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Forum Post: Numberd money - a possible OWS demand? And what money really is.

Posted 2 years ago on May 5, 2012, 6 p.m. EST by whatismoney (11)
This content is user submitted and not an official statement

Hi everybody, im a student in philosophy at Stockholm University. This started some weeks ago when I watched some videos on youtube of David Graeber and started thinking. Maybe this is not new and if it is not I would be glad to read more about it. It is a simple idea on how money was invented and an idea of how to create debt free money.

It goes like this. First, it seems that the idea of primitive money is false. Graeber points out there is no records of money in primitive societies from anthropology. If this is true then what happened when money was invented? If money is not a natural way of hanteling things then money is an invention. I suggest that what happened was that different primitive "shops" and producers in the early agrarian society, probably somewhere in Mesopotamia, came up with the idea of credits. So, say that someone came with a cow to the bakery and wanted to exchange the cow for bread. This someone with the cow doesent want all bread at once, instead he wants some fresh bread every day. The way to fix this is for the baker to promise to bake for him every day and the way to remember how much of the promise that is left is throgh handing out symbols for every bread that he owes. So the baker starts making symbolic bread that can be traded for real bread at his bakery. Theese symbols are loaded with value, the value of a bread. So the guy with the cow can when he has some bread symbols start trading them around for other things and theese symbols will be treated as money. Probably all shops start doing the same thing and they all notise that their promises are treated like money. Probably what happened next was that the biggest or most reliable money symbol issuer would be the prefered money symbol to use and it will be accepted as money all around in every shop. So now we have the first universal currency. But also, this developent would not go unnoticed by the state if there was a state. So the promise symbol issuing buisness would soon be taken over or it would become a part of the state. So now money is produced by the state and it is universal. This gives us some conclusions. Money is a promise that people can trade and it doesent just start existing. Money are loaded with the value of promises. It could also be claimed that there has never been a state without money and never money without a state. They are dependant of eachother. Obviously this notion has political consequenses. So if one wants a system where the the money and the state are not intertwined it is the universal money that is the problem. I think you agree with me that there is noting wrong with promises per se but when they are not specified and personal they become a problem. I mean, maybe there was a time when every shop issued their own currency in promise symbols when the state was not in control of the money issuing. Maybe that is where we have to look for inspiration today. Well there happens to be a technical solution that provides a similar system in our times. The solution is just to attach a unique digital number to all money symbols and they will become personal again. This is the same idea that bitcoin is built upon. Every money unit must have its own number. This would make fractional banking impossible since a coin can no longer be on two places at the same time. Instead of the promises beeing in some universal cunnrecy they would be in an unique currency. This would mean that when i buy some milk at the store i make them an unique promise instead of a general promise. Since every coin has its own number then every coin could be said to be a specific currence but one that is generally accepted. It is a way of going back to the time when all shops issued their unique currency and it is now possible because of our technology. This is some if the ideas that have popped up in my head the last couple of weeks.

What do you make of this? Is it resonable? Is it new?

What would happen if, say the state or some other organisation, started numbering all the money?

My guess is that the most specific thing that would happen is that lending would be inpossible and that there would not be any banks anymore.

56 Comments

56 Comments


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[-] 3 points by shadz66 (18067) 2 years ago

How about physical "Time Limited Money" with an expiry date ?! It can't be hoarded, so thus must be spent into the economy in return for goods and services or exchanged for new money with for example a 0.5% redemption penalty. Further, in order to aid and abet your researches, I also append the following :

Finally, re 'numbering all the money', consider that this already happens to physical paper money but the vast majority of money is 'electronic' and exists only as digital binary code.

et caveat : radix omnium malorum est cupiditas ...

(Lycka till och forsatta soka :-)

[-] 3 points by jph (2652) 2 years ago

Yes "money" is central to the problems we face,. one of the best plans for fixing some of money's problems, as well as eliminating representatives in our government is here; http://www.globalsafe.org

Removing profit from daily banking, and simplifying many social organisation issues, like voting! is a major improvement over our current corrupted setup.

[-] 9 points by shadz66 (18067) 2 years ago

Excellent point. Turning 'banking' from a private, for profit phenomena into a Public Service Utility and separating the saving, loans and retail banking functions from speculative trading ; 'market-making' ; 'investment banking' and 'mergers and acquisition' activity has Great Merit !

Hang on - wasn't all this pretty much done as a matter of law until quite recently ?!!

Why aren't the insidious, greedy scum-bags responsible for repealing The FDR era, 'Glass Steagal Act' ( http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act ) being pilloried and imprisoned ?!!!

fiat justitia ruat caelum ...

