If all the money ends up in hands of billionaires and their corporations and there will be no money in hands of regular plebs…
Who do you think will have to pay the taxes?
Also, the people would figure out a different way of trading or currency. And with that one getting taxed, all the billionaire’s money become worthless.
We had that before. It was called feudalism and it was terrible. One day, the people got pissed off enough to cut off a few heads. A golden age ensued for a couple hundred years.
Then the plebs reach for the scythes and the machetes.
That’s why the billionaires steal as much money as they can, but stop short of making a critical mass of people desperately poor: they keep most people poor enough that they try to fight for what little they have left, and between themselves for the scraps, instead of uniting and rising up against the kleptocrats who engineer their poverty.
We’re slowly getting to the point where they’re get too greedy and moving past that critical mass point. I think Trumps presidency really turbo charged the idiocy.
A lot of rich fucks are starting to feel the danger though:
The billionaires are so out of touch that they have no idea how desperate the masses are becoming.
That’s the subject of the chapter on the anarchist FAQ I was reading last week. Goes something like this: governments exist to serve the billionaires. When governments do something meaningful to other people it is a tug of war to reach a compromise, always with the goal of preserving the status quo.
You’re talking as if the billionaires are a group of organized people who know what they’re doing and act accordingly in a coordinated way.
I think the billionaires are a group of individuals, each trying to maximize their wealth, and they will absolutely take what they can get, because if they don’t, some other billionaire will take it.
And i see no evidence that they would stop short of causing mass poverty that will lead to riots.
The billionaires are not following a nefarious master plan that they agreed upon. They appear coordinated because they all act the same way, all mindlessly following the same instinct of greed that’s programmed in their genes. Just like bees or ants appear to work as a team, when in reality they’re all following the same simplistic automatic behavior.
yeah it’s convergent behavior. like they all independently arrive at the same behavior which causes the illusion of coherence where there is none.
That is an ongoing process, but it looks much different from what you imagine. Even now, a large part of the economy is working for the top 10 percent, producing luxury goods and services. Wealthy customers provide the biggest margins for companies.
“Regular” customers are getting more irrelevant every day. There was a time when your role as a consumer was important for the economy. This role gave you power and influence because companies were competing for your money. This era is slowly coming to an end, something most people haven’t realized yet.
Rich people can be fools, and a fool and his money are soon parted. That’s why much of the economy is just everyone trying to scam everyone else.
“All the money” assumes there’s a finite amount of money. There isn’t. In a fiat currency, like the Dollar, Euro or Sterling, banks create money when they lend, and the money disappears again when the loan is repaid. This is what a banking license gives you; The ability to make loans without having the existing money to back them.
Government spends by telling it’s bank (The Federal Reserve, ECB or BoE) to lend money for the things it wants to buy. Taxes then repay that debt and the money doesn’t exist anymore.
In an economy where huge amounts of wealth is horded, there’s a problem of liquidity. All of that wealth is idle. It’s not circulating and there becomes a danger of economic collapse. Therefore more money has to enter the system, either through government spending or commercial banks making loans.
Horded money is also money that isn’t going back to banks to repay the lending. So the amount of money in existence goes up, driving the value of that money down. This is inflation. One dollar can no longer buy as much as it used to as it’s value has gone down.
So, billionaires cause:
- Large amounts of commercial debt to inject replacement money into the economy. That is, personal debt or corporate debt.
- Inflation caused by that cash injection
Sound familiar?
Now a government could choose to raise its spending so that it injects the required money into its economy, rather commercial banks doing it. The advantage of that is that they can balance that with raised taxes, so inflation doesn’t get out of control. They can also choose who to tax and protect areas of the economy.
Most governments don’t see it this way, arguing that they can only spend what they take in taxes (The “government spending is like a household budget” argument). This has been false ever since they all came off the gold standard. They can spend what they want and they can tax what they want. The difference will drive inflation, so has to be kept reasonable, but if they don’t spend enough the commercial banks take over and will absolutely drive inflation.
That’s the best and most straightforward explanation I’ve ever seen about this, well done
I have read about these ideas about money being created through loans before, but also read contradictory ideas.
Since you seem to know a lot about the subject, would you happen to know of materials where I can learn more about the topic?
So these ideas are the basis of modern monetary theory (MMT) i.e. the theory of modern money, not that it’s a modern theory of money. There’s nothing very controversial here, in that the “theory” is just a description of how things work when you have a fiat currency. The controversial parts are what you do in your fiscal policy once you think about things this way.
Stephanie Kelton is a vocal proponent of this style of framing. She’s been an economic advisor to Bernie Sanders and is the author of “The Deficit Myth” which explains these concepts. She also gave a TED talk on the concepts.
Richard Murphy is a UK proponent who writes a blog and has a YouTube channel where he explains the concepts.
There are others, but these two are a good way in. Searching for them, and also the the phrase “Modern Monetary Theory” should get you lots of talks, interviews and articles on both sides of the arguments.
Uhm, should probably mention that MMT is a relatively fringe theory not supported by most mainstream economists. Saying “there’s nothing controversial here” seems more than a bit disingenous…
How banks lend money isn’t controversial. How governments spend and collect money isn’t controversial. Those are just points of fact. The controversial part is the government being able to spend before it has tax levels which “support” the spending. That’s what I meant. MMT says that’s an available choice. That’s all.
Many mainstream economists will say that unchecked spending is reckless and you risk hyperinflation. Now we’re in to policy choices though. Regardless, if you spend without worrying about the other side of the equation (tax) they’d be right. However, that’s a strawman argument because that’s not what is being said.
