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Greg Johnson
01-17-2012, 06:55 PM
Money for Nothing



http://www.counter-currents.com/2012/01/money-for-nothing/
http://whitenationalist.org/forum/showthread.php?p=5104#post5104





http://cdn.counter-currents.com/wp-content/uploads/2012/01/broken_piggy_bank_vMain.jpg
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2,901 words

Everybody knows you need to work for your money. And if somebody just gives you money, that can only be by the expropriation of somebody else’s labor. Money just doesn’t grow on trees, after all.

But is this really true? Just because you work for your money, did the guy who paid you also work for it? What about the guy who paid him? If you follow the money trail long enough, you are going to find someone who did not work for his money. He simply got it for nothing. He did not even have to go to the trouble of picking it off trees. He just created it out of thin air by bookkeeping. We call this man a banker.

Unlike people who have to produce things of real value before they count them up and enter the number in a book, the banker creates his product simply by bookkeeping operations. The whole panoply of bank services—checking accounts, savings accounts, free toasters, checks with baby ducklings or golden retrievers printed on them—are, arguably, props to disguise the fact that the core of banking is the sheer creation of money out of nothing.

When I was a boy, one of the banks in my hometown gave out free piggy banks to children. Today, that seems a master-stroke of propaganda, fostering the impression that real banks, just like piggy banks, can only give out money that they take in. But banks are not required to keep your deposits on hand. They loan them out. Every dollar in your checking or savings account is loaned out ten times over. This is how bankers simply create money through bookkeeping. And that is just the beginning of how bankers create money. And bankers can do it even if they do not operate in buildings with Grecian columns out front and teller windows inside, even if they do not have checking and savings accounts and all the other props we associate with banking.

But even though the money you borrow was created for nothing, you still have to pay it back, with interest. And when you pay it back, you can’t just create the money. You have to work for it. You have to provide real goods and services. Thus bankers, by loaning out the money they create for nothing, gain a mortgage on future production of real world goods and services.

What is money anyway? Money is a medium of exchange that allows one to covert the fruits of one’s labor into easily portable tokens that one can exchange for the fruits of other people’s labor. What one chooses for tokens does not really matter. Money can be bits of shiny metal, colorful slips of paper, electronic data in computers, or cowrie shells, just as long as they are accepted by the butcher, the baker, and the candlestick maker.

Money does not need to have any intrinsic value. In fact, it helps if its intrinsic value is next to nothing, otherwise people will hoard it rather than circulate it freely, which would cause an economic hardship known as deflation, in which money is a commodity whose value rises because its supply diminishes. (When money is a commodity whose supply rises and its value decreases, that is called inflation. It is worth asking: Can one avoid both evils if money has no value in itself, i.e., if it is not a commodity that can be bought and sold alongside bricks and butter?)

If the best money has no intrinsic value, then the worst sort of money would be precious metals. The best sort of money would be entirely intangible, just data in a computer. Even paper money can be hoarded, for instance, when the price of toilet paper gets too high. (Perhaps the best way to ensure that money is not hoarded is simply to print an expiration date on it.)

Ideally money should be a self-effacing servant of the real economy, which produces actual goods and services. But money has grown into a jealous tyrant that interferes with the real economy. The simplest example is your average economic crisis. In an economic depression, the land does not suddenly go sterile. The udders of cows do not go dry. Men do not suddenly become stupid and lazy. The sun keeps shining; the crops keep growing; the chickens keep laying; people keep working. Goods pile up in warehouses and stores. And on the demand side, people still need to eat. But silos are bursting and people are starving because, for some mysterious reason, there is suddenly “not enough money.”

People have no money to spend, or they are afraid to part with the money they do have, because of a climate of uncertainty. After all, half way around the world, a massive swindle has been discovered; a bank has collapsed; a speculative bubble has burst. So, naturally, back in Hooterville, stores are filled with sour milk and rotting vegetables and children are going to bed hungry.

If an able-bodied man were shipwrecked on a fertile island, he would not starve for lack of money. But on this vast and fertile island we call Earth, people starve amidst plenty because we have accepted the dominion of a monetary economy that disrupts the real economy. That is no way to run a planet.

