Economics As If People Really Mattered

Week One - Introduction

Galway One World Centre

Amnesty Centre, Galway.

19 February 2013

Breviari d’Amour (Breviary of Love)

by

Matfré Ermengau of Bézier

c.1288CE

Franciscan friar

Week One – Introduction

Week Two – What is Money? – (Future of Money, Chapter One)

Week Three – The Privatisation of Money – (Future of Money, Chapter Two)

Week Four – Financialisation and Debt – (Future of Money, Chapter Three)

Week Five – Credit and Capitalism – (Future of Money, Chapter Four)

Week Six – Conclusion / Open Discussion

Capitalism is first and foremost a historical social system.

What distinguishes the historical social system we are calling historical capitalism is that in this historical system capital came to be used (invested) in a very special way. It came to be used with the primary objective or intent of self-expansion.

It was this relentless and curiously self-regarding goal of the holder of capital, the accumulation of still more capital, and the relations this holder of capital had therefore to establish with other persons in order to achieve this goal, which we denominate as capitalism.

Historical capitalism involved therefore the widespread commodifaction of processes – not merely exchange processes, but production processes, distribution processes, and investment processes – that had previously been conducted other than via a ‘market.’

And in the course of seeking to accumulate more and more capital, capitalists have sought to commodify more and more of these social processes in all spheres of economic life.

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“Marx, for example, emphasizes that all of these forms of capital – merchants’ capital, money capital and rent on land – had an historical existence which stretches back well before the advent of industrial capital in the modern sense.

“Marx, for example, emphasizes that all of these forms of capital – merchants’ capital, money capital and rent on land – had an historical existence which stretches back well before the advent of industrial capital in the modern sense.

We therefore have to consider an historical process of transformation in which these separate and independently powerful forms of capital became integrated into a purely capitalist mode of production.

“Marx, for example, emphasizes that all of these forms of capital – merchants’ capital, money capital and rent on land – had an historical existence which stretches back well before the advent of industrial capital in the modern sense.

We therefore have to consider an historical process of transformation in which these separate and independently powerful forms of capital became integrated into a purely capitalist mode of production.

These different forms of capital had to be rendered subservient to a circulation process dominated by the production of surplus value by wage labour.

“Marx, for example, emphasizes that all of these forms of capital – merchants’ capital, money capital and rent on land – had an historical existence which stretches back well before the advent of industrial capital in the modern sense.

We therefore have to consider an historical process of transformation in which these separate and independently powerful forms of capital became integrated into a purely capitalist mode of production.

These different forms of capital had to be rendered subservient to a circulation process dominated by the production of surplus value by wage labour.

The form and manner of this historical process must therefore be a focus of attention.”

David Harvey, Limits to Capital (London: Verso, 2006), 73.

The purpose of capitalism is self-expansion – capital begets capital – and it does so by monetizing social value and human labour. This is a circuit of transformation.

The purpose of capitalism is self-expansion – capital begets capital – and it does so by monetizing social value and human labour. This is a circuit of transformation.

“Historical capitalism involved therefore the widespread commodification of processes – not merely exchange processes, but production processes, distribution processes, and investment processes – that had previously been conducted other than via a ‘market’. And, in the course of seeking to accumulate more and more capital, capitalists have sought to commodify more and more of these social processes in all spheres of economic life.”

Immanuel Wallerstein, Historical Capitalism (London: Verso, 2011), 15.

Breviari d’Amour (Breviary of Love)

by

Matfré Ermengau of Bézier

c.1288CE

Franciscan friar

Money is a complex phenomenon whose economic functioning relies on social trust and public authority.

The exposure of the reliance of the private financial sector on the state has brought the financial system into full view and opens it up for analysis. The opportunity must be taken to challenge the private control of finance and ask whether such an important aspect of human society should be owned by, and serve, the interests of capitalism.

The money system needs to be reclaimed from the profit-driven market economy and socially administered for the benefit of society as a whole as a public resource.

The capitalist market is not created to meet needs, it is created to make profits. [We need ‘better’ capitalism etc]

Money issue and circulation has moved between the private and public sector in an intricate relationship between the state, commerce and the banking sector.

The privatisation of money issue and circulation has led to the emergence of a financialised society where money value predominates. This has underminded public and collective approaches to social solidarity and security, particularly within the Anglo-american economies.

The case will be made for seeing money as a socially constructed and publicly authorised resource that should be subject to democratic control.

Money is a social contract.

Far from being a precious commodity that had become readily accepted through trade as the barter theorists thought, money as coin has generally been accepted by fiat, that is, issued and guaranteed by an authority, such as a powerful leader, an office-holder or a religious organisation.

Making coin out of a precious metal confuses the role of money as a measure of value with the value of the coin itself.

Gold can change value both as a commodity and as a coin in terms of purchasing power. Therefore gold/silver as a commodity does not ‘have’ a value. It is valued, but at any point in time the exact value will vary and will need to be designated in some other form of commodity or money, such as silver or dollars.

