Steve Keen: ...The thing I think we’re both in agreement on is we have to stop people, and particularly social classes, becoming dependent upon unearned income. Ultimately the only way to get a functioning capitalist society—or a society in general—is to have one where the source of income is earned, not unearned. And when you look at land speculation, or you look at any other form of speculation, people are trying to get income without earning it. That’s the real dilemma in capitalism. And if we direct ourselves toward that particular principle then we’re both on the same side. (Renegade Economists, April 21, 2010, at 13:30)Fictional Reserve Barking
Steve Keen on interest and capitalism's main dilemma
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21 comments:
The primary reason people feel compelled to engage in asset price speculation is due to the government's monopoly funny money dilution which creates and induces the asset price bubbles which will generally ultimately collapse. And the entire government-induced process (which otherwise would not even exist) will then be blamed by Keynesians on "the free market" or "capitalism".
No it isn't.
Land is a monopoly by design. Government did not invented it.
Land is a monopoly by design. Government did not invented it.
Not sure about that. In many societies historically land was held in common. Certainly, that was the case before surplus societies. Ownership of land first passed to the rulers of society, who distributed title to the aristocracy. These landed title became the basis for legal titles to land ownership as parcels were further distributed.
So the natural state is the commons, and the artificial state is enclosure of the commons and the origin of the concept of private property.
Libertarians of the right argue that land ownership is natural, hence, a natural right. Libertarians of the left argue that this is false, and that land ownership arose from coercion, generally through "government" as the ruling class. History is on the side of the left's view.
In order for people to not be slaughtered, raped, pillaged or have their hearts cut out en masse by Aztecs, it necessary to people to have private property in land (and, of course, in their own bodies). That's what makes it a "natural right". I'm sure that in your real lives, even you "progressives" refuse to let marauding bands of gangstas or hordes of armed police come rampaging through your homes. And that you consider such places "your homes" without a lot of obfuscation and doubletalk.
As I've said many times, the "natural" tendency of human beings is to rape, steal, slaughter, enslave and pillage. Since I'm not "progressive", I don't celebrate most of that wonderful past.
Further, whether or not private property in land is a "natural" right, it sure is a marvelous and practical institution, especially for keeping government and "non-government sector" thugs at bay.
As I've said many times, the "natural" tendency of human beings is to rape, steal, slaughter, enslave and pillage. Since I'm not "progressive", I don't celebrate most of that wonderful past.
This tendency was addressed historically through the rule of law and legal-judicial due process, assuming that all are equal before the law (no privileged parties or classes). Establishment of the rule of law addressed individual retribution, vigilantism, feuding, etc, on one hand, and the imposition of class privilege, on the other.
It also established the principle that the punishment should fit the crime, which was the original meaning of the biblical law, "An eye for an eye, and a tooth for a tooth," i.e., assault that commits injury is not a capital offense.
How was this applied in the absence of hierarchical authority? According to anthropologists, it was a cultural phenomenon imposed by agreement (consensus) before it crystallized into an institutional phase (hierarchical).
Tom, you are naturally right. I just meant that land is a monopoly in economic sense. The holder of the land enjoys always monopoly privilege, with or without property rights.
Vilfredo Pareto (the famous italian economist (right-libertarian?)) i believe did not accept property rights of land. According to him, land is always allocated by violence. (And those without it has the obligation to take it by force.)
Bob, if anyone has committed a crime against you and your property you should take them to court, instead of moaning about it on Mike Norman Economics.
"the "natural" tendency of human beings is to rape, steal, slaughter, enslave and pillage."
This is the root of Bob's beliefs. It explains a lot of is perspective. I kind of feel bad for Bob. What a sad state of mind to live in.
Of course it's absurd to ascribe those tendencies so universally as to call them 'the natural tendency'
If Bob were correct humans beings never would have survived and thrived. We did because we are ALSO naturally cooperative, loving, sharing, etc.
Humans run the gamut.
Humans run the gamut.
Right. So once humans are precluded by the non-aggression principle from aggressing against each other, and because they are "naturally cooperative, loving, sharing, etc.", they will voluntarily cooperate, love and share. No need for government programs to compel such behavior at the point of a gun. We finally agree!
Right. So once humans are precluded by the non-aggression principle from aggressing against each other, and because they are "naturally cooperative, loving, sharing, etc.", they will voluntarily cooperate, love and share. No need for government programs to compel such behavior at the point of a gun. We finally agree!
In order to follow the non-aggression principle in the absence of the rule of law and enforcement needed to back it up, humans have to evolve as a species to a higher level of collective consciousness defined as an expansion of realization of universality. This realization of universality has to preclude aggression naturally, so that coercion is not needed for enforcement of rights and responsibilities under the rule of law.
We are not there yet as a species although we are making progress within the boundaries provided by the rule of law and enforcement. Until we evolve more, we will need supervision as a species still in childhood and adolescence.
Steven Pinker on Deaths by Violence in Pre-state Societies
The Leviathan State Deters Crime
The Way We Used to be in the Middle Ages
Steven Pinker’s The Better Angels of Our Nature, Chapter 3
Bob, if you hate the laws of the US, hate the Constitution, and hate the opinions of the overwhelming majority of US citizens, why do you voluntarily choose to live in the US?
No one forces you to.
... no reply from Bob.
I guess we just have to assume that his behavior is simply 'irrational'.
Who would have guessed?
Hey, Y, who are you? Archie Bunker? You know, America, love it or leave it?
Actually the Constitution proscribes funny money. I guess the funny money crowd hates America and should leave.
This is the other thing that all housing bubbles (and share price bubbles, for that matter) have in common: they are all driven by borrowed money, and they can only be sustained so long as rate of growth of debt outpaces incomes. Once that stops, the engine of unearned income that enticed speculators in breaks down—since the only way that we can all appear rich without working is if we spend borrowed money.
Of course, we all know that spending borrowed money is a surefire route to ultimate poverty. The great tragedy of an asset bubble however, is that it’s someone else’s increase in debt that makes us appear wealthier when your house sells for more than you paid for it. In effect, the housing market “launders” the debt money, making it appear real.
Steve Keen
http://www.debtdeflation.com/blogs/2010/06/17/grantham-on-the-australian-housing-market/
[T]he dangers of inflation are very different ones. They are exactly the kind of unemployment which is now arising. In the usual discussion, there is quite a wrong emphasis. There are many bad effects of inflation, but the worst is that it draws labor into employments where they can be kept employed only by an accelerating inflation. And the point inevitably arises where inflation cannot be accelerated sufficiently fast to keep them in that employment.
Hayek in 1975 speaking generally about bank created funny money debt.
http://mises.org/media/2773
Hey y:
Why don't you get one of these neat hats?
http://rlv.zcache.com/america_love_it_or_leave_it_hat-p148898134957361176enxqh_400.jpg
Bob, I never said you should leave. I asked you why you voluntarily choose to live in a country when you hate its laws, hate its constitution, and hate the opinions of the overwhelming majority of US citizens.
As I said, no one forces you to.
"Actually the Constitution proscribes funny money"
Where?
Answer: Nowhere.
It's obvious that Keen and Hayek are not making the same argument.
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