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Forum Post: Money doesn't exist, not really

Posted 2 years ago on Sept. 29, 2011, 1:28 a.m. EST by shinyheart (27)
This content is user submitted and not an official statement

Money doesn't really exist. Money is just a claim check upon the capital resources of the real economy. It's just a virtual artifice built upon real output.

Therefore, I agree with TEDster Malcolm Gladwell in believing it is socially justified to raise the top marginal tax rate to something like 90%, so no one can make more than ~2 million per year, and also to raise the estate tax and the effective corporate tax rate. http://www.newyorker.com/online/blogs/festival/2010/10/video-malcolm-gladwell.html

First, because speculators, bankers, and hedge fund managers are not socially productive at all, let alone enough to justify making what they make.

Second, because every human being is entitled to food, watter, clothing, and education, because there is more than enough to go around - just because you work on Wall Street doesn't mean you can squander the (finite, but growing) capital production of society on luxury goods while people starve.

"Those who create phantom wealth, and those who are the beneficiaries of mutual funds or retirement funds invested in phantom wealth, may never realize that they are giving its holder a claim on the real wealth produced by others, and that phantom-wealth dollars created out of nothing dilute the claims of everyone else to the available stock of real wealth. They may also fail to realize that Wall Street and its international counterparts have created phantom-wealth claims far in excess of the value of all the world's real wealth, creating expectations of future security and comforts that can never be fulfilled."

David Korten

Money doesn't really exist, but people do...think about it.

18 Comments

18 Comments


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[-] 2 points by littleg (452) 2 years ago

Shinyheart,

I always knew being rich is cheating poor people, I couldn't understand why completely. Today, I know. Thanks to you to help me complete my understanding. I am a big fan of yours.

[-] 2 points by Richard (12) 2 years ago

Greetings from Serbia , somthing about how banks create money. IF you want to take for instance credit or loan for 100.000$ bank approve , but in 99% of cases you will not take cash , that money will lay on your account. When you spend that money , in 99% of cases you will spend it virtually from one account to another. So question , was there any money in cash that bank ever possesed ??? Technically yea , bank has saome cash , but only thing which is important in taking credit is that you will get to bank all you lended + interest rate. It is NOT IMPORTANT if bank has real money at all !!! Bank will create virtual money , and ensure by your mortgage or other garanteee that it will get money back. So you lend virtual money and work hard to get payment back with real money !!! + interest rate. There is NO such things in economy which validate interest rates except greed. Many people see you have unclear goals . I propose a goal . DEMAND DISMANTLING INTEREST RATES FROM ECONOMY . That is clear message , keep in mind that this has to be done on world scale , if anyone go for it. But you are not alone.

[-] 1 points by johnquindell (1) 2 years ago

Here's a guy who stood on the UW campus in Seattle with the sign:

"MONEY IS NOT REALLY REAL"

http://signsonthequad.blogspot.com/2011/02/money-is-not-really-real.html

[-] 1 points by quietlike (194) 2 years ago

Only because we left a gold standard, otherwise our money would be worth its weight in gold. Broken down money is simply a claim on labor. If i buy a product from you, labor has been put into making that product and delivering it to me. Money now must be able to last through time, meaning the cost of your labor in building that product should, equal the same when you spend your labor (money) . Our current currency is only accepted because of legal tender laws. You must fix the monetary issue.
Taxing people for making money is NOT the answer. In reality, there should be NO income tax, and the taxes should come from the point of consumption. Banks create money through fractional lending, which they can "invest" in speculative activity. Because of inflation by the FED and govt compliance, people are no longer allowed to save (or it isnt worth it, savings rate at all time lows). I must clarify that people cant save because they lose purchasing power through inflation, and the savings rate doesn't keep up with the rate of inflation. Therefore they lose purchasing power of their labor because of inflationary acts by others, which is an infringement on one's right to reap from their labor. real investment comes from those savings. Using a fractional system creates malinvestment because they are only risking a fractional amount, leading to riskier bets for large returns. Only because they are not restricted in creating money (other than having to lend it), and that they do not need to have the money they lend, can they aggregate such wealth. So by taxing them, it solves nothing, they just create more fiat money to pay for that too, which is inflation, and lowers the standard of living for everyone else holding dollars. You need to stop the fraudulent fractional lending and fiat currency, so that everyone is on the level playing field, and no one has a monopoly over the money, that everyone uses.