Money does not in itself embody a value, it measures relative values. (p,10)

Money is more helpfully seen not as a ‘thing’ but as a social form.

Money is more helpfully seen not as a ‘thing’ but as a social form.

‘Sound money’ is a product of society, not of nature.

Money is more helpfully seen not as a ‘thing’ but as a social form.

‘Sound money’ is a product of society, not of nature.

When we say people trust in money we mean that they are trusting in the organisations, society and authorities that create and circulate it, other people, traders, the banks and the state.

Money is more helpfully seen not as a ‘thing’ but as a social form.

‘Sound money’ is a product of society, not of nature.

When we say people trust in money we mean that they are trusting in the organisations, society and authorities that create and circulate it, other people, traders, the banks and the state.

Money, whatever its form, is a social construction, not a natural form.

Money is more helpfully seen not as a ‘thing’ but as a social form.

‘Sound money’ is a product of society, not of nature.

When we say people trust in money we mean that they are trusting in the organisations, society and authorities that create and circulate it, other people, traders, the banks and the state.

Money, whatever its form, is a social construction, not a natural form.

It has not inherent value but it has vast social and political power. (p.11)

- MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED LABOUR HAVE BEEN IMPOSED ON PEOPLE WHO HAVE BEEN FROM SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THE LAND.

- MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED LABOUR HAVE BEEN IMPOSED ON PEOPLE WHO HAVE BEEN FROM SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THE LAND.

- AS ECONOMIES BECAME MONETISED, PEASANT POPULATIONS WERE FORCED TO SELL THEIR LABOUR AS LANDS WERE ENCLOSED AND PRIVATISED, AND OFTEN MORTGAGED.

- MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED LABOUR HAVE BEEN IMPOSED ON PEOPLE WHO HAVE BEEN FROM SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THE LAND.

- AS ECONOMIES BECAME MONETISED, PEASANT POPULATIONS WERE FORCED TO SELL THEIR LABOUR AS LANDS WERE ENCLOSED AND PRIVATISED, AND OFTEN MORTGAGED.

- FOR THOSE WITHOUT LAND, JOINING THE MONEY ECONOMY MEANT OBTAINING SUSTENANCE THROUGH WAGED LABOUR – THE CIRCULATION AND USE OF COIN FROM THE EARLY MIDDLE AGES ENABLED RICH LANDOWNERS TO EXTRACT MORE FLEXIBLE WEALTH FROM THEIR FEUDAL POPULATIONS. (P.19)

- RATHER THAN EXTRACTING PRODUCE OR LABOUR, THEY BEGAN TO DEMANDS MONEY FROM THEIR PEASANT POPULATIONS.

- RATHER THAN EXTRACTING PRODUCE OR LABOUR, THEY BEGAN TO DEMANDS MONEY FROM THEIR PEASANT POPULATIONS.

- MONEY SYSTEMS ALSO ENABLED THE EMERGENCE OF FINANCE CAPITAL WHICH ENABLED EXPLOITATION AND THE EXTRACTION OF PROFIT. (P.19)

- MONEY CAN BE AN INSTRUMENT OF SPECULATION AND A TOOL OF EMPIRE.

- WHILE CONVENTIONAL ECONOMICS AND MUCH OF Marxist theory sees money as being a reflection of the ‘real economy’ of production and exchange, social analyses of money see it as being a phenomenon that has its own political dynamics.

- money cannot be neutral; it is the most powerful of the social technologies. (p.22)

The argument of this book is that as money is such a critical force in the circulation of goods and services and therefore provisioning, it is vital to question how money is issued and circulated, owned and controlled. From this perspective money is more than just a reflection of value in the ‘real’ economy. (p.22)

The argument of this book is that as money is such a critical force in the circulation of goods and services and therefore provisioning, it is vital to question how money is issued and circulated, owned and controlled. From this perspective money is more than just a reflection of value in the ‘real’ economy. (p.22)

The so-called ‘real economy’ – (the economy of capitalist production and exchange) – is in reality an economy determined by capitalism and by patriarchy. Outside its boundaries lie the natural world and the un-monetised labour and needs of women, children and the poor, as well as non-monetised subsistence economies.

The argument of this book is that as money is such a critical force in the circulation of goods and services and therefore provisioning, it is vital to question how money is issued and circulated, owned and controlled. From this perspective money is more than just a reflection of value in the ‘real’ economy. (p.22)

The so-called ‘real economy’ – (the economy of capitalist production and exchange) – is in reality an economy determined by capitalism and by patriarchy. Outside its boundaries lie the natural world and the un-monetised labour and needs of women, children and the poor, as well as non-monetised subsistence economies.

It is not a neutral ‘economic’ choice to give something a monetary value, it is in essence a social and political choice that dominant groups and classes have imposed. (p.23)