Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Libertarian opposition to the Federal Reserve and Central Banking

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU
 
Meldread Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 05:19 PM
Original message
Libertarian opposition to the Federal Reserve and Central Banking
This is a re-post of my response in another thread, which was somewhat buried. I am re-posting it in its own thread to generate discussion. I believe people have a misconception of libertarianism based upon both bad Libertarians who don't know what the hell they're talking about and bad information in general (blame Ayn Rand for both). I've found that Liberals and Libertarian's have a lot in common, and share many of the same goals - even if at times their methods of achieving the goals differ. I believe it is a good thing to expand ones knowledge of other political philosophies, and it is my hope that this thread sparks discussion regarding this aspect of libertarian belief.

------

Libertarianism is a complex political philosophy based upon individualism. It is believed that an individual will always act in their own self-interest, and that allowing people to do that is the most moral form of governance. It stands against aggression of all sorts, both those inflicted by individuals and the government. Many people mistakenly assume "self-interest" translates to "greed."

While it is true that some individuals will be greedy, you actually benefit more by providing value. In essence, you reap what you sow. A libertarian believes that a greedy individual is less likely to succeed. You'll see an example of this at the end of my post. For now, I want to address the question regarding libertarianism and the Federal Reserve.

If you want to get to the root of the Libertarian hatred of the Federal Reserve, then it is this: they oppose the Federal Reserves government granted monopoly rights on the creation of money. They further oppose the government forcing citizens to use that money. That is the root of the issue with the Fed. Now, let me explain why a Libertarian views this as a problem.

First, you have to understand the difference between money and wealth. Wealth consists of goods and services provided to consumers. Money is a claim check on goods and services that constitutes wealth. The more money people have, the larger percentage of goods and services they are able to claim for themselves.

When you deposit your money into the bank, you are given a promise that they will return it to you if or when you need or want it. A bank with many customers can usually count on being able to make good on their promise, because it is unlikely that -everyone- would want to withdraw all of their money at the same time.

However, eventually people do want to withdraw some portion (or even all) of their money. To counter this banks keep a part of it on reserve and loan the rest out. This in turn creates more money. There are additional methods at their disposal to do this as well.

Let's give an example. You go to your local bank and deposit $100. The bank has determined, in order to function optimally (i.e. make good on its promise to its depositors) it needs to keep 20% of all its funds in reserve. Thus, of the $100 you gave to your bank it keeps $20 on reserve and loans out the remaining $80. I now have the $80 loaned to me by your bank and deposit it into my checking account, which now tells me I have $80 in the bank. Your account still says you have $100. Together, we have $180 in the bank... but wait! There is only $100 to begin with, which means the bank just created $80 out of thin air! Correct. The same process continues as the bank takes my $80, reserving 20% ($16) and lends out the remaining $64, which is then redeposited to repeat the same process.

The lower the reserve requirement, the more money that is created. Creating this extra money causes price inflation when there is no compensating increase in goods and services (i.e. wealth).

To give a comparative example of how price inflation works imagine a game of Monopoly. All players start out with $1,500, and as they move around the game board they acquire property. When one player lands on another players property, they pay rent, which earns the property owner money. This money is then used to build houses and hotels, increasing the value of the property, costing the other players more rent when they land on it, with the eventual goal of one player bankrupting all the others.

Now, let's assume that all players of the Monopoly game started with $7,500 instead of $1,500. What is the consequence? Players will be able to build houses and hotels earlier in the game. A boom in building would result. When the starting money was only $1,500 the players might have to sell some of their existing properties to other players in order to get enough to build their hotels and houses on the remaining ones. When starting with the extra cash, property owners might not need to raise the money. Players without property would have to pay owners more in order to entice them to sell. Real estate prices would rise with the inflation in Monopoly just as they do in the real world.

The other side of the coin is price deflation. This occurs when the money supply decreases without a compensating loss in goods and services that people want (i.e. wealth). Banks can cause deflation by increasing their reserves. This keeps money out of circulation. In the Monopoly example, deflation would be simulated by the players having to return a percentage of their cash to the bank.

