Tuesday, April 30, 2013

Drew Little — Producism: Is This Capitalism 4.0?

With the urgent need for alternative economic systems, a tech social entrepreneur steps up to the challenge. 
Producism: Is This Capitalism 4.0?
Drew Little

Many anti-capitalists proclaim Socialism as the answer. Unfortunately, many people don't understand that in our current economic system and in Socialism, there is onlyone monopolized currency that can be accepted for taxes, which is created out of compound interest debt, and is the root cause of our unsustainable economic system; currently, the private sector has a monopoly on legal tender like the government does with Socialism. So, by instituting Socialism, we might change the "driver" of the "car," but the root problem still exists so constant "repairs" or corporate bailouts are always going to be needed.
Many anti-capitalists also feel a bloody revolution is needed. But let's get real, the U.S. government has too many resources at its disposal; spending more on the military than all other developed nations combined. So that's not an intelligent decision. Many well meaning citizens feel change can be made within Washington. Unfortunately, as history shows that isn't going to happen either. What is there left to do? What if we agreed to play a new game instead? One that doesn't break any laws, is opt-in, and fills in the gaps left by the old game. It wouldn't require a revolution that sheds blood, but the shedding of economic ignorance...Essentially, it requires a revolution of the mind.
Little is out of paradigm, but I've read some the book, and he is a good example of what's going on with America's youth. Definitely high aspirations and high energy, willing to experiment in alternatives and aware that the world is digital. In addition, Little is non-white, and that adds another dimension to the story.


paul meli said...

"there is only one monopolized currency that can be accepted for taxes, which is created out of compound interest debt, and is the root cause of our unsustainable economic system; currently, the private sector has a monopoly on legal tender…"

What???? Incoherent at best…

Lets get real…credit expands as a function of $NFA expansion…the leash is tight currently, there is no meaningful headroom other than completely ignoring underwriting…and that won't end well.

Increasing private debt is not the way forward, but spending has to increase along with savings for the 99%.

Any ideas?

Tom Hickey said...

Drew LIttle is a Zeitgeister, as are many of his generation. But he is highly committed to developing an alternative, and I don't think that he or his cohort would have any problem changing their idea about money if it was presented to them clearly.

Tom Hickey said...

The alternative Little proposes is a social currency modeled on Bernard Laitaer, Silvio Gesell, and Thomas Greco's ideas. He is basically correct that over 90% of the money society uses is bank created. One solution is going to government money creation only like AMI, etc., and another is alternative currencies like Laitaer proposes. A third is digital currencies like Bitcoin. This stuff is now in the air.

paul meli said...

"He is basically correct that over 90% of the money society uses is bank created."

That is past-tense...pretty much all of the collateral backing loans for the 99% that don't see debt for what it is...a trap...is encumbered.

There is little room for bootstrapping.

It's all fiscal from here and I don't see how alternative currencies will work.

Almost all of GDP is subsidized...how does an alternative currency achieve that? Who's going to fund activity with no chance for profit?

I'm looking for ways out of this but...

Matt Franko said...

I think 'public purpose' has to be expanded from here Paul similar to what Dan came up with ie his 'Public Enterprise'... there are lots of things we could be working on currently..

This portion should probably represent over half of what we do... 'Private Enterprise' could complement this and should be encouraged, mostly this "Private" side would be related to leisure type activities (ie Facebook, Apple, Nike, Under Armor, Ping, Fine Dining, Music, Film... etc.), but a lot of people would still "work" in that sector if they wanted to be over there..

Lower taxes... Larger public pensions... earlier retirements... fixed fees for loan origination vice interest...

The $NFA flows could come from the majority "Public" side... then flow into the "Private" side...



Matt Franko said...


We came off the metals in 1971 fully (after almost 2,000 years) and then sort of stumbled around for a few years with non-zero rates but then the edge eventually tipped and it became a 30 year descent to zero rates (the 'natural' rate)

Now we are here. It's like: "we're back!"...

I'm with you, I think it is all fiscal from here but most dont realize this yet...

How did we get here? Amazing...


paul meli said...

Matt, i agree completely...that's pretty much the point I've been trying to make...but I've wanted others to fill in the dots because it's perceived as "socialism"...even though I've been consistently making the argument that capitalism can't work for the benefit of the many without government investment.

"Pure" capitalism will make a tiny subset of the population rich at the expense of everyone else...even as "everyone else" is providing the labor and the consumption. As Bill Black says it's "the road to Bangladesh".

The capitalist of last resort is the government spending for public purpose...government funds the "game" and profits and saving accrue as a result of that funding.

It's criminal that only a very few end up with a disproportionate share of that public investment.

Matt Franko said...

The govt flat out lets them get away with it....