[-] 1 points by wanttruth (5) 2 years ago

"...raise the top marginal tax rate to something like 90%, so no one can make more than ~2 million per year"

Whatever scams and betrayals exist, you cannot tell Americans that their salary will be capped at 2 million. This statement is dangerous and not very well thought through.

Being wealthy doesn't mean that one is necessarily a greedy thief.

Imagine: What if everyone, individually, started taking responsibility for there own actions every minute of every day?

If we did this, shinyheart, then we could create our OWN wealth, beyond our wildest dreams--we wouldn't be beholden to a fatally flawed system.

[-] 2 points by wanttruth (5) 2 years ago

The idea of limiting wealth is folly!

[-] 1 points by bjoyce (9) 2 years ago

As illustrated in the comment below, I think many people have a sense or hunch about economic injustice, about the truer meaning of taxes, or the critique of economic power, but have trouble formulating it to themselves or others.

I think a wonderful product— if nothing else— would be to create a "literature" (really in every medium) that would articulate these hunches and senses to a wide variety of political affiliations in a wide variety of forms. I say this because sometimes I even hear those committed to reform speaking in the language, or under the presumptions, of reaction. It would be great to have a literature to undo presumptions and provide a better language— in new parables and platitudes, even.

[-] 0 points by kestrel2011 (10) 2 years ago

Of course it all fails when there isn't enough water, food, clothing and education to go around.... so disparty will always exist.

[-] 1 points by wanttruth (5) 2 years ago

There IS enough to go around!! It is only distributed unevenly, because of the institutions that are now in place. There IS enough!!!

[-] 0 points by 666isMONEY (348) 2 years ago

As I said before, ever since the CIA killed JFK (Gerald Ford was on Warren Commission, Ronald Reagan was on the Rockefeller Commission on CIA Activities in the US, which whitewashed CIA involvement, Bush Sr. was head of CIA) . . . all presidents were selected by the plutocrats and corporations found loopholes in the laws to fund elections. Ending corporate personhood will change little or nothing. ABOLISH MONEY!

Many famous ppl believed in eliminating money. Edward Bellamy wrote a novel called "Looking Backwards" around 1880. The book was very popular and was a part of the Populist party agenda.

http://666ismoney.com/MoneyQuotes.html

[-] 0 points by gawdoftruth (3698) from Santa Barbara, CA 2 years ago

"t is socially justified to raise the top marginal tax rate to something like 90%, so no one can make more than ~2 million per year,"

sure, socially justifiable but systemically impossible... have you considered the consequences of that idea thoughtfully?

you know that has assorted consequences for everyone, not just the rich. Its kind of like saying lets load every car down with a 12 ton weight to discourage speeding.

[-] 2 points by littleg (452) 2 years ago

Let's hear the consequences you have thought of having top marginal tax rate of 90% ?

I don't see any negative consequences, it was done before by both liberal and conservative presidents between 1950 and 1980s. It was the happiest times for the middle class and poor in America. The rich was happy too, just that their greed and excesses was under control.

Don't give me a reply without answering my first question.

[-] 2 points by shinyheart (27) 2 years ago

Why is it systemically impossible, when it's been done before, in the '50's? Did you watch the video?

Have you seen the top marginal tax rates historically?
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

Did you watch the video?

Also, I reject the argument that raising the top marginal tax rate is akin to loading all cars down with a 12 ton weight to discourage speeding. It's more like, once people start travelling at 150 miles per hour, THEN we'll load them down with a 1 ton weight to discourage speeding.

I also reject the analogy to speeding, it should be to eating. After your 15th trip to the buffet, we tell you to slow down a little bit and let other people have a chance to eat.

[-] 0 points by gawdoftruth (3698) from Santa Barbara, CA 2 years ago

no, i didn't. the economic stability of the whole system could manage to bear that back then. right now if you implemented such a rule in essence the economy would collapse. I sympathize with the idea, but i think there are better ways to limit wealth by making false valuations and bubbles themselves illegal. We need to go after corrupted wealth, not wealth in general. We need a functional free market system.. just because the market system we have now is evil does not mean lets throw the baby out with the bathwater. What about making virtual money or hedge bets on loans and etc illegal? what about making stock trading not related to direct distribution illegal? etc. Just stop the assorted bubbles themselves. trying to control things from the wrong directions makes us control freaks, not problem solvers. The rich do nothing, are social and civil and economic parasites. Stop valuing the bubbles they use to grease the gravy train and the house of cards ends, without putting artificial limits on wealth. Some billionaires deserve their fortunes for the work they manage to do. not many. but some.

