5 ms·

Wages lag production so debt is required. The banks in this article are everywhere because they have a monopoly on credit creation and demand interest. Take 5

Wages lag production so debt is required. The banks in this article are everywhere because they have a monopoly on credit creation and demand interest. Take 5 minutes to read this, it articulates what the author failed to (and as a result reached a conclusion of little use): http://www.socred.org/index.php/blogs/view/it-s-time-for-an-economic-copernican-turn http://www.socred.org/index.php/blogs/view/it-s-time-for-an-... Think of the banks everywhere. They are today's churches. Big spacious lobbies. Stand in awe not at the creativity but at the sheer amount of high value real-estate they can waste. The guy writing this article doesn't understand the wider dynamics at all. It's about money creation and the use of that to ramp land prices in order to compel everyone to hand over part of their labour. As you note if you have money you can get more of it because you can leverage it. But that's only part of the picture. I'd encourage everyone to read the above link and also Henry George "progress and poverty" http://www.amazon.com/Progress-Poverty-Industrial-Depressions-Increase/dp/0911312587 http://www.amazon.com/Progress-Poverty-Industrial-Depression...

iamsohungry 11y ago
> Wages lag production so debt is required. An alternative would be for wages to not lag production, and for the ultra-rich to make less money.
- branchless 11y ago
  This isn't what social credit is about. Even if you add up all the wages that go to the rich it's still less than the value of the goods produced, hence the need for debt to fill the gap. I agree I'd like to see far less inequality BTW.
ZenoArrow 11y ago
The ideas of social credit definitely have some merit, though I think it's important to flesh out how it would be implemented, as there are clearly risks if it's implemented poorly. For example, how would you guard against over-consumption? Would be interested to hear your thoughts on the Positive Money campaign, I believe you'll be interested in it. http://positivemoney.org/ http://positivemoney.org/
- Natsu 11y ago
  In the current system, you have to get money by convincing other people to give it to you. There are plenty of flaws in that which we know all too well, but I couldn't find any description of how "positivemoney" was actually supposed to work, only lists of problems and appeals for donations. There were no descriptions of what it would do to actually solve the issues in the text. Their description of the problems with debt is particularly confusing because it's not clear how they intend to avoid any of those things. There seems to be a lot of concern about numbers shown in bank accounts and no concern for what happens to production of and access to goods and services, which is what's really important. The comments there are more interesting than the main article: http://positivemoney.org/issues/debt/ http://positivemoney.org/issues/debt/
  - ZenoArrow 11y ago
    > "I couldn't find any description of how "positivemoney" was actually supposed to work, only lists of problems and appeals for donations. There were no descriptions of what it would do to actually solve the issues in the text." Thank you for the feedback about the website. I've been attending Positive Money meetings close to where I live, I'll be sure to raise those points at the next meeting I attend. With regards to the plan, I'll try to give a short summary. I would say there are three central ideas, the rest of the details follow on from these ideas: 1. Control over how much money is created would be moved away from those with the power to spend it. 2. The group in charge of creating money would base their decisions on how much new money to make on economic data, for example keeping unemployment low. 3. The money that was created would be debt-free. Interest would not need to be paid back to the creators of new money. I can go into some of the implications, but before then do you have any questions about the three points above?
    - Natsu 11y ago