When players return money to the bank they are less likely to have the ability to afford the high prices of rent (generated by houses and hotels). If players try and sell their properties, they find them worth less money than it cost them to buy them. Real estate prices fall, just as they do in the real world.

This is more-or-less what took place last year. As people who bought homes could no longer afford their mortgage they began to default on their payments resulting in foreclosure. This in turn resulted in a drop in property values. When the news of the crappy mortgages sold to people who couldn't afford them spread, no one wanted to buy them. The banks got stuck with them on their books, meanwhile some of them were all chopped up into derivatives and sold off in bundles. This essentially meant that you could own 3% of 100 different mortgages. Those who bought the derivatives believed them to be safer than standard mortgages, because while a fraction of those who have mortgages will not pay them not everyone would default. This means you'd only lose a percentage of the mortgage derivatives you held instead of -all- of it had you owned the entire mortgage.

The banks were unsure how much the mortgages and the mortgage derivatives were worth, so in order to ensure that they could make good on the promise they had made to their depositors they increased their reserve. They were no longer lending. There was a credit freeze. There was serious danger of the banks going under as they had over leveraged. To avoid this and to get credit flowing again the government through the Federal Reserve began to pump the Banks with lots of cash. The Federal Reserve also began to print more money. This results in inflation.

Unlike our Monopoly example above inflation and deflation created by changes in the money supply does not effect everyone equally. When the bank or the Fed creates new money, it increases its claim checks on the wealth relative to everyone else. The bank is like a Monopoly player who gets more money than any of the other players to start with. If both you and I were bidding on the same property in Monopoly, and my cash pile increased while yours stayed the same, I would likely top your best bid and get the property.

When I am sure to outbid you with new money, the auctioned property will probably sell for a slightly higher price than it otherwise would have. The seller would thereby acquire some of the newly created money. As they spend that extra money, by outbidding other players for property or paying rent, it eventually defuses into the hands of some of the other players. However, several turns may pass before some players get access to the new money. Those who have no property may never get any of the new money. They are worse off relative to the other players than they would have been if no new money had been created at all!

In real life, the banks create money and use it first. Those wealthy enough to put up collateral can borrow the money and use it next. Since both the government and the wealthy are the biggest borrowers, they benefit at the expense of those who have little property and savings. When the government begins to deficit spend, it must first borrow the money, and when it does so it inadvertently redistributes the wealth from the poor to the rich.

The longer the other players of Monopoly wait to share the new money, the worse off those without it are. In real life, prices rise before wages do as new money is created. This is a double whammy. People who do not get the new money at all (anyone on a fixed income without savings or property) must contend with the rising prices WITHOUT an increasing income.

Those who get the new money last are worse off than if there had been no inflation at all. Inflation through new money creation -artificially- increases the claim checks on goods and services for the wealthy, but not for the poor. This redistribution of wealth to the banks and the well-to-do by increasing the claim checks (money) that these groups have is referred to by Libertarians as the inflation tax.

The United States banking system alternates inflation with deflation. Without alternating the cycles, inflation would run rampant. In nations that inflate rapidly, getting the new money even a few hours later than someone else makes a person very much worse off. That is why workers in such countries rush to buy goods and services as soon as they can receive their paychecks, finding no incentive to save.

Alternating inflation creates other problems as well. When the rate of new money creation slows, people and businesses cannot borrow as readily as before. Consumers cannot buy goods; businesses must cut back production; workers get paid less or are laid off. Those who have little to no savings find themselves unable to make their mortgage payments. As a result, banks foreclose on many more homes in times of deflation.

The same people who were hurt by inflation usually find themselves crippled by deflation as well. People without property and without savings suffer the most. Alternating inflation and deflation bankrupts those living on the edge. Creditors repossess the homes and belongings of these individuals. The rich get richer and the poor get poorer.

In 1914 the Fed received the exclusive monopoly to issue United States currency. As you have noted it is a private corporation, operated by its member banks which are also private. Before it's creation banks generally found they needed to keep roughly 20% or so in reserve so that they would have enough money on hand when their customers wanted to make a withdrawal. When the Fed came into being it lowered the reserve requirement. It keeps a portion of its funds in reserve (like a bank) and loans the rest out to its member banks. When money is loaned out, the wealth of the American people is used as collateral.