[-] 2 points by jph (2652) 2 years ago

well, true that,. i believe in looking always for opportunities, and when the far-right corpratists and banksters have pushed us this far,. some push back must now come from the other direction! I think they have provided us the opportunity to introduce some new ideas into our systems of social organisation, that are effectively broken under current conditions. The 0.01% have used the money supply and our corrupted political organs to shift vast amounts of wealth from the many to themselves. This should be easy to unravel, the results of the crimes are self evident; Follow the money, find the culprits. yes those in gov that aided and abetted need also be brought to justice. However the mian thing to do is remove the structures that allowed them to corrupt banking laws for personal gain,. and all the rest,. for me the only answer is the end 'representative gov.' we no longer require these corruptible people in the system at all.

[-] 2 points by monetarist (40) 2 years ago

And what do you think would be the benefits of public banks? Could you give me a list of these benefits. A short list would do.

[-] 3 points by shadz66 (18067) 2 years ago

1) Democratic Accountability and oversight over behaviour such as led to The 2008 Financial Crisis ;

2) Prevention / removal of a culture of short-termism and 'perverse incentives' & of just rewarding 'greed' ;

3) Profits to be ploughed back into "Society" rather than to 'private shareholders' (Foreign or otherwise) ;

4) Driving out 'bad banking practice' and favour / instil 'ethical' practices and behaviour ;

5) Genuine rewarding of savers - NOT fleecing them and driving them towards 'sharks' ;

6) A far more fair, rational, longer-term & more socially responsible outlook for lending ;

7) Reigning in dubious practices ("Innovative Financial Products" - CDOs, CDS's, 'Mortgage Backed Securities', et al & outright fraudulent behaviour - Bernie Madoff / Jon Corzine / MF Global, et al) ;

8) Re-instilling Public Confidence by Accepting / Realising that Banking & Financial Services can NOT just be left to 'Selfish Short-Term Profit Motives' ;

9) Have you ever heard of The State Owned "Bank Of North Dakota" ? IF NOT, why not d'you think ? ( http://en.wikipedia.org/wiki/Bank_of_North_Dakota and http://banknd.nd.gov/ ) ;

10) The points re. 'Glass Steagal' remains and I also refer you to jph's answer, immediately above.

Of course there is some degree of overlap in my points and almost guaranteed that you will argue the toss, so from a purely US perspective - I'll seek to leave you with something more substantial to read, reflect and ruminate upon : http://publicbankinginstitute.org/home.htm .

I (and maybe others) sense an ethical dimension and moral perspective in you 'monetarist' and you possibly may favour : democratic meritocracy ; 'a fair day's pay for a fair day's work' ; a strong public sphere (Healthcare, Education, Infra-structure) freeing, enabling & encouraging private individuals to do and be the best they can. Your very presence here (sometimes playing 'devil's advocate') attests to the above I 'feel'.

~*~

'commune bonum' est 'summum bonum' ...

[-] 2 points by hchc (3297) from Tampa, FL 2 years ago

Im not sure you can get to any of this, most of which is good, until you deal with the Federal Reserve and Goldman Sachs.

[-] 1 points by shadz66 (18067) 2 years ago

I hear you 'hchc' and further to my other comments on this thread - I append herewith and Strongly Recommend, the very latest (10th May, 12) "Keiser Report" :

Max Keiser and Financial Journalist, Stacy Herbert are right on the cutting and leading edge of 'Bankster Analysis' and they have their usual chat (where Max has another one of his moments of justified apoplexy, lol) in the first have (~15 mins) BUT in this episode the 'expert guest' in the second half - one Chris Whalen ( http://www.tangentcapital.com/team/whalen.html ) - is bang on the button re. The Fed, Wells Fargo, Goldman Sucks and a whole lot more.

I can not recommend "The Keiser Report" ( http://rt.com/programs/keiser-report/) or "Capital Account - with Lauren Lyster" ( http://rt.com/programs/capital-account/ ) highly enough to anyone who is serious about trying to understand US and Global 'Markets' and their workings and dark practices and there is some excellent and free investment advice for those with the eyes to see and ears to hear.

fiat lux ...

[-] 1 points by monetarist (40) 2 years ago
  1. Even if the govt wanted, they couldn't do day to day oversight. And even now your banks are accountable to you just like any other business. Sure, you will in theory get more control with a public bank. But that can also be detrimental. What if the govt which runs the bank out of populism wants the bank to give away very cheap loans to sub prime borrowers?

  2. So no rewarding greed right? I don't think that's a good idea. Say I am your banker/fund manager and to remove greed you promise me a fixed salary no matter how I perform. Will I give my best to the job? Will I really care what returns you get? You are not rewarding greed, you are rewarding performance. It's like telling your kid that he gets a Xbox no matter what he scores in the tests. Do you really think the kid would study?

  3. Ok. fair point.

  4. Are all govt servents ethical? If not, then how do you expect all these employees of the private bank to be ethical?

  5. Please elaborate. Did not get you.

  6. Again, you need to elaborate. This can mean many things to many people

  7. They aren't dubious practices. They are perfectly useful financial products. It's like wanting to ban baseball because baseball bats can be used to beat someone to death. You and I may not need these products but businesses and funds do.