      1) Money is created by giving out loans (fractional reserve banking), so I assume you're talking about some other way of creating money. What, exactly, would you do to the Fed to change governance? 2) I believe that's already a goal, though there are certainly perverse incentives. How does this plan correct those incentives, specifically? I'm looking less for goals and more for action plans. 3) This sounds like bitcoin, but I don't see how you can abolish the idea of debt entirely or even why that's desirable. Say I don't have enough money for food (or whatever). If I don't even have the option of going into debt, I starve? I could see more use for something like debt horizons or forgiveness (i.e. debt expires after a time), but we more or less have this already with bankruptcy, though obviously there are plenty of flaws in that. And then it's hard to get anyone to give you more money because, well, you've already shown that you probably won't be able to pay it back. I do find some fundamental disconnects on what money is, though. It seems like the idea conveyed there is a simple number in a bank account, but in actuality it's far more complex than that. Ultimately the numbers on your account aren't what's important: access to goods and services is. There are also issues with the idea of trying to rate limit everyone from becoming "too rich." You might prevent future Rockafellers, but you'll also get rid of future Elon Musks. It seems more useful to prevent people from falling off the bottom than trying to shave off the peaks at the top.
drumdance 11y ago
It's about money creation and the use of that to ramp land prices in order to compel everyone to hand over part of their labour. If you could point me to a single bank president who says his goal is to "compel everyone to hand over part of their labour," I might find this believable. Otherwise it reads like an Us vs. Them Marxist diatribe. Red meat for the proletariat, no different than the Tea Party. I agree that there are systemic forces at work, and that they should be changed, but it's silly to impute dark intentions.
- rlucas 11y ago
  It's not very fair to say "I'll only believe that an esoteric motivation exists if the party motivated by it explicitly states that publicly." (By esoteric motivation, I mean either an "underlying" motivation or an "epiphenomenon" that feeds back onto itself.) It is not necessary to acknowledge or even to know that you are behaving as part of some esoteric motivation, for it to be either a true or at least useful model. For example, think of "selfish gene" type explanation of reproductive / behavioral biology. That is a useful model for thinking about behavior even if the parties themselves talk about courtly love, religious morality, etc. Particularly in the case of a highly developed financial economy, there are lots of decisions that have effects, which effects tend to reinforce making those decisions, without anyone explicitly talking about those effects. For example, the political decision to create and maintain the tax-deferral advantages of e.g. 401k accounts, is bipartisan and widely touted as helping to advance the cause of retirement security and broad prosperity. However, in a very real way, it's also about shunting vast quantities of "dumb money" into a relatively high-fee intermediary industry of 401k administration, mutual fund management, and etc. In turn, those intermediaries employ vast numbers of well paid personnel, as well as enjoy concentrated financial returns to their ownership -- and the owners and workers of the intermediaries lend massive poltiical support to perpetuating and extending those types of program (see e.g. the successive creation of more and more favored account types: Roth IRAs, 529s, Coverdell ESAs, HSAs, FSAs, etc. etc.). This means that Congress is compelling the nation at large to turn over a higher % of GDP to financial intermediaries. It would be disingenuous to claim to disbelieve this unless a Senator stood up and said his goal is to "turn over a higher % of GDP to financial intermediaries." That is certainly not his exoteric goal and probably not even something that he thinks about. But it is a very real consequence, and the feedback loop from the beneficiaries (lobbying, jobs, contributions) most certainly influences him and makes it "about" that.