The obvious solution is simply to increase the money supply. One must make consumer demand effective so the market clears and life can go on. And the simplest way to do that is for the government to print money and give it to people. Remember George W. Bush’s 2008 “stimulus checks”? That was money for nothing, handed to people to stimulate economic activity. The effect, of course, was negligible. But it was morally and economically far preferable to the massive “bailouts” and the Obama stimulus plan that followed.

Whereas the Bush stimulus checks went directly to millions of consumers, who injected the money directly into the economy when they purchased goods and services, the bailouts and stimulus spending went to a relative handful of politically connected insiders. It turns out, furthermore, that very little of the money went to stimulate the US economy. Instead, a lot of it was invested overseas. Other recipients of bailouts held onto their cash, hoping that they could buy up real assets for cheap if the economy continued to slide deeper into depression. Moreover, whatever money did go into the US economy came with strings attached: the necessity to repay principal and interest. At least with the Bush stimulus checks, the money went directly into the economy with no strings attached in straight up purchases of goods and services.

But, as we have seen, money for nothing is not merely part of an occasional emergency stimulus measure. It is business as usual for banks.

But if money is being created out of nothing all the time, then we have to ask: Should this be left to the banks, or is there a better way of doing it?

Why not simply have the government create money and send each individual a monthly check, to be spent as he sees fit? This money would stimulate the economy directly, through the purchases of goods and services, whereas money created by banks in the form of loans must be paid back, with interest, creating a parasitic class of people who get a share of real production by loaning at interest a commodity they get for nothing.

Again, every industry that produces real goods and services has accounting and inventory costs, but actual production has to come first. You have to make toys before you can count them. With banks, money is by created simply by bookkeeping operations, e.g., making loans. Bankers “produce” merely by juggling numbers.

But if money for nothing is simply a feature of the modern economy, why not cut out the parasitic “private sector” middlemen and simply have the government create money and distribute it directly to consumers?

Why is the government preferable to the private sector as the creator of money? Because, unlike private businesses, the government is accountable to the public. Its purpose is to secure the common good. Moreover, when the private financial sector is in crisis, it looks to the government to bail them out—at the expense of the taxpayers. Time for the government to bail the people out—at the expense of the banks. Let’s repudiate all our debts and start fresh with a new financial system.

“But simply creating money and mailing out checks would be inflationary!” some would object. True. But it would be no more inflationary than allowing banks to create money.

Furthermore, there is a deeper issue here: Is inflation or deflation simply a product of the commodification of money? The commodification of money means that money is not merely a tool of exchange, but a commodity that is exchanged, a commodity with a cost of its own (interest). Would it be possible to decommodify money, i.e., to eliminate interest and a secondary market in money, either partially or altogether? Would the creation of money that expires after a while cut down on the commodification of money?

“But money for nothing would be socialism!” others would object. Yes, I am proposing socializing the creation and initial distribution of money. But what people do with the money at that point is their own business. The system I propose is completely consistent with private property and private enterprise. Indeed, it would strengthen and secure them, because it would eliminate a parasitic class of people who steadily mulct the real economy, and occasionally send it into crises, by creating and loaning out money that is free to them and should be free to all.

“But how would businesses capitalize themselves without bank loans?” That is a fair question. Perhaps the best answer is to say that that just as individual consumers could get money for nothing from the state, creditable producers could do so as well. But nothing about my proposal would prevent banks and credit unions from forming to capitalize businesses. But they would not be allowed to create money out of thin air. They would have to attract savings by paying interest, then loan out their deposits—and no more than their deposits—at interest to creditworthy businessmen. To do this, banks would have to offer serious interest for savings and charge serious interest on loans, but it could be done. It would definitely be “tight” money, though, which might be a good thing in the long run, since it would discourage speculative investments. Of course if money went bad after a while, it would make no sense to save it. But none of this might be necessary if interest-free state financing is a viable option. It is certainly a question worth exploring.

Nothing, moreover, would prevent businesses from capitalizing themselves by selling shares and paying dividends, either.

