MEDIA ROOTS — Modern Money and Public Purpose is the 2012-2013 Series on Contemporary Issues in Law and Political Economics at Columbia Law School. The video below displays some hard-hitting, yet, little-known truths about our economy. We can broadcast the truth about money and the people’s democratic sovereignty to control it, especially given the false economic crises facing Americans–where unnecessary economic pain and austerity is being inflicted onto the people.
The speakers in the fifth installment in the series, Dr. Woody Holton (Univ. of S. Carolina), Dr. Farley Grubb (Univ. of Delaware, Economics Department), and Dr. Christine Desan (Harvard Law School) is moderated by Dr. Gillian Metzger (Columbia Law School). A notable aspect of this panel is the description of the origin of money, which traces its value in our society to today’s modern money systems. These inquiries lay bare the reality of money sovereignty for public purpose, denied by those who truly wield power in the USA, namely those who control the power to create money. As Dr. Holton noted in quoting the private banker Gouverneur Morris during the 1787 Constitutional Convention: “The monied interest will oppose the plan of Government, if paper emissions be not prohibited.”
NEW ECONOMIC PERSPECTIVES—The latest installment of Modern Money and Public Purpose is now online. This seminar explores the relationship between money and the legal formation of the modern liberal capitalist state, with a particular emphasis on the pre-Revolutionary and early United States. In contrast to conventional economic narratives that cast money as lubrication for existing forms of exchange, this event highlights the legal and political origins of our modern monetary system, and traces the influence of those forces on the shape of the modern economy.
“The number one reason the people who wrote our Constitution were there—in Philadelphia, in that summer of 1787—was to stop the states from printing paper money. That’s the number one reason they were there,” said Dr. Holton.
Wow. The monied interests would straight shut down Government and Democracy, altogether, if the people awaken to the power of controlling the money supply for the public purpose. Although the speakers presented important work and were descriptive of historical truths, they seemed less, or un-, willing to explicitly connect those important truths to today’s real conditions of unnecessary and avoidable widening inequality and economic misery for a growing majority, as others do, such as Dr. Michael Hudson:
“But if governments are not allowed to create their money, then all of the credit the economy needs is created by the commercial banks. And when the commercial bank credit creation leads to debt deflation and the government cannot finance the deficit to pay the interest then the commercial banks say: Alright, sell off and privatise your infrastructure. This is what we’re seeing in Greece today, in Ireland. You’ve seen it in Iceland. What you are seeing is a financial grab of infrastructure that is taking place by the ability of commercial bankers to prevent the central bank from creating credit.”
A good and important debate.
However, I think that until we address the deeper aspects of what wealth is, and, as a corollary of that subtle issue, why economic activity needs to be explicitly measured via price/market mechanisms at all, then go on to examine why economic activity is considered more ‘valuable’, almost a priori, than unpaid or non-economic activity (such as parenting or having fun with friends), our discussions of money will be shallow and lead us nowhere useful. In other words, I feel we should be examining what factors give rise to society’s need for an explicit measure of value which itself has value (money). Also: Why is money, a representation of wealth, conflated with wealth itself? What are the social consequences of this conflation?
I strongly believe this need arises, in part, from how we view/experience scarcity culturally, and how this perspective relates to private property and to the labour theory of value. The consequences are increasing social division and class-based stratification, as well as an increasing cultural distance from natural processes which can be partly seen in our rapacious conversion of ‘idle’ resources into commodities just to keep the economy growing, as if the economy (GDP growth) were more important than humans and the earth combined.
For example, the question put to the panel as to why govt. would be better at regulating money than private banks is a very good one. Is there a good answer? No one on the panel had one; there were shrugs all around. I believe the reason for this is a failure to look at the social consequences of having a non-thing (money) appear to measure value via price, where the enormous utility value of money has the effect of lending money the illusion of being wealth itself (or store of value). This on top of how money is used as a control tool to keep the state operational as what it is: a hierarchical, class-based process of exploitation by the elite of the non-elite. While this combination of social effects remains unexamined, as it was in this debate, solving the riddle of money will be impossible.
My own explorations of this extremely important social Gordian’s Knot have led me to believe that only by severing the systemic link between money and value/wealth, and by embarking on a broader process that unwinds private property and thus the state, and takes us towards a more anarchist, access-based system (or resource-based economics), can these issues be resolved. We live in a system which conflates a representation of wealth (money) with wealth itself. But this conflation is a systemic effect (or emergent property) of a deeper dynamic, namely the civilizational project of mastery of nature itself (now primarily the conversion of ‘idle’ resources into goods and services), based as it is on control and measurement of all variables, the most important of which, economically speaking, is value. But value, like beauty, is immeasurable. In other words, money is far more about power and control than value, but its role in market trading and price discovery generate the illusion that value is being measured, that money stores value. These illusions have led us, slowly but inexorably, into the mire we are in today, where infinite GDP growth is an imperative, even though it is impossible. In my humble opinion, tackling money requires redefining civilization itself, and dissolving the state and private property too. Ignoring these aspects of the puzzle that money is leads to the head scratching we witness in this debate and elsewhere.
(Sorry for the excessively long comment!)