At 22:39 21/01/2013, Mike Spencer wrote:
(MS) There is no intrinsic reason of the order of "We hold these truths to
be self-evident..." that profits should accrue to anyone but the people
who actually did the work -- those who wrote the book or screenplay,
shot the film, drove the flaming motorcycles, played the guitar.
Exploitive capitalism isn't a embodiment of a self-evident truth
But not all capitalism is exploitive. There's the exploitive capitalism
that the banks extract from ordinary cheque accounts and the non-exploitive
capitalism that banks use with time-share (deposit) accounts. There's a big
difference between these two types of accounts -- or ought to be anyway. As
to the latter, the industrial revolution would never have got started in
the 17th century had not enough private merchants' banks in London agreed
to turn away from backing sea-trade exclusively but also to back projects
in the provinces. In the event of failures, then the partners (one and all)
of the banks (usually no more than half-a-dozen in those days in each)
would forfeit their money right down to one suit of clothes and the tools
of one's trade.
It took the better part of the 18th century for some private banks, after
acquiring enough experience in giving credit to venturers (what is now
termed VaR -- value at risk), to start issuing banknotes when giving credit
instead of gold and for these notes (each bank had its own) to gradually
dissipate in the wider domain and become trusted by others. Some of those
who accumulated a few banknotes, and also seeing the prosperity of the
bank, then began to present the banknotes to the bank desiring to open an
account (that is, become a partner, even with unlimited liability) Very
gradually, all through the 18th century, hundreds of private banks
gradually became what we now call commercial banks (high street banks).
Under the 1820 Bank Charter Act, time-deposits were allowed to become
regularized as actual shareholdings (witjh limited liability) if desired,
and new non-time deposit accounts (cheque accounts) were instituted for
non-entrepreneurial holders of bank-notes. Under the 1844 Bank Charter Act,
scores of commeciral bank-notes were made illegal and only those of the
Bank of England (until then a private bank).
Unfortunately, because when issuing credit the banks started using cheque
accounts (of mainly ordinary, non-venturesome people), as well as the
time-deposit accounts, the 1844 Act did not say that the new cheque
accounts should be 100% secure and untouchable as the source of the bank
offering credit. In the course of the 19th century as hundreds of
commercial banks collapsed (fair do's for shareholders and depositors who
were knowingly taking risks) so did the life-savings of hundreds of
thousands of more ordinary people. But the banks didn't want to charge
fees for looking after cheque accounts and so they persuaded the
government's lawyers to fluff the difference the two types of accounts. It
was only in the 20th century that cheque accounts have become insured (up
to a certain amount) and even then the banks have escaped responsibility by
getting the government to pay the fee.Thus the taxpayer is paying for the
follies of the banks.
How to summarize? Capitalism as presently practised is certainly
exploitive. Capitalism as an idea is still valid so long as governments and
politicians had the power (and the probity respectively) to treat banks
like any other business.
Keith
.
Neal Stephenson's 1992 novel, _Snowcrash_, begins with the
assumption/assertion that the Chinese have put everything possible --
everything that is or can become digital media -- on the net for free,
turning the media industry into a smoking crater. Well, that didn't
happen but it could have happened. If they were to do it now, it would
ensure furious Western cooperation in bricking up the Great Firewall of
China. Maybe Pakistan or Iran will do that.
- Mike
--
Michael Spencer Nova Scotia, Canada .~.
/V\
[email protected] /( )\
http://home.tallships.ca/mspencer/ ^^-^^
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