"Here we come to the central question of this book: What, precisely,
does it mean to say that our sense of morality and justice is reduced to the language of a business deal? What does it mean when we reduce moral obligations to debts? What changes when the one turns into the other? And how do we speak about them when our language has been so shaped by the market? On one level the difference between an obligation and a debt is simple and obvious. A debt is the obligation to pay a certain sum of money. As a result, a debt, unlike any other form of obligation, can be precisely quantified. This allows debts to become simple, cold, and impersonal-which, in turn, allows them to be transferable. If one owes a favor, or one’s life, to another human being-it is owed to that person specifically. But if one owes forty thousand dollars at 12-percent interest, it doesn’t really matter who the creditor is; neither does either of the two parties have to think much about what the other party needs, wants, is capable of doing-as they certainly would if what was owed was a favor, or respect, or gratitude. One does not need to calculate the human effects; one need only calculate principal, balances, penalties, and rates of interest. If you end up having to abandon your home and wander in other provinces, if your daughter ends up in a mining camp working as a prostitute, well, that’s unfortunate, but incidental to the creditor. Money is money, and a deal’s a deal. From this perspective, the crucial factor, and a topic that will be explored at length in these pages, is money’s capacity to turn morality into a matter of impersonal arithmetic-and by doing so, to justify things that would otherwise seem outrageous or obscene. The factor of violence, which I have been emphasizing up until now, may appear secondary. The difference between a “debt” and a mere moral obligation is not the presence or absence of men with weapons who can enforce that obligation by seizing the debtor’s possessions or threatening to break his legs. It is simply that a creditor has the means to specify, numerically, exactly how much the debtor owes."
Posted this elsewhere re: recession, debt, monetary reform (UK)
#might as well get value from my time investment there
Why is the debate just about reducing or increasing borrowing? Both options still involve borrowing, at interest, from an independent central bank. Both increase the national debt (currently at £1 trillion). Clearly if those were the only two options, you’d go for the one which actually is able to provide vital services, as people are more important than money (although Tories seem unable to understand this point). But they’re not the only two options. Why should we even be borrowing in the first place? Why should public money be created as interest-bearing debt?
The government can issue debt-free currency. It does this all the time - all your notes and coins are debt free. How could they not be? Little pieces of paper and metal aren’t going to wing their way to the bankers every quarter are they? But only 2% of our money supply consists of notes and coins. The remaining 98% amounts to numbers on a screen or on a ledger, created either through government bond issues or by fractional reserve banking (ie when banks loan out more money than has actually been deposited with them).
In 1946, about half of currency was direct, debt-free government issued money, printed and minted. Now we’re down to 2%. Is it any wonder that in recent decades the national debt has skyrocketed (seriously, look at a graph), inequality has grown and the rich are richer than ever? We’re paying £48 billion a year on interest on this national debt, which is mainly owned by insurance companies, private (mostly overseas) individuals, and other financial institutions. Why should we?
Money is just a symbolic medium of exchange, it’s something we create as a society. It’s not real. We can change how it works. We can change it to make it fairer, and we really need to do that because the extent of the unfairness is getting ridiculous now. I wish people would be a bit more optimistic about our chances of actually achieving something (surely it’s just good tactical sense to be optimistic), and at the same time be a lot more cynical / critical towards the theories and justifications of economists and financial institutions like the Bank of England, IMF, etc. They don’t deserve to be accorded so much respect. They demonstrably don’t respect you.
They’ll talk about ‘The Market’ (what it wants, what it might do) like it’s a fucking nature deity that needs to be appeased, rather than just being the aggregate actions of real living people, particularly the obscenely rich. They’ll talk about the ‘business cycle’ (what they used to call ‘boom and bust’) as if it’s as natural as the waxing and waning of the bloody moon, rather than being affected by the centralised manipulation of interest rates. This is political language - it’s passive, depersonalised, there’s no agency, no blame, no negative connotations. It’s the equivalent of the MoD saying ‘threats were neutralised’ rather than ‘we shot and killed some people’.
If someone comes along and says they’re an expert on a subject, but then they’re unable to explain how the system actually works, they use unnecessary and intentionally obfuscatory jargon, rely on groundless appeals to authority, their models are repeatedly unable to explain / predict the data and not only that but (this is the big one) consistently lead to disastrous results - they’re not really experts are they.
American “Dollar” Imperialism
“Imagine this : you are deep in debt but every day you write cheques for millions of dollars you don’t have — another luxury car, a holiday home at the beach, the world trip of a lifetime. Your cheques should be worthless but they keep buying stuff because those cheques you write never reach the bank ! You have an agreement with the owners of one thing everyone wants, call it petrol/gas, that they will accept only your cheques as payment. This means everyone must hoard your cheques so they can buy petrol/gas. Since they have to keep a stock of your cheques, they use them to buy other stuff too. You write a cheque to buy a TV, the TV shop owner swaps your cheque for petrol/gas, that seller buys some vegetables at the fruit shop, the fruiterer passes it on to buy bread, the baker buys some flour with it, and on it goes, round and round — but never back to the bank. You have a debt on your books, but so long as your cheque never reaches the bank, you don’t have to pay. In effect, you have received your TV free. This is the position the USA has enjoyed for 30 years.”
Since the US emerged as the dominant global superpower at the end of the Second World War, US hegemony rested on three unchallengeable pillars : 1) overwhelming US military superiority over all its rivals ; 2) the superiority of American production methods and the relative strength of the US economy ; 3) control over global economic markets, with the US dollar acting as the global reserve currency.
