David Graeber says how finance crashed the economy, while at the same time Britain had one of the finest education systems in the world. So what did the government do, rather than reform finance along the lines of Britain’s university system, it financialised the education system instead?
Before long, the Bank of England (the British equivalent of the Federal Reserve, whose economists are most free to speak their minds since they are not formally part of the government) rolled out an elaborate official report called “Money Creation in the Modern Economy,” replete with videos and animations, making the same point: existing economics textbooks, and particularly the reigning monetarist orthodoxy, are wrong. The heterodox economists are right. Private banks create money. Central banks like the Bank of England create money as well, but monetarists are entirely wrong to insist that their proper function is to control the money supply. In fact, central banks do not in any sense control the money supply; their main function is to set the interest rate—to determine how much private banks can charge for the money they create. Almost all public debate on these subjects is therefore based on false premises. For example, if what the Bank of England was saying were true, government borrowing didn’t divert funds from the private sector; it created entirely new money that had not existed before.
One might have imagined that such an admission would create something of a splash, and in certain restricted circles, it did. Central banks in Norway, Switzerland, and Germany quickly put out similar papers. Back in the UK, the immediate media response was simply silence. The Bank of England report has never, to my knowledge, been so much as mentioned on the BBC or any other TV news outlet. Newspaper columnists continued to write as if monetarism was self-evidently correct. Politicians continued to be grilled about where they would find the cash for social programs. It was as if a kind of entente cordiale had been established, in which the technocrats would be allowed to live in one theoretical universe, while politicians and news commentators would continue to exist in an entirely different one.
The New York Review
9 comments:
You claim: “one of the finest education systems in the world. ”
But yet:
“Back in the UK, the immediate media response was simply silence. The Bank of England report has never, to my knowledge, been so much as mentioned on the BBC or any other TV news outlet. Newspaper columnists continued to write as if monetarism was self-evidently correct. Politicians continued to be grilled about where they would find the cash for social programs”
Obviously your claim is not true....
If your claim was true, then we would see an immediate adjustment....
From the stories I believed when I was in school, the UK education system was brutal. The finest form of brutality on the planet.
David Graeber
'Common sense might have suggested that if the education system was performing successfully (for all its foibles, the British university system was considered one of the best in the world), while the financial system was operating so badly that it had nearly destroyed the global economy, the sensible thing might be to reform the financial system to be a bit more like the educational system, rather than the other way around. An aggressive effort to do the opposite could only be an ideological move. It was a full-on assault on the very idea that knowledge could be anything other than an economic good.'
Tom Brown's Shcool Days. The private boarding school system was brutal, for sure.
This artificial creation of fiat funny money by a central bank is completely illegal and unconstitutional in the USA and, of course, morally degenerate and depraved. The whole point of the system is to allow the elite to rob the citizens blind because the first recipients of the new money are robbing purchasing power from the masses. Naturally, the perpetrators of this system wish to obfuscate the true nature of these activities much like the USA does when it destroys nations like Libya and Syria.
One must wonder about the obtuseness and morally depravity of people who promote this system in a positive light and are oblivious to the longstanding definitive critiques of it.
A good example is the obsession with inflation. Economists still teach their students that the primary economic role of government—many would insist, its only really proper economic role—is to guarantee price stability. We must be constantly vigilant over the dangers of inflation. For governments to simply print money is therefore inherently sinful.
No, numbnuts. Since there is no reason to ever artificially create fiat funny money, the primary "economic" role of government would be to severely punish those who create fiat funny money. It is "sinful" to simply print money because the purpose of the system is to shift wealth to the first recipients of the new money from the holders of the existing money, the value of which invariably decreases which is how the wealth transfer is effectuated.
It is "sinful" to simply print money because the purpose of the system is to shift wealth to the first recipients of the new money from the holders of the existing money, Bob Roddis
Then you'd have no objection if ALL fiat creation beyond that created by the monetary sovereign for the general welfare was via an equal Citizen's Dividend?
Since fiat money gets its so-called value by way of a government decree and libertarians view such a government decree as morally depraved and criminal, what is the likelihood that I would support any type of fiat money?
All money used by government is by government decree.
That being the case, then the money used by government should be as inexpensive as gets the job done (e.g. durable, counterfeit resistant, etc.)
In that regard, gold or gold-backed fiat is a wasteful, obsolete relic.
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