I love the way Ann Pettifor unpacks complex topics and gives the historical and critical analytical context that so many commentators lack. I highly recommend her writings...
History reveals very clearly that whatever the money system, preventing increases in the prices of land, natural resources, commodities, foodstuffs, capital goods or services requires other system reforms. Nature has a zero cost of production and, therefore, nature should not have a selling price. Rather, as David Ricardo explained and Henry George confirmed, every parcel or tract of land has a potential rental value based on output given the same input of labor and capital goods. All that needs to be done to cut inflation to zero is to capture the full potential rental value of nature (i.e., of surface land, natural resource-laden land, the seas, other natural assets such as frequencies on the broadcast spectrum or takeoff and landing slots at airports, and competition-limiting licenses issued by government) to pay for needed and desired public goods and services. Economics professor Fred Foldvary some years ago estimated that "rents" comprised almost one-third of global GDP.
Henry George made a strong case for the elimination of all taxation except for that of rents. He argued against the taxation of income. I would modify his proposal to take into account the long history of under-taxation of rents that has led to today's ever-worsening concentration of income and asset ownership at the top. This could be addressed by an individual income tax that simplified compliance but was very progressive. How might this look? Exempt all individual incomes up to some amount (e.g., the national median income). Eliminate all other exemptions and deductions. Above the exempt level, impose in increasing rate of taxation on higher rates of income. The effect will be to lift the burden of taxation from income earned producing goods and services, shifting the weight of taxation to gains from speculation and from rent-seeking privileges enjoyed by those at the top.
What happened in Lahaina, Maui, had nothing to do with climate change, but was quite obviously allowed to happen ("made to happen" may be a better phrase) by the people in charge: Maui EMA (local branch of FEMA), the local Water Management administration, the Police Department, etc. The facts are obvious, and have nothing to do with "conspiracy theories", being a "conservative" or anything like it (personally I'm on the left). Alex Jones (sorry!) explains it well in a few minutes at https://banned.video/watch?id=64dd41044258a36c0b9fc553
Keynes: "Deflation…involves a transference of wealth from the rest of the community to the rentier class and to all holders of titles to money; just as inflation involves the opposite. In particular it involves a transference from all borrowers, that is to say from traders, manufacturers, and farmers, to lenders, from the active to the inactive. "
Please look into including colonialism and specifically slavery and *human* bondage as you consider the financial system historically. I think Greg Grandin covered this: at some point in the Americas (or maybe just the U.D.) enslaved human beings, as commodities, or perhaps more accurately as human capital (why I loathe the term) were the largest part of the insured market.
In Maui, Indigenous Hawaiian leaders and climate scientists (see Democracy Now's coverage) have emphasized that it is a combination of climate change (atmospheric conditions you mention) *along with* land use change due to colonialism -- first the seizure and use of land for monocropping sugar cane and pineapple, then the abandonment of that land, that reduced the water table (worsening long-term drought) and built fields of tinder.
Therefore we also have to solve the colonialism and neo-colonialism problem. The modern financial system globally was built on the trafficking of human beings and the abuse and despoiling of land.
If you're not already doing this, please speak to scholars who cover this to make sure you don't write a white-washed book. Thank you.
Hi, thanks for this. It is indeed best understood as a system from my pov.
(sorry if the following comes across in a mansplaining tone - not assuming ppl don't know (lots) more than me, but laying out a chain of thought).
Although it's not 'alive' - this finance system has a sort of pseudo life afforded it by those humans who elect to spend their lives animating it. And through them, and things like corporate personhood, it seems to have attained the characteristics which are ascribed to 'Complex Adaptive Systems' (CAS).
This lens seems useful to me in considering theories of change.
CAS perpetuate themselves on the basis of something that is described as 'path dependency' - the observation that the system works in such a manner as to ensure that its future state (as understood by itself) is as coherent as possible with (some function of) its history of state.
This 'history of state' is easily understood as 'identity' - and if we think about ourselves we can see that we certainly will go to great lengths to maintain our identity - not to change who we 'are'.
That the finance system does the same is evident - it reacts against all external reform (even reforms which would make it stronger), in just the way that people resist being educated about their 'way of life'. Internally proposed reforms' only get traction if they obviously strengthen the system - they make more $$. There are of course understandable evolutionary reasons for these conditions - its not that the system is 'evil' (although there are human crooks within it), but that it simply wants to carry on being itself, as best it can.
When change is forced upon it, it first fights back (reforms are very often repealed after heavy lobbying, and bribery - sometimes overt, more often through roundabout means - is definitely involved), and if it cannot achieve repeal it seeks ways to carry on being itself despite the change - to transform both itself and the novelty so as to make the novelty part of its identity.
