A regular commenter here – Zarapheth – and I do not agree, but in disagreeing he makes valuable contributions to the discussion here:
The problem with the monetary system is just a small piece of a larger problem.
Yes and no. The monetary system has indirectly resulted in huge distortions and maldistributions in the economy, and fixing the monetary system by itself will not directly address that, of course. But I have never suggested that fixing the monetary system is a panacea. In fact, I have suggested fixing the monetary system only in conjunction with a debt jubilee; but even both of these done at the same time won’t make heaven on earth.
The debt jubilee addresses the maldistribution issue directly and without force, by simply declining to have government force used to enforce existing debts. This amounts to a collective wealth transfer from debtors to creditors on a vast scale, unlike anything else in modern times, but due to the limitations of what the law can do, it paints this picture with an extremely broad brush. The virtue of it is that it just leaves everything where it is and subjects no one to compulsion. But this is a very important virtue politically, socially, economically and intellectually. Don’t give it short shrift.
Problems will therefore remain – serious problems, even – but people will be free to deal with them and the rules for doing that will have been greatly improved. Currently, the rules are incoherent due to the incoherence of the monetary system. Restoring sanity to the monetary system is only the first step, or perhaps it would be better to say it’s like a pre-condition for dealing effectively and justly with the problems at all.
Put yet another way, fixing the monetary system doesn’t solve all the economic problems, but it is a sine qua non of solving them.
The monetary system comes from and gains its whole value from the community as a whole.
In many ways this is the nub of the disagreement between me and Z. Z may or may not realize this, but this is exactly the same position taken by the current regime. This is the basis of the system we currently have, the same system that has resulted in the seemingly insoluble financial crisis.
What’s wrong with it? Just this: human beings have no legitimate conjuring powers, either individually or collectively. No one can create value by decree, or magic, and no ipse dixit can make it otherwise. Whether it’s medieval alchemists, a banking cartel with a Princeton economist acting as its point man, or a General Assembly from an Occupy encampment, or the King, or the Pope, or the community as a whole, the power to conjure gold out of lead, or to make something out of nothing does not exist, or if it does it does not belong to any human being or group of them.
Yet this is the basis of our monetary system now, and Z seems to be in agreement with it. It is as if by decree we could say that a meter or a gallon was one thing today and a completely different thing tomorrow, with each being a true measure by virtue of simple fiat – ipse dixit. This is a tyranny of whim, the tyrants themselves being fungible. Sound familiar?
Though fixing the monetary system will help the economy, we must also fix ownership of land and natural resources, along with ownership and control over all other community derived privileges.
If land and natural resources are “community derived privileges”, then they cannot be “owned”, other than by the community, which is to say no one in particular. This would be socialism, or a variant of it. I tend to think of socialism as a failed social experiment of the 20th century that took place primarily in the Soviet Union.
Inasmuch as “centralized money and credit” was a plank of the communist manifesto, and properly so, it would appear that socialism and a coherent monetary system are incompatible. Socialism depends in large measure upon the very idea that a coherent monetary system would reject: namely, that money is a function of the collective will, rather than subject to the natural world and the natural order like everything and everyone else.
In the end, Z votes for tyranny; he just wants to change tyrants.