Dear Tadit, please note that when I spoke of monetary pluralism it explicitely excludes private for-profit players, we are talking about local communities or virtual communities. Of course, they should be fully accountable to the public. can you explain what you mean exactly by debt-free ? my understanding of LETS and such was that you get the money by performing a task, not by lending it ? in your scenario, would the sovereign just 'give' the money? (basic income?) Michel On Sun, Oct 16, 2011 at 10:09 PM, <[email protected]> wrote:
Michel,
I will need to reply to this in chunks or as issues to a volume. On Keen, and thereby MMT, the counter point is MMT. With Keen you are seeing the analytical side of the econometrics and his approach is to a strong degree about his use of the methodologies to identify dys-functional financial and fiscal policies. The simple identification that the finance sector doe not have a neutral effect/voice in either the political or economic commons. It is by the monitoring these sort of metrics that we can choose principles and practices to move us toward a different set of objectives assuming that the ends are privatized as in toward sustainable economics.
The current set of pretexts of neo-classical/privatization/**enclosure of the currency and thereby our economy are continuing to include more oiled fictions as rhetoric to support appearance. At one level the more generic difference is between positivist sciencism (ie faith based) and dialectical science as a socializing process. Keen's focus and methodology is rigorously and passionately mathematical. I don't recall him speaking much toward the alternative policy discourse which had Lerner and Lowe. Keen is describing the means and mechanisms to set different objectives. Perhaps implicit is that a takeaway from Keen is that the particular varieties of dys-function relative to the public interests and high functionality relative to a more selected profile and influence, the .01% . The instability is intentional not accidental, as in the US Trader recently and eloquently described for the BBC his clients make "money" on the way up and on the way down. In fact there are massive incentives to promote economic instability.
On Sun, 16 Oct 2011 09:07:30 -0400, Michel Bauwens < [email protected]> wrote:
This is a difficult debate for me Tadit, as I have never truly studied
MMT, and what kind of money is best.
I'd like to posit some general principles as to what a commons/p2p friendly policy would be ...
- first of all, I think monetary freedom is important, which for me means that next to sovereign money that is governed by the collective, and we need at least a national and global level, we also must accept community-driven 'socially sovereign' money ... so repression of successful local money by the state is not acceptable
Tadit: Here again comes my story about the "Free Banking" period in the US, which had relatively speaking the highest levels of fraud and embezzlement as US history up until about 2000. The front side of the story is that the Second National Bank of the US was as big a fraud as was the First National Bank of the US. Pres. Thomas Jefferson allowed the charter of the First National Bank of the US, which caused a very angry visit by Mayer Amschel Rothschild to the British War Department, which then became the US British war of 1812, which oddly seemed to be more about burning down the national capital as a symbolic act, than the occupation of territory. Anyway Andrew Jacksonbecame convinced that the people behind the Second US National bank were frauds and thieves due to evidence of illegal activities. The other side of the process is that the bank was buying up politicians at a rapid rate, such his veto on any renewal of that charter could be over-ruled by congress given enough unregulated campaign funding. What Jackson did to destroy the Second US National Bank was to move the funds of the US government to other banks. Beyond Jackson's anger at the Second US Bank, he was also a strong state's rights/local rule advocate. His solution was in effect to let each state to work out their own banking processes. This began what is known as the "Free Banking Era in US history from 1832 to 1860 the US as a sort of economic confederacy had over 7,000 local currencies, generally issued by local banks. The level of banking and currency fraud was enormous. In effect Jackson had a serious and legitimate problem with the practices of the Second National Bank of the US, but he proposed effectively the wrong solution, and it was in some large degree a "free market" bit deregulation which became a different major problem.
The US Greenbacks and various currency sovereignty details were established and then later in Lincoln's administration the US Banking Acts of 1863 and 1864 established some national standards, and it also created more problems which lead to a different story.
