I saw this video a few days ago and the more I think about it the more his approach makes sense.
Jun 3, 2018
Professor L. Randall Wray, discussing the origin of money, which forms the foundational conception of money in Modern Monetary Theory.
The usual origin story for money as given by economists is that humans began by bartering in markets, but that this was difficult because of the “double coincidence of wants” problem: I have to have something you want and you have to have something I want, right now, or else we can’t trade. From this, a medium of exchange is selected by an evolutionary process, beginning with seashells and beads, and eventually settling on gold.
Then, the story goes, people discover that gold is sort of burdensome to carry and difficult to protect, so they arrange to keep it with the village goldsmith. The goldsmith hands out receipts, and people realize that these receipts can be used as money in place of the gold. This is, supposedly the beginning of paper money.
Then the goldsmith realizes that not everybody will come to claim their gold on the same day, so the goldsmith can create receipts from thin air and spend or lend them as money.
This is, supposedly, the origin of bank lending, or credit money. The biggest problem with this story is that there’s no historical evidence for it whatsoever, nor do we observe barter-based markets today within the tribal societies that are still around.
The reason is obvious: if you’re living in a small tribe, you know everybody. You don’t need exact, proportional, spot-trade equivalence of the kind used in barter if you’re doing all of your business with your cousin, or your neighbor.
In practice, we find that these kinds of societies arrange themselves along informal credit relations: I’ll help you out a bit here, then you’ll help me out with something else later. This is problematic for the barter story … The description continues and other 500+ words.
We all deal with money, so who knows, there might be an interesting discussion, or two, to be mined from this video.
I’m sure there are some other interesting theories being peddled out there.
Anything else seems based in nothing to me. Like bitcoin, which he dismisses near the end. The issuers are invisible, and I doubt they are taking bitcoin as payment for anything they have, so, they are already in default, as this guy defines it.
This idea of Social Security going bankrupt is being used as a weapon right now to frighten people into accepting Trump, tariffs, cutting social programs, and keeping taxes low for higher incomes. We aren’t “burdening our grandchildren” with debt. We’re fueling the economy. I don’t claim to understand this all, but it makes a lot more sense than what Congress is saying.
He didn’t address what we do, which to me is what he means when he talks about the government’s liabilities. He says, "it’s valuable due to the state’s promise to redeem it in payments to the state”. As citizens of the US, we feel somewhat disconnected from our government, since they lie to us every day, but to the world, who accepts our money, they see us as creating value, from the resources we mine to the ideas that we come up with in our institutions. We don’t have the raw human power that some countries have, but we have ways to enhance that power and we continue to innovate. We innovate in health care to keep that human power working.
Anyway, my point, if we ever get this understanding of money to the mainstream, then we can stop being afraid of the big numbers that they use to control our thinking about “deficit spending” or whatever, and instead, start thinking about what we are doing. The current money myth points us to short term extraction of resources, to exploitation, and to expansion beyond the physically possible. An understanding of debt and redemption could lead to responsibility for our actions and thinking about the future. We could value the planet instead of the myth of money.
But how to get people to start valuing our planet?
When it seems that right wing politics is all about treating our planet as something hostile, something to be derided, mistreated, and consumed.
As for their policy towards other humans, it seems to be: grievance, hate mongering, vengeance lust.
When I surface to take a gulp of Washington news, it’s pretty horrendous, worst outcomes is starting to come to mind. How fast we’re imploding. How fast they are taking advantage of every opportunity to vandalize our society.
