Here's where I add my voice
to the swelling chorus
that has set out to remake the conventional wisdom on money.
My approach is directed against the many lies
that are endlessly propagated in media and academia:
I tackle some of the most prominent examples.
If this is your first approach,
I suggest you start with
the whole essay in one page.
If you'd rather curl up in a comfy chair
with old-fashioned paper for serious reading,
you can grab the pdf version here.
If you prefer to take a little at a time,
you can read the essay section by section
The individual sections are intended to facilitate
you can insert a link to one of the sections
when you want support for a specific point.
For reference, here's the complete list of sections:
Here's background material, linked from above,
mostly comprising quotes from experts and other authorities.
When I say
money here, I mean fiat money.
Items lacking links remain to be written.
Textbook money definitions
are accurate but uninformative.
Money is a claim on society.
Money is unbounded.
Money has a life cycle.
Money is created by sovereign spending and bank lending.
It is destroyed in payment of taxes and fees to the sovereign.
Money is also destroyed when bank loan principal is repaid
(but interest payments do not destroy money).
Money is also destroyed when loans are written off.
Between creation and destruction,
money circulates in the subject (non-sovereign) parts of the economy.
The value of money derives from
the sovereign's requirement of its use for payment of taxes and fees.
Taxes do not fund sovereign spending.
Sovereign debt is a policy choice.
A subject (non-sovereign, including banks)
can be forced into involuntary bankruptcy for non-payment of debts,
with consequent forfeiture of collateral and other assets.
Sovereign bankruptcy is a policy choice;
a sovereign cannot be forced into involuntary bankruptcy,
as long as its debts are denominated in its own currency.
The national debt can be usefully seen as the national savings.
It's the only part of subject savings
that is free from the risk of involuntary default.
Full employment is a policy choice.
A Job Guarantee funded by the sovereign
could maintain full employment as well as set a floor on wages.
Absent genuine scarcity, inflation is a policy choice.
Excess money creation (usually due to bank loan orgination
not sovereign spending) is inflationary.
The best tool for managing inflation is probably taxation to destroy money
and discourage speculation.
Distribution of income between profits and wages is a policy choice,
with levers of influence including taxation and a sovereign job guarantee
or other minimum wage adjustment.
Control of the domestic labor supply (via enforced restrictions on immigration)
may also have a role to play.
Likewise trade policies can have a large effect
on distribution betwee profits and wages
if owners can freely move jobs and commodities
between low wage and high wage destinations.
Inflation, as policy, redistributes wealth.
Creditors are punished, debtors rewarded.
Fixed income recipients are also punished.
Under-regulated bankers tend to fraud.
Beware the Minsky Moment.
punishing depositors for banker's misdeeds.
Austerity is a policy choice,
unless there are genuine shortages of real resources.
Money is not a real resource.
Lack of money is never an obstacle
to pursuit of social goals for the sovereign.
Lack of real resources (labor, materials, land, etc.)
may provde genuine obstacles,
but lack of money is purely a policy choice.
Bankers are unelected sovereigns.
The power to create money by making loans
with little or no democratic oversight
devalues democracy by highjacking sovereignty.
This power is one of the pillars of oligarchy in our society.
must be wrested from private banking.
Thanks for reading!