avevale_intelligencer (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
avevale_intelligencer) wrote2014-04-04 01:53 am
avevale_intelligencer) wrote2014-04-04 01:53 am
Too big to fail
I've been sharing links on FB to an outfit called Positive Money UK, who believe as I do that the way we think about money, the way money is created, has got to change, and have some suggestions about how it could be done. I won't be doing so any more, because people who know more than I do about economics keep telling me they and I are wrong about this or that, and since I don't understand the arguments they use, and am not going to be becoming an economist at my time of life, I can't very well argue back. I assume that's the idea.
But we're not wrong about our main point. Money as we know it is founded on a false belief.
I've been told in all seriousness that "if a bank lent out more than it owned, there would be a run on the bank, people would demand all their money and the bank would get into trouble." I feel this shows a touching faith, a childlike naïveté, and a memory of having seen It's A Wonderful Life once or twice. I may be wrong.
If a bank has fifty customers, or five hundred, or even five thousand, that might be true; but no bank is that small now. Banks have billions of customers, assets in the trillions, and if all the people went to them demanding their money, they would simply say "You silly people. Of course we aren't going to give you your money; why should we? Go away and sit quietly and think about how badly you've behaved, and maybe one day, if we feel like it, we will let you come and look at your money for a little while."
Perhaps I exaggerate a little; but the point remains. People still like to think in terms of a world where the ideal position for an individual or a business is to finish the year owing nothing and a little better off than they were last year, and maybe some people actually manage to live that way; but this ignores the fact that in the world there is a vast pyramid of people at the top of which live four or five men whose continued enrichment depends on the fact that most of us owe more than we own and continue to owe more every year. They do not care about ideals, or common sense, or fairness, or sanity; they only care that we continue to be in debt, because debt is their business, and business is very good. They are the bankers; and you can talk about the reason for spiralling debt being to do with ordinary people being lazy, or stupid, or greedy, or whatever other nasty name you want to call them, but that is simply doing what they want you to do. The world's economy is based on ever-growing debt, because they, the bankers, wish it so; and nobody can touch them. If they ever do get into trouble through their own stupidity, or laziness, or greed, we (in the person of our governments) go to them and apologise to them and give them money till they are all right again, and they accept this as no more than their due.
They are too big to fail. Too big to fight, too big to argue with, too big to impose rules on, too big to vote out of office, too big to be affected by anything we may do or say. And they have got that way by the simple fact, acknowledged by the Bank of England, that they have created nearly all the money in circulation as debt; they have lent us, and our businesses and our governments, money that represents no substance and no human labour, that they have created by pretending that it existed, and demanded interest from us for doing it, and we have paid it back from our substance and our human labour and will continue to pay it, and they will go on doing it indefinitely unless this power is taken away from them.
And if you think that is a right way, or a sane way, or a fair way or a just way, to run any kind of economy, then it is you who are wrong; and that is an end of it.
But we're not wrong about our main point. Money as we know it is founded on a false belief.
I've been told in all seriousness that "if a bank lent out more than it owned, there would be a run on the bank, people would demand all their money and the bank would get into trouble." I feel this shows a touching faith, a childlike naïveté, and a memory of having seen It's A Wonderful Life once or twice. I may be wrong.
If a bank has fifty customers, or five hundred, or even five thousand, that might be true; but no bank is that small now. Banks have billions of customers, assets in the trillions, and if all the people went to them demanding their money, they would simply say "You silly people. Of course we aren't going to give you your money; why should we? Go away and sit quietly and think about how badly you've behaved, and maybe one day, if we feel like it, we will let you come and look at your money for a little while."
Perhaps I exaggerate a little; but the point remains. People still like to think in terms of a world where the ideal position for an individual or a business is to finish the year owing nothing and a little better off than they were last year, and maybe some people actually manage to live that way; but this ignores the fact that in the world there is a vast pyramid of people at the top of which live four or five men whose continued enrichment depends on the fact that most of us owe more than we own and continue to owe more every year. They do not care about ideals, or common sense, or fairness, or sanity; they only care that we continue to be in debt, because debt is their business, and business is very good. They are the bankers; and you can talk about the reason for spiralling debt being to do with ordinary people being lazy, or stupid, or greedy, or whatever other nasty name you want to call them, but that is simply doing what they want you to do. The world's economy is based on ever-growing debt, because they, the bankers, wish it so; and nobody can touch them. If they ever do get into trouble through their own stupidity, or laziness, or greed, we (in the person of our governments) go to them and apologise to them and give them money till they are all right again, and they accept this as no more than their due.
They are too big to fail. Too big to fight, too big to argue with, too big to impose rules on, too big to vote out of office, too big to be affected by anything we may do or say. And they have got that way by the simple fact, acknowledged by the Bank of England, that they have created nearly all the money in circulation as debt; they have lent us, and our businesses and our governments, money that represents no substance and no human labour, that they have created by pretending that it existed, and demanded interest from us for doing it, and we have paid it back from our substance and our human labour and will continue to pay it, and they will go on doing it indefinitely unless this power is taken away from them.
And if you think that is a right way, or a sane way, or a fair way or a just way, to run any kind of economy, then it is you who are wrong; and that is an end of it.