The welfare state is a great example of this - resisted, tooth and nail, 1870-1945 (earlier in the US with the New Deal), then accepted with ill grace through fear of communism in Europe. This turned out to be enormously beneficial for the finance system as it was the basis on which consumerism became possible, and then, within thirty years it became something the finance system had fully internalised and understands how to (ab)use.
So if change required of the finance system in service of social ends ( even something as high-falutin' as, say, the preservation of civilisation, as against than a climate-driven collapse) breeds first resistance and then co-option, how can we achieve anything significant at the speed required?
My observation is this - that systems don't fight against physics; there's simply no upside to it. A river system is a simple kind of CAS. If you try to dam it, you will experience fight-back and all sorts of persistent attempts to reinstate itself as a river in its original form. But if you were to change the viscosity of water, or the gravitational field, it would instantly - actively - begin to change to meet its new reality.
This offers something to think about wrt the finance system - which is that it treats money as physics. Individuals within the system know, of course, that money is a made up system - that it is a social invention, and that it has changed continuously over time; but in their finance dealings, they act as if it is physics - as if the dollar is a fact of nature. Economists generally treat money in this fashion, taking its existence and workings as a given.
This suggests that an approach which alters how money works 'under the hood' - changes things like the characteristics of issuance, of instantiation (commodity vs credit) - might be achieved without pushback - as long as it delivers a $ advantage.
I think there is evidence for this approach being worth it from the Nixon abrogation of the gold standard dollar. This was achieved without much politics - an executive order, and changed nothing overt. It occasioned much comment, of course, but no pushback from the finance system, while in practice changing everything (so many strong inflection points in economic graphs at the beginning of the '70s).
The question, of course, is how one could achieve something of this kind - clearly, the conditions which made Nixon's action possible ceased to exist - it would take agreement between the World Bank, the IMF, the Fed to attempt something equivalent - and they are clearly in the pocket of the financiers.
I do believe that there is scope for meso-scale 'inside moneys', operating within bounded markets for the benefit of their members, with carefully designed interfaces to the fiat/forex system, to provide such strong benefits that their use spreads - a pluralism developing from the grass-roots. But I've written too much here already!
Three minutes of this video I hope communicate the above with an ecosystem metaphor.
I love the way Ann Pettifor unpacks complex topics and gives the historical and critical analytical context that so many commentators lack. I highly recommend her writings...
History reveals very clearly that whatever the money system, preventing increases in the prices of land, natural resources, commodities, foodstuffs, capital goods or services requires other system reforms. Nature has a zero cost of production and, therefore, nature should not have a selling price. Rather, as David Ricardo explained and Henry George confirmed, every parcel or tract of land has a potential rental value based on output given the same input of labor and capital goods. All that needs to be done to cut inflation to zero is to capture the full potential rental value of nature (i.e., of surface land, natural resource-laden land, the seas, other natural assets such as frequencies on the broadcast spectrum or takeoff and landing slots at airports, and competition-limiting licenses issued by government) to pay for needed and desired public goods and services. Economics professor Fred Foldvary some years ago estimated that "rents" comprised almost one-third of global GDP.
Henry George made a strong case for the elimination of all taxation except for that of rents. He argued against the taxation of income. I would modify his proposal to take into account the long history of under-taxation of rents that has led to today's ever-worsening concentration of income and asset ownership at the top. This could be addressed by an individual income tax that simplified compliance but was very progressive. How might this look? Exempt all individual incomes up to some amount (e.g., the national median income). Eliminate all other exemptions and deductions. Above the exempt level, impose in increasing rate of taxation on higher rates of income. The effect will be to lift the burden of taxation from income earned producing goods and services, shifting the weight of taxation to gains from speculation and from rent-seeking privileges enjoyed by those at the top.
What happened in Lahaina, Maui, had nothing to do with climate change, but was quite obviously allowed to happen ("made to happen" may be a better phrase) by the people in charge: Maui EMA (local branch of FEMA), the local Water Management administration, the Police Department, etc. The facts are obvious, and have nothing to do with "conspiracy theories", being a "conservative" or anything like it (personally I'm on the left). Alex Jones (sorry!) explains it well in a few minutes at https://banned.video/watch?id=64dd41044258a36c0b9fc553
Re the comment that debtors benefit from inflation - isn't this only true where the interest being paid for loan is less than the rate of inflation?
Similarly lenders can benefit from inflation where central bank monetary policy raises interest rates?
Keynes: "Deflation…involves a transference of wealth from the rest of the community to the rentier class and to all holders of titles to money; just as inflation involves the opposite. In particular it involves a transference from all borrowers, that is to say from traders, manufacturers, and farmers, to lenders, from the active to the inactive. "
Keynes, 1930.