“But shouldn’t people work for their money?” Yes and no. Money needs to get into circulation. And the modern welfare state gives people money for nothing all the time in the form of unemployment insurance, old age pensions, welfare payments, food aid, healthcare, etc. Why not bundle all these benefits together into a single, flat monthly payment? These payments would be enough to ensure the basic social safety net we all have anyway. It would also be fairer than the present system, which expropriates the fruits of some people’s labor to redistribute it to others.

But the basic payments I envision would not allow people to live opulently. Thus most people would choose to work. Some might choose to invest their monthly checks. Others might wish to defer them so they can enjoy better old age pensions. But the whole character of work would be changed, because people would not work because they have to. They would work because they want to. The socialist dream of the “de-commodification” of labor would be realized.

Sure, some people might choose to spend their time smoking dope and strumming guitars. But one of them might be the next Goethe or Wagner. And surely we would be better off extending the adolescences of a million bohemians than supporting a thousand scheming Wolfowitzes, Madoffs, and Shylocks along with all their warmonger and pornmonger cousins.

“But this system would create public debt!” some might object. But I am talking about creating money, not borrowing it. Why should the government allow banks to create money and then loan it, at interest, to the government, when the government can create money itself? The very existence of public debt goes back to the time when money was something of intrinsic value (like gold) that banks might possess and that the government could not just make up. A government that can simply create money has no need of public debt.

“But this system will create idleness!” is another objection. Yes, but there is nothing wrong with idleness. In fact, as I see it, the whole point of social and technological progress is to create a world in which machines put us all out of work. The goal of social policy should be to create conditions of ever-increasing productivity through scientific and technological progress.

But it would be ecologically irresponsible, indeed catastrophic, if people were to take the gains of increased productivity in the form of more consumer goods or burgeoning population growth. Thus the goal of social policy should be to keep consumption roughly stable and cash out productivity gains in terms of ever-shorter work weeks. As productivity increases, it might be possible to maintain a comfortable standard of living with 20 hours of work per week, then 10, then 5, then 1.

When the work week approaches zero hours, we would be living in a “Star Trek” economy in which scarcity of physical goods is abolished through the invention of unlimited cheap and clean energy sources and the “replicator” which can turn energy into any desired good, simply poofing it into existence. In such a world, the only scarcity would be ecological carrying capacity, which would have to be zealously guarded by keeping populations in check—or sending them out to colonize the stars, terraform dead planets, create galactic empires, etc.

But what to would people do with their leisure? Such a society would be the culmination (and, I would argue, following Hegel, the hidden inner purpose) of all human striving, from the moment man first differentiated himself from the animal and stepped into history. It would obviously be a farce if mankind struggled for millennia only to give birth to a world of indolent, empowered morons. Imagine Homer Simpson poofing donuts and Duff into existence while watching holoporn until he becomes one of the boneless blobs in hoverchairs depicted in Wall-E. Utopia would be wasted on such people. Thus along with scientific, technological, and social progress, we would also need to pursue cultural, spiritual, and genetic progress to create a race worthy of utopia.

A job is just something you do to make money so you can do the things you really enjoy. A job is just a means to doing things that are ends in themselves. Once machines put us out of work and the lollygaggers and lotus-eaters are bred out of the gene pool, people can busy themselves doing the things they find intrinsically rewarding: raising children, writing books, playing and composing music, writing software, inventing machines, playing sports, tending gardens, perfecting recipes, advancing science, fighting for justice, exploring the cosmos, etc.

It will be a realm of freedom in which the human potential to create beauty, do good, and experience joy will be unhampered by economic necessity.

This is the stuff of science fiction and other utopias, staples of the American imagination. Yet the dominant political paradigm in America and the rest of the white world is profoundly regressive and dysgenic. While whites dream of the Space Age, our system is headed toward to the Stone Age, worshiping Negroes as heroes and gods (Morgan Freeman has been typecast as God) and placing a product of dysgenic miscegenation in the highest office of the land.

If we are to resume the path to the stars, we will have to begin by addressing four principal evils: dysgenics, economic globalization, racial diversity (including non-white immigration), and finance capitalism.

What do we call this alternative economic paradigm? Ultimately, I would call it National Socialism. But the little florilegium of economic heresies I have assembled above is drawn primarily from the Social Credit ideas of Clifford Hugh Douglas (1859–1952) and Alfred Richard Orage (1873–1934), partly by way of Alan Watts, who was my first introduction to these ideas, and Ezra Pound, who is the most famous exponent of Social Credit.