Lowering the reserves results in the creation of more money. When the Fed began to do this the money supply doubled between 1914 and 1920 and once again from 1921 to 1929. In contrast, gold in the reserve vault increased only by 3% in the 1920s. This meant the bankers would obviously not be able to keep their promise to deliver gold to depositors if a large number of people wanted to withdraw their money at the same time.

The money flooded the economy and business could not use all the newly created money the banks wished to loan, so stock speculators were encouraged to borrow. Many people got heavily into debt, just as happens in any boom as people mistakenly believe it will continue. They believe the growth is real but in reality only a "bubble" has been created.

In 1929, the Fed responded to this excess money by slowing the creation of new money and deflating the currency (increasing the amount it had in its reserves). People who had counted on renewing their loans to cover stock speculations or other investments found, due to the new scarcity of money, that they could no longer borrow. They were forced to sell their securities, and a stock market plunge ensued.

When people lose money they spend less on goods and services; this means business began to slow. With banks unwilling to renew loans, businesses began to reduce their work force. People nervously began withdrawing their gold deposits as banks in other countries quit honoring their promise to return the gold. Rumors circulated that the Federal Reserve would soon be bankrupt as well. This was true, because as noted, there was no way for its member banks to exchange the inflated dollars for gold.

Just as the money supply increases when people deposit their funds, the reverse happens when they withdraw them from the bank. The banks' failure to loan coupled with massive withdrawals, caused even greater deflation. People lost their savings and their purchasing power; in turn, businesses lost their customers and laid off workers. Each loss contributed to the next, resulting in the Great Depression. This is what was in danger of happening last year.

This could go on, but the general point has been made. A Libertarian would like to see the elimination of government controlled currency and the Fed. This would be returning to an older system, before the Fed, where the Banks issued their own currency.

Under such a system, the owners / managers / CEO's would be liable if the bank lost its depositors' money through doing risky business. Most of these banks would most likely buy liability insurance to protect themselves from their depositors, which in turn would eliminate the need for the FDIC. The premiums would be different for each bank, depending on how well it invested its depositors' money. Bad banks would be saddled with high premiums or forced out of business. As premiums go up, profits go down, ensuring that poor managers / owners / CEO's would be fired. Likewise, customers would only trust banks with good records of making good on their promises.

Today, each bank pays the same premium regardless of the way it does business. Managers can make risky loans that generate high closing fees, and walk away if their loans turn sour. The American people, and in particular poor American's, are forced to subsidize the wealthy by picking up the tab.

This wraps me around right back to the beginning of my post. Libertarianism is a complex political philosophy based upon individualism, which assumes that each individual will make the choice they deem in their self-interest. In a Libertarian form of banking the Banker may become greedy, but his greed would be punished by failure. He reaps what he sows.

Under the current system self-interest does not disappear as each individual continues to make the best choices they deem in their best interest. The downside is now clear: the government through the creation of the Federal Reserve and through its willingness to subsidize the banks and wealthy risk takers has made greed acceptable. There is no longer a downside: failure. There is only an upside: if you succeed you make a lot of money, and if you don't the government will save you. In turn, this places the American people – in particular the poor (as detailed above) – at a disadvantage. It harms them the most.

This is why the Libertarians stand against the Fed.
Printer Friendly | Permalink |  | Top
AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 05:22 PM
Response to Original message
1. Odd
The highest ranking official in public life happened to be a kool-aid drinking libertarian, and he was chairman of the federal reserve.
Printer Friendly | Permalink |  | Top
 
Meldread Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 05:28 PM
Response to Reply #1
2. Libertarian's don't agree on everything.
Edited on Fri Oct-23-09 05:31 PM by Meldread
It's just like any other political philosophy. For example, some libertarian's believe in abolishing government run police, courts and roads while others believe in keeping them under government control. Some libertarian's like the idea of big business and large corporations, others don't and seek to find ways to restrain them through the use of the free market.

