes. All we need, then, is the money, declared the Governor, so we will print it. This was done in the form of special 1-pound State note secured by the revenue-raising capabilities of the new works in the future; the real credit behind the notes lay in the proposed new works, in particular the market hall. The contractors were paid with these notes, which in turn were paid to the workmen and others who supplied the materials, and they were accepted throughout the island by the shops and local banks as being sound money. As new building and repairs were completed, incoming rates, rents, and dock dues went to pay back the currency, which in time, was destroyed. No debts, arose and no long-term interest payments. The hungry unemployed found work and incomes, trade improved, and the entire island began to enjoy a new found prosperity. [end excerpt]
Note the part about currency being destroyed. That’s how inflation is controlled.
Excellent article in every respect.
This article brought back memories of what William Joyce wrote, in his classic ‘Twilight Over England.’
‘The notion that the level of production should be controlled by monetary considerations belongs to a very primitive and superstitious stage of social evolution. Indeed, there are few savage tribes that would accept it as it is accepted in Britain today. Suppose that in some very backward island, a shell standard of money prevailed. Assume also that some malicious or half-witted creature managed to acquire half the shells in the island and to drop them into the water beyond recovery. The chiefs and witch-doctors would have to hold a council of emergency. But if the rulers of that island decreed that because half the money of the community had been lost, hunting and fishing and tilling must now be reduced by fifty per cent, there’d be a hot time in the old town that night. In such a simple state of society, the criminal absurdity of the proposal would be obvious to the meanest and most untutored intellect. Yet a policy which the most undeveloped savage tribe would reject as nonsense has been accepted by the British people as a sacred ritual for many years. Thus, of course, international finance, by restricting supplies and causing shortage, can produce whatever conditions of marketing that may be most profitable to itself. If there is one truth against which the Old School of Finance is fighting today, it is the supreme verity that production of goods should be based on the needs of the people, the only limit being the limit of natural resources and raw materials. Since the dawn of human history, the great struggle of man has been to wrest from Nature by force and cunning the means of life and enjoyment. It was only when the blessings of modern democracy made their appearance one hundred and fifty years ago, that he was told, in an arbitrary manner, that his efforts must be slackened and regulated henceforth by the private interests of an infinitesimal proportion of the world’s population.’ (William Joyce, Twilight Over England, pages 53-54; emphasis mine).
Julius Evola, went further, noting that we have now reached the stage where instead of production serving to fulfil needs, needs are generated in order to facilitate production. As if that were not bad enough, much – perhaps the vast majority – of what is produced in the economy, constitutes waste in one form or another, (ex: resources used up for marketing, wasteful duplication, etc…) – as Thorstein Veblen outlined in his ‘The Engineers and the Price Mechanism, chapter V’.
Indeed, as a general rule, the more intelligent the individual, the more absurd he finds the current economic system.
Robert Poteat did an excellent job in describing “What is Inflation”: https://groups.google.com/forum/?hl=en#!topic/the-american-monetary-institute/FB5ng-6yDN0
Although I disagree entirely, both morally and factually, with almost every point the author makes in this essay (and two other recent related essays), his clearly and reasonably expressed views make for a very promising discussion. I’m hesitant, however, to put my thoughts into words in a post which, precisely because it disagrees so strongly, may never see the light of day.
Just this observation for now: this series of essays makes for a significant departure from the metapolitical project the site, it was my understanding, had committed itself to. Greg, it seems, has settled on precisely the kind of ‘package deal’ WNism he once opposed (when enunciated by conservatives). (‘Package deal’ here refers to WN arising out of more fundamental moral or philosophical commitments — WN comes ‘packaged’ as part of the deal, although contemporary society, it is held, unnaturally overlooks this.)
I agree with most everything in this article. Of course, I’m assuming a homogenous high-trust society. There is, however, one important tweak that I would make:
The freshly printed money should only be given to households and not individuals. This would encourage marriage, and prevent women from using the state to finance the dysgenic promiscuous lifestyle that is currently filling our societies with sociopathic bastards (there’s a reason “bastard” was an insult). Perhaps it should also be a flat-amount per household to manage population size.
good stuff. I think I agree, some thoughts (wider than the precise topic)
1. Metapolitics: I think this area is or at least potentially could be ultra metapolitics because there’s very few things that could reshape the ground more totally. The problem is it is hard to break down into meme sized chunks.