It is my conviction that the North American New Right, if it is to provide a genuine alternative to the existing system, must break with all forms of “free market” economic orthodoxy and work to recover and develop the rich array of Third Way economic theories, including Social Credit, Distributism, Guild Socialism, Corporatism, and Populism. This essay and others, including ones to come, are my naïve attempts to start a conversation in the hope that it might draw in other writers who are more qualified to construct a critique of capitalist orthodoxy.

Creating an ideal world will cost us, and our enemies, a great deal in real terms. But the first step toward freedom, namely the act of imagining it, is free.

Greg Johnson
02-15-2012, 02:55 PM
Thoughts on Debt Repudiation


http://www.counter-currents.com/2012/02/thoughts-on-debt-repudiation/#more-23534
http://whitenationalist.org/forum/showthread.php?p=5258#post5258






http://cdn.counter-currents.com/wp-content/uploads/2012/02/SolonBlondelParada-297x300.jpg
Merry-Joseph Blondel, 1781–1853, "Solon, Legislator of Athens"

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2,325 words

In Ancient Athens, debtors who were unable to pay their creditors lost their land and were reduced to serfs who had to give their landlords one sixth of their produce in perpetuity. If the debt exceeded the debtor’s total assets, he and his family were reduced to slavery. A debtor could also become a slave by pledging his personal freedom for his debts.

By the 6th century BC, serfdom and slavery had become so widespread in Athens that the small landowners and militia men who were the backbone of Athenian society were disappearing. Wealth and power were becoming concentrated in the hands of a few families through the black arts of usury. Athens was thus in danger of losing the freedom guaranteed by its large, landed middle class, which was increasingly unable to resist the power of the rising plutocratic elite.

Thus to preserve republican government, the Athenian lawmaker Solon (http://en.wikipedia.org/wiki/Solon) (c. 638 BCE–558 BCE) instituted the Seisachtheia (http://en.wikipedia.org/wiki/Seisachtheia), from seiein, to shake, and achthos, burden, i.e., to shake off the burden of debt. Solon’s debt repudiation cancelled all outstanding debts, emancipated all slaves and serfs, and returned all property seized by creditors. Solon also instituted a legal limit to property size, to prevent the concentration of land into the hands of a few wealthy families.

Similar forces were at work in the Roman Republic. Debtors who defaulted could lose their property, their freedom, and even their lives to usurers. This led to the concentration of power and property in the hands of the few and the decline of the small farmers and legionaries who were the foundation and strength of the Republic.

Rome, unfortunately, lacked a statesman with the vision of Solon. There was no wholesale debt repudiation, but some palliative measures were passed. For example, one of the provisions of the Lex Licinia Sextia (http://en.wikipedia.org/wiki/Lex_Licinia_Sextia) of 376 BCE was the distribution of captured lands to establish small farms. The Lex Poetelia Paprina of 326 BCE abolished debt bondage (nexum (http://en.wikipedia.org/wiki/Nexum)).

But, as Brooks Adams (http://en.wikipedia.org/wiki/Brooks_Adams) summarizes so compellingly, the unrelieved march of usury — along with deflation and cheap slave labor — was one of the chief causes of the destruction of Roman freedom. (See Brooks Adams, “The Romans (http://www.counter-currents.com/2011/10/the-romans/)” and my own “Brooks Adams on the Romans (http://www.counter-currents.com/2011/10/brooks-adams-on-the-romans/).”)

Debt repudiation is also described in the book of Leviticus, where it is instituted on a 50 year cycle. In Leviticus 25:10, it is commanded: “Consecrate the fiftieth year and proclaim liberty throughout the land unto all the inhabitants thereof: it shall be a Jubilee unto you—and you shall return every man unto his own clan, you shall return every man to his family.” This is taken to mean the abolition of debt slavery and indentured servitude.

The Jubilee is also connected with land reform. In Leviticus 25:23 we read: “The land must not be sold permanently, for the land belongs to me. You are only foreigners, my tenant farmers.” In Leviticus 27:21 we read: “When the field reverts in the Jubilee year it shall become holy unto the LORD, as a field set apart; and it shall become owned by the priests.”