  8. Take Royal Bank of Scotland. It's partially govt owned, hence salaries and bonuses are capped even for people in their investment banking and trading arms. Yet today, the bank find itself in trouble and did the exact same mistakes as other banks.

  9. No I havent. Will look up

  10. Yes yes I know you guys think Glass Steagall is the silver bullet that will cure banking of all woes.

[-] 2 points by shadz66 (18067) 2 years ago

Fair enough 'monetarist', I'll be your huckleberry as far as I can ...

1) Regulatory Capture is the current status quo. Publicly Owned Banks would bring cultural changes which would take time. 5, 10 years - maybe an generation (20 years) to embed. You say - "Banks are accountable ... like any other business" ! To which I'm bound to reply : Really ?!! This will be news to most of us here as well as to Lloyd Blankfein (GS), Jamie Dimon (JPM) et al !!! Though you accede that "you will in theory get more control with a public bank." - you aren't at all clear as to how "that can also be detrimental". "Sub-prime" as we now infamously know it - was caused by fraud and greed of private institutions and people who'd "drunk the Kool-Aid" and swallowed the propaganda of private home ownership' & were desperate to join the 'property owning dream - there is no reason to think or believe that Publicly Owned Banks would have engaged in such predatory behaviour or sought to 'overly debt burden' vulnerable people. It can be argued that Publicly Owned Banks would have behaved much better. Also such Public Banks need not act & behave as Governments Departments as they could be ring fenced and given a more 'autonomous identity'.

2) Wanton rewarding of greed is a bad thing & even Bankers get this concept ! Rewarding "performance" with bonuses is not necessarily the same as rewarding greed and there are ways and means of doing so without giving rise to 'perverse incentives'. "Carrot & stick" can and ought to apply at both ends rather than just 'carrot' at the top and 'stick' at the bottom of society.

3) Thanx. IF you think about it in the round - then this point alone could justify 'nationalisation' - just as The Argentinians have recently concluded after going through what we in Europe and America are harshly discovering only now ( http://topdocumentaryfilms.com/argentinas-economic-collapse/ and http://topdocumentaryfilms.com/the-take/ ).

4) No, all government servants are not necessarily 'ethical', however they are much, much more prone to investigation, prosecution & sanction and the consequences of Private Unethical Bahaviour is why OWS has come to be extant. (For a reminder - tho' I know that you are not exactly a fan of this documentary film - http://documentarystorm.com/inside-job/ ).

5) Private Banks actively wish to pay as little as possible in interest instead favouring director and employee bonuses and then shareholder dividends as a distant afterthought. Savers are being rinsed throughout The Western World and are thus being pushed towards the 'Madoffs (man - you couldn't have made That Name Up, lol!) and the Corzines' of this world in an attempt to not just maximise but secure any returns & try to inflation proof their savings. Public Banks could ensure that one of their primary 'reason d'etre' was to reward thrift and prudent saving. Further, please look into the realities of 'The Carry Trade', whereby The Banks make massive returns by using deposits but repay a pittance.

6) The 'Credit Crunch' has been a function of Private Bank Practices and Paranoia - as they become nervous and seek to hoard cash reserves and it has had a massively detrimental effect on small and medium sized businesses (and maybe 'Big Business' too!). Also, please reflect that the regular and ritualised expansion and contraction of credit euphemistically termed 'The Business Cycle' is NOT a 'Law of Nature' like Gravity being responsible for the tides etc., but it is an utterly artificial construct 'designed' by a relatively small group of people purely for their own benefit. Publicly Owned Banks would not be in this Private Cartel and can play a much longer game on different terms, more beneficial to Society at large.

7) Well we just may have our biggest point of contention here and I'm afraid (without meaning to insult you) that simplistic syllogisms Just Won't Do !! You say : "They aren't dubious practices. They are perfectly useful financial products." and I am obliged to point out that "Mortgage Backed Securities" & "Collateralised Debt Obligations" etc. were at the heart of the 2008 Financial Crisis. Bundling BS 'sub-prime loans' with slivers of more 'healthy and viable Debt' and Triple-A rating total dog-shit as 'prime investment products' was fraud, malpractice and unethical behaviour on a truly Massive Scale. All sections of 'The Finance Industry' are implicated but no one carries the can or takes any responsibility. The Private Banks, Ratings Agencies ('Moody Fi(L)tchers whose Standards are Poor !!!), Auditors (both Internal & External), Multi-national Accountancy Firms and The Captured Regulators & The 'Lobbyists' are ALL implicated - but the 99% picked up the tab to Bailout The Banks in 2008 ($1.4 Trillion in UK alone) and again now via Enforced Austerity and thus this is the essential raison d'etre of OWS. Many of these "innovative financial products" did not even exist a decade or two ago but people like Blythe Masters ( http://en.wikipedia.org/wiki/Blythe_Masters ) and ilk as well as the previously scientifically employed 'Quants' - have conjured up equations which are now increasingly being exposed for the facile and specious house of cards that they are ( http://topdocumentaryfilms.com/quants-alchemists-wall-street/ and http://topdocumentaryfilms.com/the-midas-formula-trillion-dollar-bet/ ). Bank balance sheets do NOT reflect any true financial position and failure to 'mark to market' means these 'dubious financial products' are not (and perhaps can never be) properly accounted for. Finally, please consider that "Derivatives" are essentially 'derived' from The Evil of "Geometrically Increasing Compound Interest Generating Debt" & insurance contracts (bets!) on the 'payability' of those Dark Dubious Debts !!!

