Patricia AasJul 1, 2024

2/ Only barely through the introduction and the start of chapter 1, but it got interesting so I wanted to start the thread. (I’ll get back to Harvey when the polls are done)

So, the premise here seems to be that you (a country) have your own national currency. The thing she is going to get to, as far as I can understand these things right now, is that “deficits are a myth”.

And I think this is related to the Piketty (I can’t believe this is useful now) stories about how states erased their debts through inflation: Germany and France were the examples. And Germany are today apparently very skeptical of this approach.

Show threadPatricia AasJul 1, 2024
3/ The reason that I had to post is that she started talking about this question I had earlier. Basically: it seems risky to me to take out loans in a currency you don’t control since you can no longer use inflation to erase it.
https://social.vivaldi.net/@Patricia/112707420539468262
Patricia Aas (@[email protected])

24/ ok, I give up on this part and tbh I’m not sure it’s important. He has drifted into one of the features of FIAT/normal money being an instrument by which a state can eliminate its debt in that currency by tanking the value of its currency. Given this, why would anyone lend a state money in its own currency? Sweden wants to borrow money, why wouldn’t you lend them euros? It seems a bit risky to use their currency. Though I believe these “loans” are actually in the form of government bonds, so in that case the borrower has taken control of the currency in which it is expressed. I bet the developing nations debt is not expressed in their own currency, just to make sure we can erase our debt, but they sure as hell can’t erase theirs.

Vivaldi Social
Show threadPatricia AasJul 1, 2024
4/ She literally says: “and they need to refrain from borrowing, that is taking on debt, in a currency that isn’t their own”
Show threadPatricia AasJul 1, 2024

5/ So maybe we’ll get a glimpse into this mechanism.

Unfortunately, we have seen examples of countries that didn’t have this option, like Haiti and I guess also Greece (because they were using the Euro). Feel free to chime in here.

I’m also interested in how she deals with what made Germany so intent on not going through that again. I wish Piketty had spent more time on that.

Show threadWeltzeitgeistJul 1, 2024
@Patricia In Germany economic thought is dominated by the socalled ordoliberals ('ordoliberalism') and they have no fucking clue how money or a monetary system actually functions.
Show threadPatricia AasJul 1, 2024
@wackJackle I don’t know what “ordoliberalism” is 😅
Show threadWeltzeitgeist
@Patricia This is a good enough summary: https://en.wikipedia.org/wiki/Ordoliberalism
Ordoliberalism - Wikipedia

Jul 1, 2024 at 1:14pmWeb
Show threadPatricia AasJul 1, 2024
@wackJackle I guess this is a form of capitalism sort of?
Show threadWeltzeitgeistJul 1, 2024
@Patricia It's the German version of neoliberalism, but there is an understanding of the necessity of some social systems that support the broader economic system of capitalism. 'Ordo' means that ordoliberlism also supports the idea of the state as the one entity that sets the rules in which a capitalist market economy functions. So it is free market capitalism with the belief that the state is a rule setting necessity and also that there have to be some social systems backing it up.
Show threadWeltzeitgeistJul 1, 2024
@Patricia Interestingly Hegel is responsible for this kind of right wing economic thought and also for what Marx and Engels had to say about it. That's 'Dialektik', I guess. :)