- chris ritchie
- Manchester
- United Kingdom
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What other systems could society use, rather than a Monetary System?
Looking at the world today, everything seems to revolve around the economy. This causes mass amounts of people to be incredibly poor, a lot more so than incredibly rich.
Why CAN'T everyone have the same.
Looking at it the big picture, the Monetary system clearly is'nt working, so what else can we do?
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Lejan . 30+
- Installing mechanisms to prevent wealth to accumulate individually and locally
- Change or system of values towards less vanity, greed and claim for power
- Banish gambling and betting from economical interaction
- Redirect value back into the 'making' instead of its 'trading'
- Banish the concept of interest rates
- Banish virtual value
The concepts are there, it is the implementation were the problem lays.
The monetary system itself is not the problem, its the rules we allowed to form within.
Krisztián Pintér 200+
Lejan . 30+
Let me try to make this understandable. If the worldwide monetary value would be worth $100. Now half of the population would lend the other half money with an interest rate of 5%, one year later the overall value of the monetary system could increase to a maximum of $105. Where does this $5 come from, as in this whole interaction nothing but virtual value got produced? As a monetary system can only represent its underlying sorce of material 'resources' it outbalances itself by this virtual part.
If you would have borrowed a book from your friend instead - 100 pages thick - first, it is most likely that he did not expect you to add 5 extra pages when you returning it - I would reconsider this friend if he would :o) - and if he did, the pages you are then giving to him would be real in their value, as they exist materially.
Due to the creation of this virtual value we can and will observe the existing economical system collapse on a regular basis.
I have always wondered why only money is allowed and therefore capable to reproduce itself out of itself. Matter can't do this and this is why the laws of physics do not collapse on themselves.
So if we would ban this virtual value come to existence, it would lead to more reliable forms of global economic trades. And remember, 'interest rates' are not more than a man made concept and can therefore be changed at any time. And if they proof to be harmful to people, I support they should be changed.
Krisztián Pintér 200+
1. you claim that i don't know what is good for me? because i agreed to take money at 5% interest. but you somehow know better what is good for me? how do you know? maybe i can jump start my business with it, and have 20% yield on the money. maybe it will save the life of someone i love. maybe it will save me from a grave situation. 5% seems to be a good price to me. but you say i'm engaging in some evil activity, and i should not do that.
2. you seem to claim that lending money at interest is an evil thing to do, and friends don't do that. i lent money for interest to my friend. so you seem to claim that i'm evil, i exploited my friend. but he seemed to be happy to me with his new car, which he should not wait another year to get. so i believe i was cool, as opposed to evil or exploitative.
3. you also seem to claim that such behavior leads to collapse of the economy or things of that nature. i fail to see how could my actions possibly hurt anyone. explain.
Lejan . 30+
the simplified example I have given was neither meant nor intended to disturb you nor to accuse you of having any evil intention. So I apologize if it did.
I was heading for the general concept of interest rates only and took on your example which may have caused this misunderstanding.
The given fact, that I loan money to my friends without interest rates proves my concept that there is no necessity to it. So what you think I may think about you doing differently, is up to you, as I am not going to judge your actions. I just know, there is no necessity to it, that's all I am stating.
The example you have given of saving someones life by taking on a loan, has, unfortunately proofed itself to become bitter reality for those who were not able to do so, just because they have not been granted 'creditworthiness' in a system, which do not support general and free health care. As much as I know this topic has caused endless debates in the US and still is today.
That the concept of 'interest rates' is capable of leading economies into collapse can be seen at the given financial crisis within the US and Europe and as much as I have seen, people are getting hurt by it.
Krisztián Pintér 200+
there is no necessity to drink orange juice either, but you don't want to ban it, do you? if you don't want to lend at interest, fine for me. if you want to borrow for free, and you can find partner for it, fine. but why should that limit me?
i believe la trappe dubbel is a good beer. not everyone can afford it, but it does not make it any worse does it? or for example a cancer drug, or a comfortable car, they are all valuable, though not available for everyone. a loan of USD120,000 is a (or can be a) good thing, though not everyone can afford it. why would that be a problem? how health care come into the picture, i honestly have no idea.
interest rate is as old as history. yet, many empires and countries thrived. so it is not very justified to blame the fall of some on interest. for one example, the current economic crisis can be blamed on *too low* interest rates.
for interest rate has an economic meaning. just like price, interest rate delivers information about the scarcity of the item, in that case, savings. interest rate tells investors how scarce savings are, so how profitable an investment has to be in order to be worthwhile to invest in. set the interest rate too low, and investments start to happen that are unnecessary, and generate a negative value at the end. that's why the US have built thousands of houses now empty. given the low interest rates, it seemed to be a good idea. but it turned out to be a waste of resources.
pat gilbert 50+
"- Change or system of values towards less vanity, greed and claim for power" Do you propose vanity police? If so they should make their headquarters at the beltway.
