Can Congress Create Money?

Every now and then we get into “one of those” arguments.  You know what we mean.  The person who starts the argument or inserts him- or herself into it knows why everything you’re saying, have said, or ever will say is totally and completely wrong, wrong, wrong.  Why?  Because it doesn’t agree with whatever preconceived notion he or she came into the fight, er, discussion with.

Rally at the Fed: Green Money, Green Growth

Yesterday we pondered the eternal question: how can we avoid the twin evils of capitalism and socialism, and yet still have an economically just society in which no one is enslaved to savings?  The answer (of course) is “By creating new money in ways that create new owners.”  The next question is “How are we going to get them to do it?”

Are Rights for Everyone?

Yesterday we gave in very broad outline some of the monetary reforms that will be required to implement Capital Homesteading.  Perhaps the biggest reform, however, is in people’s thinking about money.  Most people are absolutely convinced that the only source of money for new capital formation is existing accumulations of savings, which by definition are a monopoly of a private sector élite (capitalism), or the State (socialism).

Reforming National Monetary Policy

Last Thursday we closed the daily posting with the eternal question, “How can we use what we know to make every child, woman, and man into an owner of capital?” and promised to look at it on Monday.  Well, it’s Monday, so here goes —

News from the Network, Vol. 9, No. 12

Yet another week filled with some important news items:

Financing Expanded Ownership

Yesterday we looked at how Louis Kelso proposed to restore Say’s Law of Markets, the economic “law” that says as a rule if you want to consume, you have to produce.  The restoration of Say’s Law, of course, makes no sense to anyone who thinks that labor alone is productive, for Jean-Baptiste Say assumed as a given that labor, land, and other forms of capital were all productive; limiting production to a single factor flew in the face of his common sense.

Restoring Say’s Law

Yesterday we looked at Say’s Law of Markets to gain insights into the true nature of money.  We realized that — all other things being equal — the only way to consume is to produce, and that in order to consume what others have produced, we must produce something ourselves to offer in exchange.  The medium by means of which we carry out exchange we call “money.”

Say’s Law Again

The main issue we raised in yesterday’s posting was where are people supposed to get the money (also known as “moolah,” “filthy lucre,” “long green,” “the ready,” “dosh,” “dough,” “bread,” “funds,” and a bunch of other terms we’re too lazy to list just to make a point) with which to purchase the advancing capital that is displacing them from production at an accelerating rate.

The Perpetual Motion (Political) Machine

One of the few things a couple of people remember about high school physics — apart from how to build catapults to hurl frozen pumpkins into the air — is that neat stuff like time travel and perpetual motion is impossible.  They both violate the second law of thermodynamics: for a thermodynamically defined process to occur, the sum of the entropies of the participating bodies must increase.

News from the Network, Vol. 9, No. 11

The gamblers are ecstatic: the stock market is having its best quarterly rally since 1933!! . . . you know, when the country was on the skids, there was high unemployment, Keynesian economics was artificially inflating prices by backing money with enormous amounts of government debt and concentrating economic power in the State, the Spanish Civil War was about to start, the Japanese were about to invade Manchuria, Hitler had just come into power, and the country was about to enter the “Depression within the Depression” . . . what was there to worry about?

Do We Need the Rich?, IX: Rally at the Fed

Yesterday we looked at the role of the central bank and discovered that, far from being a conspiracy, central banks fill an essential role in a sound financial and economic order, particularly in providing an adequate, stable, and elastic reserve currency for economic growth and private sector development.

Do We Need the Rich?, VIII: About That Central Bank. . .

In yesterday’s posting we saw how commercial and mercantile banks create money.  They do it the same way anybody can create money: by accepting mortgages and bills of exchange, trading their promissory notes for the contract, thereby creating asset-backed money.  So why should we have a central bank, if commercial banks, even people by themselves without banks, can do the trick?

Do We Need the Rich?, VII: How to Make Money

Yesterday we addressed the rather obvious point that you can’t destroy rights for some in order to restore rights for others, especially private property.  To argue that the rich should have their presumably ill-gotten gains taken away simply because they’re rich — which is taken as de facto proof of wrongdoing — simply makes all property insecure.

Do We Need the Rich?, VI: How to Circumvent Existing Wealth

Last week we noted that, while we need a rich child, woman, or man as much as we need any other human being — there is nothing specially good or exceptionally wicked about being rich that makes any rich individual better or worse as a human being — we can get along very easily without their money.

News from the Network, Vol. 9, No. 10

Once again this week we have some very interesting news items, so (instead of offering obvious comments about the wild swings in the stock market) we’ll get straight to them:

Do We Need the Rich?, V: How Future Savings Emancipates

So far in this series we’ve seen how past savings enslaves, and we’ve mentioned how future savings emancipates — but we didn’t say how future savings does the trick.  It’s all very well for a magician not to reveal his secrets, but a financial wizard who is interested in economic democracy had better be a little more forthcoming . . . especially when the “secret” is how to turn non-owners into owners without harming existing owners.

Do We Need the Rich?, IV: How Past Savings Enslaves

Most people today simply take for granted that the only way to finance new capital formation — and thus widespread capital ownership — is through past savings.  That means that you need someone or something who is so rich that he, she, or it can afford to finance new capital formation without having to suffer for it, and the more expensive capital becomes as technology advances, the richer they have to be.

Do We Need the Rich?, III: Faith & Reason

Yesterday we saw what can happen when you put faith and reason in opposition to each other when trying to decide whether other people are guilty, guilty, guilty . . . or just different from you in things that don’t really matter . . . such as how much money they do or don’t have.

Do We Need the Rich?, II: Faith v. Reason

Last week we applied our reason to the task of deciding whether or not we “need” the rich as human beings and thus as members of society — political animals — on the same basis as everyone else.  Thinking very hard (you probably smelled the smoke from where you are), we concluded that — on the basis of human reason alone — that the rich are no different as human beings than any other human beings.

News from the Network, Vol. 9, No. 09

This week we again have some very interesting news items, so we’ll get straight to them:

Do We Need the Rich?, I: Be Reasonable

Socialists and capitalists both claim that “the rich are different” — to which the proper Just Third Way response is (with apologies to Papa), “Yes.  They have more money.”  Or, actually, they have more access to money and credit for the proper purposes.

The Crisis That Need Not Be, IV: Rally at the Fed

Yesterday we concluded the posting with a promise to tell you what you might do to advance the effort to implement Capital Homesteading . . . aside from being independently wealthy, running for president, and persuading Congress to pass the necessary enabling legislation, that is. . . .

The Crisis That Need Not Be, III: Transcending Greed and Envy

Yesterday we asked the eternal question, How can ordinary people who lack existing savings and don’t have the capacity to cut consumption in order to save acquire capital ownership without taking anything from existing owners?  Of course, regular readers of this blog know the answer, but we might get someone who came in to get out of the rain and got interested.  It bears repeating in any event.