Which at core I dont even care if they have lots of balances as they cant ultimately take it with them anyways... but what we can see as a complete failure is manifested as what is being made the "low" end so to speak...

But you are correct about Marx's "Capitalism" ... Marx is illustrating (to me) "hey morons! You've got a BIG problem with the distribution of your (real) surplus!!!!"


Dan Kervick said...

People have to get beyond all of this monetary crankery. The problems with the present economic order have little to do with "the monetary system" as such. It's all about how our productive capacity's are owned and organized, and finding a better balance between public enterprise and private enterprise.

The notion that is going about that the private sector "creates" most of the money and that the public is therefore in some way dependent on the private sector for its money is doubly wrong: First, the private sector only creates negotiable liabilities that are redeemable in government-issued dollars and that can't even function as currency outside the small circle of the bank's own depositors without the interbank payment system which is entirely grounded in government dollars.

Second, the government already has all of the power it needs to issue US government liabilities and use them for public purposes. Some tweaks to the system that eliminate the automatic issuance of bonds in conjunction with deficit spending would be nice, but no revolutionary changes are necessary.

What is needed is an attitude adjustment among Americans. They need to get more active in democratic governance, develop stronger bonds of solidarity and sociality, and get busy building the future they want through deliberate public choice rather than sitting back and letting capitalist enterprise hand it to them.

The challenges are large-scale, even global scale. So what is needed is organization and the power of numbers. If people get lost in do-it-yer-selfer dreams based on the American weakness for radical individualism - like Harrison Ford's character in The Mosquito Coast - their unrealized potential for changing he world will be be dissipated into a million half-baked, crackpot schemes.

We aren't going to save the planet from being cooked, fracked and plundered to death with a bunch of bitcoins and village currencies. We need to fight a war for the future.

There is no escape from our "rendezvous with destiny". Somebody is going to be running this planet in 2030. Will it be a network of cooperating democratic communities? Or will it be the CEOs of Nestle, Google, Goldman Sachs and PetroChina.

Tom Hickey said...

What is needed is an attitude adjustment among Americans. They need to get more active in democratic governance, develop stronger bonds of solidarity and sociality, and get busy building the future they want through deliberate public choice rather than sitting back and letting capitalist enterprise hand it to them.

Well, polls show that increasing numbers are distrustful of government, big business, and the unholy alliance between the two, but so far it has not manifested in any political action that has elected anyone with anything like a viable solution or an inspiring vision. In fact, the Tea Party has been mosts successful so far, and their solution, liquidation, worse than the status quo.

I don't see much hope of any change on the horizon and I think a lot of others don't either, especially young people. It seems that they have lost faith in the system and are seeking their own solutions in alternatives.

There is no viable progressive movement in the US at this point, since most progressives are, frankly, morons when it comes to solutions.

So the young are flocking to conspiracy theory, fringe politics, and creating alternatives outside the system to deal with what they see as a system that is hopelessly corrupt and rigged against ordinary folks.

President Obama deserves a great deal of blame for this by running a campaign based on hope and change and then doing the opposite. Even large numbers of traditional Democrats are bailing on party affiliation at this point, as moderate Republicans already have Now it is the neoliberals v. the crazy.

I don't see much hope for significant political and economic change before the next crisis, which will put the ball in play big time. Crisis is already gripping Europe. It looks to me like the next decade or two will be rocky not only due to the politics and economics, but also global warming hitting.

Dan Kervick said...

Sorry, Tom. I don't believe young people in general share your fatalistic alienation and bunker mentality. My prediction is that the youth of Europe are about ready to start setting the world on fire with a new activist brand of aggressive social democracy based on engaged, participatory democracy, and that after it starts there it will spread to the US.

European leaders have brought that continent to the breaking point. They are one spark from rolling out the guillotines again. The united front lead by Merkel and the ECB is now cracking; rats are starting to run from the sinking ship and the continent's politics will be turned upside down in the big generational surge that is coming.

History shows that people rarely settle for massive governmental failure and passive social fatigue for long. They just can't stand to live that way. Europe is not weighed down by the American disease of lonely and impotent individualism. They have a longer historical consciousness and abundant historical models of radical upheaval and social solidarity in response to profound government failure.

Obama does deserve blame. The whole generation of leaders he is a part of - Merkel, Cameron, Osborne, Boehner, Peterson and Schäuble - will stand convicted by history of incompetence, corruption and evil.

Tom Hickey said...

I don't disagree that there is a large contingent as you describe. But as far as I can tell, there is huge alienation among youth over government, as well as corporate management.