Please look into including colonialism and specifically slavery and *human* bondage as you consider the financial system historically. I think Greg Grandin covered this: at some point in the Americas (or maybe just the U.D.) enslaved human beings, as commodities, or perhaps more accurately as human capital (why I loathe the term) were the largest part of the insured market.
In Maui, Indigenous Hawaiian leaders and climate scientists (see Democracy Now's coverage) have emphasized that it is a combination of climate change (atmospheric conditions you mention) *along with* land use change due to colonialism -- first the seizure and use of land for monocropping sugar cane and pineapple, then the abandonment of that land, that reduced the water table (worsening long-term drought) and built fields of tinder.
Therefore we also have to solve the colonialism and neo-colonialism problem. The modern financial system globally was built on the trafficking of human beings and the abuse and despoiling of land.
If you're not already doing this, please speak to scholars who cover this to make sure you don't write a white-washed book. Thank you.
Hi, thanks for this. It is indeed best understood as a system from my pov.
(sorry if the following comes across in a mansplaining tone - not assuming ppl don't know (lots) more than me, but laying out a chain of thought).
Although it's not 'alive' - this finance system has a sort of pseudo life afforded it by those humans who elect to spend their lives animating it. And through them, and things like corporate personhood, it seems to have attained the characteristics which are ascribed to 'Complex Adaptive Systems' (CAS).
This lens seems useful to me in considering theories of change.
CAS perpetuate themselves on the basis of something that is described as 'path dependency' - the observation that the system works in such a manner as to ensure that its future state (as understood by itself) is as coherent as possible with (some function of) its history of state.
This 'history of state' is easily understood as 'identity' - and if we think about ourselves we can see that we certainly will go to great lengths to maintain our identity - not to change who we 'are'.
That the finance system does the same is evident - it reacts against all external reform (even reforms which would make it stronger), in just the way that people resist being educated about their 'way of life'. Internally proposed reforms' only get traction if they obviously strengthen the system - they make more $$. There are of course understandable evolutionary reasons for these conditions - its not that the system is 'evil' (although there are human crooks within it), but that it simply wants to carry on being itself, as best it can.
When change is forced upon it, it first fights back (reforms are very often repealed after heavy lobbying, and bribery - sometimes overt, more often through roundabout means - is definitely involved), and if it cannot achieve repeal it seeks ways to carry on being itself despite the change - to transform both itself and the novelty so as to make the novelty part of its identity.
The welfare state is a great example of this - resisted, tooth and nail, 1870-1945 (earlier in the US with the New Deal), then accepted with ill grace through fear of communism in Europe. This turned out to be enormously beneficial for the finance system as it was the basis on which consumerism became possible, and then, within thirty years it became something the finance system had fully internalised and understands how to (ab)use.
So if change required of the finance system in service of social ends ( even something as high-falutin' as, say, the preservation of civilisation, as against than a climate-driven collapse) breeds first resistance and then co-option, how can we achieve anything significant at the speed required?
My observation is this - that systems don't fight against physics; there's simply no upside to it. A river system is a simple kind of CAS. If you try to dam it, you will experience fight-back and all sorts of persistent attempts to reinstate itself as a river in its original form. But if you were to change the viscosity of water, or the gravitational field, it would instantly - actively - begin to change to meet its new reality.
This offers something to think about wrt the finance system - which is that it treats money as physics. Individuals within the system know, of course, that money is a made up system - that it is a social invention, and that it has changed continuously over time; but in their finance dealings, they act as if it is physics - as if the dollar is a fact of nature. Economists generally treat money in this fashion, taking its existence and workings as a given.
This suggests that an approach which alters how money works 'under the hood' - changes things like the characteristics of issuance, of instantiation (commodity vs credit) - might be achieved without pushback - as long as it delivers a $ advantage.
I think there is evidence for this approach being worth it from the Nixon abrogation of the gold standard dollar. This was achieved without much politics - an executive order, and changed nothing overt. It occasioned much comment, of course, but no pushback from the finance system, while in practice changing everything (so many strong inflection points in economic graphs at the beginning of the '70s).
The question, of course, is how one could achieve something of this kind - clearly, the conditions which made Nixon's action possible ceased to exist - it would take agreement between the World Bank, the IMF, the Fed to attempt something equivalent - and they are clearly in the pocket of the financiers.
I do believe that there is scope for meso-scale 'inside moneys', operating within bounded markets for the benefit of their members, with carefully designed interfaces to the fiat/forex system, to provide such strong benefits that their use spreads - a pluralism developing from the grass-roots. But I've written too much here already!
Three minutes of this video I hope communicate the above with an ecosystem metaphor.
https://www.youtube.com/watch?v=1koUpspA1jw&t=331s