8) The Royal Bank of Scotland is ONLY "partially govt. owned" (85% actually) because of the shit that the previous Greedy, Selfish Bastard Management got that institution into. I do hope you are really not trying to pass off responsibility of RBS (with the emphasis on the last two letters!) & their problems onto the (now enforced) "Govt. Ownership" ( http://topdocumentaryfilms.com/rbs-inside-the-bank-that-ran-out-of-money/ ).

9) Good - I do think that your eyes will be opened and please put the matter to your "friends in banking".

10) NO ! Glass Steagall is NOT a panacea, so please don't caricature my argument which I made almost as 'orbiter dicta'. There are very, very few serious people 'Outside Banking', who think that repealing GS was a good idea and most intelligent commentators advocate its reintroduction.

~*~

I hope that you will reflect on the above and on http://publicbankinginstitute.org/home.htm , as I am considering you to be an honest and intelligent interlocutor.

fiat justitia ...

[-] 2 points by monetarist (40) 2 years ago
  1. Yes regulatory capture is a sad reality and we need vigilant citizens to check such practices (and yes OWS is doing a good job at it. OWS may not be making coherent noise but it is surely making enough noise for others to sit up and take notice)

Saying greed was the reason for sub prime mortgage crisis is simplying it too much. Fed mandated low interest rates, govt policy to offer home loans too played a part. Wall St, in my opinion (and I am not an economist), simply hastened the collapse

Yes, public banks would probably not have engaged in such predatory behavior.

  1. There is a thin line between those. The pursuit of performance can easily turn into a pursuit of greed. But banks need to come up with bonus schemes where the long term impact of the trades are taken into account as well.

  2. Agreed you can prosecute civil servants far more easily but you do that too much and you will cause a paralysis in their functioning. These civil servants will then second guess their every decision and will be afraid to take bold decisions. There needs to be a balance.

  3. That's what any business would do. If we compared a bank to any other business, paying interest can be considered as a cost and any business would like to minimize it's cost as much as possible. Despite that, the net interest margin for US banks is around 3.4% and that of Bank of America is 2.69%, not a huge number actually. Also, employees in retail banking do not earn a lot. Traders and Investment Bankers make all those huge sums of money that you read in the media.

  4. Yes, a public bank might have behaved more generously during the credit crunch. See, when the credit crunch happened, the risk analysts (along with the chief risk officer) took over the show and what if you let risk managers run amok they will try and stop any transaction that is even remotely risky.

7.See you need to seperate the ratings given to those products and the products themselves. These products are used all the time without any adverse impact. The fault lies with the rating agencies who were drinking the Kool-aid.

  1. I am not saying what happened to RBS was because of govt ownership. What I am saying is it happened in spite of govt ownership (and cap on bonuses and salary which OWS thinks checks greed). So may be public banks arent all that immune to the same mistakes and private ones.
[-] 3 points by shadz66 (18067) 2 years ago

I really and honestly think that you will really like the actions, raison d'etre and 'modus operandi of "Occupy The SEC" and their important work, which could have an enormous beneficiary impact on honest, hard working Americans - probably like yourself.

Thus : http://www.occupythesec.org/ and I can not speak highly enough of these young people.

I also copy here, a few words by Noam Chomsky "On Banks" :

"Before the 1970s, banks were banks. They did what banks were supposed to do in a state capitalist economy: they took unused funds from your bank account, for example, and transferred them to some potentially useful purpose like helping a family buy a home or send a kid to college. That changed dramatically in the 1970s. Until then, there had been no financial crises since the Great Depression. The 1950s and 1960s had been a period of enormous growth, the highest in American history, maybe in economic history.

"And it was egalitarian. The lowest quintile did about as well as the highest quintile. Lots of people moved into reasonable lifestyles -- what’s called the “middle class” here, the “working class” in other countries -- but it was real. And the 1960s accelerated it. The activism of those years, after a pretty dismal decade, really civilized the country in lots of ways that are permanent.

"When the 1970s came along, there were sudden and sharp changes: de-industrialization, the off-shoring of production, and the shift to financial institutions, which grew enormously. I should say that, in the 1950s and 1960s, there was also the development of what several decades later became the high-tech economy: computers, the Internet, the IT Revolution developed substantially in the state sector.