Of these three, the role of the dollar may be the greatest among equals. The US dollar is the world’s reserve currency, meaning that central banks all over the world hold huge amounts of dollars in reserve. As a result of this situation, today America borrows from practically the entire world without keeping the reserves of any other currency. Because the dollar is the de facto global reserve currency, US currency accounts for approximately two-thirds of all official exchange reserves. America does not have to compete with other currencies in interest rates, and even at low interest rates capital flies to the dollar. The more dollars are circulated outside the US, or invested by foreign owners in American assets, the more the rest of the world has had to provide the US with goods and services in exchange for these dollars. The US even has the luxury of having its debts denominated in its own currency.
How does this work ?
The United States runs a balance of payments deficit by spending more money in other countries (buying their products, investing in them, or giving them dollars) than they spend in the United States . - The extra dollars are held by the countries’ central banks. The banks do not ask the United States to redeem them for gold or another currency. As long as foreign banks accept and hold dollars as if they were gold, the dollars act as reserves.
Bulent Gokay, Iraq, Iran and the end of petrodollar : The waning influence of the USA in the Asian century
full text here
UK welfare cuts, debt, and some fucking perspective
So David Cameron and friends are announcing more welfare cuts, disproportionately affecting women, the young, the poor and the disabled. Of course he says these cuts are ‘necessary’. And of course he wants you to think that the recession happened because some young single mother somewhere got housing benefit.
SOME CONTEXT IS NEEDED. Here’s just a few salient statistics. There are many more to be found. I’m bolding the £ costs each time for ease of comparison, but money is really not the thing we should be most worried about here.
UK government proposal to scrap housing benefit for 380,000 under 25s
- saves ‘up to’ £1.8 billion a year
- (leaves young people with nowhere to live)
Scrapping disability benefits for 500,000 people
- saves ‘up to’ £2.2 billion a year
- (leaves disabled people with no income)
- Current cost of 2012 Olympics = £12 billion (x5 original budget of £2.4 billion)
- Does not include another £4.4 billion for security/intelligence services, or £1.1 billion allocated to police for additional counter-terrorism during Olympics
and GOVERNMENT-FUNDED TERRORISM!
- Cost of UK involvement in Iraq and Afghanistan wars, as of June 2010 = £20,000,000,000 (£20 billion)
- (also, hundreds of thousands of murdered civilians)
- ‘Defence’ budget for 2012 alone = £47.2 billion
and DEBT SERVITUDE!
- National debt = over £1,000,000,000,000 (£1 trillion)
- Interest paid on this debt in 2012 alone = £48,600,000,000 (£48.6 billion)
- Goes to insurance companies, banks, other financial institutions and overseas investors.
Oh yeah, and BANK BAILOUTS!
- Since 2007 the UK has committed to spending £1,162,000,000,000 (approx £1 trillion) on bank bailouts
- Suffice to say banks are not benevolent public institutions. They are privately-owned corporations with a license to legally counterfeit, loan out money that doesn’t exist (at interest) and gamble with other people’s life savings.
Some of these numbers are bigger than the other numbers.
The People's Record: US foreign military sales have shot over $50 billion. →
#Military Industrial Complex
June 15, 2012
Another record-breaking year is expected thanks to US ally Saudi Arabia, which accounts for three-fifths of the sum.
“We have already surpassed $50 billion in sales in the fiscal year 2012,” Andrew Shapiro, assistant secretary of state for political-military affairs, told…
Wait, what. That’s insane. A 70% increase on last year? With 3 months to spare? Saudi Arabia spent $30bn in one go on a load of US fighter jets? Fuck.
Of course Saudi Arabia is ruled by a horribly repressive, misogynistic, Islamist absolute monarchy. But that’s okay, they’re family friends, they have oil, they’re happy to sell it to us. (So much for the war in Iraq being about spreading freedom and democracy).
Just watch how quickly things change if the Saudis ever turn off the oil tap. Like how things turned against Iraq after Saddam switched the oil currency from US dollars to Euros in 2000 (costing the US and UN a fortune). Or Iran, when they likewise switched from US$ in 2007. Or Hugo Chavez, when he stopped the privatisation of Petróleos de Venezuela, hurting the profits of Western multinationals.
Or in 1951, when Iranian Prime Minister Mohammad Mossadegh nationalised the country’s oil, which had previously been under British control. Within two years, the Churchill and Eisenhower administrations (via MI6 and the recently formed CIA), had successfully orchestrated a coup d’état to overthrow the democratically elected Iranian government, replacing it with a monarchical military leadership who gave us the oil.
I didn’t realise Saudi Arabia was such a big military spender though. They’re currently 7th in the world ($48bn per annum), just behind Japan ($59bn) and just ahead of Germany ($47bn). Of course America ($711bn) spends more than the next 19 or so countries combined, or roughly half of all global military expenditure. Also, barring China (2nd, approx $140bn) and Russia (5th, $72bn), all the big spenders are friendly to the US, and most are NATO allies, while some (e.g. Israel, Turkey) are heavily subsidised by US taxpayer money.
So yeah. OMG we need to stop Pakistan (33rd, $5bn), North Korea (approx $5bn), Iran (35th, $4bn) and Venezuela (50th, $3bn) BEFORE ITS TOO LATE.