iamsohungry 11y ago

> Wages lag production so debt is required. An alternative would be for wages to not lag production, and for the ultra-rich to make less money.

branchless 11y ago
This isn't what social credit is about. Even if you add up all the wages that go to the rich it's still less than the value of the goods produced, hence the need for debt to fill the gap. I agree I'd like to see far less inequality BTW.

ZenoArrow 11y ago

The ideas of social credit definitely have some merit, though I think it's important to flesh out how it would be implemented, as there are clearly risks if it's implemented poorly. For example, how would you guard against over-consumption? Would be interested to hear your thoughts on the Positive Money campaign, I believe you'll be interested in it. http://positivemoney.org/ http://positivemoney.org/

Natsu 11y ago
In the current system, you have to get money by convincing other people to give it to you. There are plenty of flaws in that which we know all too well, but I couldn't find any description of how "positivemoney" was actually supposed to work, only lists of problems and appeals for donations. There were no descriptions of what it would do to actually solve the issues in the text. Their description of the problems with debt is particularly confusing because it's not clear how they intend to avoid any of those things. There seems to be a lot of concern about numbers shown in bank accounts and no concern for what happens to production of and access to goods and services, which is what's really important. The comments there are more interesting than the main article: http://positivemoney.org/issues/debt/ http://positivemoney.org/issues/debt/
- ZenoArrow 11y ago
  > "I couldn't find any description of how "positivemoney" was actually supposed to work, only lists of problems and appeals for donations. There were no descriptions of what it would do to actually solve the issues in the text." Thank you for the feedback about the website. I've been attending Positive Money meetings close to where I live, I'll be sure to raise those points at the next meeting I attend. With regards to the plan, I'll try to give a short summary. I would say there are three central ideas, the rest of the details follow on from these ideas: 1. Control over how much money is created would be moved away from those with the power to spend it. 2. The group in charge of creating money would base their decisions on how much new money to make on economic data, for example keeping unemployment low. 3. The money that was created would be debt-free. Interest would not need to be paid back to the creators of new money. I can go into some of the implications, but before then do you have any questions about the three points above?
  - Natsu 11y ago
    1) Money is created by giving out loans (fractional reserve banking), so I assume you're talking about some other way of creating money. What, exactly, would you do to the Fed to change governance? 2) I believe that's already a goal, though there are certainly perverse incentives. How does this plan correct those incentives, specifically? I'm looking less for goals and more for action plans. 3) This sounds like bitcoin, but I don't see how you can abolish the idea of debt entirely or even why that's desirable. Say I don't have enough money for food (or whatever). If I don't even have the option of going into debt, I starve? I could see more use for something like debt horizons or forgiveness (i.e. debt expires after a time), but we more or less have this already with bankruptcy, though obviously there are plenty of flaws in that. And then it's hard to get anyone to give you more money because, well, you've already shown that you probably won't be able to pay it back. I do find some fundamental disconnects on what money is, though. It seems like the idea conveyed there is a simple number in a bank account, but in actuality it's far more complex than that. Ultimately the numbers on your account aren't what's important: access to goods and services is. There are also issues with the idea of trying to rate limit everyone from becoming "too rich." You might prevent future Rockafellers, but you'll also get rid of future Elon Musks. It seems more useful to prevent people from falling off the bottom than trying to shave off the peaks at the top.

drumdance 11y ago

It's about money creation and the use of that to ramp land prices in order to compel everyone to hand over part of their labour. If you could point me to a single bank president who says his goal is to "compel everyone to hand over part of their labour," I might find this believable. Otherwise it reads like an Us vs. Them Marxist diatribe. Red meat for the proletariat, no different than the Tea Party. I agree that there are systemic forces at work, and that they should be changed, but it's silly to impute dark intentions.

rlucas 11y ago
It's not very fair to say "I'll only believe that an esoteric motivation exists if the party motivated by it explicitly states that publicly." (By esoteric motivation, I mean either an "underlying" motivation or an "epiphenomenon" that feeds back onto itself.) It is not necessary to acknowledge or even to know that you are behaving as part of some esoteric motivation, for it to be either a true or at least useful model. For example, think of "selfish gene" type explanation of reproductive / behavioral biology. That is a useful model for thinking about behavior even if the parties themselves talk about courtly love, religious morality, etc. Particularly in the case of a highly developed financial economy, there are lots of decisions that have effects, which effects tend to reinforce making those decisions, without anyone explicitly talking about those effects. For example, the political decision to create and maintain the tax-deferral advantages of e.g. 401k accounts, is bipartisan and widely touted as helping to advance the cause of retirement security and broad prosperity. However, in a very real way, it's also about shunting vast quantities of "dumb money" into a relatively high-fee intermediary industry of 401k administration, mutual fund management, and etc. In turn, those intermediaries employ vast numbers of well paid personnel, as well as enjoy concentrated financial returns to their ownership -- and the owners and workers of the intermediaries lend massive poltiical support to perpetuating and extending those types of program (see e.g. the successive creation of more and more favored account types: Roth IRAs, 529s, Coverdell ESAs, HSAs, FSAs, etc. etc.). This means that Congress is compelling the nation at large to turn over a higher % of GDP to financial intermediaries. It would be disingenuous to claim to disbelieve this unless a Senator stood up and said his goal is to "turn over a higher % of GDP to financial intermediaries." That is certainly not his exoteric goal and probably not even something that he thinks about. But it is a very real consequence, and the feedback loop from the beneficiaries (lobbying, jobs, contributions) most certainly influences him and makes it "about" that.