"The developments that took place during the 1970s set off a vicious cycle. It led to the concentration of wealth increasingly in the hands of the financial sector. This doesn’t benefit the economy -- it probably harms it and society -- but it did lead to a tremendous concentration of wealth."

from : http://www.tomdispatch.com/post/175539/tomgram%3A_noam_chomsky%2C_a_rebellious_world_or_a_new_dark_age/

I wish you well 'monetarist' :-)

pax et lux ...

[-] 2 points by shadz66 (18067) 2 years ago

A better link to that Chomsky aricle :

multum in parvo ...

[-] 1 points by monetarist (40) 2 years ago

As much as I respect Chomsky for his contribution to Linguistics and I do realize that he is one of the brightest thinking minds around, I don't think he is seeing the pic picture here.

The 1970s were a different time, asian economies started growing and labor was cheap there and hence production was cheap. So American companies too had to start shifting prodcution there to remain competitive.

But yes the rich has grown much more richer in the last few decades while the rest (particularly the lowest quantile) haven't seen their prosperity increase at a rate even close to what the rich have.

[-] 5 points by shadz66 (18067) 2 years ago

'monetarist' ; further to our exchange & re. JP Morgan Chase's latest dark devious actions, I append :

fiat lux et caveat - radix omnium malorum est cupiditas ...

[-] 2 points by monetarist (40) 2 years ago

read that already :)

[-] 1 points by JoeTheFarmer (2654) 2 years ago

The is the problem with bailing out any private corporation. We need to stop bailing these guys out so they stop taking miscalculated risks.

The current system is like telling me that I can go to Vegas with my money and my neighbors money as well and if I lose it all \ the tax payers will bail me out.

[-] 2 points by shadz66 (18067) 2 years ago

Further to the above, I also append some relevant and hopefully useful links :

fiat lux ...

[-] 1 points by JoeTheFarmer (2654) 2 years ago

The is the problem with bailing out any private corporation. Banks, auto, solar energy, whatever... We need to stop "stimulating" and bailing these guys out so they stop taking miscalculated risks.

The current system is like telling me that I can go to Vegas with my money and my neighbors money as well and if I lose it all \ the tax payers will bail me out.

[-] 1 points by hchc (3297) from Tampa, FL 2 years ago

Still no progress on the MF GLobal stuff either, the shit is still happening and wont stop until we are bled dry and all the money has moved to the BRIC countries

[-] 1 points by shadz66 (18067) 2 years ago

I append two links to very interesting TV (+ online) programmes which will very much back you up with hard facts and analysis on the matter of Jon Corzine and MF Global - and much, much more besides :

radix omnium malorum est cupiditas ...

[-] 2 points by hchc (3297) from Tampa, FL 2 years ago

Throw Clinton and both parties in jail. I'm down with that.

[-] 3 points by DKAtoday (34900) from Coon Rapids, MN 2 years ago

Money is money. Transfer out of banks and into credit unions. That will make an impact on the corrupt.

[-] 2 points by shadz66 (18067) 2 years ago

Re. JP Morgan Chase's latest criminal enterprises :

radix omnium malorum est cupiditas ..

[-] 2 points by DKAtoday (34900) from Coon Rapids, MN 2 years ago

Karma? Or the predicted continuation of the fall?

http://www.informationclearinghouse.info/article31300.htm

[-] 2 points by Shule (1696) 2 years ago

I think the real problem is the fact we use somebody else's money; i.e. money printed by the "1%". If we just started using money we make ourselves, i.e. say like personal coupons or IOUs, and not accept the 1%'s money, then we can make the 1% money useless, or at least diminish in usefulness which in turn effectively makes the 1% powerless.

Power to the People , but if and only if the People make their own money.

[-] 2 points by penguento (362) 2 years ago

Ah, but then, the value of the money is dependent upon the trustworthiness of the individual issuing it. Fine if you know them personally, but what if a stranger wants to buy something? Do you trust them? What happens when, inevitably, some of the people who issue private money welch on the promise and you're stuck with a worthless piece of paper? And what do you do when others are reluctant to take your private money? There are communities around the country who've tried things along this line, but it only seems to work when its a small community and everybody knows and trusts each other.

[-] 2 points by Shule (1696) 2 years ago

Very true what you say. I think you are on to something. The problem we are facing today is the people who issue the money we are using (namely the dollar here in the U.S.A.) are demonstrating they can't be trusted.

[-] 2 points by friendlyopposition (574) 2 years ago

What exactly is the benefit of not having a universal currency? How would people receive pay from their employers?

[-] 1 points by whatismoney (11) 2 years ago

The numbered currency would be universally accepted like any currency but there would be no banks, no loans, no intrest in the system. Thats the only difference. Instead of loans people would make plans for payments.

You would recieve your pay just like today.

[-] 2 points by friendlyopposition (574) 2 years ago

If I received my pay in US dollars - how does that translate into this system? Are you saying that if I have the money, then I would go ahead and use my US dollars - but if I didn't have the money, I would have to make individual payment plans with a store/vendor?