The purpose of the Jubilee seems to be the prevention of the concentration of land (the primary form of wealth in pastoral and agricultural societies) in the hands of a few families through usury, which results in the loss of land and liberty for debtors who cannot pay. Presumably, after the Jubilee, when land reverts to God (under the administration of the priests), it is again divided up among small farmers, including newly freed slaves and indentured servants. The idea that all men are tenant farmers of God means that no men should be tenant farmers of other men, which is a strong affirmation of the idea of a society of small, independent farmers. (It is ironic that the ancient Jews argued against usury and debt slavery and in favor of agrarian populism, given the economic profile they later assumed as urban money-lenders, traders, and professionals. Apparently Jews had become an overwhelmingly urban and non-agrarian people by late antiquity.)

The common assumption of the Solonic Seisachtheia and the Biblical Jubilee is that freedom is a high political value. Freedom, moreover, is best secured by a society in which as many men as possible are free and able to support themselves on their own land. Freedom requires private property that is widely distributed. Over time, however, debt and foreclosure lead to the concentration of wealth and power into the hands of the few, leading to the loss of freedom. Thus the preservation of freedom requires wholesale debt repudiation

The fate of debtors has become easier over the centuries. Debt slavery and serfdom are no more. Debtors’ prisons were abolished in the United States beginning in 1833 and in the United Kingdom in 1869. Bankruptcy laws allow people to escape crushing burdens of debt.

The moral premise of bankruptcy laws is that individuals should not have their lives and prospects ruined by financial mistakes. Society as a whole is better off if a man can shake off his debts and focus on the future: pursue an education, start a family, start a business, etc.

But if it is right for individuals to shake off their own debts, then it is certainly right to shake off the debts imposed upon us by others, including people who are long dead, i.e., public debts. Life is lived forward. Ascending life should not be shackled by the dead weight and accumulated mistakes and debts of the past.

Debt may no longer lead to slavery or prison. But debt still corrodes freedom is subtler ways. Those who are self-employed have more liberty of thought and action than employees, who are pressured to conform to the opinions and tastes of their employers. For the same reasons, property owners are freer than renters. And debt and foreclosure are the major factors in turning the self-employed into employees and property owners into renters. Thus if we wish to reestablish a society with a large middle class of self-employed farmers and businessmen, we need to revisit the idea of debt repudiation.

America’s national debt is now beyond $15 trillion and counting. The debt now approaches $50,000 per American citizen, $135,000 per taxpayer. Unless we have radical change, it will only get bigger. And in addition to paying those debts, taxpayers will also have to fund Social Security, Medicare, and Prescription Drug liabilities approaching $120 trillion and counting. That means that every white baby born today is saddled with $1.2 million in federal debts and liabilities (provided that he becomes a producer not a parasite). And this does not include state and local government debts.

But ask yourself: when a pregnant Mexican sneaks across the border to drop her “anchor baby,” is she bringing America another taxpayer to assume $1.2 million in debts and liabilities run up by Gringo politicians? Or is she here to add to the burdens that must be borne by white children?

Remember this when the eyes of immigration apologists grow moist describing the travails of hard-working people from around the globe who only wish to “contribute” to the great American experiment. Are they here to contribute more than $1.2 million apiece? Obviously not. They are coming to take, not contribute. They are coming to add to our burdens, not share them. Ultimately, they are coming here to replace us and our posterity. And when they are the majority, they are not going to go on laboring to feed and medicate old white people. They are going to pull the plug and take care of their own.

In addition to public debt, Americans also have trillions of dollars in personal debts, primarily in the form of credit cards, home mortgages, and student loans, some of them accruing interest at ruinous rates.

Nobody seriously thinks that all of these debts will be repaid. It is not a question of whether they will be repudiated, but how. The most likely method will be the devaluation (inflation) of the dollar. Someday, you might have the choice of paying $100,000 to pay off your student loans or to buy a cup of coffee. And since we’ll always be able to buy a cup of coffee, maybe hyperinflation would not be such a scary prospect, except that it creates economic and social chaos.