I have two main points relative to the proposal of local currencies. One major problem is the entire field has no standards of transparency or accountability. The second you are already familiar with the distinction between a sovereign fiat currency issued on the basis of debt(often masked as "credit" because is sounds more positive, but in the detail of practice it makes no difference between "Debt" and "Credit") and a privatized franchise to "print" money.
Treating an exchange association as an LLC and as a cooperative has its advantages in part by familarity of the model, by member capitalization, by patronage rebates, by internal revolving loan funds, other forms of incubation, and more.
- money should be a commons, I'm not sure exactly what that means, but it should not be subjected to speculation, and is a public utility that should
Tadit: Speculation can be eliminated to a large degree at least formally
be protected from private misuse ...; how exactly can we make money into a
commons, that is an important question for me, in which I would like to be educated ; instinctevely I'm against the private for-profit creation of money as it is currently practiced
Tadit" IF and this is some degree a big IF, if the process of governance is not also controlled as a commons based democracy by performance, then it is unlikely that this will happen except by autonomous initiatives such as the CRX. MMT/FF tends to relatively neutral and instrumental toward objectives defined with regard to democratic outcomes, not by an electoral system chained to a stacked deck of "legitimate" choices.
- third, money has a design, and that design should be a design that does not permit excessive accumulation, nor require infinite growth
Tadit: money circulation and management does define money by how it can be used and controlled. The package of fictions related nominally legitimating the monetary defaults. Understanding reserve accounting how it is currently used is critical to how that process can be simply turned to the benefit of the commons and commoners in several ways
before encountering MMT, the people I listened to were:
* Bernard Lietaer, because of his recognition of all the levels, and his effort to have an answer for each level
Tadit: The notion of complementary currencies is all useful, and still Lietaer operates within a debt based standard. I am sure that the complementary innovations could also be implemented under a debt-free currency process.
* Thomas Greco, and his idea for local credit commons, based on the real interactions of local players; weakness here is that it can't be applied rapidly enough in national crisis situations
Tadit: For me this is an external process which can be worked in other ways. The CRX explicitly has the capacity to develop internal revolving loan funds either through the CRNs or through the accumulation of Federal Reserve Notes aka Dollars.There is no intrinsic positive to a debt based currency, imo.
and this is why I liked the approach of Ellen Brown, because of her insistence, with many documented examples of the past, that people-friendly governments can issue money as a productive investment, and that it is not inflationary in such circumstances
Tadit: Ellen Brown's argumentation is weak and her history is weak, but placing the proposal for state banking as utility banking with in the context of the needed monetary reform as recently suggested by Michael Hudson is completely agreeable as an element. Using the "success" or lack of offensive behavior in a state of less than 700,000 residents in total is not exactly a good reason to expect that the banking culture in NYC or Washington DC will change in the least. In fact it is likely that state banking in such places will have the character of the banking culture that we are generally blighted with.
to summarize:
- a pluralist money system that can operate on local, regional, national, and global levels, issued by either sovereign states or local or affinity communities
- conceived as a commons / public utility that cannot be manipulated by private interests
- designed in such a way that it does not create negative social and natural externalities (counter-example: bitcoin is socially sovereign but has the wrong design)
Perhaps if you have time one day, you could write about how you see money as a commons, and how MMT stacks up against these contemporary 'p2p' driven demands
Tadit: it is something I have been thinking about. I know that there is a natural proclivity between the two domains. Perhaps what I have at the moment is that the MMT/FF can be applied in an autonomous fashion. On the negative social externalities these have to be addressed through practice, and this one reason I thread in the form of worker and consumer cooperatives as a more familiar model. I see these details to be fairly small bumps normal to establishing a self sustaining economic process.
One question for MMT, what kind of government would want to implement this?
Tadit: It is intended to work in a range of democratic cultures. Let's turn this all upside down and shake it a bit. What we have now is effectively an MMT/FF process which is operating with an anti-democratic and even criminal agenda.
Michel
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