I took a long walk the other day and as often happens in such situations I became lost in thought. I mean, really lost, unable to stop thinking and unable to reach any real conclusions, as if the process of thinking was sufficient unto itself. Maybe it is.
The subject was, once again, money. The effort was to try to understand different and conflicting points of view on the subject, to see if some potentially mutually agreeable alternative could be reached. Maybe. Who knows?
Broadly speaking there are two, or maybe two and a half, viewpoints about money, in the sense of money’s origins and nature. One favors a central bank and “money” that is ultimately, and at bottom, a debt from one party to another, so that socially speaking, money expands and then abounds right along with borrowing and lending. The other favors money that is ultimately an asset, a commodity such as gold or silver, such that money remains relatively constant in quantity and cannot expand at all without production of some sort, such as digging gold out of the ground. There’s sort of a middle approach, exemplified by the Ellen Brown crowd, which regards money as something a sovereign can issue at will and needs no further value than that prerogative itself. This middle approach is much more similar to the central bank option than the commodity money approach; that’s why I said two and a half.
The readers here may have gleaned that I favor the commodity approach, but that’s not the subject here. The questions I pondered over my long walks had to do with finding both favor and fault with the alternative monetary approaches.