If that is the case, then the individual shop owner is taking on all the risk of 'loaning' money, instead of that risk being carried by a bank.

[-] 1 points by whatismoney (11) 2 years ago

No, that is not what I mean, if I understand you correctly.

My point is only that if all our coins and money was numbered with a unique number then it would be easy to know if a number was beeing used at two places at the same time. This would mean the end of banking as we know it.

And this system would better resemble the original use of money where it was written down promise that anyone could resolve. You could even say that each numbered monetary unit would be a own currency but generally accepted.

[-] 2 points by friendlyopposition (574) 2 years ago

Ok - I think I understand what you are saying now. Basically, there is no "virtual" money. If there is $15 billion in the economy, then there are $15 billion pieces of actual currency. One of the biggest problems is that you are pretty much limited to hand to hand transactions. Online purchasing would be gone, as would any kind of credit. Like I said before, if you go with payment options for individual vendors - then they bear the burden of the loan.

[-] 1 points by whatismoney (11) 2 years ago

Im actually thinking that there would be no cash money and that it would all be digital.

[-] 2 points by friendlyopposition (574) 2 years ago

Hmmm... I'm afraid I just don't get it. Maybe I need it in more simple terms. Maybe you can help me understand through an actual application of the principles.

I get paid on Friday and I receive $500 US dollars.
I want to buy $75 in groceries from the local market. I want to buy $8 in songs from iTunes. I want to pay my landscaping guy $25 to cut my grass. I want to put buy a new TV that costs $1200 (I don't have that much money).

How would I do these transactions under this plan?

[-] 1 points by whatismoney (11) 2 years ago

You use the creditcard for all transactions exept the TV witch you pay over time but still with your creditcard. There is even a simple iphoneapplication now for turning the cellphone into a creditcard machine. Payment over time could be made much simpler then it is today.

If you pay over time you dont need to pay interest.

Of course someone could still loan money to you against interest but it would have to be real money with own numbers and not made up money like the money the banks are using today.

[-] 2 points by friendlyopposition (574) 2 years ago

I really don't see the point now. Your original post talked about individual money symbols and then numbered money. But our dollars are already numbered. I wonder if you just want to prevent the Fed from printing more money and reducing the value of the dollar. Other than that - I don't see any difference between what you are proposing and what is in place.

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

use an atm card and owe no one

[-] 1 points by DKAtoday (34900) from Coon Rapids, MN 2 years ago

Debit card.

[-] 1 points by JoeW (109) 2 years ago

New Money for a New World by Bernard Lietaer is available on scribd, here is a link. I highly recommend it.

http://www.scribd.com/doc/93313960/Bernard-Lietaer-New-Money-For-A-New-World-full-pdf-ebook

[Deleted]

[-] 1 points by whatismoney (11) 2 years ago

What I am suggesting is that the nomey would in effect be the number on the money. No one with sense will accept unnumbered money since they are worthless and therefore the money can not exist in several places at the same time. Banking will then be impossible.

But ofcoarse the transition will not be an easy thing both because of practical issues such as creating new systems for money where unnumbered money is not accepted and then the banks that rule the world will be against it.

[-] 1 points by flip (5207) 2 years ago

you need to read graeber (debt the first 5000 years) then hudson and others on modern monetary theory. very good serries of talks given in italy that are transcribed. that should clear up some of your questions and help you thinking about this subject

[-] 1 points by whatismoney (11) 2 years ago

Hehe, strange. Thats just what I did and therse are my thoughts. What are yours?

[-] 2 points by flip (5207) 2 years ago

this is what youy wrote and it made me think you had not read graeber - "So, say that someone came with a cow to the bakery and wanted to exchange the cow for bread. This someone with the cow doesent want all bread at once, instead he wants some fresh bread every day. The way to fix this is for the baker to promise to bake for him every day and the way to remember how much of the promise that is left is throgh handing out symbols for every bread that he owes. So the baker starts making symbolic bread that can be traded for real bread at his bakery. Theese symbols are loaded with value, the value of a bread. So the guy with the cow can when he has some bread symbols start trading them around for other things and theese symbols will be treated as money. Probably all shops start doing the same thing and they all notise that their promises are treated like money. Probably what happened next was that the biggest or most reliable money symbol issuer would be the prefered money symbol to use and it will be accepted as money all around in every shop. So now we have the first universal currency. - now if you had read the transcripts from itay i don't think you would be asking questions. seems to me it was pretty straight forward as to what is money and how a country with it's own currency can function - as to my thoughts - i think what they are saying is correct - the only thing that limits a country with it own currency is real world shortages - resources etc - now the problem becomes the fact that we are running out of most of the resources we need to run our modern society

[-] 1 points by whatismoney (11) 2 years ago

Thanks to you I found this article withe the same exact ideas regarding the nature of money as I have. It was written 1913 so the question is why peaople are not aware of this and why it is not tought in schools?

http://mmtwiki.org/wiki/Credit-based_Money

Thanks, this was just what I was looking for. But still I think we should put numbers on all monetary units.