"Banish gambling and betting from economical interaction" So do away with the stock market?
"Redirect value back into the 'making' instead of its 'trading'" So we now have to make everything that we use every day ourselves?
"he monetary system itself is not the problem, its the rules we allowed to form within." So fractional banking and fiat money are fine?
Lejan . 30+
You mean put an end to private property?
No. But it can be more reasonable than it is and by this I mean limitation. Of course those limits are discussible and not static for all times, yet I can not really see any good reason why some people have millions of dollars on hand while others die of starvation. Do you?
Do you propose vanity police?
No. But I find the role models we created are mainly based on advertising strategies instead of a more humanistic view on this world. Less superficial more substancial values I propose.
So do away with the stock market?
Yes. It proofed itself worthless in creating reliable and stable markets. It creates virtual value without any substancial equivalent. It reacts emotionally, hypernervous and irrational and I don't wan't the world economy be steered by this. If my taxi-driver was this way, I would leave the cab, wouldn't you? And as long as computer programs are making millions of dollars by differences in virtual values in between milliseconds, we truly lost any porpotion!
So we now have to make everything that we use every day ourselves?
No. But I do not see any good reason why a woman in a sweat-shop in Bangladesh who makes a T-shirt selling for $20 in the US or Europe, is the last in the chain of profit and get's a ridiculous fraction of it's selling price. Also here we need a new understanding of participation and fairness. In Germany we have a saying 'The gold is in the trading' and I always wondered why this is still getting accepted.
So fractional banking and fiat money are fine?
No. This actually is the core of the problem.
pat gilbert 50+
Yes there is no evidence that you can take from those who have more and give to those who have less without reducing everyone to squalor. please read the 2 comments by Zdenek Smith in this thread. On the other hand China's annual per capita GDP has gone from $500 to $7500 over the past 10 years.
"But I find the role models we created are mainly based on advertising strategies instead of a more humanistic view on this world. Less superficial more substancial values I propose."
Who is going to decide this?
"Yes. It proofed itself worthless in creating reliable and stable markets. It creates virtual value without any substancial equivalent. It reacts emotionally, hypernervous and irrational and I don't wan't the world economy be steered by this. If my taxi-driver was this way, I would leave the cab, wouldn't you? And as long as computer programs are making millions of dollars by differences in virtual values in between milliseconds, we truly lost any porpotion!"
The very core of job creation is investment in small business of which the stock market plays no small part.
"In Germany we have a saying 'The gold is in the trading' and I always wondered why this is still getting accepted."
Because it is true:
http://www.ted.com/talks/lang/en/matt_ridley_when_ideas_have_sex.html
"No. This actually is the core of the problem."
On that we agree
Lejan . 30+
Also I would rather drive a car, which was designed to last and to be as 'green' as possible in its production and use. The technology in cars we are using today could be far more advanced than it is, yet 'the market' itself has no interest in it. Things have to break down to get replaced by new ones to perpetuate the wheel of demand. And the bill for this is written day by day.
'... A scale is irrelevant.'
No pie is growing out of it self, it is the effort of many hands to get it done. And to stay in the picture I have given before, the woman in the sweat-shop is getting the least for the creation of the product she produces, aside the woman (or men) who made the fabric and the ones picking the cotton. And as long as the purchaser at e.g. Macy's, who spend mayby two hours of getting the deal done is earing more on each T-Shirt than the sweat-shop lady and the whole chain down the line of the raw-materials, the system istelf is not in a fair balance. If it was, why does so many swet-shops do not have labor unions?
...Very few people remain in either the top quin tile or the bottom quin tile for many years.