I would be more sanguine if I saw even a glimmering of a new crop of political and corporate leaders but I don't. Zuck, for example, sold out to Goldman and is pushing the Keystone XL pipeline, and Whole Paychecks John Mackey is a Libertarian. And who are the presumable front runners for 2016? Hillary and Jeb.

So color me skeptical.

Ignacio said...

I agree with Dan the anti-government thing is mostly a USA thing.

Here in Europe people is not asking for less democracy and less government, to the contrary there is a real demand from the people to politicians to get their ass up and do something, there is also depth questioning of the status quo and political corruption, and the resignation is not disbanding the government because it "can't work", but reforming and cleaning up. The major bottleneck is the EU and their semi-fascist structure, and people is getting fed up of that too, if eurocrats don't get to act there will be some serious change (to not say 'there will be blood').

Is not "let free market reign and the wealthy and corporations will fix it all" sentiment. I wouldn't say even in USA is nothing like that except a too much noisy minority using cyber-propaganda and being funded by dubious parties.

I agree with alternative currencies as they are good for resilience, in Switzerland there has been a parallel private currency which is widely accepted going on for more than 70 years and it came to existence from a similar situation to the one we are living right now, so they can work. But what Dan usually says about alternative currencies is partially right, the growth of these alternatives is a sign of the status quo cranking, of a collapsing economy, and nothing but political and social action is going to fix that, the alternatives, can help soften some problems, but won't fix them. It's not an economic (or monetary) problem, in this, indeed TINA.

Matt Franko said...


This is from a piece by Payam Sharifi the other day at NEP:

"Communities need to “recognize and celebrate the qualities of character that help them to meet their goals, and to shun attitudes that are counterproductive” and “determine which courses of action help them to reach their goals, and celebrate these while condemning activities that hinder the pursuit of the common good, including activities that hinder the common good of developing a moral culture that supports the pursuit of the common good”. Having a moral culture means to have a moral education in “recognizing, knowing, desiring, and choosing actions that make us better as human agents”.

On the other hand, citizens of the modern state as currently characterized (including by modern economic theory) are nothing more than agents who enter society by choice in order to protect his/her own interests. It’s interesting that Aristotle had something to say about this: that any such citizens that exist are citizens of nowhere, and are barbarians."

So these libertarians are all BARBARIANS!

The other thing he brings up here is that non-barbarians (of which I would include myself) should shun and be working to expose and condemn these others as the barbarians that they are...

So it is like these barbarians have infiltrated civilization and have wormed their way into positions of authority and f-ed everything up...

A civilized person has had the "adjustment" that Dan writes about here...

The solution going forward may not be either Marx's "communism/socialism" or Marx's "capitalism" either... both may be different sides of the same barbarian coin.

I really liked Payam's post there...


Matt Franko said...

It's like people have been brainwashed into thinking that the only two choices are Marx's "communism" or Marx's "capitalism" or somewhere in between on that spectrum....

Who died and left Marx (who only operated during a time best characterized economically as "metal-love") in charge?


Tom Hickey said...

Ignacio, I recognize that the situation is different in Europe than the US and has been since the revolutions of the Sixties, which were much more left-wing than in the US.

But what I hear from Europeans than have emigrated to the US is that the corruption is much deeper and more ingrained in European countries than it is in the US, with organized crime pretty much running things in many peripheral countries and long-established power in core countries. They don't see much possibility of change there in their lifetimes and are striking out anew elsewhere. Some are here legally and some illegally. It's not difficult to get into Canada and get across the Canadian border into the US. Once here there are pretty large immigrant communities in which they can exist. This has been mostly Eastern Europeans to my knowledge. I would guess that Spanish and Portugese speakers would head to Latin America.

I live in a university town where the university and support for it is pretty much all that is happening other than the tech companies that have gathered around it. It is a modestly prosperous town that is not much affected by the national economy. There has also been an alternative community since the Sixties, most people involved in the arts, especially writers. It's also been a LGTB center over that time, too.

While it is hardly representative of the US it is fairly representative of American youth. Occupy was strong here among the alternative community, but gathering never attracted more than several hundred people. There was little interest among the university students.

The Occupy people were pretty much like the young people of the Sixties although surprising much less aware socially, politically, and economically, but just as naive about political realities and leadership. Their vision is of America as an alternative community with a consensus government and coop economy, after ending the Fed, of course. Nice people though.

Kind of reminds me of the Sixties when some of the leaders went into politics later. Like John Kerry and Tom Hayden, which resulted in zero change in the system.

Social, political and economic thought was much more advanced in the counterculture than it is today, but even then this was only a relatively small group of people in comparison with the size of the movement at the height of its anti-war expression.

Everyone had great expectations tho — that manifested as the Reagan presidency and dominance of neoliberalism.