The whole purpose of libertarianism is to maximize personal freedom and end aggression by both individuals and governments.
Printer Friendly | Permalink |  | Top
 
AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 05:32 PM
Response to Reply #2
3. While their goals maybe good
They are starting off with a fundamental misunderstanding of human nature as such the policies they pursue tend to exacerbate the goals they eschew.
Printer Friendly | Permalink |  | Top
 
Meldread Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 06:07 PM
Response to Reply #3
7. Elaborate, please.
I am unclear by what you mean when you say, "they are starting off with a fundamental misunderstanding of human nature." What do you believe to be the fundamental misunderstanding, and what do you believe to be the correct understanding of human nature?
Printer Friendly | Permalink |  | Top
 
AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 06:19 PM
Response to Reply #7
8. Libertarians are starting off with an idea
that man in his natural state is civilized. We aren't. In our natural state we are totally uncivilized savages. In our natural state there is no right or wrong, there is survival. Man is naturally corrupt. I've spent 7 years in a profession where understanding fraud was part of my job. 99% of human beings will commit fraud given the opportunity and the right justification to do so. Of course there is a 1% that will never do it and there is about a 5% that will always try to find a way to cheat, everyone else falls somewhere else on the spectrum.

Behavior and social norms are taught to us and we adhere to those. Those are called culture. Libertarians have a belief that government or institutions make man act a certain way, this is true. The key isn't ridding yourself of the institutions it is forcing the institutions to encourage good behavior.

Printer Friendly | Permalink |  | Top
 
Meldread Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 07:07 PM
Response to Reply #8
11. I see what you're saying, but I do not see them as contradictory.
If you view the world through self-interest as a libertarian does, then your way of seeing things and theirs is completely compatible. As you said, people fall along a spectrum. When you have a system that rewards greed and fraud, you will thus have more than 5% of the people committing fraud. I'm unaware of libertarian's proclaiming that their method of doing things would result in a utopia where such things would not exist, merely that they believe the free market in and of itself PUNISHES that behavior. In that way, it is self-regulating.

Thus, when you step in to 'force institutions to commit good behavior' you are acting in an aggressive manor and hurting, not only those you seek to help, but those who would undermine institutions who commit bad behavior. A libertarian believes that when regulations are placed upon the market, they favor larger businesses and institutions. This is because it is more difficult for smaller businesses to enter into the market and become competitive. The more competition that exists, the less chance you have of large corporations exploiting their workers / the environment / their customers. It also means more innovation, more jobs, and lower prices.

Let's take a controversial example. Most libertarian's oppose the minimum wage. On the surface, this makes it seem like they hate poor people and want to keep them in poverty. That isn't how a libertarian sees it at all, they see it as standing up for poor people and I'll explain why.

A libertarian would say, 'If you believe the minimum wage is a good thing and helps poor people, why not raise it to $20? Why not $200?'

A libertarian here in that statement believe that they have uncovered the problem with the minimum wage: it hurts poor people. If you were to raise the minimum wage to $20 all those who are worth LESS than $20 an hour would be fired. Many businesses would go out of business. The price for goods and services would inflate to adjust to the new minimum wage, and this would further hurt the newly created and already existing poor.

In our current economy the majority of people earn MORE than the minimum wage. Yet, it cannot be denied that there are some people who (for various reasons) have labor worth less than the minimum wage. To give an example, let us say you have a mentally challenged individual who is mentally competent enough to do some carpentry work. Because of his disability he finds it difficult to find work but his work is -good-. In fact, his work is -great-. People just aren't willing to give him a chance. In a free market, he would have to lower his wage in order to get work - beating out his non-disabled competitors. Yet, what incentive does someone have to hire him at say $2 an hour when the law requires them to hire him for $5 or more? Why take the risk, when there are other competitors out there willing to accept the minimum amount? This ensures the carpenter remains out of work. However, a libertarian believes that were he able to get the job at $2 an hour - under the minimum wage - his labor would speak for itself. In time he would build up references, and the value of his labor would increase his wage as he becomes more well known. People would value his labor more than that of his competitors, despite the fact that he is mentally challenged, allowing him to earn more than them. Ergo, the minimum wage - which is supposed to help him - harms him.

Likewise, it harms small businesses as they struggle to start-up. It benefits already existing and big business because they can dominate the market and afford the minimum wage fees. In a libertarian world everyone's labor is on a market competing against the labor of others. People are paid according to their ability to negotiate and the value of their labor. Those who provide more valuable labor earn more than those who do not.

