The Anti-Capitalists in the Gulch
The traditional story is that farming is everyone's bread and butter. Bankers and speculators produce nothing, but skim their profits from the suffering of others. The Garden of Eden is populated only by a mythical middle class of retail grocers, doctors, lawyers, and plumbers ("engineers"). No one is poor; and no one is rich.
And no one has friends in city hall or Congress - though the streets are, indeed, cleared of snow; and anyone who destroys a skyscraper eventually meets a Navy SEAL team.
The claim is made that in our glory days, the middle class produced the most wealth, but now in our evil times, the middle class is being crushed between the rich and poor. We like that narrative. We never question it. We never define the terms, never identify the individuals in aggregate.
The fact is that the richest 1% produce about 30% of the "wealth" if we measure that only by income. If we understand "wealth" to be capital, then the picture is much different.
"Eighty-seven percent of upper-income Americans -- those making $75,000 or more annually -- own stocks, as do 83% of postgraduates and 73% of college graduates. Sixty-four percent of Republicans hold stocks, compared with half of Democrats and independents. Men are more likely than women to be stock owners. Those aged 50 to 64 are the most likely of any age group to say they have money invested in the stock market." -- http://www.gallup.com/poll/147206/Sto... (And the poll shows that this is these are lowest numbers in in 15 years.)
Now, we can decry the recession. Indeed, I do. But I also know from US economic history - the stuff of numismatics, which is the touchstone of economics - that the so-called "Great Recession" (1873-1896) was a time of great growth, expanding opportunities, new inventions and new technologies: the 1890 census was completed because of punched card tabulators, i.e., the root and rock of computing machinery.
Everyone loves silver dollars, especially those fat-faced Roman ladies from George Morgan. But the Morgan Dollar was inflation money. And it was, indeed, good for gold - if you wanted... which, apparently no one did, in gross violation of Gresham's Wild Conjecture. (http://necessaryfacts.blogspot.com/20...) The fact is that, like now, the US economy continued to "contract" even as more money was pumped into it. But life got better for everyone. The world of 1896 was 23 years cleaner, safer, better fed, better housed, more educated, and entertained. Just like now.
How was that possible?
The fact is that back then, just like now, the richest 1% were just barely capably of making the smallest incremental improvements in financial management and creative investment. Using their influences with governments, they cut their own taxes, creating foundations that funded huge astronomical instruments, and even rockets for exploring the upper atmosphere... as well as hospitals, universities, and libraries...
They did not have to do that. They could have held it all in cash and swum around in it. Henry Ford wanted to. He was incensed to discover that he could not go to a bank and withdraw "his" money ($3 million at that point) in small bills and coins right from the vault. The bank did not have it. They had stocks, bonds, real estate, insurance policies,... Including stock in his firm and those of his competitors, because the market is inscrutable, even for those who like to think they can control it. They know that. So, they hedge their bets.
The commodities markets are driven by producers. Co-operatives of farmers buy and sell long and short futures contracts on the very products they bring to market. It is how they even things out over the calendar year. Meanwhile, about 90% of other investors buy on enthusiasm and sell into their misery. And they do that voluntarily.
Very few of us billions of others actually do that. We do play sports for fun. So, we know why athletes earn what they do. Most of us would rather be in a room full of spiders than to be on an stage in front of an audience. So, we know why movie stars are millionaires. But very few of us actually buy and sell anything, except our own labor -- and most people want to sell it once for life.
Therefore, they call bankers gangsters, and denounce "crony" capitalists for the friends they themselves do not have - even though city hall and the halls of Congress are wide open to any and all.
If you do not want to go yourself, you could hire someone. In this market, you can find any kind of a lobbyist for about $100 per hour, and a good one for about twice that. You can collect that kind of money from a living room full of football fans. But it is easier to condemn the rich.
And no one has friends in city hall or Congress - though the streets are, indeed, cleared of snow; and anyone who destroys a skyscraper eventually meets a Navy SEAL team.
The claim is made that in our glory days, the middle class produced the most wealth, but now in our evil times, the middle class is being crushed between the rich and poor. We like that narrative. We never question it. We never define the terms, never identify the individuals in aggregate.
The fact is that the richest 1% produce about 30% of the "wealth" if we measure that only by income. If we understand "wealth" to be capital, then the picture is much different.
"Eighty-seven percent of upper-income Americans -- those making $75,000 or more annually -- own stocks, as do 83% of postgraduates and 73% of college graduates. Sixty-four percent of Republicans hold stocks, compared with half of Democrats and independents. Men are more likely than women to be stock owners. Those aged 50 to 64 are the most likely of any age group to say they have money invested in the stock market." -- http://www.gallup.com/poll/147206/Sto... (And the poll shows that this is these are lowest numbers in in 15 years.)
