NeonSnake5d ago

A week or so ago, I made a statement along the lines of "I don't understand the arguments *against* the credit theory of money"

@KevinCarson1 here does a fantastic job of fleshing those out, on @C4SS

https://c4ss.org/content/61050

Capitalism in Inches and Pounds: A Parable

The argument that capitalists are needed to provide workers with means of production, and profit is their reward for doing so, is nonsense. All capitalists have are paper or digital claims on the right to allocate means of production or material resources. All of the actual material resources — means of production and raw materials...

Center for a Stateless Society
Show threadNeonSnake

We all "intuitively" understand that "money" is "credit".

Our personal lives are based around IOUs, after all, not "upfront" cash.

You disagree? Sure.

But think of all the rounds of drinks you've bought based on the concept that at some point, it will all even out.

(And think of the times that you've realised that Steve probably isn't going to)

Mar 16 at 11:30amWeb
Show threadNeonSnake5d ago

We all spend money, and buy stuff for other people, on the unspoken agreement that it will all even out in the end.

In the most personal relationships, we probably don't keep track - I know that I don't! - but in the back of your head, you probably have a "Steve is taking the piss, actually"

So far so good.

But - Neon! - that's all well and good, but what happens when we're talking about the REALLY REAL WORLD of commercial transactions and the like?

Show threadNeonSnake5d ago

Well, that's where "payment terms" come in.

What?

Did you think that in Big Corporate, we pay the supplier upfront?

Nah, bruv.

We pay them *90 days later*. Ideally, we've sold their product at least a few times before we've paid for it, so we're out front.

In Actually Existing Capitalism - we're already existing on IOUs. Ideally - in my job - I will have sold your product *twice" before I've paid for the first delivery.

Show threadNeonSnake5d ago

As in, I've got the profit and payment *waaaayyyyyy* before I've had to pay you.

I know this seems weird, but it *is* how it works.

There's this idea that people are "owed" payment (interest) because they've given up some amount of money that they've invested or whatever.

This is a *fairly* easy thing to wrap one's head around.

If I give up £1000 for an investment, then that's £1000 I don't have available to me to buy food. Surely - surely - I should be recompensed for that?

Maybe. But - broadly - that's not actually how it works (Bastiat can kiss my pert arse on this one).

What actually happens, in the Really Real World, is that corporations advance loans, and supplies, and are paid back many months later.

The idea that we "give up" our spending capacity is just flat-out false, in any meaningful manner, once you get above mom-&-pop investments.

Show threadNeonSnake5d ago

I have a running spreadsheet of "who owes me what" - which, yes, is in £ sterling.

Very, very occasionally, someone will dip below a level, and I send them a "Are you okay?" message. Because it normally means that they're in trouble.

But - Neon! - that's not feasible in the larger Real World!

Show threadNeonSnake5d ago

No.

I used to work for a *cough* large catalogue-based *cough* "Book of Dreams" retailer in the UK.

We had a supplier go bust on us. My director's immediate response was "Ah, fuck! I'd have reduced their terms to keep them going"

In massive Corp World, this is still a thing, because People.

Show threadNeonSnake5d ago

I guess the tldr is: no-one has a massive store of "money" or of "bread" or "food" or "shelter" that you need to pay over and above for, in any given basis.

Everything is just people advancing credit - whether it's me on a small local scale, or corps on a large global scale.

Basically - lol at the idea that there's a huge warehouse somewhere full of food that Terence McMonocle of Waistcoatshire needs paying interest for becuase he's "forgone" his fucking golf club membership.

Show threadDer Giga5d ago
@neonsnake I would like to add, that the Italian word credere, which credit is based on means "believe", back then that probably had a bigger part of "trust" in the meaning.
Etymology is rarely an argument, but it can give you hints on ideas and intentions from those who named it.
Though I can be corrected if my etymology is off here.
Show threadNeonSnake5d ago

@DerGiga I think that's cool.

My stance is largely based on "belief" or "trust", for sure.

Show threadDer Giga5d ago
@neonsnake Totally agree with you.
People do not know how much "capital" sits in cooperation and trust. Peace and stability is capital for every tank and plane that is not needed.
The first question I ask when I see a "disruptive company" I wonder: Is there any value to it, or did they just found another way to rip the copper out of our societal consent. Zero trust & sum thinking is amongst the greatest evils of our time.
Hope this wasn't too off-topic.
Show threadNeonSnake5d ago
@DerGiga not off topic at all!
Show threadMidgePhoto1d ago

@neonsnake
Money is at base, promises.
Abstracted,materialised, fungible, standardised, promises.
(Rather a lot of modern banking is promises that promises will be got - metapromise futures)

And the note near here that the Italian etymology from "belief" is an interesting angle on that.

Make more promises - Steve, or Argentina, or the USA - and the belief around you that those promises will eventuate weakens, currency devalues, costs inflate in the ratio of dis/belief.

#money #promises