Beyond that, inflation is deeply unfair. When the currency is inflated, it is not all devalued at once. Instead, huge amounts of money are handed over to politically connected insiders. When they spend this money, it has the purchasing power of the previous day’s non-inflated currency. But with every subsequent transaction, as the value of the money is discounted, its purchasing power drops. So the first man who gets to spend a $100 bill can buy a nice dinner for two, but the last man who spends it can’t afford a taco. That can only lead to further concentration of wealth in the hands of parasites.

From a White Nationalist point of view, the most important thing is to accomplish debt repudiation with a minimum of interference in the real economy, particularly the core biological functions of the economy: the preservation and reproduction of our race. We cannot have bursting silos and empty stomachs. We can’t have creditors seizing real assets for merely notional debts.

But before we deal with practical questions, we need to deal with the moral question of the rightness of debt repudiation.

Two points of clarification: First, I am not arguing for the wholesale repudiation of debts between individuals or businesses. Sometimes such debts need to be repudiated, but this can be handled with existing bankruptcy laws.

Second, I am not arguing for the wholesale repudiation of Social Security, Medicare, and other such entitlements. I believe that these sorts of programs ought to exist in some form. The existing programs should simply be improved, not abolished.

What I specifically wish to establish is the morality of repudiating government debts and all private debts to banks.

Ultimately, only the ends justify the means, and in this case, debt repudiation is justified as the means to restore and preserve a society with widely distributed, securely held private property, which is the foundation of a large and powerful middle class. Aristotle argued that such a society best equips the majority to resist the tyranny of elites, although Aristotle could not have imagined the ultimate in tyranny: an elite so wicked that it would work for the destruction and replacement of its own people.

But debt repudiation would not merely help preserve our people. It would also simultaneously strike a blow against our enemies, who are deeply invested in the financial sector of the economy.

Let’s deal with government debts first. The moral principle behind public debt is that governments, acting in the common good of the people, can create collective obligations, such as laws, treaties, or debts. Although one can question whether many government policies really are in the common good, I accept the underlying principle that there are collective goods that can justify collective obligations.

My question is: Why do governments need to go into debt in the first place? Why do governments have to borrow money at all when they can either (a) print it, or (b) raise it through taxation?

In the past, currency consisted of scarce bits of shiny metal. If the government needed more of these bits than it could raise by taxation, it had to go to people with hoards of coins and borrow them at interest.

But in today’s world, in which governments can simply print money, why is there any need to borrow it from banks? Particularly when the banks themselves just make up the money they lend out.

Thus my argument is simply that public debt is wrong because it is not necessary. It is, therefore, fraudulent to justify public debt in the name of the common good. Public debt is actually a way of making the society as a whole — specifically, the taxpayers — subservient to private interests (banks) and even to alien peoples (market dominant minorities, foreign governments).

But a free people should serve its own interests—and, I would argue, the higher interests of life—not foreign interests or private interests. Such debts should, therefore, be repudiated.

As for the foreign governments holding US bonds, we should offer them the following compensation. They can keep all the factories that American businesses have built over there, and they can use them for domestic production. Because debt repudiation should go hand in hand with the restoration of economic nationalism, including tariffs on imported manufactured goods. So businesses that wish to sell products in the United States should have to manufacture them here.

As for the repudiation of debts to banks: this is necessary, because existing debts can never be repaid, and it is moral for the reasons already laid out above. Beyond that, it is morally absurd to hold that banks, which create money out of nothing, have a right to demand the repayment of their principal plus interest. In the end, however, the case for the repudiation of bank debt rests on the existence of a viable alternative financial system, some elements of which I have sketched in my essay “Money for Nothing.”

The repudiation of government and individual debts should be a political imperative for White Nationalists. When White Republics emerge, we will of course repudiate the debts of predecessor states. But even within the present system debt repudiation should be stressed by White Nationalists, for it would prove a very popular political plank. Debt repudiation would also be useful to break White Nationalists away from the dead ends of Republican conservatism and “free market” economic orthodoxy.

Of course the primary aim of White Nationalism is to secure the existence of our people and a future for white children. But if that does not get people’s attention, then promising to cancel their credit card, student loan, and home mortgage debts definitely will.