Thursday, July 26, 2012

The Prophet Isaiah on Exogenous and Endogenous "Money"

Isaiah 13 is a prophesy related to the events surrounding God's destruction of Babylon.  Intro:
1  Load of Babylon which was perceived by Isaiah, the son of Amoz. 
The chapter then proceeds to provide some details concerning the earthly environment during the time of Babylon's destruction.  Picking it up in verse 15:
15  Everyone found shall be stabbed, and everyone gathered up shall fall by the sword.
Skipping over some more of the gory details, it is then revealed that God will use the Medes to enact His will of destruction upon Babylon.  But why the Medes?  What sets Mede apart from Babylon?

God's use of the Medes as His tool of destruction and the characteristics that He used to differentiate the Mede from Babylon are revealed in verse 17:
17   Behold Me rousing against them the Medes, who are not accounting silver, And gold - they are not delighting in it.
The verse reveals that the Medes were NOT "accounting" in silver, or as MMT might say, the Mede was not 'running their spreadsheet', or monetary system in a unit of "accounting" based on exogenous weight measures of silver.  Also revealed is that the Medes did not "delight in gold".

The implication is that Babylon was, in contrast to the Medes, operating a monetary system based on exogenous weight measures of silver, and was delighted in gold.  Two "precious" metals both in Column 11 of today's periodic table.  Many humans in our era today, at least over the last century or so, advocate a policy for use of either of these two metals as an exogenous material "standard" against which we should base our contemporary monetary systems.

So this is interesting, as it doesn't look like it worked out too well for Babylon as compared to how the Medes were able to be roused by God using perhaps a system of state currency via endogenous "money".

The implication of this Hebrew scripture is clear in that at least during the era of Babylon's demise, a state that constrained it's fiscal authority by limiting it to how much silver it could obtain, and foolishly expended real output and resources on the errand of obtaining the metal gold in order to simply delight in it's presence, would be vulnerable to destruction.  The prophet continues:
19  And it comes that Babylon, the stateliest of kingdoms, The beauty, the pomp of the Chaldeans, shall be as the overturning of Sodom and Gomorrah by the Alueim.
20  It shall not be indwelt permanently, not shall anyone tabernacle there further, for generation after generation, Nor shall the Arabian tent there, nor shepherds recline their flocks there.
21  Yet the animals of arid spaces will recline there, and their homes will be full of their uproar.
And so Babylon has remained.


Detroit Dan said...

Awesome! Thanks

Anonymous said...

I hope the GOP´ers in the Bible belt read it carefully :) !

Anonymous said...

Given that gold and silver standards created the first world war and subsequently the second I can't believe we take in mind what mad people wanting to return to that (or some substitute, like the euro current structure which inevitably will have to mutate) says.

Cult_of_MMT said...

I wonder what the prophet Mosler thinks about this. What say ye followers of the great Mosler?

Anonymous said...

No although i am in favor of MMT i surely hope it never be a cult.We allready have you Austrian lunatics and it is perfectly enough.But with such as intelligent people like Mike Norman, Tom Hickey etc,very openminded people,i don´t worry about
it at all.

Tom Hickey said...

dI am not an economist, I am a philosopher and philosophy is the pursuit of wisdom wherever it is found.

No one has the ocean in their bucket, even the sages differ in their approaches, since the same ocean can be described differently.

ekam sad vipra bahudha vadanti
"Being/Truth is one, the sages express it variously."
Rig Veda 1.164.46

As Uncle Milty (no, not Milton Berle) said, "There is good economics and bad economics." The debates are about distinguishing them, not just picking a narrative that suits one.

And you can't just throw one economist against another without showing conclusively how one is right and the other is wrong. Otherwise it is just he-said, she-said.

No reason not to criticize MMT or anything else, but back it up with logical proof, empirical evidence, economic reasoning or moral arguent — and keep these straight.

Matt Franko said...

Dan thanks... my interpretation may key on the Hebrew term for "accounting" here.... seems like they would still have to have had something similar to what we today call "accounting" back then too..

Anon1, It may go right over their heads... they seem to be focused on other earthly things ;)

Anon2, some have made the point that wars have been provisioned via endogenous "money" also so I guess there are not guarantees..

Cult, wtfo?

Anon3, no cult here imo....

Tom, yes seems truth can be dispensed in different ways...

rsp to all,