[-] 2 points by flip (5207) 2 years ago

check this out - you should be able to find the whole thing but if not let me know - Michael appeared on Guns and Butter alongside Assoc Professor Stephanie Kelton in Rimini.

Listen to the interview aired March 7th.

Make sure you read Michael’s piece on Our Very Oscar Night in Rimini for more background.

“There IS An Alternative To European Austerity: Modern Money Theory (MMT)” with Stephanie Kelton and Michael Hudson in Rimini, Italy. Difference between sovereign and non-sovereign money; what is money; fiat money; gold standard; fixed exchange rates; the Euro; difference between central banks and commercial banks; deflation and inflation; financial war against the economy; credit supply and asset prices; bank lending and capital investment; debt deflation stage and austerity stage of finance capitalism.

Show details

Subscribe to Bonnie Faulkner’s Guns & Butter podcast: Itunes > Advanced > Subscribe to this podcast > paste > http://kpfa.org/podcast/pod.php?show_id=34

Transcript via Media Roots

GUNS AND BUTTER — “But if governments are not allowed to create their money, then all of the credit the economy needs is created by the commercial banks. And when the commercial bank credit creation leads to debt deflation and the government cannot finance the deficit to pay the interest then the commercial banks say: Alright, sell off and privatise your infrastructure. This is what we’re seeing in Greece today, in Ireland. You’ve seen it in Iceland. What you are seeing is a financial grab of infrastructure that is taking place by the ability of commercial bankers to prevent the central bank from creating credit.” — Dr. Michael Hudson

“I’m Bonnie Faulkner. Today on Guns and Butter: Stephanie Kelton and Michael Hudson from their introductory remarks at the first Italian grassroots economic summit on Modern Money Theory in Rimini, Italy, February 2012. Today’s show: There IS An Alternative To European Austerity: Modern Money Theory (MMT).

“Stephanie Kelton is an Associate Professor of Economics at the University of Missouri, Kansas City, Research Scholar at the Levy Economics Institute, and Director of Graduate Student Research at the Center for Full Employment and Price Stability. She is Creator and Editor of New Economic Perspectives. Her research expertise is in Federal Reserve operations, fiscal policy, social security, healthcare, international finance, and employment policy.”

Dr. Stephanie Kelton (c. 2:02): “Good evening. Buonasera. Good evening. [Applause] I am overwhelmed and I am inspired.

“The system today isn’t working for you. And it isn’t really working for us in America. But the problems are different—and the same. And we want to talk with you for the next couple of days about the common problems that we all face and the unique challenges that you face here in Italy and throughout the Eurozone. It is fantastic to see so many people willing to come out to listen to economics and political economy for two days. And we hope that at the end of the two days we can help you all understand that this is not your problem; this is not your fault; and there are solutions and there are ways out. There is an alternative to what you’re dealing with today. It’s not a hard alternative. But it’s going to be hard to convince others to make the changes that will lead to better lives, better possibilities for all of us in the future. Thank you so very much for spending time with us, and for reading what we do, and for taking the time. And thank you so much to Paolo Barnard for making all of this happen. We are so humbled by this turnout and by your interest in what we do. Thank you. [Applause]

(c. 4:05) “I’m gonna introduce you to the basics of Modern Monetary Theory in four parts. Modern Monetary Theory is a revolutionary way to think about the way a modern capitalist economy works. The first part of the talk this morning will focus on money. It’s an essential part of the argument. You have to understand the difference between what we’re going to call a sovereign money and a non-sovereign money. This afternoon we’ll focus on the function of finance, another essential part of Modern Monetary Theory. It is the key to understanding how a modern economy can achieve what has for so long been unthinkable: full employment for all people with stable prices. Tomorrow, we’ll talk about the international economy and the way that the domestic economy is related to what happens in the rest of the world. We’ll question the conventional thinking about deficits and debt. And we’ll focus specifically on the future of Italy.

(c. 5:22) “So, let’s begin with the first lesson. What is money? All money exists as an IOU. It’s a debt. When we say, ‘I owe you,’ we mean two people are involved in every monetary relationship. The ‘I’ is the debtor. The ‘U’ is the creditor. I Owe You. IOUs are recorded in what we call the money of account. The money of account in Australia is the Australian dollar. The money of account in the U.S., the U.S. dollar. The money of account in Japan, the Japanese Yen. In Britain, the British pound. In Italy, the Euro. Do you see a difference? You will by the end of this talk.

(c. 6:21) “The money of account is something abstract, like a metre, a kilogram, a hectare. It’s not something you can touch or feel. It’s representational, something only a human could imagine. In any modern nation the money of account is chosen by the national government. MMT emphasises the state’s power over money. This is not something new. It dates back as far as Aristotle. You can find it in Adam Smith and in the work of John Maynard Keynes. I will read a brief quote from Keynes who said:

“‘The age of chartalist, or state money, was reached when the State claimed the right to declare what thing should answer as money of account. Today, all civilised money is, beyond the possibility of dispute, chartalist’—state money.