I do not know the expresion 'quin tile' but I figure it sympolises some sort of position within a system. On this I am afraid there are real 'flesh and blood' people in despair by the given rules of our global economy. And so far I have never seen a top manager who lost his job facing hunger, wheras the lower 'tile' people often do.
... This is complete crap I can explain but you probably quit listening?
I would not quit listening, yet I would probably doubt your explanation.
pat gilbert 50+
Can you demonstrate what you say about car technology? Your opining doesn't count even if it is very certain. (what German is not very certain?)
No Pie is growing by itself but the fact is certain key players have contributed much more than others Would we have as cheap as energy as we have now if not for Rockefeller or Edison, as advanced of automobiles .if not for Ford, be as smart if not for Larry Page and Sergey Brin. Yup they deserve more money than the girl in the sweat shop. But note that girl is working there because that is the best deal she can make therefore is doing better there than she could otherwise. I read a magazine article this morning that indicated that by 2015 the labor advantages of manufacturing in China will be gone by 2015 and they have coined a new word "re-shoring".
Quin tile is easily looked up thanks to the aforementioned Google. At any given time most people will suffer and most people will move out of the lowest quin tile. In fact the only time they do not is when the very certain do gooders pay them for being in that quin tile at which point they camp out at that level. This is the same reason the park service does not allow you to feed the animals as they then become dependent on others and do not learn to live for themselves.
If you still want to hear the explanation on statistical crap let me know otherwise I don't want to waste my time.
Lejan . 30+
You arre right, I am talking about equality.
Concerning the free market we will not converge in our views on it, as I do not share the widespread acceptance that consumer control the market. They could, and therefore a lot of effort is spend on confusion (e.g. phone contracts), disinformation (e.g. light products), suggestion (commercials) and censorship (e,g. Fukushima). 'Free' to my understanding looks different. There are also other effects of group behaviour which does not make a market 'free'.
I have met many Germans who are not certain, but to give you an example on car-technology there is to say, that there are oil filter who would make it needless to change the oil of the engine. Calculate yourself what this would mean to the oil industy and if they would like this technology released to the 'free marked'? This market is not free, it is a place of interest and as bigger you get, as more you can influence it. But also here our views will not converge.
You are twisting my example by comparing Edison with the girl of the sweat-shop. And the fact that she has no other choice but to work there does not legitimize her payment, yet causes it. Yet back to your argument. Does Edison or any other inventor or founder deserve more money than his employees? Yes, they do and should (see incentives), yet the difference became ridiculous. To me this is a matter of proportion, which got out of control. The effect of the 're-shoring' you talked about will be interesting to watch and I hope it will be beneficial to many Americans.
Google did not give me any useful result on 'Quin tiles' and even Wikipedia did not help. This may also be related to the fact that I am no native English speaker and that my translation program did not answered my query. So thank you for the translation and your example which I finally was able to understand.
But you can save your time on the statisticals.
pat gilbert 50+
I will leave it at this and give you the last word.
Lejan . 30+
Which is a good thing and was hard worked for. But also China shows the perversion of super-capitalism, as it created a number of super-rich people to the burden of the others. And if this and corruption could be eliminated I am quite sure the average could be more than $7500 today.
(role model) Who is going to decide this?
Who is deciding it now? Big advertising budgeds! I am certain that after 3.5 billion years of evolution we can do better than that. We already have all the ethics needed, it is that they are not getting promoted.
The very core of job creation is investment in small business of which the stock market plays no small part.
And by which those jobs are getting outsorced into 3rd world countries to increase the shareholder value. Leading to swet-shops and such. No, I am convinced that small businesses can be supported in a much more efficient way to create and also to sutstain their jobs.
(Gold in the trade) Because it is true.
We may have a missunderstanding here. I am not against trading, on the contrary, I am aginst the given distribution of the benefit which is gained in trading. This German saying states, that you are making more money in trading goods than you can make by producing goods. And this can be quite 'off scale' to any good purpose.
It may not became clear enough. I am aginst the perversion, the extremes in our given economy,
not against the economy itself. And the extremes are increasing to the disadvantage of the majority of the people. And this I do not accept.
pat gilbert 50+
Advertising creates interest in their products which is the opposite of government that by definition is using force on people to tell people what those who (with great certainty) "know best" have decided they have to do.
