”There is no Science, the Study of which is more useful and commendable than the Knowledge of the true Interest of one’s Country; and perhaps there is no Kind of Learning more abstruse and intricate, more difficult to acquire in any Degree of Perfection than This, and therefore none more generally neglected. Hence it is, that we every Day find Men in Conversation contending warmly on some Point in Politicks, which, altho’ it may nearly concern them both, neither of them understand any more than they do each other.
Thus much by way of Apology for this present Enquiry into the Nature and Necessity of a Paper Currency. And if any Thing I shall say, may be a Means of fixing a Subject that is now the chief Concern of my Countrymen, in a clearer Light, I shall have the Satisfaction of thinking my Time and Pains well employed.
To proceed, then,
There is a certain proportionate Quantity of Money requisite to carry on the Trade of a Country freely and currently; More than which would be of no Advantage in Trade, and Less, if much less, exceedingly detrimental to it.
This leads us to the following general Considerations.”
http://founders.archives.gov/documents/Franklin/01-01-02-0041
Paper is poverty…[edit]
“Paper is poverty…it is the ghost of money, and not money itself.” Thomas Jefferson,
. The bankruptcies in London have recommenced with new force. There is no saying where this fire will end. Perhaps in the general conflagration of all their paper. If not now, it must ere long. With only 20 millions of coin, and three or four hundred million of circulating paper, public and private, nothing is necessary but a general panic, produced either by failures, invasion or any other cause, and the whole visionary fabric vanishes into air and shews that paper is poverty, that it is only the ghost of money, and not money itself. 100 years ago they had 20 odd millions of coin. Since that they have brought in from Holland by borrowing 40. millions more. Yet they have but 20 millions left, and they talk of being rich and of having the balance of trade in their favour.
https://founders.archives.gov/documents/Jefferson/01-13-02-0120
I am convinced that those societies (as the Indians) which live without government enjoy in their general mass an infinitely greater degree of happiness than those who live under the European governments. Among the former, public opinion is in the place of law, & restrains morals as powerfully as laws ever did anywhere. Among the latter, under pretence of governing they have divided their nations into two classes, wolves & sheep. I do not exaggerate. This is a true picture of Europe. Cherish therefore the spirit of our people, and keep alive their attention. Do not be too severe upon their errors, but reclaim them by enlightening them. If once they become inattentive to the public affairs, you & I, & Congress & Assemblies, judges & governors shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions; and experience declares that man is the only animal which devours his own kind, for I can apply no milder term to the governments of Europe, and [254] to the general prey of the rich on the poor.
@Johndoyle.
“Debt is claim,no? You can call it lots of other things, like IOU’s, tokens etc, but it all comes back to there first being a debt.”
https://archive.org/stream/AlexanderDelMar/AlexanderDelMar-TheScienceOfMoney1896#page/n7/mode/2up
Actually no it does not all come back at first there is a debt. What there is and the condition precedent for trade is a double coincidence of wants, more precisely The requirement to exchange.
Money is a rain check which allows delayed consideration if the Money token is created so that it comes from Skin in the Game it does not give rise to the asymmetric risk problems inherent in the Creation of Money with the Debt mentality.
This is not even a semantic point it is a logical point.
The existing system is such that the Debt = Money axiom holds but that is by no means the only way to do Money.
This from Alexander DelMar , who correctly showed that Money as an expression of value was an abstract “Convenient posit” ( See Quine two dogmas). And what its true substantive function is and was back then and has been recognised by people down the ages from Aristotle onwards is a Mere numerical ratio. To express a numerical ratio there is absolutely no reason to insist that any component of debt necessarily exists.
-
I think you are complicating the fact of money enormously. I cannot decipher the book as its all too small and dark. But I doubt there are many truths there we need to know in this blog. I’ve never heard of the author, not that is germane, but it might be.