Furthermore, Unions are not inconsistent with a libertarian world view. Thus, laborers may band together in unions to protect themselves against businesses that mistreat their workers or exploit their labor.

In a market in which the value of an individuals labor is relative to the amount they earn a greedy individual, who is unwilling to pay a large sum of money, would receive (generally speaking) lower quality labor and results.
Printer Friendly | Permalink |  | Top
 
The Magistrate Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 05:43 PM
Response to Original message
4. Two Points, Sir
As a definition of wealth, "goods and services provided to consumers" is very poor. Wealth is capital, whether in the form of land, machinery for production of goods, or stored value in forms of cash or goods. 'Services' are not wealth at all; indeed, services consume wealth in their performance, and cannot create it, since they are ephemera, and produce nothing which can be stored. That is the difference between service and labor.

Banking prior to the Federal Reserve was hardly utopian. The history of the United States through the nineteenth century was marked by boom and bust cycles of great severity, and the banking system riddled with fraud and deceits, which often paid the perpetrators of same very handsomely, and beggared many of its victims. It cannot sensibly be argued from the historical record that the system you sketch in theoretical ideal performed as you predict in actual practice.

"In theory, there is no difference between theory and practice. In practice, there always is a difference."
Printer Friendly | Permalink |  | Top
 
Meldread Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 06:31 PM
Response to Reply #4
10. A few points....
...first, I'm not an economist. I'm just trying to explain a libertarian perspective on the Federal Reserve as best I know how, and thus if there is any misused definitions in my post then it is entirely my own fault.

That being said, you are correct about the boom and bust cycle experienced before the Federal Reserve, and I don't think an honest libertarian would proclaim an economic system without the Fed and Central Banking a utopia.

During the 1800's, the United States had a regulated banking system without a central bank, not a free one as many libertarians would naturally advocate. Regulations varied from state to state, but most required banks to use government bonds as part of their reserve. Before maturity, those bonds would often be liquidated at a loss. Thus, the banks went under when faced with unusually high demands from depositors. Deflation caused by the resulting contraction in the money supply was rapid and destructive, just like deflation was during the Great Depression.

Some deflation is natural, of course, and occurs when the production of goods and services becomes more efficient that prices drop. An example of this could be seen during the Industrial Revolution. A libertarian would argue that this type of deflation, like cheaper memory for computers, is obviously a boost to the economy as a whole, not a detriment. They would place much of the deflation of the late 1800's down to the beneficial increase in efficiency.

An idealized form of banking that a libertarian might seek to create is one similar to that in Scotland during the early 1800's. Each bank had their own currency, back by gold. They collectively operated a clearinghouse so that each customer could use their bank notes freely. If a bank started 'over-inflating,' it was 'punished' by the clearinghouse, which refused to take the inflated money at face value.

Since owners were personally liable for depositors' funds, banks rarely inflated dangerously. When a bank went under, the depositors were sometimes reimbursed by other banks seeking their business.

Some libertarians might force the banks to buy insurance to ensure that their depositors were reimbursed instead of relying on competing banks. Understanding that libertarianism is not about the elimination of all government is important, even though there are -some- who do seek that end. It's primary focus is about increasing the freedom of each individual by limiting aggression.

Under a system such as that described here, international bankers would have a difficult time maintaining their stranglehold. Although libertarian's are often believed to be supporters of big business (and it is true for some), the converse is more often than not true. In the end there are only two ways for a business to get big: first is to provide something desired by consumers, and second is through government regulation which harms (or eliminates) their competition.

You are correct, however, that theory and practice are different. However, that is true of any philosophy, but among many libertarians it is an especial weakness because they are rigidly dogmatic. This makes the compromising nature of governing difficult for them.
Printer Friendly | Permalink |  | Top
 
The Magistrate Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 09:00 PM
Response to Reply #10
13. Again, Sir, The Thing is Not That Simple
The Scottish banking system in the latter eighteenth and early nineteenth centuries suffered several major and costly dislocations, during which one or two large banks acted as 'central banks' for the entire system, and by the mid-nineteenth century regulation of issue was imposed by the government.