Jobs that are outsourced create more jobs through comparative advantage that is explained in the video. Since value is created by the virtue of the exchange why shouldn't it be more commensurate? Which brings up another point this evil rich guy has grown the size of the pie he has increased everyone's standard of living so he is not taking his wealth from anyone. A scale is irrelevant.
The extremes are a category they are not real flesh and blood people. This fallacy is created by politicians and is specious. Very few people remain in either the top quin tile or the bottom quin tile for many years. Real flesh and blood people will occupy many categories over their lives.
Additionally through statistic manipulation the politicians have shown the rich in U.S. to have increased their wealth many times over the past 20yr or so over the middle class. This is complete crap I can explain but you probably quit listening?
Zdenek Smith 100+
I think there needs to be a balance so that wealthy are not getting wealthy beyond reasonable level while being rewarded for their important contributions. We also need more transparency in the banking sector and introduce accountability by business leaders?
pat gilbert 50+
We just need to get government out of banking. We now have banking controlled by government. We are suppose to have a profit AND loss system which means if you want to make bat shit crazy investments go for it but when you go get stung YOU get stung.
Lejan . 30+
Completely agree with you on your 'YOU get stung'. Yet I do not 'fear' as much the involvement of the government within the market. I also do not believe in the self-correcting principles of a free marked, as especially the most recent crises proofed that it is not working. Also the tendency of forming monopolies is a sign, that a free market will serve towards the good for the people.
Capital is greedy in its nature and therefore has to be tamed. For governments and its potential for improvements we two could probably open and fill many separate threads on this site... :o)
pat gilbert 50+
Can you give me some examples of monopolies with out government help if even then?
Capital does have to be controlled. By the one devise that is irreducibly simple and infinitely complex simultaneously the FREE MARKET. Sorry Jan-Bernd but you are not qualified to do this job.
Lejan . 30+
Oh yes, we have definitively seen what qualified people have managed on the capital market. I salute and bow my head in awe.
For the sake of our controversy I wish to have your faith in your FREE MARKET, but I judge any system by it outcome and by this the free marked failed to make me believe in its self-correcting mechanisms. Bubble after bubble creates itself out of thin air, no substance at all, and burst sometimes that hard that whole nations with all their people get shoken by it. If all these tradegies would only affect those who caused the problem I would be on yout side. But they are not and this is what makes me think different.
Regarding Hitler, I liked your I know comment. And most likely I would not have been worried at that time like most Germans have not. But to me there is a difference in between a government within a dictatorship and the government of a democracy, in which our nations live today. And as I said we could easily go on for hours in dissecting the problems in democratic systems, yet to me this is the best form I can think of and therefore I wan't the market, the capital be controlled for the good of the people and the trading.
Lejan . 30+
Somehow I can not directly reply on your comments, probably because of the way these comments are interlaced, so you can find another comment on yours at the end of this page regarding the CAR.
Lejan . 30+
If you are granting me the last word, I hope I will choose it wisely.
If it comes to people and fairness I am aiming as high as I possibly can, as compromises are a part of any democratic process and thus will be cut down to a certain extent.
By doing so I am not afaid to become idealistic, never was and hopefully never will be, as I do not consider Idealism a bad thing if its intention is for the good of all people.
This world we all live in is only as good as we make it, day by day.
If it comes to people and fairness, the principles of logic not always apply and I am glad they don't.
Logic by its very own nature operates free of any humanity, thus it should be used gently in this matter.
If the chances of your or mine cancer treatment - god fobid - will ever be on its lowest chance of success, it would not be logic to try, yet we would be thankful if we were granted to try.
And hey, what do you think Robin Hood was good for as a role model in our childhood? I am certain it was not only meant to spark the urge for green leggings ... :o)
Zdenek Smith 100+
Lejan . 30+
Where is the free will and who will decide what is a good rule and what is not?
The decision of the quality of a rule is its outcome. If a role does not work, change it. If a role has imperfections, improve it. This is called optimisation if we choose for it based on our free will.
The recent collapses we have seen in the US and in Europe shall not make us re-think the principles of our economy? This I would consider the loss of our free will for the sake of invariability.
pat gilbert 50+
Zdenek Smith 100+
Capitalism has problems but it is the best we currently have?