Now, we can decry the recession. Indeed, I do. But I also know from US economic history - the stuff of numismatics, which is the touchstone of economics - that the so-called "Great Recession" (1873-1896) was a time of great growth, expanding opportunities, new inventions and new technologies: the 1890 census was completed because of punched card tabulators, i.e., the root and rock of computing machinery.
Everyone loves silver dollars, especially those fat-faced Roman ladies from George Morgan. But the Morgan Dollar was inflation money. And it was, indeed, good for gold - if you wanted... which, apparently no one did, in gross violation of Gresham's Wild Conjecture. (http://necessaryfacts.blogspot.com/20...) The fact is that, like now, the US economy continued to "contract" even as more money was pumped into it. But life got better for everyone. The world of 1896 was 23 years cleaner, safer, better fed, better housed, more educated, and entertained. Just like now.
How was that possible?
The fact is that back then, just like now, the richest 1% were just barely capably of making the smallest incremental improvements in financial management and creative investment. Using their influences with governments, they cut their own taxes, creating foundations that funded huge astronomical instruments, and even rockets for exploring the upper atmosphere... as well as hospitals, universities, and libraries...
They did not have to do that. They could have held it all in cash and swum around in it. Henry Ford wanted to. He was incensed to discover that he could not go to a bank and withdraw "his" money ($3 million at that point) in small bills and coins right from the vault. The bank did not have it. They had stocks, bonds, real estate, insurance policies,... Including stock in his firm and those of his competitors, because the market is inscrutable, even for those who like to think they can control it. They know that. So, they hedge their bets.
The commodities markets are driven by producers. Co-operatives of farmers buy and sell long and short futures contracts on the very products they bring to market. It is how they even things out over the calendar year. Meanwhile, about 90% of other investors buy on enthusiasm and sell into their misery. And they do that voluntarily.
Very few of us billions of others actually do that. We do play sports for fun. So, we know why athletes earn what they do. Most of us would rather be in a room full of spiders than to be on an stage in front of an audience. So, we know why movie stars are millionaires. But very few of us actually buy and sell anything, except our own labor -- and most people want to sell it once for life.
Therefore, they call bankers gangsters, and denounce "crony" capitalists for the friends they themselves do not have - even though city hall and the halls of Congress are wide open to any and all.
If you do not want to go yourself, you could hire someone. In this market, you can find any kind of a lobbyist for about $100 per hour, and a good one for about twice that. You can collect that kind of money from a living room full of football fans. But it is easier to condemn the rich.
As for moving south of the border i did that to recoup the 35% loss in buying power in a nation that had turned it's back on it's own Constitutiton and no longer had the right to expect loyalty. that nation and those of you who helped that effort not even recognizing ghe importance of Dec 30th nor bothering to talk about it you helped destroy. How many drops did you make? In your life? Yet after ignoring all the imiportant issues you discuss banking systems of the 1800's and not the system that has replaced the Bill of Rights. Of what good are you? the system is there to be exploited that much is clear. No one believed me I proved it. Not just the moocher system but the political system. It takes more than discussing philosophy to accomplish anything. Discuss that for a few days. List those efforts. Then explain why you ignore the events of Dec. 30th.
And continue to discuss rights you no longer have.
I would guess to quote a Heinlein saying. The number of your drops is zero.
I would guess iyou will vote for the left as do most of the pontificators here ...if they vote at all. What use is objectivism if not applied?
You weren't worth fighting for and we never took an oath to fight for you which is a good thing. Our oath was to the Constitution and with it the Bill of Rights . The one you ignored while it was shit canned in favor of commenting on banking systems of the 1800's.
I pity you and all who are saying ' what happened on December 30th?"
the food went to shut ins and others that could not get to the food banks. the lesson in how the system really works went over peoples heads.
I live in Mexico primarily because I prefer it to a fascist police state being handed to a dictator who did away with civil rights along with 85% of your elected officials.
Seig me no heils Comrade I do not serve the party....
Read the Creature From Jekyll Island.
Stop repeating irrelevant data in your irrational defense of the looter banking cartel.
I believe that without the War Between the States and the consequential creation of the national banking system, banking would have sorted itself out, as did the railroads and telegraphs and, for that matter, medical colleges, as well as tailors and machinists, and everyone else.
