Michael,
“ it is not actually correct to say the ‘new money represents non-existent value’… unless more is issued than society has the capacity to create new goods and services:)”
You are right that they simply wouldn’t just be handing it out, but spending it into circulation. I suppose my point is that when there is a tendency to be pulling it out of circulation, back in the days this meant burying coins, there was probably less concern this would be for a tangible and stable commuity resource, like grain in the community grainery.
So the coin would remain in circulation, long after the original transaction has faded.
“Money is just information: a ‘measure’ of ‘value’. Dollares and Euros are just like inches and centimetres.
In a trade, the only party giving actual value is the seller who provides actual goods or services.”
Yet it’s not just information, but a quantization of some collective, communal obligation, or it would just be so much noise and no signal. It is the fact that others see that value, that makes them willing to trade for it. As such, it is a contract, a promise, between the community and the individual.
“While these conditions are rarely met, for the most part, the system is ‘good enough’, except when it comes to ‘financial transactions’ which are largely responsible for the widening of the gap between rich and poor.”
Then they become chips in the casino and the tail wags the dog.
“Given the price is ‘fair’, the money allows the seller to recoup from the rest of society the same ‘value’ that they ‘put in’ (when they sold their goods and/or services).’
Exactly. See above.
“For this to work, the amount of money on issue needs to increase with the capacity of society to produce goods and services. Too much, and inflation advantages the holders of assets over the holders of money. Too little, and trade is constrained, with the holders of money being advantaged over the holders of assets.”
Yet, confining this excess to the casino works. For awhile.
“Ultimately, money is ‘backed’ by the natural, human, technical and organizational resources of the society that issues it.”
Yes. It is a tool to enable those resources to interact. The problem arises when this tool becomes a god and the function of the economy is to manufacture it as an end in itself.
“All money is created ‘out of thin air’.”
So is any promise, or IOU. There is still that contractual relationship between the asset side and the debit side. It is an accounting device.
“Ideally, we should also issue a flat amount as a Universal Basic Income to all citizens.”
This is a bandaid to a deeply troubled society. While it might serve the function of a bandaid, my interest is to peel back the layers and get down into why society has the issues bedeviling it.
For one thing, money goes directly to that relationship between energy and form. As you say, it is information and form tends to cohere. Think gravity.
So the Ancients would have jubilees every fifty years, as a method of breaking up this dynamic and resetting. If the government were simply to keep issuing ever more money, without a way to either cancel it, or tax it back out of those wells, then we have oligarchy, as those with the largest piles of public obligations leverage them against the community and the public becomes private. Aka, disaster capitalism/predatory lending.
I recall that when Reagan tried to gut welfare, in 86, one of the more powerful lobbies against it was the food industry, especially Archer Daniels Midland, as the money eventually ends up in their pockets.
“ The money flows up much faster than it trickles down.”
;-)
Though when the foundations can longer support the weight, it does more than trickle down.
“To keep it circulating, a flat % tax could be levied on all transactions”
The reality is that you will have to reprogram society to understand that money functions as a societal medium, like roads, and we effectively only own it like we own the section of road we are using. Otherwise the rich tell the middle class that government is trying to take their hard earned money to pay off welfare queens and the issue sinks like a rock.
One of my original insights to this was a campaign slogan GHW Bush had; “We want you to keep more of your money in your pocket.” The first thought the little vioce in the back of my head popped up with was; “Thank God it’s not my money, or it would be worthless.” It’s not my picture on it. I don’t hold the copyrights and I’m not responsible for maintaining its value and stability.
“The rich cannot (in good conscience) complain about the tax as they are getting the benefit of the higher profits and salaries due to the additional spending generated by the UBI.”
A healthier economy! Whoda thunk? Actually Henry Ford. He paid his workers twice what he needed to, because it created a more reliable, better functioning workforce and they could afford to buy the products they were making.
“The one caveat (and it is a big one) is that the system needs to move to a ‘circular economy’, where resources are fully recycled to avoid stripping the earth bare.”
Which runs very deep into the Western goal and object oriented, linear, ideals based monist culture. For one thing, we confuse the ideal with the absolute, from monotheism to nationalist exceptionalism. That is the sort of discussion that could be started in more philosophic circles, without drawing in the very real social tensions associated with the economy, but the field of philosophy seems seriously degraded. Broken and quantified into all the varied fields and ruts, if you want my opinion.
Where, in this day and age, do such conversations exist? Medium seems like a good idea and start, but it is also fragmented and more about writing, than the collection and debate of ideas.
I do think the idea of an income, without any social value in return, needs to be kept to a minimum. There is no free lunch, but most people do contribute a lot more than can be accounted for. Which goes to the fact that the best economy is organic and reciprocal, from the ground up. Keeping it cyclical.
When we have a culture that is based on the individual, the result is an atomized culture and it allows formal government, rather than social mores, more control and banks, rather than organic reciprocity, to mediate and tax most of the relationships. As in the movie, The Matrix.
So this individualism, that is supposedly freedom, reduces the power of the individual to be part of their own world and more a piece to be shuffled around.
We need to view the world around us as an extension of ourselves, much as a book, or a tool is an extension of our minds and bodies.
The western view of time is of the future in front of ourselves, as we view ourselves as distinct entities, moving through our environment. While the Eastern view of time is of the past in front and the future behind, as what is past and in front is known, while the future and what is behind are unknown. Which accords with a more contextual view of reality, as we do see events after they occur and then the energy transmutes to other events.
