| Subject: | Re: [socialcredit] Re: the credit theory of money | | Date: | Friday, November 26, 2004 16:24:20 (-0700) | | From: | martinh <martinh @....net>
|
For heaven's sake! "Rent" "Profit" "Interest"and "Dividends" are all very
different things, with technical economic meanings. Please don't sow
confusion.
Rent, in particular, is income that comes from the ownership of a property
or natural resource, rather than from human activity. This is possible
because such assets can make human effort more productive, and therefore
have more value.
I believe that one of the areas that GJM should be very concerned about is
the concept of a fair distribution of the unearned "rental" income in
Society that comes from the ownership of assets. I deal with it on my
website at www.edmc.net/~martinh/richpoor.htm.
Martin Hattersley: 1970-10123-99 St.
Edmonton, Alberta, Canada T5J 3H1
Phone:(780)423-4081 Fax:(780)425-5247
Website:http://www.edmc.net/~martinh
e-mail: "martinh@edmc.net"
On Fri, 26 Nov 2004 william_b_ryan@yahoo.com wrote:
> >[RESPONSE] And here we have the absurdity that
> >"mortgages, consumer loans and rent seeking" are
> >"unproductive" ipso facto.
> No, just that contrary to your claims, they are not
> ipso facto productive, and in fact are often not
> productive.
> -----------------------
> ---------------------
> [11-26] I didn't say they are "productive" ipso
> facto. I disputed the assertion they are
> "unproductive" ipso facto. Perhaps you should look
> up the meaning of "ipso facto."
> ---
> >>[REJOINDER] Duh? Are you really so clueless? Of
> >>course they pay less than the rate they charge.
> >>Banking is a business.
> >
> >It is a rent seeking "business," not a productive
> >one. You evidently do not know the difference.
> >-----------------------
> >[RESPONSE] But entrepreneurs "seek rent." That's
> >what they do.
> No. Some seek to produce.
> -----------------------
> ---------------------
> [11-26] Evidently, in your peculiar jargon, "seeking
> rent" is ipso facto "unproductive" and a form of
> theft. Again, you need to look up the meaning of
> "ipso facto" to know what I just said.
> In the English language, I am informing you, the
> terms "rent," "profit," "dividends," "interest"
> relate to different aspects of the same phenomenon.
> Economists use the terms pretty much interchangeably
> depending on the context. It would be helpful if you
> would learn the conventions of the English language
> rather than relying on "definitions" from money
> cranks and extremists. In the free economy, "rent
> seeking" simply means entrepreneurial initiative.
> They attain "rent" through innovation that increases
> the quantity, variety and quality of the goods and
> services they supply from the perspective of final
> consumers in competitive markets. In respect to
> bankers, it is their share of the increasing wealth
> they help create through the financial services they
> supply. That is at any rate the theory as opposed to
> the "statist" theory you seem to espouse.
> ---
> >>>>Sales of goods and services to consumers
> >>>>commence the "reflux" back to the banks in the
> >>>>lending-investing-amortization cycle. The
> >>>>informational feedback mechanism from consumers to
> >>>>entrepreneurs and their financiers is profit-loss.
> >>>
> >>>That would be true for investment banks that created
> >>>no money and effectively just acted as agents to
> >>>their depositors, like mutual funds.
> >>>---------------------------------
> >>>-------------------------------
> >>>[REPLY] It is true for all banks.
> >>
> >>Wrong. There is a difference between lending money
> >>as an agent for its owner and creating money ex
> >>nihilo in order to obtain interest on it.
> >>-------------------------
> >>----------------------------
> >>[REJOINDER] Again, assertion without argument.
> >
> >??? What "argument" is needed to support a self-
> >evident fact?
> >-----------------------
> >-------------------------
> >[RESPONSE] It is "self-evident" to a self-educated
> >ideologue too stubborn to learn or even to listen. I
> >say "self-educated" because you couldn't have picked
> >up the peculiar jargon you are exhibiting from the
> >formal economics curriculum at any school that I am
> >aware of, or at any rate any school with
> >accreditation. I suppose there are unaccredited
> >"Marxist" or "Georgist" "schools" that spout such
> >nonsense.
> So in your view, there is no difference whatever
> between creating money in order to charge interest on
> it and acting on commission as agent for the owner of
> pre-existing money??? In the context of the history
> of banking and currency, such a view is plainly
> idiotic.
> -----------------------
> ---------------------
> [11-26] You should look at the Innes papers for a
> different perspective on the historical narrative,
> which Hummel very tersely summarized in the
> initiation to this thread. The papers are archived
> at
> http://www.geocities.com/new_economics/innes/
> and elsewhere on the Internet. My argument is
> consistent with Innes's thesis, which is certainly
> not "plainly idiotic." It may be disputed, but it is
> not idiotic. Innes makes a persuasive case that
> takes more than simplistic assertion like yours to
> rebut.
> As to the answer to your question, there is division
> of labor in the financial sector. That division
> could in concept be under one roof called a "bank,"
> or under two roofs called "bank" and "savings and
> loan," etc. The "banks" could in principle be
> prohibited from keeping anything but "checking"
> accounts for depositors, and the "savings and loans"
> could be prohibited from keeping anything but
> "savings" accounts for their depositors. Such an
> arbitrary demarcation would not change the
> fundamental creditary nature of market economies.
> All bankers no matter what they are called
> intermediate between creditors and debtors by
> becoming creditors and debtors to their customers.
> The modern concept of money is broader than the
> specific form of money that people receive in their
> pay vouchers. Poorly informed people think in terms
> that what they receive in their pay vouchers is the
> quasi-commodity "medium of exchange." In reality
> they are mere "tickets" redeemable in the retail
> market. General fungibility (without which
> competitive markets could not exist) requires that
> bankers cooperate among themselves; making banking a
> natural monopoly that is most efficient in supplying
> the service it provides to the extent it is a
> monopoly. Being a monopoly, it must be regulated by
> an independent authority so its privileged but
> necessary position is not abused. Modern industrial
> civilization does not operate through a "medium of
> exchange."
> Transactions between producers supplying the retail
> market overwhelmingly involve offsetting balances
> involving debits and credits in the books of the
> banks following the rules of double-entry (accrual)
> accounting.
> Profit (rent, interest) in double-entry accounting is
> not the measure of the net gain of some arbitrarily
> specified commodity (like gold coins) or quasi-
> commodity (like Treasury notes), but the operational
> increase in the differential between assets of all
> types and liabilities.
> -
>
>
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