The root cause of the federal legislation was as much a popular demand from below as any kind of conspiracy from above. Agreed, like the railroads, the banks cartelized under the federal government. Not only did they not resist, they sought it. But they did not dream it up on their own. And, it took the actions of a representative Congress to make it happen. And - more to the point - it had started a generation earlier at the state level.
I point out also, that even in Texas, the city of Austin runs the electrical power and water distribution system. (Houston does not. There you have enough choices that you need a website to sort them out.) The calls for government controls come from many sources. Anyone with something to gain will ally with someone else with some other agenda if they can agree on the controls. But they cannot get it done unless "everyone else" (or most of us) go along one way or another, either actively or passively.
What was lacking then was a fully consistent theory of capitalism, based on egocentric ethics, founded on rational-empiricism (objectivism) in epistemology and metaphysics. We have that now.
"The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy." -- https://www.treasury.gov/resource-cen...
Banknote reporters (competing publications of various reliability) told bankers and the public which notes were good and which were suspect. They also informed about known counterfeits.
While it is true that many banks actually were legitimate businesses, it is also true that many were fraudulent from the get-go and some were so with state charters supposedly attesting to their credit worthiness. At least one of the banknote reporters was accused of being behind counterfeiting operations. Counterfeiting was so prevalent that in some cases today, the only evidence we have of a bank is the fake notes, not the genuine ones. That was possible expressly because of the widely de-centralized nature of banking.
I wrote two articles about "Levi Loomis and the Bank of Singapore." The first research was later turned into a graphic short story. I can put it up on my blog. Singapore was a wildcat town and bank in Michigan. They attempted to defraud Levi Loomis, and in fact, the entire town, as Loomis eventually held most of the notes issued in Singapore. Loomis finally met the bank's clerk by sticking a gun under his nose and taking him to a magistrate. The wild and unbridled nature of 19th century banking is what led to the gradual creation of the central banking system.
The national banking system created by Salmon P. Chase was backed in gold. Banks were limited to issuing 90% of their assets as bank notes. And still, some failed.
I can direct you to actual Clearinghouse Scrip created by banks in the so-called "Panic of 1907." And I can show you hundreds upon hundreds of examples of Depression Scrip created by local authorities when President Roosevelt closed the banks.
The history of money is richer than the anti-bank populists would have you believe.
I agree we're in grave danger from all the things you mention in the secon paragraph: the underground economy, the need to bribe or donate to get anything done, leading to loss of rule of law and a meaner form on interacting with one another (i.e. whips and guns instead of dollars).
It's not just bankers that know that periodic recessions will happen, we ALL know that periodic recessions will happen. And if we're not old enough or savvy enough to know that, well, we have no business taking out mortgages. Caveat emptor. And let the games begin.
Four food banks with every two week policeis. Two a week invest $1.50 each way on the bus fare times six bags of food twice a week for $3.00 or $12.00 per month for 24 bags of food and related household products sometimes was one helluva a good return especially as it was non reportable and non taxable. Immediate need satisfied for a portion thereof created a form of wealth and no controls on bartering or trading nor even selling outright.
Tongue firmly back in cheek ask me if it bothered me morally.
go ahead ask me.....
not as long as the amount was less than that the government owed me anyway.
I viewed it as reclaiming that which I had produced stolen and reclaimied in a Robin Hood manner.
Extend that to medical and housing assistance etc. why it's a wonderful growth industry and particular suited to the times.
heh heh heh heh heh or in spanish ja ja ja ja.
The capable always rise to the top. No matter what.....
Then i took my retirement pay and moved to Mexico and points south immediately gaining and now more than regaining the 35% loss in buying power, rejoined the middle class and have nor moral qualms whatsoever.
Objectively speaking it's a second career made for retirement ....and unfortunately required when you retire
I have enough faith in the market that I believe the jobs will come back anyway -- but that most of the new jobs will be off the books, in the shadow economy. And this is why I say the US is becoming a banana republic. Once we're working off the books, we all become criminals and have to expect to start bribing officials. Which is the beginning of a slide into a meaner form of civilization that may be irreversible -- a form where the law is not to be trusted by anybody. What once made the US worth protecting was precisely that its people did not have to live that way.
But most (all?) recessions are preceded by bubbles, and those take a few years to happen and can be spotted if you know what to look for. I got out ot the stock market 3 years before the dot-com bust of 1999 because I knew it was coming. Of course I panicked too soon and lost some potential profit, but I'd rather be safe than story.
One of the biggest signs of a coming crash is when brokers start advising people, "The rules of the market have changes. There are no business cycles any more."