That there is a desire first is just nit picking. The debt comes into being by virtue of opportunity.It precedes the exchange part of the equation. A double entry book keeping event. ties it all up. -
John, I think maybe Stephen Zarlengas the lost science of money might be an easier read although DelMar is one of the Numastatist greats, Zarlenga is a modern counterpart, who develops the work of DelMar into the late 20th and early 21st-century context.
https://archive.org/details/StephenZarlengaTheLostScienceOfMoneyScan44Mb/mode/2uphttps://en.wikipedia.org/wiki/Alexander_del_Mar
https://en.wikipedia.org/wiki/Stephen_Zarlenga
It is true that Money as a phenomenon and its close relations Value and Price are hard to pin down confusing an accounting identity with the function of money in an economy and the special relationship of some forms of money to Debt actually gives a much more complicated story in my own opinion.
WIth SEEDs I think there is a hope to give the Unit of account a dimensionless but immutable metric which will make the measure function of money less corruptable.
The third Writer I have found very good at scraping away the patena of obfuscation surrounding the debt-based money construct is Kreutz.
https://www.themoneysyndrome.org/tag/helmut-creutz/
“He lucidly explains the economic terms and functions that surround money and shows his factual findings in numerous diagrams and graphs, using the example of Germany’s economy since World War II. He then shows the various effects of our monetary system on a vast range of fields including agriculture, social instability, the degradation of the environment, the over-indebtedness of the Third World and a trend toward triggering wars.”
I also highly recommend Carol Quiggleys Tragedy and Hope for the full Geo Political aspects of Money in exchange outside of National or Kinship groups.
http://www.carrollquigley.net/pdf/Tragedy_and_Hope.pdf
Damon Vrabels series from some time back is a very astute description of the present system. The present system of debt bondage is a very good way to excercise authoritarian control over populations whilst scolding them for their own profligacy and imprudence.
I made this reading list for Prof. Richard Murphys Blog, before he banned me for arguing against his position on the Positive Money proposals which he was misrepresenting even though there is a direct dialogue between him and Ben Dyson the founder of Positive money extant on the web in several places.
Tomlinson’s Honest Money
https://www.amazon.com/Honest-Money-Challenge-John-Tomlinson/dp/1898271380
and future money by James Robertson
http://www.jamesrobertson.com/futuremoney.htmhttp://bibocurrency.com/index.php/downloads-2/14-english-root/101-book-page Gauvin The Money Psyop and Bibo
http://bibocurrency.com/index.php/downloads-2/14-english-root/105-passive-bibo-currency-distinguishing-claims
Bernard Leitaer The future of money bernard Leitaer pdf download
https://docs.google.com/document/d/1L6f44zBs2-FCYAuHI_X3H-4a3VGB9o1dNUMSGbrpD7k/edit
Helmuth Kreutz the Money Syndrome.
http://www.themoneysyndrome.org/index.php/links/
I find Wrays writing much easier to digest than Mitchells this Paper he did for the Levy Institute is excellent.
http://www.levyinstitute.org/pubs/wp_717.pdf
full list for wray on Levy Institute web sitehttp://www.levyinstitute.org/publications/l-randall-wray
Zarlenga ( Lost Science of Money )
https://archive.org/details/StephenZarlengaTheLostScienceOfMoneyScan44Mb/mode/2up
Ellen Brown
( http://www.webofdebt.com/ ),
Alexander Del Mar https://archive.org/stream/AlexanderDelMar/AlexanderDelMar-TheScienceOfMoney1896#page/n7/mode/2up
This is an excellent video Series from Mike Maloney
Cullen Roache for a critique of MMT
https://www.pragcap.com/modern-monetary-theory-mmt-critique/
What I have found in the ten plus years I have been studying this seriously is that the questions have become sharper I started really with Tomlinson and the Michael Journal
https://www.michaeljournal.org/There are some great documentary films as well I have embedded many of them on this web page.
http://theconquestofdough.weebly.com/some-documentary-films.html
May 8 2018 at 2:05 pmhttps://www.patreon.com/posts/mosler-keen-4pm-18467116
https://medium.com/@alexanderdouglas/keen-and-mosler-on-mmt-35d7cb7b2b68
Neil Wilson is for me the best Blogger on MMT his analysis and critical thought is peerless in the field.
https://web.archive.org/web/20180215150511/https://medium.com/@aldursys
https://medium.com/@aldursyshttps://web.archive.org/web/20180215150511/https://medium.com/@aldursys
#ConquestofDoughCullen Roache’s web site is an excellent critique of MMT, a critique is a subtle analysis of questions arising from a body of knowledge, information or a book. It is not a counter proof or proof against the claims made necessarily but always helps in sharpening questions and defining boundary conditions
This is a massive subject John no one school of thought has all of the answers for all of the use cases, defining the Unit of account in itself is what DelMar is getting at in chapter 2 of the linked book.