“A sovereign government defines the money of account. A sovereign government imposes taxes, fees, and other obligations to be paid to be paid to the state. A sovereign government decides what it will accept in payment to itself. And sovereign government chooses how it will make its own payments to others. Most governments in the world today choose their own unique money of account. And they issue their own unique currency. One nation, one money, is the rule in almost every corner of the world today. U.S. dollars, bills and coins. Mexican pesos, bills and coins. British pounds, notes and coins. Most governments also require that taxes be paid in a currency that the state has the exclusive power to issue. These currencies are sovereign money.

(c. 8:50) “As long as the state has the power to enforce its tax laws, the people will need the government’s money. The currency will have value. People will work to sell things—goods and services—to the government in order to get government money. Whatever the government accepts in payment to itself becomes the ultimate, ‘definitive,’ money in the economy. It is the only way to settle a debt. You must use government money. We can imagine in any economy a hierarchy of money. But not all money is created equal. The most acceptable money sits at the top of the pyramid. Those are the IOUs that everyone accepts and everyone must accept. Those are the IOUs that are ultimately needed to pay our debts. Those are the government’s IOUs. The rest of us can go in debt, issue IOUs, but our debt is not as good as government debt. It’s not as acceptable. It can’t be used to pay for things.

(c. 10:25) “In the U.S., the hierarchy looks like this: The government’s IOU—the United States dollar—sits at the top of the pyramid. It is a fiat currency. The United States government is the monopoly issuer of the U.S. dollar—the only entity on the planet that can legally create the currency. The U.S. government taxes in dollars. It spends in dollars. And it controls its own currency. Why is this important? What are the benefits of issuing your own currency? They are extraordinary.

(c. 11:19) “The government, when it issues its own currency, and goes into debt in that currency can always pay its debt, can never go broke, can never run out of money. It can afford anything that is for sale in that currency. It doesn’t need to borrow its own currency. And it can set its own interest rate. It does not have to pay what markets want. It does not become a victim to speculation, to bond vigilantes. It has additional policy space. It can do things for its economy and for its people that a government that does not have a sovereign currency cannot do.

[-] 1 points by whatismoney (11) 2 years ago

I see. You mean that MMT has all the economical answers but the question is if we want to have an efficiant economy?

For me its a question of freedom. I want to abolish this economy for egoistic reasons. This economy doesent give me any freedom so I want to change it and I think numbered monetary units could be the way.

[-] 1 points by geo (2638) from Concord, NC 2 years ago

Our current currency in of itself is not the problem. The problems we are experiencing on a personal finance level have to do with the attack on personal savings and the creation of various complex debt instruments pushed heavily by the banks. (mortgages, credit cards, pay day loans, etc.)

Not being in debt and having savings provides financial freedom. Debt provides financial slavery.

On the macroeconomic level MMT provides the rules and mechanisms for fiat currency. There is a great deal of misunderstanding in how a fiat monetary system works. Many ideas and policies relating to commodity based currency systems get pushed in to play and really messes up our economy. They don't work. Austerity budgets during a recession being one of them.

[-] 1 points by flip (5207) 2 years ago

i have no idea of what you mean - explain more - are you talking about wage slavery?

[-] 1 points by whatismoney (11) 2 years ago

Ok, there are are two things making my life bad and those are the banks and the massmedia. So we need to find another system.

Adbusters has the answers to the media-question and maybe the answer to the economic question is MMT with numbered money.

Im thinking that with numbered monetary units it will be easy to avoid banking.

[-] 1 points by flip (5207) 2 years ago

this is what you said - This economy doesent give me any freedom so I want to change it and I think numbered monetary units could be the way. - the media is a problem but there are many other sources so i cannot see how that infringes on your life - as far as the banks making your life bad - how do you mean - do you have loans or do you have a problem with the system of work - wage slavery is the system we have in place - not sure it is the fault of the banks

[-] 1 points by whatismoney (11) 2 years ago

No, the banks are fraudulant as you should know from following Michael Hudson. He suggest the nationalisation of banks but I think it is better to get rid of banking once and for all through numbering the money.

So it is just the totally fraudulant system I dont like and it seriously affect my freedom in all kinds of ways.

[-] 1 points by flip (5207) 2 years ago

for instance?

[-] 1 points by whatismoney (11) 2 years ago

Well it shapes the whole society. The banks choose who should have money and who should not, witch companies should have money and witch ideas that are not worth any money.

On top of that I have to stand economytalk on the radio.

There must be a better system.

[-] 0 points by hchc (3297) from Tampa, FL 2 years ago

Money is a middle man, but a needed middle man.

A government that takes large chunks of your money, and says it will pay it back later, while printing their own whenever they want, is a massive problem.

[-] 2 points by MattLHolck (16833) from San Diego, CA 2 years ago

over 300 million people in the US