[-] 1 points by shinyheart (27) 2 years ago

But as a matter of broad social policy, should we be legislating to the exceptions?

Nobel economist Joseph Stiglitz recently tore the "marginal productivity" theory of earnings to shreds: "Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin." http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105

Furthermore, suppose even that the billionaire was soooo socially productive that he "earned" his billions, as it were. Does that entail that he has a right to consume 1 billion dollars worth of luxury goods, while people are starving?

There are diminishing marginal returns to wellbeing from money - the 1,001st dollar you have make is worth much, much more to your survival than your 1,000,001st dollar.

Therefore, in the REAL world, in which we're speaking about life, health, social wellbeing, etc. society as a whole is made much better off by redistributing virtual capital from those who don't need the money to those who do.

The vast, vast majority of super-wealthy people are wealthy far in disproportion to their contribution to society - and that is the whole point about "phantom wealth."

Moreover, in an age in which all digital content can be recreated virtually infinitely for everyone at zero marginal cost, a random person with Internet access can potentially be hugely socially productive.

And it just so happens that Jesus was right, that giving money to the poor is a pretty good fix for poverty: http://opinionator.blogs.nytimes.com/2011/01/03/to-beat-back-poverty-pay-the-poor/

Zero marginal cost changes everything, as I've argued here: http://www.ted.com/conversations/5936/are_capitalism_and_education_f.html

And here: http://www.ted.com/conversations/1650/in_2011_is_it_possible_to_mak.html

Many economic institutions are driven by waste, not efficiency, because waste is a "fitness display," and thus it is sexually selected for. (You can only afford to waste huge amounts of resources if you are really really wealthy - so think of peacock's tails, bling, and MTV's cribs).

Knowing this, a rational society only allows so much of it: http://www.nytimes.com/2011/08/04/business/sales-of-luxury-goods-are-recovering-strongly.html

http://www.nytimes.com/2011/09/18/business/darwin-the-market-whiz.html?pagewanted=all

[-] 1 points by gawdoftruth (3698) from Santa Barbara, CA 2 years ago

i will just admit i don't have the time for this today and ask you to remind me in the morning. You make a strong case, it just does not immediately jive with my model. Aside from that I don't have a strong argument against it other than that what you are really starting in on here is a class war against the rich, and I'm thinking in more dynamic terms of how to achieve economic singularity and not sure if that moves us closer or further from that goal. Please give me some time to review these ideas before trying to comment on them. don't let me forget. :)

[-] 1 points by littleg (452) 2 years ago

How can we help you not to forget ? That is socialism ;)

[-] 1 points by DoWhatIsRight (26) 2 years ago

The class war is against the poor, or the working class if you will. Billionair made that billion by creating a situation in which he gathered up the finite amount of wealth that exists and kept it for himself. Thus making him a billionaire... he can still own his business which earns him a constant stream of income... but that wasn't enough... he had to ensure that he had money saved for the future, which meant less to go around for the others... imagine a heart pumping blood.... now the heart accumulates blood for itself by creating a slower outward flow while maxiizing inward flow... the heart will explode and collapse the system.... I am not saying limit intake, I am saying that if there is no job creation, if there is only stagnation, then something must be done... the money needs to flow. There is enough for everyone... plenty of people who want to work. We want to create good in our world and not war. We want to help not hinder. We don't want slave wages and no concern for our health. Maybe taxing isn't the issue we should focus on per se... but how else can we create the conditions to create the world we want.... taxes allowed them to earn their fortunes... we are only asking for a bit to pay it forward.... still much less than most of our entire history... and we've become poorer as a whole as those top tier tax rates have gone down... except for the 90s.... but we all know what happened then... they got more, wanted more, outsourced, made a tedch bubble... then a housing bubble... traded fake securities... made online scams... when is enough enough? Can't we work together? Why must we tear each other apart to get ahead....?