Presentation on theme: "Trends in Money & Finance What is Money? What is Wealth? Debt, Waste and Scarcity Financialization: Hijacking the Information Revolution Decommodifying."— Presentation transcript:
Trends in Money & Finance What is Money? What is Wealth? Debt, Waste and Scarcity Financialization: Hijacking the Information Revolution Decommodifying Money
Money Basics Impersonal: allows transactions to be extended over time and space. Trust essential Most prominent initially in external trade. Capital: money increased in the process of exchange.
The Disintegrative Power of Money rooted in the impersonality of money internal concerns with alienation of land & labour money-trading: long considered an unsavoury occupation. related concerns with bourgeois competitive individualism major breakthrough--Capitalism: the means of production become forms of money. –increasing production means increasing moneyand vice versa. money becomes industrialisms main measure of wealth.
Main Characteristics of Money 1. Means of Exchange money as information, a symbol 2. Store of Value a commodity, a thing-in-itself, a source of power The evolution of money: growing importance of the means-of- exchange function
wheat, cattle, tools metals Currencies coins certificates of deposit private & public fudiciary currencies fractional reserve gold standard gold-exchange standard Breton Woods Interest Rate Standard Casino Economy community currencies Money as Information: Money is an information system used to deploy human effort. (Linton) The Dematerialization of Money The Paper Economy
The Industrial Definition of Wealth Money Material
Scarcity & Class... inequality & relative scarcity: 1. control of scarce resources &... 2. monopoly of high culture...by a minority.
Industrialism: Accumulation Production-for-productions-sake Invisibility of key factors Centralization of production, massive upfront investment Focus on labour productivity : resources substitute for human energy Cog-labour: humans as component parts Regulation: controls as limits Scarcity-based: role of waste since WWII Globalization: free trade & intellectual property
Markets and Material Connection between needs, wealth & markets. the Invisible Hand: worked... 1.for an economy focused on meeting primary needs simplicity. 2.in a situation of relative scarcity 3.in the absence of sophisticated information technology
The Threat of Abundance Productivity boom of the Roaring Twenties –output outdistances worker wages Crisis of effective demand & structural overproduction: Great Depression as a reaction to potential abundance. White-collar work, universal education: the threat to cultural monopoly. –increasingly social character of production; rise of industrial unionism
Fordism & the Reinforcement of Industrial Wealth Matter Waste Fordism Suburbanization/ Consumer Economy War Industry Money Debt Keynesianism Paper Economy Planned Inflation New forms of credit- money
The greatest misallocation of resources in human history. …James Howard Kunstler
Keynesianism & the Crisis of Effective Demand Baran & Sweezy: crisis of profitable investment outlets for capitalism. Money: a tool of national economic planning. Strong domestic multipliers. The Paper Economy: growing disjunction between the real & financial economies Planned Inflation & Purchasing Power re-redistribution of income: offsetting wage hikes in the unionized sectors Debt & the Economic Treadmill: Work-and-spend
1970s: End of the Line for the Fordist Waste Solution saturation of markets social & environmental costs coming due: fiscal crisis of the state limits to inflationary strategy Vietnam war, decline of the dollar, German/Japanese competition OPEC & the energy crisis –Petrodollars & Currency Crisis
Post-Fordist Casino Economy floating exchange rates: interest rate standard –Eurodollars & Petrodollars new technologies & Megabyte Money financial sector: 30-50 times (?) larger than the material economy Speculation: Stomp the weak / Get rich quick Empty wealth creation: de facto redistribution of wealth. The End of Mass Consumption & rise of new producer services: new forms of effective demand. Polarization of work and society –end of social contracts: attack on Welfare State –the growing gap between rich and poor
Debt & Forced Economic Growth 1.Competition for money 2.Lack of purchasing power 3.Wage dependency equals Export warfare The main point that needs to be understood is that in order for money to come into circulation, someone must go into debt to a bank. If there were no bank debt, there would be virtually no moneyits as simple as that. Since banks charge interest on all this debt, and since the money to pay the interest can come only from further debt, debt grows like a cancer within the global economic body. This debt imperative creates a growth imperative that is forcing us to destroy the life-support systems of the planet. –Thomas Greco
Debt in the US Economy 1970s: debt 1½ the size of GDP 1985: twice the size of GDP 2005: 3½ times the size of GDP
Source: Magdoff, 2008: calculated from tables L.1 and L.2; Flow of Funds Accounts of the US; and table B- 78 from the 2006 Economic Report of the President
The Global Casino: Hijacking the Information Revolution expansion of employment in speculative industry –Wall St.: more advanced technologically than the military. Bubble Economies: last frontiers for capitalist growth. -stock crash of 1987 -tech stock bubble of late 90s -housing bubble of 2001-07 Housing speculation: most destructive & exploitative of the poor & average people.
Decommodifying Money diversification of forms of everyday exchange –supporting the informational character of currencies. –undercutting the scarcity-power of money. financial industry restructured as public utility and/or service industry. –money directed to priority areas of green development –transition: green Tobin tax new forms of remuneration –direct consumption; basic incomes; account- money; free food, health care & housing gradually enlarging the sphere of gift relationships –consistent with new productive forces based in mass collaboration...or turns them into service workers
Living in De-Material World Redesign not controls Direct focus on human (& environmental) need The Service Economy: Extended Producer Responsibility (EPR) encouraging provision of services not stuff. Servicizing (voluntary EPR). The Lake Economy: economic biomimicry: sectoral orientation: regenerative food, energy, manufacturing, c ommunications. New forms of economic security Conscious support of the Commons Disarming the autonomous power of money Building a community/ecosystem base: localization.
Security in Gift Economies "In that way, the giving of surplus to friends and neighbours is not very far from the giving of surplus to the cashier in a bank. The quality of integrated society, like the legal rules of banking, guaranteed that the gift would not be forgotten and a future claim ignored. --Hugh Brodie on Irish rural life