I’ll be honest, I’ve yet to hear a convincing argument against MMT, and I’ve looked. I started off sceptical, but I now think it’s a useful framing tool. Every counter I’ve seen doesn’t address what it actually states, rather what they imagine it states (normally unchecked spending). If anyone has seen a good factual argument against MMT I’d be interested.
Thanks!
What do you mean “if”?
This is the comment.
The majority population falls into progressively more desperate poverty. Work hours are extended for less and less personal gain and greater risk of injury, disease, and disability. Recreation, autonomy, and actualization become ever more out of reach.
It started in 1971 and it’s still running its course. So, look around I guess. If we don’t do anything in another 20 years it won’t be possible to own a home for anybody. We will all be severely restricted on what we can eat and how we can travel. Everything you buy will be disposable garbage that makes you sick and needs replacement often.
I recommend the episode of Recess where they use monstickers as currency. In this episode, TJ finds ways to amass all the monstickers and make everyone else destitute. It occurred to me while watching the episode that all the other kids have to do is stop requiring each other to pay for stuff with monstickers, since nobody has them anymore. And then it occurred to me, why can’t we do that in real life? Why can’t society just collectively realize this whole money thing doesn’t work if a few people are hoarding it all and just come up with a new system? Instead people are being deprived of basic needs because of this stupid imaginary system
Because the people with the money also control the physical goods, how are you going to acquire food and shelter without money? and then while you may accept small amounts of bartering you will need some amount of money to continue purchasing food and shelter
It’s a tad worse than that. They also control all the debt. You can’t invent a new currency and use it to pay a mortgage, car payment, student loans, credit cards, etc.
Well, at least not before it develops value that those institutions will recognize. I can’t say that Bitcoin made that leap, but it can be readily exchanged for other currencies these days so maybe there’s hope.
Don’t forget the part where they also own the people who create the laws and therefore the people who enforce the laws.
They let us borrow some so that we can buy their products and pay them back more. We have to trade our labor to make up the difference between our passive income and current expenses, but they’ll only give us just enough to sustain a population of laborers.
Some take a risk and borrow wayyyy more than they can really pay back with their own labor and use that money to buy assets that they hope will be successful in integrating with the loop of money. If it’s successful, their assets buy the labor of others to generate income so they pay back the loan and do it all over again.
It basically already did
The economy collapses and you get a revolution, mass emigration, and/or other major societal upheavals – probably as soon as a lot of people start going hungry…
There is only 9 meals between man and revolution
mass emigration
to where?
we all rot as they continue eating steak
Aren’t we supposed to get cake, at least?
bootlick them enough and you’ll get a slice of synthesized cakes
Cake = the caked on shit at the bottom of a bread pan.
Elysium happens.
I’ve never seen it. Is it good?
yeah, it was actually a good movie. The big thing was that all the super rich lived in space on a halo ring while Earth went to hell for everyone else.
these days this movie hits a little too close to home for me.
The “plebs” will develop a new currency of their own. And by this I basically mean anything from bottle caps to IOU notes etc. Monopoly money, whatever. Arguably they could use something actually valuable too but using an IOU-type thing kinda secures it against theft. Point is that it starts with small communities with some degree of trust of course. Alternatively, trade work for food and goods - but we’re primed to use money so I think we’re likely to just create a new currency since we already know it’s simpler to just trade 5 bottle caps for a carrot than it is to wash dishes for… oh i dunno, 3 carrots or whatever.
This kinda is what we should be getting to do anyway at this point. The 1% should be regarded as a force of nature. You can’t win against them anymore you can win against a volcano. Best you can do is work around them (instead of trying to beat them at their own game which they are constantly rigging in their favor anyway).
Money itself only has as much value as we give it.
That’s crypto. Non governmental currency.
that’s the wet dream, fictional version of crypto.
that’s the idea that made me excited about crypto 15 years ago. (stupid young 31 old me 👶 )
Oh yeah, it’s stupid. But so is the idea of non-governmental currency having any sort of real or consistent value. Every exchange type that we come up with is subject to the same problems as crypto. Crypto just got there faster
Nothing has real or consistent value. Value is entirely human constructed. That’s exactly why again: in small trusted communities, you can easily develop your own currency or a work-trade system. The only thing stopping people is their desire for the “universal money” that they consistently overvalue (which creates a feedback loop - everyone wants money because everyone wants money). But the thing is few people actually want money itself, they just want what they think money will get them. In communities you can (and should) exchange goods and services for other goods and services instead (again, requiring mutual trust). My proposition isn’t outlandish either, economists etc. have talked about it too.
https://www.ijccr.net/article/view/9504/9190
https://en.wikipedia.org/wiki/Subjective_theory_of_value
I see this as a sort of a mandala actually. “THE MONEY” has expanded so much that it has little contact with the center - the people - anymore. It’s become more of a force of nature that we’ve lost control of on the level of the individual. Yes it provides limited structures but not enough to support. The solution is to start something new at the center, instead of pining after something that’s way out of reach at the outskirts (and eventually this new thing will also expand beyond the reach of the individual, prompting another new start and so on).
No, what i propose is pretty much the opposite of crypto. You need physical exchange, not just abstract numbers.
Depends on how you look at it. Technically, it’ll never happen. The megacorps still need employees to do some tasks. They’ll still have some pocket money.
OTOH, you could say that it’s already happened. The plebs are broke, the middle class is basically gone, and the tax structure can’t support everything that the government wants to do. Eventually, borrowing runs out, and we get a crisis that makes the current economic troubles look mild.
I don’t relish this path.