I don't see much movement on the left in the US yet although it is very early in the game. The right is much better organized because it is billionaire funded, with all that implies.

I still think that Strauss & Howe and Ravi Batra have the trend right, and this is just the beginning of a social, political and economic transition that will occupy the next several decades globally. I am projecting the 2020's for it to hot up tho, catalyzed by the pressure of global warming and the need to shift to clean, renewable energy.

The power structure is based on money and energy, and both are in transition, which means that society is in transition.The type of money and the type of energy that emerges will say a lot about the type of society that will be built on that.

Ignacio said...

Well, I was talking mostly about western Europe, not the former soviet countries which are, at least in many places, a shithole (although not everywhere). But problems there are much more wide and entrenched, I wouldn't say it's comparable to western Europe.

I know because despite how bad situation is here, a lot of east Europe immigrants refuse to go back to their original countries. Is that bad, unfortunately.

Only very few people with certain professional profiles is going out of Europe to seek jobs abroad, the majority of the work force (specially under certain cohorts, ie. not young) is not emigrating outside and the pressure for reforms and different policies will continue. And increasing emigration intra-EU is mostly good, even if it's a by-product of a crisis created by misguided policies, and is only increasing a natural trend that has been going on over decades.

Summing it up, I don't know how entrenched is the problem in USA, but I believe in western Europe the push towards new policies and reforms is going to continue, and the 'beatings will continue until morale improves' neoliberal policies are extinguishing their political capital.

Not trying to say it's all gonna be good and well, but progress is going to be done within the current status quo without major revolution (silent revolutions, maybe, but we have had these a lot of times already). And some of the 'alternative changes' will increasingly get assimilated by the status quo to increase survival odds (like turning on the Internet would be suicidal) like it has been in the past (long time ans short time ago, like in the 60's & 70's, some of the attitudes back then have been assimilated by the majority of the population).

Tom Hickey said...

Ignacio, do you see a social democratic United States of Europe coming?

Tom Hickey said...

BTW, my experience of people that emigrated to the US from the core was because they found their societies to stultifying socially. These people were mostly professionals that could fit in pretty easily in the US.

The people that emigrated from from Eastern Europe and who are still emigrating or want to is due to lack of opportunity in those places, as well as rampant corruption.

Andre (Energy Change) Hardeman said...

Great conversation guys, I'm lovin it. I just want to say that alternative currencies may not be a fix all solution but its one hell of a great idea such for a young man like Drew to propose.

I hope you find time to read the entire book like I did. Alternative currencies may or may not "save the world" but a little action from "actionist" sure will take us further ahead than where we find ourselves at the moment.

One thing that I see many of us recognize is that the government always enters the conversation as the answer to our problems. It was even proposed earlier that government or President Obamas "Hope and Change" campaign would be our new let's say solution, fix-all, fix it, or hell "fix-some-of it".

I would like to say that people have learned from the process of the interaction of the Politics with the Government. People elect politicians to which those elections are influenced by lobbyist, and the lobbyist are influenced mainly by the corporations.

The problems people have are in their communities. The government can't do anything for those communities until it takes care of its primary concern of catering to multinational corporations, lobbyist, and maintaining the Military Industrial Complex. That's why whether it takes a "village currency" Dual or Quad system the mere act will make possible a new way to attract value to currency, or money. That the present currency can't do.

We have people willing to work, we even have highly skilled seeking jobs far outside of their education. And we have work that needs to be done. That's a simple job for currency to fulfill that many people should understand. Yet, it's just not happening because the DOW is soaring , corporate cash is flowing, the "Masters of the Universe" may not admit it but they are satisfied.

Ignacio said...

"my experience of people that emigrated to the US from the core was because they found their societies to stultifying socially"

Yeah it could be, agreed to a point, thought I don't really know if it would be much different in USA. there is a certain degree of social stagnation, lack of social mobility, and perennial problems. Individual experiences of any type are to be found in any place, a lot of educated westerns think that going to Asia is the future etc. But on aggregate levels, I'm sceptic of these arguments.

I have been working on North Africa last times and, if anything, it has changed my views respect western hegemony. I could say that as soon as western nations get their act together I'm pretty sure our nations will thrive again (the same way I never believed in Japan 'lost decade' and despite all the problems it continues to thrive in many things beyond any other nation in the planet).

So, we will have to wait and see, sure there is going to be tremendous economic growth in some places, but western nations will have to transcend that at some point and deal with other problems that are the result of a very productive society, whereas others are still solving the problems of increasing productivity.

As for a democratic united europe, well it will be that, or it will be going back to the old order, there is no in-between. We may have to see some drama happening, but eventually, we could have some sort of united states of Europe (at a smaller scale, Switzerland was the result of an experiment like that).