and computer science
, a hash tree
or Merkle tree
is a tree
in which every non-leaf node is labelled with the hash
of the labels or values (in case of leaves) of its child nodes. Hash trees allow efficient and secure verification of the contents of large data structures. Hash trees are a generalization of hash lists
and hash chains
Demonstrating that a leaf node is a part of the given hash tree requires processing an amount of data proportional to the logarithm
of the number of nodes of the tree;
this contrasts with hash lists, where the amount is proportional to the number of nodes.
(Bjerg 2014, 96
100). With Žižek, we can understand the commodity theory of
money as an effort to found the value of money in the dimension of the real by pointing to the intrinsic value of gold as the ultimate support of the currency. It is crucial to note how Žižek’s definition of the real is anything but straightforward and even varies throughout his writings. At some points, the real is located in a positive existence beyond the sphere of symbolization. He defines the real as ‘that which resists symbolization’ and ‘as the rock upon which every attempt at symbolization stumbles’ (1989, 69, 169). At other points, the real is located in a negative existence, i.e. as merely a void or an aporia inherent in the symbolic
order. Žižek states that: ‘the symbolic order itself, is …
barré, crossed-out, by a fundamental impossibility, structured around an impossible/traumatic kernel, around a central lack’ (1989, 122). This lack is the real.
Credit money plays a crucial role in Schumpeterian theoretical analysis of economic development.
Recollection of the famous passage in The Theory of Economic Development
(Schumpeter, 1934,p. 74) should suffice:The banker […] is not so much primarily a middleman in the commodity ‘purchasing power’ as a producer of this commodity […] He stands between those who wishto form new combinations and the possessors ofproductive means. He is essentially a phenomenon of development, though only when no central authority directs the social process. He makes possible the carrying out of new combinations, authorizes people, in thename of society as it were, to form them. He is the ephor of the exchange economy. In other words – as Schumpeter wrote in his ambitious and unlucky
Business Cycles credit creation is the monetary complement of innovation
(Schumpeter, 1964, p. 110):
Money now is the NOTHING you get for SOMETHING before you can get ANYTHING
In order to investigate this I will draw on Bjerg’s analysis of ‘what is money’ in his book “Making Money: The Philosophy of Crisis Capitalism” (2014). Bjerg describes the double meaning of the phrase making money: redistribution of already existing money, and the literal meaning of creatingnew money6.Using Heidegger’s distinction between the ontic and the ontological Bjerg calls for a better philosophical understanding of the latter.
Heidegger’s distinction between the ontic and the ontological is to be found in his separation of ontology in two spheres: beings (Seiende) and Being (sein)7. Seiende refers to beings that already are, and is limited to the preoccupation of functions of beings in relation to other beings, leading to the question of “what is X” (white, carpenter etc.). This is what Heidegger names ‘ontic’8. On the contrary sein deals not with what is already being, but the ‘to be’-ness of an object. This leads to the investigation of the question of “How is X” and excludes relations in order to investigate the true sein. This is the ontological9.
Applying the notion of ontic and ontological to money, Bjerg initiates a philosophical discussion of the assumptions of money. Instead of asking the ontic question “What is money (in relation to other beings)”, he asks the ontological question “How is it that money exists?”10. In the following, I will use his analysis of how money is created to provide a basis for discussion of the Swiss Gold Referendum 2014 (hereafter SGR). Here I claim that the assumptions of mainstream critique of contemporary money creation is historically and philosophically misplaced and thus impotent.
Theories of Money
There is no superior theory of the being of money, hence Bjerg’s bold and paradoxical statement “money does not exist”11 in a book investigating the very subject. This is derived from the fact that there are different kinds of money in forms of commodities, fiat and credit, where the majority of this today is money as credit. The three dominant theories of money; Commodity-, Chartalist-, and Credit-Theory all supply an answer to how money comes into being. However, they all also face the ontological problem of the relation between price and value: What is the price of money? In Žižekean terminology price is a symbolization of ‘real’ value of an asset. If money is a symbolization of value, there must already be a system in which to measure value. The problem arises when we use money, the symbolic, to determine the real value, as this can only lead us to the conclusion that money equals value expressed in money, in other words: Money is Money. In heideggerean terminology, we are mixing the distinction between sein and seiende. The Being of money is “…characterized by a particular configuration of the value and price”12. The distinction between sein (the Being) and seiende (being) blurs when it is applied to itself: Money used to describe what money becomes tautological.
A Loophole Allows Banks – But Not Other Companies – to Create Money Out of Thin Air
One of the Main Causes of Our Economic Problems
The central banks of the United States, England, and German – as well as 2 Nobel-prize winning economists – have all shown that banks create money out of thin air … even if they have no deposits on hand.
The failure of most governments and most mainstream economists to understand this fact – they instead believe the myth that people make deposits at their bank, and these deposits are then lent out to new borrowers – is the maincause of our rampant inequality and economic problems.
But how do banks actually make loans before they have sufficient deposits on hand?
Economics professor Richard Werner – the creator of quantitative easing – noted in September that the field of economics has been lost in the woods for an entire century because it has failed to understand how banks actually create money.
What banks do is to simply reclassify their accounts payable items arising from the act of lending as ‘customer deposits’, and the general public, when receiving payment in the form of a transfer of bank deposits, believes that a form of money had been paid into the bank.
But why don’t mainstream economists understand how banks actually create money?
Economics professor Steve Keen explained
last week in Forbes:
In any genuine science, empirical data like this would have forced the orthodoxy to rethink its position. But in economics, the profession has sailed on, blithely unaware of how their model of “banks as intermediaries between savers and investors” is seriously wrong, and now blinds them to the remedy for the crisis as it previously blinded them to the possibility of a crisis occurring.
A wit once defined an economist as someone who, when shown that something works in practice, replies “Ah! But does it work in theory?”
That’s why the 2008 crash happened … and that’s why the economy is heading south now.
So things are going to get worse and worse until they’re fixed to account for how banks actually create money.