In our country, the degree to which banks were regulated varied widely from state to state. Notes from those banks which were under stricter regulation of their reserve capital were favored by the market in notes over those which were less regulated, and this preference was wise, as the less regulated banks failed much more often, and in their failures, wrought havoc for many who had accepted their notes or deposited their funds.

The deflationary banking panics that afflicted our nineteenth century economies had nothing to do with increased supply of goods, or increased efficiency in production, but were rather the result of inflating the issue of credit beyond what could properly be sustained by the underlying reserves of specie and liquid assets such as state bonds and mortgages on productive land. A complicating factor here in the early nineteenth century was that as a 'developing economy', a good deal of the capital in the United States was on loan from foreign investors, who would respond to the first tremors of these panics by pulling out their funds as quickly as the technologies of the time would allow.

Deflation has a very detrimental effect on any economy which depends to any degree on the issue of credit, because it requires people to repay loans with units of currency that are worth more than those received when the debt was incurred. Thus a premium over and above the interest must be paid, and this at a time when by definition money is scarce and profits short owing to the general drop in prices. It matters nothing if the 'value' of eighty dollars received for the crop in a field today is equivalent to that of a hundred dollars last year, if one is pledged by contract to repay a loan of eighty dollars plus twelve percent interest undertaken when the crop was planted: sell every particle of corn, and you still are short and lose your field.
Printer Friendly | Permalink |  | Top
 
OHdem10 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 06:04 PM
Response to Original message
5. Just a quibble. Early in the post you said they believe Greedy will not
succeed. How do they explain all those Greedy Investment
Bankers who took us to the brink and are still in their jobs
getting ready(IMO) to pull the same greedy stunt again.

Guess I have seen too many greedy people who do very well.
Printer Friendly | Permalink |  | Top
 
Walk away Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 06:06 PM
Response to Original message
6. Ask any Libertarian what they think of any social program for the poor.
elderly or helpless children and they will logically explain that providing help for these people only encourages them not to help themselves. Why it's the liberal's fault that all of these problems exist.

Free Market means unrestricted business. If a thousand people die from eating Ann Rand Burgers then the company goes out of business. Problem solved!

I know many Libertarians. Many that I know work for Banks and feel completely justified in their bonuses this year despite the fact that their companies have taken Tarp $.
Printer Friendly | Permalink |  | Top
 
Trillo Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 06:20 PM
Response to Original message
9. Opposition to and being in favor of the Federal Reserve is not a Left-Right issue.
I believe it's closer to a Authoritarian-Liberal issue. I'm thinking of the Political Compass grid in particular.

As such, you can be solidly in the middle of the lefties and righties, and still be against granting the power to create money to a few private entities, depending upon where you fall on the Authoritarian-Liberal axis. I would presume that if you were Liberal, you'd be infavor of everyone as a private citizen being able to create money or in favor of a Central Bank that's publicly owned by all of us together, for instance, controlled by congress. If you're an Authoritarian, and simply like the power that money grants you over other people, then you'd probably be all for a Centralized Bank, composed of smaller banks that are all privately owned by a few.

Now where it gets sticky is when someone thinks of themselves as a Liberal, but are for a privately owned system of banks under control of a quasi-public-private central bank, I suspect they just haven't thought it through, or are perhaps secretly a closet Authoritarian.

Moving away from the Political Compass structure, one has to ask, where on the conservative/progressive axis does Federal Reserve reform lie?

One can probably tie one's thinking up in knots trying to understand a "conservative-liberal" axis as it's so often framed, as then it seems in practice we end up with a 90deg L curve.
Printer Friendly | Permalink |  | Top
 
JVS Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-23-09 07:19 PM
Response to Original message
12. A monetary system that is rooted in geometric growth (i.e. more mining) is inadequate to keep up....
the exponential growth associated with industrial capital accumulation. Even if you could get mining technology to yield productivity improvement to keep up (which would be hard), doing so would be a criminal misallocation of society's scientific capacity. People who are against central banking are fucking loons who don't seem to remember the massive depressions of the late 19th century that were caused by the inability of the monetary system to deal with capitalist production hitting its stride.
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Thu Oct 30th 2014, 02:11 PM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC