Trends in Money

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Trends in Money Finance

• What is Money?
• What is Wealth?
• Debt, Waste and Scarcity
• Financialization Hijacking the Information
  Revolution
• Decommodifying Money

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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

• 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

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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.

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The Industrial Definition of Wealth

• Money

• Material

N.B. Perpetuation of the System demands the
perpetuation of this definition
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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
  

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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

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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

• ... inequality relative scarcity
• control of scarce resources ...
• monopoly of high culture
• ...by a minority.

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Markets and Material

• Connection between needs, wealth markets.
• the Invisible Hand worked...
• for an economy focused on meeting primary
  needssimplicity.
• in a situation of relative scarcity
• in 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
The Post WW II Waste Economy

• Permanent War Economy
• The Suburb Economy
• Oil / Autos / Subdivisions
• Note the gender and racial subtext of sprawlaaa

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

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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

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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

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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

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Debt Forced Economic Growth

• Competition for money
• Lack of purchasing power
• 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

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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

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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
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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.

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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