"Where is the free will and who will decide what is a good rule and what is not?"
In terms of ethics and morality UN Declaration of Human Rights is universal framework. In terms of concrete rules we need courts, politicians and working democracy (meaning democracy where people are well informed and active in the political process).
"The recent collapses we have seen in the US and in Europe shall not make us re-think the principles of our economy? "
Yes there are definitely lessons to be learned. However we have no option but to continue with using money and capitalism before we find something better?
cheers
Lejan . 30+
Capitalism has problems but it is the best we currently have?
Yes! So let's make it even better! Less speed, less greed, more humanity.
... meaning democracy where people are well informed and active in the political process.
Totally with you!
However we have no option but to continue with using money and capitalism before we find something better?
And we will rightly so. Unfortunately I do not see any progress in learning so far...
Lejan . 30+
And so it is in capitalism. Where is the financial crisis in the US based on if not on loans? The same in Europe. And it seems that we have lived far beyond our means and the correction of this was and will be quite painful.
I recently saw a documentary about Deutsche Bank and how they are throwing out American families in large numbers off their homes, because those weren't able to pay their dues. So families are getting punished to reduce the loss in profits for the sake of the shareholders? And because of the inflation in the American property market those houses remain empty, because they can not be sold by Deutsche Bank. In what world are we living in? No, this can not be right at all!
pat gilbert 50+
Lejan . 30+
Accordingly to the information on Wikipedia, again, I disagree!
And again, if you count that much in qualified people, I again bow my hed in awe for those brilliant bankers.
Qualification does not protect against common sense and against the tool called risk analysis!
If you run a business by loaning money to people to make your profit by it, it becomes your very own interest to have a closer look to those people you are working with... your customers. And who ever is telling you not to, just don't listen to them! Those subprime mortgages out of the CRA act did neither cause the volume nor the crisis itself.
And if you are running a business you are responsible to your own actions anyway.
According to Luci Ellis, Bank for International Selttlements 'The housing meltdown: Why did it happen in the United States?' (http://www.bis.org/publ/work259.htm) the housing meltdown shows no causal relation the Community Reinvestment Act. This topic seems to be controversal and because I am not into this matter deep enough, I can not take this argument than Deutsche Bank is doing rightly so to kick families out of their homes. This is dirty business!
Ryan Alexander
The government has made mistakes in the past but what you seem to be proposing is complete detachment from governmental intervention. I don't think because of governments poor decisions in the past that you throw government intervention away completely.
What should happen is constant revision of government policy...but because of people in this country who fight for this complete lack of government intervention we have what I like to call a "The brick wall of American Politics"
I personally would love to see statistical analysis of class mobility because in all my research it seems that the lower class typically stay lower class much more often than the upper class or middle class, drop to lower class.
I think your just as ideological and less logical as a socialist. With no government at all I don't see anything happening but the rich getting richer and the poor getting poorer. Who will look after the people? The free market? How does the free market accommodate to the poor? As I see it in today's society...the only motivator is money. One of the lowest paid professions in America are social workers and teachers. Why all of a sudden we stop involving the government will any of this change?
Zdenek Smith 100+
The government program had some major issues.
The people taking mortgages did not make educated decision and didn't understand or even ignore their financial situation.
Banks offered mortgages that were not suitable for financial profile of many of the borrowers. They also offered mortgages with too low qualification criteria. Some mortgages were setup with minimum or no payment over time toward principal.
Probably a few more factors I didn't notice.
Krisztián Pintér 200+
and now they complain about "losing" their house. what house?? they've never owned a house! be grateful for the good years, and now back to reality.
the losers are not the borrowers, but the lenders. those that lost their lifetime savings. they should be outraged now! i should go to ING, and ask them: did you invest in US housing? do you own mortgage based CDO-s? if so, what was your thinking? do you not understand the fundamentals? or i pay you for jumping on bandwagons?
pat gilbert 50+
The banks only went along with this financial suicide because the government offered them a carrot and a stick. The stick being that if they did not make these loans the regulators would make life miserable for them. The carrot was the Fanny and Freddie would carry the paper which is now to the tune of 5 trillion.
The derivative thing was vastly overstated as the banks hedge their bets and did not have as much exposure as the media would have you believe. (if really was as big as the media said why doesn't it make the news any more?)