Merry Christmas and a Happy 2013!
Jesus was not born on December 25th, Santa=Satan, Political Correctness is making it a ‘happy holiday’, gluttony is one of the mortal sins (and the food is poison anyway), commercialization is messing it all up and then there is family………
……But Goodwill Prevails!
Dozens of new units are being launched as we speak: Freicoin is one, Wayne Walton’s Mountain Hours are showing the way forward in popularizing the method, Usury has been firmly put on the agenda.
We at Real Currencies wish all our readers, supporters, contributors, donators and those spreading the word and acting upon it all the best for the coming days, and indeed, the coming year!
May the Spirit bless you and yours!
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Merry Christmas, Anthony.
Happy Christmas Anthony, whom God preserve of Utrecht!
and thank you Nixon!
Merry Christmas..I’ve noticed that your understanding/position on monetary/economic issues seems very close to Church teaching..You’re to be commended…Pax Christi..
Thank you Charlotte, may the One bless you too.
Thank you for mentioning Freicoin, Anthony.
Merry Christmas
and thank you for being in the war Timon!!
Hi there. I love your website, particularly your discussions on interest and debt based money. I am a teenager and new to economics and have a question, though. I am wondering if “transactions” or “trades” are mutually beneficial? For example if I own a piece of land which sells oil and my customers buy this oil, surely they will purchase my oil only if they calculate that they make more profit off their use of my oil than that which they spend to acquire it. So is this trade a win win situation? My gut feeling is actually that this is a lose-lose situation somehow, but society is too big for me to map the implications in my mind. Sorry if this question does not belong in this section.
Hi Mac,
Thanks for your support, much appreciated!
Trades are mutually beneficial, but this is the result of a problem: all marketplayers suffer from imperfect information.
For instance: a poor laborer will go to a bank for a mortgage. This benefits him: even though he pays 500k for his 200k home (because of the 300k interest on the mortgage over 30 years), after 30 years he owns the house and the 500k he will have paid for it is less than if he had rented the place.
However, this suits him, because he doesn’t understand the money is printed by the bank, and he could have created an interest free unit with a couple of pals, saving him a bundle. This is one example of imperfect information, and in this case we consider it extortion: people are played because they are gullible.
But there are more normal examples. For instance, my father used to import cutlery, medical supplies and manicure/pedicure pliers etc. from Solingen (the Ruhr), Germany, which was the leading industrial hub at the time. In the early nineties he saw that Solingen was losing out to the Far East: Sialkot, Pakistan was on the rise with low cost, reasonable quality stuff and my father invested in building relations there. He then thrived for two decades, because he was ahead of the pack: major retailers in Europe bought his stuff and he made a handsome profit of it.
Imperfect information on the side of the retailers made them love him as their favorite supplier.
Because people didn’t know their way around in Sialkot, he was able to make a bundle.
This would be considered normal trade.
Is this fair?
After all my father could have served the retailers (and, in the end, the man in the street) by doing this work without a profit.
This, I guess, is the future of economics:
When people start crucifying self and truly learn the lesson of service, there will be no more trade. There will only be gifts.
If we are in a community and everybody works for himself, we all have one working for us: ourselves.
If we all stop working for ourselves, and start working for others, all of the sudden, a whole community would be working for our benefit!
This is practical implementation of the Kingdom.
Thanks for asking. I hope I have answered your question.
Excellent website Anthony as I have said before keep up the good work. Jesus may not of been born on December 25th but his message of peace and love is one we should all reflect upon at this time of year. Jesus only ever lost his temper when whipping the moneylenders in the Temple in Jerusalem, how right he was in pinpointing our real enemy and that the love of money is the root of evil! Usury and the usurers must be defeated!
Hope you had a merry Christmas and have a Happy New Year 2013!
thanks much henrythefifth!
May your new year be usury-free!
As for me, I turn 24 today. Yay!
Happy Birthday Julia. Good to see someone so young interested in the money creation/ usury issue.
congrats Julia and happy new year!
Thank you!
Anthony, I am wondering (and I might have asked you this before, so bare with me), are you familiar with Graeber’s book “Debt: the First 5000 Years”? It gives a good insight as to the origins of money and how money’s function was originally that of credit/debt relations as opposed to barter relations (as is commonly believed).
Also, are you familiar with P.J. Proudhon’s writings on the topic of usury? He is my favorite political philosopher, so yes I am quite biased. 馃槈
No, I’ve not seen either Proudhon or Graeber.
Money as credit/debt relations is basically the Mutual Credit story too. Marc Gauvin has a keen eye for this thing too.
So is it an accounting tool or a means of exchange? God, the monetary is hopeless! We can’t even agree on the most basic of things!
Perhaps we can lend a concept of particle physics and call this phenomenon the ‘MoE/Accounting duality’?
The Freicoin link is an excellent discussion on demurrage money. Humans do come together to do trade in a voluntary relationship. But, this voluntary relationship is protected by a system of laws. Think of it like a hard legal egg shell protecting the gooey inner “free” part of the egg.
The State could and has become overcome by predators and thus changes free voluntarily relationships through force. Money in its ideal form is part of a system of laws and governance, where all of the parts work together for the betterment of the most.