Of course, I don't expect bankers to actually commit to refinance forever. I expect that enforcement of the rule would mean they stop offering loans that end in balloon payments. But if bank managers were personally liable for bank failures, as they ought to be (and were in Scotland in Adam Smith's time), they would not want to write loans that risky anyway.
"How much will you pay me to go into my yard, and dig a hole, and then fill it up or maybe not?"
The issue is not whether or not you think there is utility in the matter, but whether I do. You may very well evaluate such an activity as being of no value and that you would not pay someone to do it. That is completely within your right. You have zero right to tell me, however, how I should valuate such a project. You may be willing to pay $50 million for a yacht on which to sail the ocean and enjoy yourself. Given the same $50 million, I may choose instead for a private jet. Is one of us right and the other wrong?
Again you didn't read and understand.
You continue to make off topic arguments and insisting that I am wrong without reading the source material I referred to and without even comprehending the simple statements I post.
Fractional reserve banking is much older than the federal reserve, but those instances were significantly different than the banking cartel legislation written by banking cartel members. Prior to that legislation, each bank had to maintain confidence in each bank's non-legal tender IOU's (i.e.,the credit created by the bank.) Banks had to compete with other lenders who also had to maintain confidence in their own IOU's. Customers who accepted the banks IOUs had to believe in the worthiness of the bank that issued them. If the bank made significant bad loans the reputation and the value of the bank's IOUs would degrade and not be acceptable for payments. In the free market with competition between lenders, this limited the volume of IOUs that the banks could issue, limited their potential profits, and placed the owners at risk and responsible for their poor decisions. The federal reserve act places that risk on the taxpayers and eliminates competition from non cartel members, destroying free market banking and giving immense unearned counter-productive power to the cartel.
For all the labor put into them, if they have no marginal utility for you, they have no value for you. Marginal utility for you, not labor invested, is the source of value.
MEM replied: "Murray Rothbard and others would agree with your that any fractional reserve banking is fraud."
FFA rejoined: "Mike, I said nothing about fraud at all. i did not say fractional reserve banking is the sole problem."
You surely did. Moreover, my reply was quite clear: the barber writes himself an extension of credit - "creating money" - every time he pays an invoice by mail rather than paying cash on the barrelhead. That is the part of the essential nature of capitalism: credit exists because good living makes us optimistic. Capitalism brought that better standard of living about.
Even more, Salmon P. Chase created a gold-backed nation-wide system of independent banks, limited by law to lending out no more than 90% of their reserves - and some still went bankrupt, in 1903 a lot of them... But when barbers and pharmacists and piano teachers can't pay their bills, it is a different matter entirely. In fact, some people blame the bankers for that, also.
But the barber could buy soap and when the bill arrived pay it later -- so much later that 2-10-EOM was printed on invoices: "Take a 2% discount if you pay by the 10th of the month, or else pay it all by the end of the month." So, how come bankers do not get that by law? Because so many laws are based on anti-business prejudices inherited from the Middle Ages and previous times.
Shariah Law of the Muslims forbids compound interest. They did not get from their Martian overlords: they got it from Moses and found it validated in Aristotle. The Greeks considered it "unnatural" to make money on money. One reason that Julius Caesar reformed the calendar was to take it out of the hands of corruptible priests who were bribed to put off the end of the month, the time at which loans were due.
When it comes to the bourgeois virtues of trade and commerce, we have a long way to go to get them codified into law and understood by the common culture.
(I don't know why you got a Zero, aside from being wrong. Your ideas are found within the mainstream of libertarian economics. Wrong though they are, they are worth discussing in order to get to the truth. So, I plussed you back to One.)
The labor theory of value is easily contradicted by digging a hole and filling it back up. "
You contradict yourself right there. I can find utility in the process of work where you do not. It is not up to you to determine what qualifies as utility for me.
Farmers dig up holes and fill them back in all the time. It's called plowing. What they are in fact doing is loosening up the soil to increase its fertility by making it easier for a plant's roots to take hold. Does that not produce utility?
I can dig a hole and fill it back in with a fence post. Does that action have no utility?
I can even dig a hole and fill it right back in with the very dirt I pulled out of the hole. What have I gained? The exercise of my body and the affirmation that I can in fact perform physical labor. Let's say that I am recovering from cancer and this is one method of rehabilitation and improving my stamina. Would you say it has no utility?
Now you may argue that it is not efficient, but there again, it is because you see your goal where I see mine. So if you were trying to persuade me that Smith is incorrect, you're going to have to present a different argument, because this one isn't in the least bit persuasive.
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