"A FLEET OF A THOUSAND COLONISTS are blown off course for weeks by a series of violent cyclones, eventually crashing onto the reefs of a large uncharted island. All of their ships and provisions are lost to sea. They wash ashore, all surviving the stormy night. As morning breaks they begin their search for water and possible food sources.1000 Castaways, Chapter 1: System One
"The survivors struggle in this foreign land at first. They collect crabs at the rocky tideline, forage along the dense forest-edge, and weave simple palm leaf baskets to collect the many unidentifiable fruits they find in the forest. Eventually they begin to be more successful at fishing and manage to get some shoots of wild yam-like tubers to sprout in small raised-mound gardens. Eventually they begin to have enough food and to build stronger, larger, and more permanent shelters. In time they have enough goods to live in relative comfort..."
Clint Ballinger
Clint argues in that draft chapter than privately issued money is beneficial because it enables loans to be made which fund capital investments. That’s debatable.
ReplyDeleteIt is easy to attain full employment given an adequate supply of base money: just issue enough of the stuff. Moreover, in a “base money only” economy people and firms will actually lend to each other – sometimes direct person to person and sometimes via banks, and that will fund capital investments. Thus it is entirely unclear what the merits of privately issued “fake dollars” are.
David Hume referred to the latter privately issued money as “counterfeit” 350 years ago, as did the French economics Nobel laureate economist, Maurice Allais.
Plus private bank issued money is a short term liability of those banks, and it is precisely “borrow short and lend long” that leads to bank failures. In other words, and not to put too fine a point on it, it was precisely the fact that we let private banks create or “print” dollars that lead ten years ago the millions being thrown out of work, plus thousands losing their homes and thousands of suicides.
I left a comment roughly along the above lines after Clint’s article, be he has not published it yet.
Hey Ralph, I don't see any pending comment from you, can you re post it?
ReplyDeleteI found it, don't know why it had gone to spam, its up now, thanks. Will reply when I can, cheers
ReplyDeleteHi Clint,
ReplyDeleteA lot of people and algorithms classify my writing as spam....:-)