When ground rules are broken, contracts are abrogated, whether voluntary or not. If somebody doesn’t pay, force or law will be invoked. Since demurrage money stands in as a good, and said good is transacted, it is a form of contract. Example: Somebody doesn’t hold up their end of the bargain, by not paying with goods, services, or money. Soon, law will be invoked in order for wronged debtor or creditor to have restitution. This is why Gessel says that money is a State monopoly.
In terms of natural laws, we humans are born with our own money power, and we divest a percentage of it to the State to manage for us. In the same way we divest some of our legal authority to a Sheriff to manage “law” for us, as we producers do not have the time to look for bad guys. In a republic, we give away a small amount of our natural legal rights to our representative, the sheriff. To my mind, money follows the same logic, we are born with our natural money power, and we give away a certain percentage of that power to our money Sheriff. We should demand that our money system be structured properly so it doesn’t steal from us. Voluntary money systems, like Freicoin, could be upgraded with a local Sheriff concept, particularly if/when the state becomes parasitic with plutocrats.
Usury money funds plutocracy and paves the road to debt peonage. Demurrage money with a legal basis will strike at the heart of our parastized political/usury money culture.
I appreciate the intent of Freicoin and applaud it, but we should come to terms with the notion that money is used to mediate debt/credit contracts, and if that is so (which it is), then legal basis of money is intrinsic. Money’s legal function means it is a state function. The fiscal side, taxation is also a piece of the puzzle, as money becomes meaningless without the means to produce. We cannot trade goods if we cannot produce; for example if land or the means of production are taxed into oblivion, or the means of production become owned by a plutocracy.
Money has a legal basis intrinsic to its function, because money is used to settle contracts. The grey matter between the brains of humans demands that force be invoked when contracts are broken.
Some of the demurrage tax should be diverted to pay for “mining” overhead, and some of the tax should be used to pay for our local Sheriff. The battle against usury parasitism has to be funded.
Of course, a State could just fork freicoin and spend the full initial supply into existence. And the demurrage (or part of it). The state wouldn’t really need p2p, he could issue his currency on a centralized server, I just don’t think that will happen soon.
In the meantime, I don’t see any reason why credit denominated in freicoin can’t be enforced if the loan is materialized on a legal contract. But I’m not a lawyer…
Money circulates in the supply and can only be removed from circulation by taxation and then subsequent destruction. It takes a sovereign to issue money, and the ideal form is as seigniorage debt free spent into households. In this case, the sovereign would then have to tax the population in order to spend. The relationship between people and their sovereign is then within proper bounds, as the real source of money power resides with the people. Demurrage money further improves the system by properly separating asset and counting functions of money.
Credit is not money, but stands in as money. Credit disappears as it returns to the ledger, which is why loans zero out when paid off. Goods are wealth, money stands in as a good, and finally, credit can stand in as money. We should not use the terms credit and money to mean the same thing. Silvio Gessel clearly understood the distinction between credit and money. The confusion is that we use both credit and money to settle contracts, and to the average user the units appear identical.
If freicoin is issued as credit, and has an additional demurrage tax on it, it becomes something new in monetary history. I know of no cases where credit is made to accelerate. The term demurrage implies there is a “rusting” tax as applied to money. Freicoin also will have to piggyback onto existing legal enforcement arms of the state.
Bitcoin is mined in order to create the unit. The mined unit takes energy and effort, particularly computer cycles to generate the hash. Once a proper hash is accepted, new bitcoins pop into existence and enter bitcoin money supply when spent.
In the same way, gold was mined, and then submitted to a mint for coinage. Once coined, gold money entered circulation as seigniorage. In other words, additional gold coins debased the money supply as said supply expanded relative to goods and services volume. Once in circulation, gold money could go on to transact contracts forever.
Of course, we now know that banks would issue their credit bank notes on top of gold, then cause depressions, and recall gold in exchange for their former credit. Also, gold was a lower form of money due to its emphasis on “asset value” and not its counting function.
So, it seems to me that bitcoins are a unit of money in that they pop into existence as seigniorage (against exiting bitcoin money supply and the goods bitcoin’s demand). Bitcoin mining is made more difficult as computers gain computation power; this in order to limit bitcoin money supply growth.
So, Freicoin’s demurrage meets the definition of money. It is not particularly scientific in that its relationship to goods and services production is loose. But, perfection should not be the enemy of the good, particularly when our governments have been hosted by usury banking parasites.
http://www.economist.com/node/21563752
Sorry, I should have clarified some things. When I say money I mean “medium of exchange”. So I consider mutual credit systems such as LETS or Ripple to be monies too. I differentiate between cash-monies (no one else’s liability) and credit-monies.
There’s a LETS-like system with demurrage called ROCS, but I don’t think mutual credit needs demurrage since it’s usually issued at zero interest anyway.
Although I agree with you on the right way to issue money by a sovereign, that’s not the only way money can be created. Bitcoin, as you say later, is mined into existence. Ithaca hours, for example, are donated to non-profits into existence.
With Freicoin we’re trying an hybrid between the later two, since many people complained about issuing it all through miners. 20% will be issued through mining. Miners will also receive the demurrage fees (forever). The remaining initial 80% will be issued through grants managed by the Freicoin foundation (to be created):
http://www.freicoin.org/freicoin-foundation-development-thread-t81.html
Feel free to register on our forum and make your suggestions.
Not some un-happy German guy, at the beginning of a world war instigated by UK, but a United States Senator, in the Senate, at the time when it was still well known in the United States who their enemies were:
God bless you name789!
thanks Rex, all the best for the New Year.