A last word for Alexander DelMar.
”
VALUE IS A NUMERICAL RELATION.Legał use of the words “ unit of value ”—Their importance—They are not defined in the law—Unit a synonym for measure—Evolution of the word “ value ”—Its classical meaning related to the power of numbers— During the Dark Ages it became associated with labour—In the Renaissance it acquired the meaning of an attribute of matter— Fallacy of this last view—The correct naturę of value rediscovered by Montesquieu and Bastiat—Yalue shown to be a numerical ratio between all exchanged things—Yalue measurable by the whole numbers of money —The existing mint laws practically make the whole numbers of money (or the unit or measure of value) to consist of an indefinite sum, whose only limits fluctuate between illimitable demand and uncertain supply.
The laws of certain States ordain that either one of several different coins weighing so many grains, or of pieces of paper of such a size, each called a pound, a dollar or franc, shall be “ the unit of value Important as they are, neither of these words, “ unit,” or “ value,” is defined in the law. Reasoning from its use in analogous cases, “ unit ” is a synonym for measure; but the meaning of “ value ” is not to be determined by analogy, for there is no analogous use of it in the statutes.
When it is remembered that the ablest logicians of all countries, from Aristotle to Mili, have vainly endeavoured to give it form, it will begin to be seen how complex and obscure the naturę of value must be, and therefore in what great uncertainty the statutes have involved all commercial relations, by using, without defining, this intricate term.”https://twitter.com/PositiveMoneyUK/status/1228304868097560579
https://twitter.com/scientificecon/status/1229479681033998336
Surprise, surprise: The real point of so-called “central bank digital currency” (something nobody knew we needed) is to abolish banks.
Permanent Japanisation. Growth no longer allowed.
Totalitarian control over all transactions
When will the banks wake up to what is happening?
— Richard Werner (@scientificecon) February 17, 2020
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Looks like you have a bit of news to catch up on.
Start here:
Lost centuryhttps://t.co/JpnpSPCQ8gCan banks individuallyhttps://t.co/uvlKNyunWY
How bankshttps://t.co/T1tParIwII
RES QE QTC https://t.co/5lCqugJk6S
QTC 1997https://t.co/hXmzf048yG
— Richard Werner (@scientificecon) February 19, 2020
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TIM GOLDFINCH
@TIMGOLDFINCH
·
Feb 20
Not true , there are capital and reserve requirements(in reserves in some countries) and credit is also constrained by the viability of the borrower & the demand for credit.
My daughter was offer £175 to transfer to HSBC . Now why do you think they would offer her that?
@jbhearn
The Monetary System Explained
@SubGrew
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@ektrit
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In practice, reserve req’s are not really a constraint because banks can just issue credit beyond the reserve requirement, and then go to the central bank for reserves after the fact to cover. Therefore its not really a constraint. See pgs 10-11 here: https://imf.org/external/pubs/ft/wp/2012/wp12202.pdf
6:01 PM · Feb 20, 2020·Twitter Web App
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GrubStreetJournal
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And then came the Wolves. Jefferson and Franklin. Paper is Poverty. “If once they become inattent…
”There is no Science, the Study of which is more useful and commendable than the Knowledge of the true Interest of one’s Country; and perhaps there is no Kind of Learning more abstruse and intricat…
notthegrubstreetjournal.com
TIM GOLDFINCH
@TIMGOLDFINCH
·
Feb 20
Replying to
@SubGrew
@ektrit
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I don’t have to you have just agreed with me “Therefore its not REALLY a constraint”
And there is no cost for the additional reserves ? Or to raise Capital to expand the balance sheet ?
The Monetary System Explained
@SubGrew
·
Feb 20
Well when you can borrow basically at 0% and lend to a business at, say, 5%, I think the marginal cost of reserves pales in comparison. It’s essentially a negligable cost. And capital requirements are also gamed because the central bank can just inflate the pool of reserves.