2. Stated Aim: What’s the aim of the economic platform? I’d say something like maximizing the middle class to create stability and freedom i.e. not an economic aim. This gives a clear demarcation: socialism focuses on the poor, capitalism focuses on the rich, third way focuses on the middle.
3. Capitalism: Capitalism has a tendency to create plantation economies with excessively concentrated wealth. The problem with this is not a moral egalitarian one but a practical one. If you have excessive concentration of wealth then the lack of disposable income among the majority poor leads the economy to stagnate through low demand. No demand, no innovation.
4. Socialism: In theory if wealth is shared equally then the economy ought to thrive from the maximized disposable income and maybe it does for a while but the lack of incentives leads to stagnation also and thus relative poverty over time. No incentive, no innovation.
5. Third Way: By maximizing the middle class there is a large amount of disposable income to drive the economy and by allowing the incentive of joining the rich there is also a drive to innovate and increase productivity. Demand plus personal incentives -> innovation.
6. Time Preference & Usury: It’s true that people have a time preference and thus are prepared to pay more to have a shiny object sooner and interest is a fair price for that preference however there are negative public consequences to consider. By choosing to pay the price of an object plus interest the person is reducing their future demand for real goods and services by the amount of interest paid. In terms of the effect on their demand it’s equivalent to someone getting their wages and burning a percentage of it.
And it’s not just a simple transfer of one person’s demand to the money lender’s demand because of the relative numbers. With debt-based consumption you end up with very large numbers of people seduced by time preference into surrendering some of their disposable income to a few who then hoard it. The effect is to siphon demand out of the economy. It’s probably the worst way capitalism can concentrate excessive wealth as it’s completely non-productive.
So as usury for consumption is harmful then no fractional reserve banking and either no borrowing for consumption at all or at least always require a deposit – saving up is good and provides the fuel for borrowing for investment.
7. Central Bank: Replace with a state bank that creates as much money as is needed for the economy to run at full capacity and inject it through public works or social credit removing any excess via taxation. Getting rid of the private central banks immediately removes their 2% yearly inflation target which is simply legalized counterfeiting.
8. Banks: There is still a role for private banks as regulators of investment borrowing. Successful investment loans are defined as those where increased productivity as a result of the investment puts into the economy more than is taken out by the interest payments. People specializing in judging those loans maximize the effectiveness of savings used as capital.
Any individual with any financial education can borrow money from a bank for a certain amount of interest, and then invest in a stock or a bond that pays more interest than the bank is asking. Yes, these deals may be hard to find, but when you do, you make a ‘profit’ on your money. Is that so ‘wrong’? I attempt to do it right along and I do not see myself as immoral or criminal. It’s the basis of capitalism, to which I subscribe. I ‘produce’ money to pay my other bills and buy food for myself (I am retired, and too old not to be retired), by cleverly using the capitalist system. I do make mistakes occasionally and lose money instead, so that balances the system, I suppose. Money always circulates, no matter how it is originated.
The idea that the people in times of economic collapse should receive the bailout over Wall St. reminds me of a quote by the “founder of the modern welfare state”, Lester Frank Ward:
“The charge of paternalism is chiefly made by the class that enjoys the largest share of government protection. Those who denounce it are those who most frequently and successfully invoke it. Nothing is more obvious today than the single inability of capital and private enterprise to take care of themselves unaided by the state; and while they are incessantly denouncing “paternalism,” by which they mean the claim of the defenseless laborer and artisan to a share in this lavish state protection, they are all the while besieging legislatures for relief from their own incompetency, and “pleading the baby act” through a trained body of lawyers and lobbyists. The dispensing of national pap to this class should rather be called “maternalism,” to which a square, open, and dignified paternalism would be infinitely preferable.”
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