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Trends in Money & Finance What is Money? What is Wealth? Debt, Waste and Scarcity Financialization: Hijacking the Information Revolution Decommodifying.

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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:

1 Trends in Money & Finance What is Money? What is Wealth? Debt, Waste and Scarcity Financialization: Hijacking the Information Revolution Decommodifying Money

2 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.

3 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

4 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.


6 The Industrial Definition of Wealth Money Material N.B.: Perpetuation of the System demands the perpetuation of this definition

7 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

8 Postindustrialism: Regeneration New relationship of culture to economics: centrality of human development Substitution of human creativity for resources Direct targeting of human need: conscious consumption Human-scale technologies: production distributed over the landscape ; Integration: ALL places are places of production Qualitative Wealth is PLACE-BASED Distributed regulation: incentives for positive action throughout economy. Self-reliance / interdependence: Trade recipes, not cookies

9 Industrialism: The Divided Economy Invisible Visible Use-value Exchange-value Consumption Production People Things Unpaid Paid Women Men Informal Formal Private Public

10 Scarcity & Class Class: arose from societies with a permanent economic surplus. Based in 1.control of scarce resources (the surplus) 2.monopoly of high culture Undermined by 1.material abundance (sufficiency) 2.Widespread cultural production

11 Markets and Material Connection between needs, wealth & markets. the Invisible Hand: worked... 1.for an economy focused on meeting primary needs simplicity. a situation of relative scarcity the absence of sophisticated information technology

12 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

13 Watershed of Industrialism: The Great Depression Structural Overproduction: productivity outruns worker capacity to buy. Beginnings of long-term crisis of effective demand Waste: main development strategy to create demand without redistributing wealth.

14 The Post WW II Waste Economy Permanent War Economy The Suburb Economy: Oil / Autos / Subdivisions Note the gender and racial subtext of sprawl

15 The greatest misallocation of resources in human history. …James Howard Kunstler

16 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

17 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

18 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

19 Post-1980 Casino Capitalism: Hijacking the Information Revolution Main strategy for reproducing scarcity shifts from waste to debt New info technologies supply new ways of creating money: Fantasy Finance Decline in real wages; increasing polarization of the rich and the rest. Benefits of productivity gains monopolized by the 1%. Great Risk Shift from organizations to individuals. Rise of McJobs, outsourcing. Shift in power from manufacturing to financial capital

20 Empty Wealth Creation (& theft) in the Global Casino 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.

21 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

22 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

23 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



26 Austerity: Self-imposed Scarcity most repressive solution to the overextension & destructive impact of debt. --creditors rights virtually sacrosanct --a kick-start to the timid debt-based economy the other obvious solution: clean slate / jubilee / debt amnesty --the traditional remedy down through civilization. But in an age of potential abundance, this risks undercutting class power altogether by eroding both material and cultural monopolies.

27 The Economy & Culture of Fear Mainstream politics and media today are mobilized for the creation of fear, based in both scarcity and personal insecurity. Reality TV competitions, extreme fighting, Tea Parties, racist fundamentalism, cultural scapegoating, etc. Question: should we be careful of adding more fear, however justifiable? (climate change, etc.)

28 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

29 Strategies for Abundance Invest in social and natural regeneration infrastructure & public goods Material Economic Security: meet everyones needs Disable the Coercive power of Money Community Currencies Basic Income guarantees Free Culture: from ownership to access; from belongings to belonging

30 Invest in Social and Natural Regeneration (includes growing categories of public goods and social/eco infrastructure) increased role for government on all levels invest in community: the nexus for regenerative development eliminate externalities: make polluters, extractors, incarcerators pay

31 Unleashing the Informal Economy Juliet Schor emphasizesSelf-Provisioning as one of the key features of Plenitude, the new economics of true wealth Rooftop gardening, self-help building, preventive health care, natural water treatment, etc.

32 A New Paradigm of Security Geared as much to unleashing individual and community creativity as protecting the vulnerable. Eliminates fear on many levels. Deflates the coercive power of moneyallows ethical values to factor into personal economic decisions. Supports imagination & innovation that transforms other sectors: e.g. community business. Meet everyones basic needs...or else!

33 Ending the Coercive Power of Money Community Currencies especially account-money systems Basic Income Guarantees the more universal, the better Public Provision of Services health care, transport, housing, infrastructure

34 the appropriate goal: Gift Circulation Money as information & energy Brand: Information wants to be free. Requires social / eco value to be embedded in everyday life : indicators Question: transitional mechanisms

35 Qualitative Economic Development focus on locally-owned business increase resilience & diversity raise standards: high road development

36 Green Financial Strategy 1.Limit and starve Wall St. gambling 2.Find ways of getting capital to regenerative enterprise

37 Regenerative Finance Toolbox Cooperative investing Impact investment Local Stock Exchanges Crowdfunding Community investment & revolving loan funds Public banking

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