TIM GOLDFINCH
@TIMGOLDFINCH
·
Feb 20
Even at 0% (not UK US) why isn’t there a wash of credit creation in Japan or the EZ ?Causing CBs to tighten policy?because it is constrained by the factors I mentioned. Banks need to satisfy day to day customer demand for cash,which means liquidity constrains credit creation >
TIM GOLDFINCH
@TIMGOLDFINCH
·
Feb 20
And that is why HSBC wants more depositors
rogerglewis on February 22, 2020 at 10:50 am said:
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“Much of this can be difficult to come to terms with. The idea that money is simply created out of thin air is alien to our way of thinking. I doubt this is accidental. My feeling is we’re schooled this way deliberately so our thoughts won’t stray towards grasping the true nature of the society imposed upon us. I have read the suggestion from (Professor Henry C. K. Liu) that when this gets properly understood it’ll be as significant as grasping that the Earth isn’t flat or that it goes around the sun.
I agree. I think the true dark ages are those we’re living in now.
Bill Kruse – http://www.economania.co.uk/various-authors/various-authors.htm
– Permission granted to freely distribute this article for non-commercial purposes if attributed to Bill Kruse, unedited and copied in full, including this notice.
http://bibocurrency.com/index.php/downloads-2/14-english-root/105-passive-bibo-currency-distinguishing-claims
https://medium.com/@alexanderdouglas/keen-and-mosler-on-mmt-35d7cb7b2b68
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John Hearn
@jbhearn
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Easier to remember that all cash (currency) is money, but not all money is cash and better to think of money as a medium of exchange, unit of account and standard of deferred payment.
2:03 PM · Feb 21, 2020·Twitter for iPad
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And then came the Wolves. Jefferson and Franklin. Paper is Poverty. “If once they become inattent…
”There is no Science, the Study of which is more useful and commendable than the Knowledge of the true Interest of one’s Country; and perhaps there is no Kind of Learning more abstruse and intricat…
notthegrubstreetjournal.com
Richard Werner
@scientificecon
·
Feb 21
Replying to
@jbhearn
@EdgarWortmann
and 9 others
Not true. International accounting standards say: current account bank deposits are “cash” money. Also, central bank notes are promissory notes, ie. credit.
Reflecting this reality, we get:
All cash is credit. All money, except gold, is credit.
The importance of credit creation
TIM GOLDFINCH
@TIMGOLDFINCH
·
Feb 21
Now Richard , you know I support a lot of what you say & agree with most , but current account= cash is bollocks .
And I rest my case by the fact that the international accounting standards ( popular with MMT) disagree!
All CB notes are “promissory” agree but not credit >
TIM GOLDFINCH
@TIMGOLDFINCH
·
Feb 21
There is a difference between the medium of exchange being supported by a promise and a loan being supported by a promise to repay . The former develops the note into a medium of exchange ( that every man in the street accepts as cash) an the latter a debt >
TIM GOLDFINCH
@TIMGOLDFINCH
·
Feb 21
you must have more varying confidence in .I wonder if the the people in China see it as the same ?
dr.menendez
@renee_menendez
·
Feb 21
Replying to
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Maybe it is appropriate to distinguish between currency (cash) and the reference to currency. A credit is an arrangement, where the object of negotiation is currency. => Credit is on a meta-level to currency – therefore it is not appropriate to identify credit and currency.
John Hearn
@jbhearn
·
Feb 21
Almost right……where the object of negotiation is a claim on currency and it is most appropriate to separate the currency and credit components of money.
EWortmann
@EdgarWortmann
·
Feb 21
The object of negotiation is not necessarily a claim to money. It is expressed, however, in the currency: the general unit of value.
John Hearn
@jbhearn
·
Feb 21
Correct, it is a claim on currency as well as monetary measure.
dr.menendez
@renee_menendez
·
Feb 21
Due to the hierarchical relation of credit and currency one must note, that money in the meaning of Mxyz is not a well defined entity, because it consists of an object (currency) and claims on that object (deposits). It is more a proxy variable to map purchasing power…
John Hearn
@jbhearn
·
Feb 21
Clever use of the double entendre “note”
Marc Stevenson
@stevensonmarc1
·
Feb 22
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It also has the fabulous advantage of making the transaction anonymous.
https://twitter.com/GrubStreetJorno/status/1241736338363252737